PEs bring hope of cash but no comfort to O&M overcapacity

A LOT of blame has been piled up on offshore & marine (O&M) industry players for over-investing in capacity building. But industry players have hit back at critics, arguing that over-investment is the consequence of excess liquidity seeking better returns in a low-yield capital market.

In this respect, industry players have argued that the current O&M crisis is not far off from what has gone wrong in conventional shipping. At the Danish Maritime Days conference, one owner - responding to a criticism of over-investment in the container shipping industry - proclaimed that the only way to curb capacity building would be to kill off "all private owners like myself".

He may have veered to the extreme but his remark drew out concerns about how far the cash-tight O&M players can count on the support of private equity (PE) injections to get out of the current rut in the market.