Russian Oligarch Yachts; Ukrainian Solution

Lloyd's Registry announced over the weekend that it was 'withdrawing' its services from yachts that benefit Russians..

Based on the latest legislative requirements taking effect in the United Kingdom, the European Union and United States, LR has confirmed that it will disengage from the provision of all services to Russian owned, controlled or managed assets or companies.

https://www.lr.org/en/latest-news/lr-withdraws-services-to-russia/

What this means from a practical perspective or how strictly they'll enforce it is unclear. I can't imagine it's going to make life easier for these oligarchs. There are alternative classification services. But, I don't know who many there are outside of the reach of western sanctions that would still be acceptable to insurers...which brings up insurance. How long until these vessels become uninsured?

We’re talking about a group of people who have, well they probably have more money than anyone else does, or has ever had. I don’t think the world even knows how much wealth they really have. So it’s difficult to gauge how these various punitive actions will affect any of them. I don’t think anyone knows what it will take to make their lives unpleasant or if that’s even possible. Not that the civilized world isn’t trying.

I have no sympathy for the Oligarchs but most of them made(stole) their money years ago and moved it and themselves abroad. It is unclear what impact or influence they have in Russia or on Russian affairs. They and the more westernized elites of Moscow and St. Petersburg are widely mistrusted by the majority of Russians living outside those areas. (several writers have drawn the analogy of the mistrust much of middle America feels toward the so called 'liberal elites' of the north east and Pacific coasts). The people we need to worry about are the Sivloviki -literally 'men of force' - colloquially 'hard-asses'. The leader is Nicholai Petrochev a particularly ruthless character. There are about 7 of them in the inner circle plus a few dozen more on the fringes. They are Putin's inner circle, inform his thinking and protect him. Although Putin has made them all wealthy they have kept their money in Russia, They are motivated by ultra nationalism, patriotism and a rather twisted view of Russian history, They believe that Russia is predestined to be a leader amongst nations and has been humiliated. They mean to restore the 'honor' of Russia at any cost. These are dangerous people and they have wide support in Russia outside of Moscow and St. Petersburg. They are ruthless and control the secret police. They hate most of the oligarchs. All of the oligarchs fear them. We should too. These are the guys to watch. By all means seize yachts but do not become distracted.

More RA/Solaris news, as well as S/Y A getting deflagged:

Just a friendly reminded that this thread is for discussion of how the conflict, and subsequent actions by governments & individuals, relates to the industry of yachting, shipyards, etc.

Yes Boss, quite right. It's just that I have a Nazi gun tower parked outside my house, 200 yards away. The Poles and Jews who built it were shipped off to the next island of Alderney.

You can't shade, edit or hide that when you see it everyday. I do.

WAR IS REAL

https://en.wikipedia.org/wiki/Alderney_camps

In a long winded bombastic speech to the Russian people last night Putin turned on the Oligarchs (as expected) suggesting that western sanctions were set up to turn them into a 'fifth column'. "We will spit these traitors out like midges that flew into our mouths" he declared. They live with their villas and their yachts in 'Monaco and Miami' and 'cannot get by without their caviar, oysters and gender freedoms' (there's a combination for you) but their hearts are there 'not here in Russia'. So the Oligarchs now find themselves in the vice many of them feared. Putin went on (and on) about other stuff but it does not directly affect yachts or oligarchs so I'll leave it alone.

"Putin's millions stashed in London to be frozen by UK's new 'kleptocracy' unit"

https://www.mirror.co.uk/news/uk-news/putins-millions-stashed-london-to-26483929?1=

Another article I read on the same subject pointed out that they've estimated Putin's personal net worth at around 200 billion Euros, with a lot of it discreetly distributed among trusted oligarchs. This could also explain the "Putin's yacht" rumor that went around last week... perhaps indeed his, just not technically his.

Has anyone seen any reporting on the yachts that are currently in build that are suffering from 'problematic' ownership? Even the best, most solvent shipbuilders run on exceedingly tight working capital. Imagine being a yard in the middle of a 100M yacht build and suddenly have to stop all work...while the yacht sits in its shed. It doesn't take a CPA to see the potential for catastrophe particularly considering where the world is right now, economically.

I believe Luursen has the greatest exposure in this category.

Lurssen has tremendous exposure, but also can likely handle the most. Bloss+Vohm also traditionally has done a lot of work in that area and Heesen has some exposure plus had a director resign, whether voluntary or encouraged.

I know of at least one boat in drydock at Lurssen where all crew was terminated by the owner. Lurssen then hired a small crew to maintain it and I believe is continuing work. Of course, in that situation they have the financial advantage as the cost of their work is well under the value of the boat. However, new builds are far less safe as the builder could have a more difficult time affording the continued build and recovering the cost depending on how things go.

To my knowledge, Luerssen has presently no newbuilds for ownerships from this country in the pipeline. At least not in the construction phase. But for sure will this situation remove one or the other potential customer for larger yachts from the waiting list. And this waiting list is pretty long. Luerssen refit and repair has definately more problems in this regard.

But Luerssen has orders for several new frigates for the German Navy. I am pretty sure, they will survive . Do not worry, Peter Luerssens piggy bank is nicely filled .

Dilbar has a remaining crew of 5. The Captain, 2 deckhands and 2 engine guys. The are hired and payed by Luerssen in order to prevent damage to the ship. If Dilbar will finally be confiscated, it will take some time to make the confiscation and the auction legally robust. Compared to Russia, Germany is a constitutional state.

Btw. In the meantime Peter L.'s own Yacht could also be renewed.

And by the way B&V is also Luerssen.

This is not directly related to yachting but important so I'll keep it brief.
Putin has finally publicly acknowledged the war in Ukraine calling it a 'Special Operation".
He appeared before 200,000 pumped up supporters in Olympic Stadium and intoned "I commenced this Special Operation on the birthday of (Saint) Fyodor Ushakov (military commander to Catherine the Great) who never lost a battle and who reminded us that his efforts were always for the glory of Russia". "So it was then, so it is now, so it will always be " declared Putin. "I do this for the preservation of Russian values."
Great cheering.
Gee whiz.

On most large yacht contracts, the payment schedule is divided in only 3 or 4, max. 5 steps. By the time the yacht enters the final outfitting, 75 to 85 % is already payed in advance. The only problem is the sometimes strange taste, as far as the internal design is concerned, of those O from R. That can make one of those yachts pretty hard to sell.

Dilbar will be very hard to sell, just because of it' size, may be to the middle east. Solandge will much easier sell, also her interior is a little bit to bombastic.