articles: Michael Simms

Baltic Exchange sale – tax implications

It was announced in August that Singapore Exchange Ltd (SGX) had made an offer to purchase the entire share capital of The Baltic Exchange Limited (Baltic Exchange). This became effective on 8 November and payments are expected to be despatched to shareholders by 18 November. We have summarised the main issues to consider from a tax perspective below. We have also prepared a more detailed factsheet, which can be accessed here.

Shipping must improve risk management

Not enough companies in the shipping industry are following joined-up risk management procedures.

Our second annual Shipping Risk Survey revealed a fall, when compared to last year, in the overall level of satisfaction on the part of respondents that sound risk management had contributed to the success of their organisations. The involvement of senior management in managing risk at the highest level also declined against last year.

What the Budget 2016 means for the energy, mining & renewables sector

The Budget contained a number of surprise developments that are likely to be of interest to the energy, mining and renewables sector. These include a radical set of measures which are intended to assist the offshore oil and gas sector, and some significant business energy tax reforms.

However, there were also wider changes to the taxation of large corporates that will affect many sectors.

Implications of new US lease accounting standard for shipping & offshore maritime sectors

The Financial Accounting Standards Board (FASB) in the United States has issued a lease accounting standard update following the release in January 2016 of an International Financial Reporting Standard (IFRS) dealing with the same subject. Although it had been expected that the FASB and IFRS standards would be identical, there are instead now two standards which, although similar in many respects, contain significant differences. The shipping and offshore maritime sectors will need to assess the effect of these changes on their balance sheets.

Keeping control of the wheel during tough financial times

As shipping companies and the offshore oil services industry feel an increasing financial squeeze, management teams need to take proactive action to keep control of their future.

The offshore oil services industry, for example, has been under pressure since the collapse in the oil price, enduring low charter rates. That pressure will only increase following Iran’s agreement to curb its nuclear programme in return for the removal of sanctions. Crude oil from Iran is not expected to flow freely for several months, but when it does the offshore industry will face even greater challenges in meeting existing debt obligations and conserving cash. Offshore oil services companies would be well advised to take a close look at the options available to them before creditors start taking action for themselves.