Transparent process for those in good financial health

Clearly, for those terminals seeking financing, now is the time to do it.

José Luis Alabau, managing director of Valencia-based TCV Stevedoring, believes that terminals today tend not to acquire equipment outright. In TCV’s case, for example, 99% of major purchases are done through leases arranged with specialist providers.

“There is a lot of competition among financial institutions to offer financially sound terminals such as TCV leasing deals. But to get the very best ones, terminals do have to be able to demonstrate that they are in good financial and operational health,” he says.

Is it a case of the larger the purchase, the better the rates? Mr Alabau says it is not. Financiers are more likely to link attractive rates to the perceived solvency of the company making the purchase.

“It’s all a highly transparent process and there are no hidden costs to be taken into consideration,” he says.

Ports of Auckland (POAL) rarely makes use of leases to acquire equipment. A spokesperson told Port Strategy: “The port prefers to either use a consortium of banks to fund equipment purchases, or acquire finance from its shareholder.”

As for interest rates, the port views current levels as being “reasonable”, so equipment funding remains accessible. However, New Zealand has seen several established finance companies forced out of the market, resulting in less choice available for purchasers.