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Russian dry bulk carrier receives EBRD financing
A US$ 43 million (ECU 33.1 million) loan facility from the European Bank for Reconstruction and Development (EBRD) will enable the Sakhalin Shipping Company (SASCO), Russia's third largest dry bulk cargo shipping company, to acquire eight multi-purpose 4,200 dwt ships as part of its fleet modernisation programme.
"SASCO has undertaken a substantial restructuring programme with the help of the EBRD and is now able to expand its services", said Ron Freeman, First Vice President of the EBRD. "The vessels under consideration are currently chartered to SASCO, which is affecting its cash flow situation. In purchasing the vessels, the EBRD's funds will enable the company to reduce significantly its annual interest costs and to improve its cash flow, allowing it to consider the purchase of other vessels as necessary."
The EBRD is lender of record for the loan, US$ 20 million of which has been syndicated to two commercial banks, Société Générale and Banque Paribas (Suisse) S.A. The loan is partially structured on a dual flag basis, under which the vessels, constructed at the Sedef Yard in Turkey, are registered both in the name of a Malta-based SASCO subsidiary, and on the Russian registry, on a "bare-boat" basis in the name of SASCO, to allow them to fly the Russian flag. SASCO is guaranteeing the loan.
Based in Kholmsk, on the south-west coast of Russia's Sakhalin Island, SASCO operates a fleet of approximately 80 vessels trading principally in the Russian Far East and in South East Asia. The company is well placed to take advantage of the continuing economic growth in the Pacific Rim countries as well as the largely underexploited and abundant natural resources in eastern Russia.
As of 30 June 1996, the EBRD has arranged ECU 341 million in financing for Russian shipping companies of which ECU 147 million has been on its own account. For Russian projects overall, the EBRD has financed ECU 1.3 billion for 45 separate transactions.
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