Ignace Van Meenen’s life changed when he got a call from a former boss telling him of an industry in turmoil that needed him.

The business was shipping, and there was one shipowner in Germany prepared to take whatever measures were needed to adapt to the future.

Van Meenen took the hint — handed down by former Deutsche Bank chief executive Jurgen Fitschen — and met Bertram Rickmers, sole shareholder of the Rickmers Group.

That paved the way for a period during which the group has undergone perhaps the most dramatic transformation in its 180-year history.

In what will be its fifth year in October, Rickmers and his new managerial team are steering the Hamburg-based company away from its reliance on traditional German finance towards a brave new world of international investors.

It is a path that looks likely to culminate in an IPO and, if successful, it could provide the blueprint for other German companies. All of which has been made possible by a gut feeling of the Rickmers patriarch — the fifth generation at the company’s helm — that the industry needed to change.

The sixth generation of the family are not actively involved in the operational management, but the overriding reason for importing financial expertise was the extent to which the shipping industry in Germany was being turned on its head.

Rickmers’ desire to glean financial expertise from other industries was fulfilled by taking on 48-year-old Belgian national Van Meenen, who agreed to accept the challenge in 2011 with the support of his Tokyo-born former colleague Mark-Ken Erdmann. The two had worked together more than a decade ago for media group Bertelsmann, which is among Germany’s more financially sophisticated organisations.

Neither had had previous extensive contact with shipping — both came from backgrounds in banking, mining, chemicals, property and management consulting — but they were impressed by the willingness of the German shipowner to open up and transform the company by bringing in financial expertise.

Ignace Van Meenen: ’All we’ve done so far is get to the start of the marathon’

“He realised at a very early stage that the funding situation of the shipping industry would dramatically change after the financial crisis in 2008 and 2009 and that shipping can’t continue as it did in the past,” Erdmann, 42, tells TW+.

“Even if Bertram Rickmers did not anticipate completely how things might develop, he at least felt there was a dramatic change in the industry and that if the company wants to grow, the company must change.”

Taking on outsiders could appear a gamble in a relationship-oriented business like shipping. But Rickmers, who remains chairman of the supervisory board of Rickmers Holding, has stayed around to use his contacts. For much of the early period — and still sometimes today — trips to see leading lights in the industry would be made together. That gave the new pair time to build up contacts while bringing a fresh perspective to the business.

Furthermore, Rickmers took on former NOL chief executive Ron Widdows, the high-profile US liner shipping executive, to run the company and help the two younger men learn the ropes of the shipping business. Widdows stayed until May 2014, when Van Meenen and Erdmann assumed their current roles as chief executive and chief financial officer.

It proved a successful induction. The newcomers immediately felt comfortable, more so than they had in the somewhat intangible media business. “We liked it from the beginning,” says Erdmann.

What appealed most to Van Meenen was “the hardcore asset side of business. I have a better feel for real estate, coal mines, production facilities, steel ships — that’s what I like.”

The duo were left to organise the management team as they saw fit and were charged with growing the company and moving it forward.

The scale of the challenge was obvious, given the financial catastrophe that hit the German ship-financing business in the wake of the financial crisis.

The old German model of KG (limited partnership) financing from retail investors was discredited and obsolete. A new plan had to be forged to make the company more attractive to professional investors.

One way was to clear the slate of the long list of near-insolvent KG-owned vessels. When Van Meenen and Erdmann arrived, Rickmers still had 63 KG-owned ships under management, most of which were ordered in the boom times at levels that made financial nonsense in the new market. Today the number of KG vessels is 14 and falling. It is estimated to have cost Rickmers €40m ($43.8m) to deal with the legacy of its KG-owned fleet.

The captain and officers, a steward and two Chinese boilermen on the Helene Rickmers (built 1889) — the first steamship to sail under the Rickmers flag

Another costly area that needed to be tackled involved restructuring its multipurpose and heavy-lift operation Rickmers-Linie, which over four years had recorded net losses of €60m-€70m. That has been turned around, albeit the company has shrunk from 2.5 million tons of freight to 1.4 million.

“We have put it now in a situation where that segment can be sustainable. It is not going to make a lot of money but it will not lose money,” says Van Meenen.

“That puts you, over a period of time, in a situation where you can talk to partners on projects, on joint ventures, on alliances, on whatever it is. You have a totally different way of how you can manage the business and how you can interact with them.”

More recently, the group’s willingness to break with the past has been apparent in the marking down of the value of the fleet.

About half of an extraordinary impairment of €103m unveiled in results for the first nine months of last year was attributable to 20 panamax and sub-panamax containerships of 3,500-teu to 4,250-teu at Singapore-listed subsidiary Rickmers Maritime, in which Rickmers Group holds a 34.19% stake. The rest reflects the value of the car carrier and multipurpose heavylift fleet. Erdmann points out that the write-down is small in relation to the company’s book value of €2.7bn.

Such moves have not been easy, but the hope is that they deliver credibility as the company tips its hat to outside investors.

“It’s a very painful exercise,” Van Meenen admits, yet he talks of a “financial resetting of where the company needs to be in order to have a sustainable path of growth” as well as “a regional resetting” reflecting the shift of business towards Asia.

The drawn-out process has already borne fruit, with around $1.2bn raised from professional investors, including through the reorganisation of €1.28bn in bank loans completed in February and last year’s issue of a €275m corporate bond and a €57.5m multicurrency note.

The bond has had a tumultuous ride in recent weeks, falling in price by nearly 50% at one stage. Van Meenen attributes investor nervousness to negative press reports on German bonds and the wider economic malaise of the markets but reconfirms Rickmers’ 2015 profit forecasts, which are due to be published on 14 March.

The investors include Apollo Global Management, with which Rickmers operates a joint venture in 12 ships of 1,500-teu to 3,500-teu; and Oaktree Capital Management, for which it manages a series of 5,400-teu ships. In April 2015 Rickmers invested $260m with a sovereign wealth fund in three 9,300-teu vessels.

If things go to plan, that could be the tip of the iceberg.

“We have built a network of strong partners that have a certain view but who leverage upon your ties within the industry,” says Van Meenen.


“That’s not enough for the future. We have to strengthen our own equity and balance sheet, so that we stand on our own feet and move the company forward, so that we can build upon our own cash flow in the future and not build it over the sponsor hubs [financial relationships] which we have right now.

“But we had to go through the first phase in building first a network of solid partnerships on the financial side in order to get there. That’s where we are today.

“All this we have done in order to have multiple options... in a very difficult operational and financial environment for tramp owner or non-operating owner companies.”

Other moves to strengthen its equity position are in the pipeline, including a possible IPO or a private placement. “We are going down that road,” Van Meenen confirms.

It is, however, a long and winding road that may make it difficult for the Rickmers bosses to see around the corner. All signs suggest that they are in for the longer haul and are intent on staying for at least the next five years, which should give them time to see their plans through.

“All we’ve done so far is get to the start of the marathon rather than the end of it,” Van Meenen says. “It’s a self-help story. We’re not banking on others to get the company back into growth. This is something we’ll do ourselves.”


German owners have been picked off since the 2008 Lehman Brothers collapse, Ignace Van Meenen says, losing market share as US-listed companies moved up the ranks of non-operating (charter) owners. “The German non-operating owners were just sitting in the trenches and not moving an inch, because they had no access to capital on the back of their own merits.”

So where is German ship financing heading? “It’s going from a system that provided you with an unbeatable ­competitive cost of capital... to a system where you have to reinvent your cost so capital is competitive again, and the liquidity and sourcing of that is deep enough that you can actually compete in a very capital-intensive business.”