Fairstar Heavy Transport Takes Fleet Finance Loan
Fairstar Heavy Transport N.V. (FAIR) has signed a USD 247 million syndicated loan facility led by ING Bank. The facility provides the necessary liquidity to satisfy the outstanding payment obligations to Guangzhou Shipbuilding International (GSI) due under the construction contracts for the 50,000 DWT semi-submersible vessels FORTE and FINESSE. In addition, the facility provides Fairstar with a USD 20 million tranche for the performance bonds required under the Gorgon, Ichthys and Golden Eagle contracts.
Ingmar den Blanken, Treasurer of Fairstar negotiated the deal with the banks and provided the following additional details, “The facility has a one year term and is priced for the first nine months at LIBOR plus 400 basis points, rising to LIBOR plus 600 basis points after nine months.
In addition to providing the funds we need to pay our obligations for the FORTE and FINESSE, it re-finances the current loans we have with HSH Nordbank and ABN AMRO. The banks will hold first mortgages over the Fairstar fleet once funding has been made. While the terms are not nearly as attractive as the DNB Bank facility we signed last year, in light of the recent disruption to our business caused by Dockwise, we are pleased to be able to satisfy our obligations to GSI as well as our obligations to our “red box” clients.”
Philip Adkins, Chief Executive Officer of Fairstar provided further elaboration: “We were very clear to the market last week that the payments we are obliged to make will be made and the performance bonds we are obliged to issue will be issued. At Fairstar, we keep our promises. Fairstar is a very valuable company. ... I am certain our clients knew what they were doing when they chose to award almost USD 300 million in contracts to Fairstar. The Fairstar Boards are preparing a formal rebuttal to the Offer Document that is now in circulation. In the meantime our invitation for a constructive dialog goes unanswered.”