Strategies for financial communications in distressed situations for shipping companies. Presented on February 24, 2010 at Marine Money Hamburg conference.

1. Communications Strategies
in Financial Crisis Situations
Richard M. Lemanski
Marine Money -- German Finance Forum
Hamburg -- February 24, 2010

2. The facts of life in a crisis
• What can go wrong probably will go wrong
• The world of the traditional silent shipowner is gone
• Rumors fill the vacuum of silence (expect your
constituencies to use rumors for their own agenda)
• You are now in the business of “herding cats”
• Communications strategy follows business, financial,
and legal strategy
• “The market will get better” is not an action plan!

3. Practical advice
• Speak with one voice
• Get bad news out early so it becomes old news
• Use attorney-client privilege (where available) for drafting
and analysis
• Understand your disclosure requirements
• Be accessible, but keep a safe distance
• Know where you are in the zone of insolvency
• Be fearless in giving feedback, even when it is not wanted

4. Practical advice (continued)
• If you do not know the outcome, (if you can) focus on the
process of how the outcome will occur
• Attempt to frame the human element of the story
• Level the playing field in terms of information flow – Get
your share of voice
• Organize the constituencies
• Never forget that communications is ultimately about
understanding the concerns, needs, and agendas of your
constituencies

5. Shareholders
Type Challenge
• Controlling • Realization that they may
no longer be in charge
• Limited number (KG, KS, • Building a consensus
private equity)
• Dispersed group (public) • Maintaining creditability of
management team
• Avoiding lawsuits

6. Bondholders
• Blood in the water can quickly attract the
sharks
• Can be your best friend in the end -- Often
have a stronger interest in seeing the firm
survive as a going concern than the banks
(particularly if they are unsecured)

7. Banks
• Can be just as deliberately ignorant as any shipowner in
facing up to problems
• Do not be afraid to ruffle feathers to get a real decision
maker
• They may be in very different positions and one may not
be speaking for all
• Often have difficulty realizing they are not the only ones
in the capital structure
• Often have difficulty understanding that they cannot have
privileged information

8. Suppliers
• If entitled to maritime liens, will attempt to
“jump position” with arrests (which feeds the
frenzy of the trade press!)
• Like unsecured bondholders, also have a
strong vested interest in your survival

9. Charterers/Customers
• Do they have an alternative at same or lower
cost?
• Expect them to use your difficulties to their
advantage

10. Employees
• Bearing the greatest burden
• The best are often the first to go
• Cannot be fooled -- They often know the
problem (and possible solutions) before you
do

11. Media
• Loves bad news and a financial crisis is bad
news (headlines, conflict, drama, cast of
characters)
• Often interested in the “human element” of
the story
• There are differences in financial versus
trade press

12. About MTI Network
• Established in 1989
• The leading crisis media responder for the shipping /
energy industries
• International Network of 17 offices
• Providing 24/7 media response, planning, training
and drills
• Some 7000 ships from 250 companies registered in
service
New York • London • Rotterdam • Oslo • Genoa • Athens • Paris • Singapore • Hong Kong
Sydney • Tokyo • Sao Paulo • Dubai • Barcelona • Cape Town • Montreal

13. Client driven approach to now offer
financial communications
… with a difference
Guiding philosophy that
• financial communications is just as much about “managing expectations” as
“touting what is being sold”
• a structured financial communications program should leverage rather than
consume the time of a company’s executive management
• feedback from financial markets should not drive a company’s business
strategy, but does provide an important feedback loop
requires personnel experienced in:
• shipping
• financial markets
• communications

14. ‘The Leading Global Communications Network
serving the
Shipping, Energy, Offshore and Transportation
Industries’
New York • London • Rotterdam • Oslo • Genoa • Athens • Paris • Singapore • Hong Kong
Sydney • Tokyo • Sao Paulo • Dubai • Barcelona • Cape Town • Montreal