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European Bank signs loan for Estonian ferry company
The European Bank for Reconstruction and Development has signed a loan agreement with the Estline Marine Company Limited, a joint venture company, formed between the state-owned Estonian Shipping Company and the Swedish ferry operator and bulk shipper, Nordstrom & Thulin AB.
The aim of the SEK 240 million loan (ECU 28.3 million equivalent) is to expand the Estline ferry service that runs between Stockholm, Sweden and Tallinn, Estonia by partly financing the acquisition of a 505-cabin vessel. This would replace the existing vessel which has been running at capacity for some time. The new ferry would be able to transport 2000 passengers, 370 vehicles and 52 container trucks per voyage.
Ron Freeman, Vice President for Merchant Banking, said "There are a lot of firsts in this deal: it is the Bank's first transaction in the shipping sector; the first in Estonia's private sector; and the first to be syndicated to a Scandinavian bank (Skandinaviska Enskilda Banken). It is also the fastest deal to date. From start to finish, i.e. disbursement, it took only two and a half months to complete."
Of the project, Mr Freeman commented, "Due to the increase in passenger and cargo traffic between the two countries, which is itself a positive sign for the Estonian economy, the existing ferry service was no longer able to cope. This new boat, which will be staffed mainly by Estonians, will allow for the natural expansion of trade. It will also provide an additional outlet for the growing number of Swedish tourists looking for another holiday destination."
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