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 MARINE SURVEYS & APPRAISAL CONDITION SURVEY REPORTS

 

                                                                                        "You can observe a lot by just watching"                                                                                                                                                                    Yogi Berra

Typically, vessel valuations are prepared on the assumption that the underlying asset (ship) is in average physical condition and with a fair survey position in respect to drydocking; such, so-called ‘desktop valuations’, can be obtained from shipbrokers worldwide. As convenient and expedient such ship valuations may be, for shipping loan documentation and other investments, clearly they introduce a lot of uncertainty and assumptions that potentially may expose principals to liability claims and  failing proper due diligence practices.

 

Ideally, vessel valuation reports and vessel appraisal reports should be accompanied by a concurrent physical inspection of the marine asset, undertaken by a qualified marine surveyor in order to inspect the marine asset and prepare a marine condition survey report.  A marine condition survey report (also known as valuation condition survey report, if its exclusive use is for appraisal purposes) includes a thorough description and condition of the marine asset upon inspection, physical access to every part of the vessel including bridge, engine and cargo holds, sighting of original certificates and documents onboard, assessment of general condition of the marine asset in its entirety, and assessment of good seamanship practices onboard the vessel by the crew and the vessel’s managers. A condition survey report also includes hundreds of images and other documentary evidence.  The preparation of the condition survey report eliminates a great deal of the assumptions associated with a ‘desktop valuation’ and allows for the financiers and creditors to obtain a current and objective assessment of their collateral at the time of originating a transaction; further to it, a condition survey report upon origination can serve as a baseline for the vessel’s maintenance by the managers during the term of the financing, and can be used to hold parties accountable, if need be.  Records of annual or periodic condition survey reports can accompany the sale of the equity or debt (shipping loans) in the future, and likely would lead to better pricing.  

 

Vessel valuations may be prepared by qualified individuals (marine appraisers) or valuation firms.  Marine condition survey reports can be prepared by qualified individuals (marine surveyors) or marine surveying firms.  Most likely, marine appraisers are not qualified in marine surveying, and vice versa. Certain valuation firms and surveying firms employ individuals qualified and certified in either field in order to provide their clients with full-service, turn-key solutions.

 

Basil M Karatzas is both a qualified marine appraiser and a qualified marine surveyor, holding the

 

A representative sample of vessel appraisal and marine condition survey reports that were prepared in the last year includes:

  • Modern Diving Support Vessel (DP2)

  • Offshore Supply Vessel (Jones Act)

  • Remotely Operated Vessel (ROVs) (work submarines tethered to offshore assets)

  • Cement Carrier (National flag)

  • Great Lakes Vessel (Canadian flag)

  • Self-discharge Bulk Carrier (National flag)

  • Aframax Tanker (International flag)

Further, Karatzas Marine Advisors, via its professional network worldwide and access to NAMS and ASA databases, can provide vessel valuations and marine survey services worldwide, on short notice, and with any marine asset class, including semi-submersibles, drill-ships, inland, tugs, barges, and fishing vessels.  The firm can provide marine survey reports, marine condition reports, marine valuation and appraisal reports, marine damage reports and per-purchase inspection reports.