CMES financing 10 VLCCs

2014-07-02

China Merchants Energy Shipping (CMES) announced through a regulatory filing on June 27 that its wholly-owned subsidiary China Merchants Energy had signed a ship financing contract worth $510m with the Export-Import Bank of China (CEXIM).

According to Eworldship, the credit facility will be used in paying 60% of newbuilding price for 10 Very Large Crude Carriers (VLCC), carrying 10-year maturity.

The ship financing agreement was proceeded with collateral of owned ship and the loan will be provided in accordance of payment periods for newbuilding project of 10 VLCCs.

Meanwhile, CMES signed a letter of intent for a loan to pay 10 VLCCs with CEXIM in November 2013 and said official contract would soon be inked.

The Chinese shipping company invested CNY 2.89bn in VLCC newbuildings at the end of 2011 and released a regulatory filing that it would additionally place an order for 10 newbuildings, aiming to acquire 13 VLCCs within three years.

CMES signed a newbuilding agreement for 3+2 VLCCs with CSIC and Shanghai WaigaoqiaoShipbuilding in February 2013. The newbuildings are slated for delivery from December 2014 to the first half of 2015. The newbuilding price is $85m apiece and the shipping company will pay 10% for the first four times and the remainder 60% will be paid upon delivery.

If the four options are all declared within six months, the company will be achieving its VLCC newbuilding project earlier than planned. According to the latest regulatory filing, the project to build 10 VLCCs is going smoothly without any difficulties.

Source from : asiasis

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