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US$ 225 million syndication completed for Russian shipping company to purchase new Croatian vessels
A US$ 225 million (ECU 187.5 million) loan facility has been arranged for Russia's largest tanker operator, Novorossiysk Shipping Company (Novoship), by the European Bank for Reconstruction and Development (EBRD), ABN AMRO Bank N.V. and MeesPierson N.V., which acted as joint arrangers.
Novoship is the first private Russian shipowner to come to the market to seek this level of funds without a state guarantee. Interest in the transaction was very strong. The syndication, in particular, included banks with specialist ship finance expertise and for the majority this was their first financing in the Russian market. The facility was substantially oversubscribed but was not increased.
The EBRD is lender of record for the facility which is structured on an A/B basis. The loan was signed on 15 December 1995 with the EBRD taking US$ 60 million for its own account (A loan) and the US$ 165 million B loan being fully underwritten by ABN AMRO and MeesPierson. A syndicate of 12 additional banks (representing six countries) subscribed to the B loan and the participation agreement for the completed syndication was signed on 31 January 1996.
In addition to EBRD, ABN AMRO and MeesPierson, banks providing funds are: Banque Indosuez, Banque Nationale de Paris, Credit Lyonnais, DNI Inter Asset Bank, Industri & Skipsbanken AS, Long-Term Credit Bank of Japan, The Royal Bank of Scotland, Societe Generale, Westland/Utrecht Hypotheekbank, Finance Company Viking, KB Financial Services (Ireland) and WestLB Group.
The loan proceeds will be used to provide partial post-delivery finance of 11 new 40,000 dwt product tankers, currently being built at four Croatian yards: Trogir (Trogir), 3 May (Rijeka), Split (Split) and Uljanik (Pula). The vessels are scheduled for delivery in 1996 and will be registered under the Liberian flag.
In terms of carrying capacity-tonnage and volume of trade, Novoship is the largest tanker shipping company in Russia and seventh in the world. As a specialist tanker and oil/bulk/ore carrier operator it currently has a fleet of over 90 vessels which operate almost exclusively on international trades. The new vessels form part of Novoship's fleet modernisation and replacement programme.
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