A bird's-eye view of ships along the coast in Singapore July 9, 2017. REUTERS/Jorge Silva
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Dutch shipowner Vroon is finding talks with banks tough going as it tries to navigate a way out of a long slump in the shipping industry.But European banks that lent heavily to the sector when it boomed over a decade ago have a heavy toxic debt burden following the 2008-09 global financial crisis and a shipping markets crash in 2010 .This left European banks with a debt burden of more than $100 billion and the value of at least 70 percent of those loans has fallen, according to industry estimates.By the end of the first quarter of 2017, HSH had 9.9 billion euros in its so-called "bad bank" that it is running down, and the remaining 6.7 billion euros in its core bank."The losses were clocking up without them [the banks] seeing it," Lunde said.With the shipping industry still struggling, the banks' prospects for off-loading their toxic debts are challenging. Attempts by HSH to sell a 500 million euro segment of shipping loans, as part of a 3.2 billion euro portfolio sale that included other assets, proved unsuccessful because the debt was deemed toxic and attracted offers the bank considered too low, shipping finance sources said.
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