The Shipbuilding Financing Method Under The Circumstance Of Tough Shipping

The characteristics of tough shipping industry are subject to continued financial crisis, bad economy and trade and shipbuilding cost increase and prices decrease. Based on these, the imbalance of supply and demand is obvious in shipping companies, as well as the low freight rates and operating loss, which restrict the sustainable development and shipbuilding financing modes. However, the shipping companies’ ability of shipbulidng is restricted by shipping market downturn and uncertain condition. This paper shows the shipbuilding finance strategy for shipping enterprises, which turns out to be challenge and an opportunity. The key decision analyses are about enterprise’s risk and cost accounting. Therefore, this paper mainly researches the shipbuilding financing methods.The content of this paper is divided into four parts. Firstly, the paper analyzes the present situation and development of shipping and shipbuilding industry, points out some characteristics of shipping downturn, and summarizes the concept and the development of shipbuilding financing; Secondly, the paper comparatively studies the main financing modes of shipbuilding finance, shows out the choice of shipping and feasible financing modes, and discusses the low period of new financing methods (such as mezzanine financing, ship trust); Thirdly, the paper discusses two aspects of enterprise system and financial risks, by means of ERM (Enterprise Risk Management) and cost accounting methods. Fourthly, the paper applies the selected shipbuilding finance modes to specific case analysis.This paper helps to provide empirical research for financing and subsequent research. For investors, shipping and shipbuilding enterprises, they may as well consider their own and market situation, choose and modify shipbuilding financing, so as to take decisions to reduce or avoid risk and loss, qualitatively and quantitatively.