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Christopher Lowe has left three fee earners and three support staff in Copenhagen. The move comes a year after the closure of the firm's Oslo office.
Watson Farley advises the Danish ship credit fund, Danmarks Skibskreditfond, which provides financing for export credit. Sources have suggested the firm's on-the-ground presence is key to winning and retaining the work of the government-backed body.
The Danish ship financing market has been hard hit by the economic crises in the Far East and Eastern Europe which has resulted in fierce competition over freight rates and the closure of shipyards.
The European Commission has launched an inquiry into shipping competition and Danish regulatory law has been amended to make it possible to syndicate shipping loans and spread the risk.
Watson Farley's financial director Michael Reid says the firm has yet to decide who will replace Lowe as head of its Copenhagen office, which does not practise Danish law.
But Reid insists the partnership has made no decision to close its Danish office, and that the firm is committed to maintaining a local presence.