Buss Capital Restructures KG Funds in Singapore

Watson, Farley & Williams LLP (“WFW”) has advised three separate Singapore-based partnerships on the restructuring of their container and lease portfolios and USD 1.2 billion of related debt financing in Singapore, to allow the Partnerships to take advantage of Singapore’s Approved Container Investment Enterprise (“ACIE”) scheme, which provides container owners with concessionary tax rates on container leasing and management activities. The Partnerships are owned by German KG funds sponsored by Buss Capital GmbH & Co. KG of Hamburg, Germany.

From 1 April 2008, leasing of containers has been included under the Maritime Finance Incentive (“MFI”) and an ACIE will enjoy either a concessionary tax rate of 5% or 10% on its income from leasing sea containers (by way of operating or finance leases) to onshore and offshore lessees, depending on the level of local business spending and headcount commitments. The management company of an ACIE will also enjoy a 10% concessionary tax rate on its management fee income derived in connection with the management of an ACIE.

Full House in Athens – Part 2

By Kevin Oates

…in the longer term shipping should correct but quality, transparency and financial strength are key to survival.

Despite the tough market and the general lack of ship finance, Marine Money’s Greek Ship Finance Forum again filled the seats in Athens.  With 310 delegates and speakers and some 40 more for the TEN Ltd lunch, there was plenty gossip and exchange of views at the 11th Annual conference held on the 8th of October 2009.

The event had started with a speaker’s dinner the previous night co-hosted by Navios Maritime Holdings and was to end in the early hours of the following morning at the Capital Party co-hosted by Capital Product Partners LP at a well-known Athens nightclub.  Even if the market is tough, we still know how to enjoy ourselves.

Back at the conference, our day began with Guy Verberne, a leading economist at Fortis Bank (Nederland) telling us that the economic recovery has come and it may well be sustainable.  China, he says, has plenty foreign reserves to prolong it’s stimulus package for as long as it needs and he sees no meaningful cutbacks from the stimulus packages of western governments, at least through 2010.  A risk is a double dip in 2011 if we get too bogged down in debt.
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The CSL Group Invests in Indonesian Flag

The CSL Group Inc. (“CSL”) of Montreal, Canada, a world-leading provider of marine dry bulk cargo handling and delivery services, has invested in the Indonesian flagged, floating offshore transshipment platform “FOTP Derawan”, constructed at the Yahua Shipyard in Nantong, China. The vessel will be operating offshore Kalimantan, Indonesia for PT Berau Coal.

This was a complex multi-jurisdictional transaction involving CSL’s international partners and its various subsidiaries. The Singapore office of Watson, Farley & Williams LLP advised on the overall transaction structure, the shareholders’ agreement governing relationships of the relevant entities, the loan and security agreements for the financing of the vessel and the various commercial agreements (including the construction contract and charter arrangements in relation to the vessel), which were necessary for the closing of the transaction. The transaction team consisted of Chris Lowe, Damian Adams and Ivan Chia.

New Project & Structured Finance Partner for Watson, Farley & Williams Singapore

The Singapore office of Watson, Farley & Williams LLP (“WFW”) is pleased to announce that Mehraab Nazir, a structured asset and project finance specialist, has moved from the London office of WFW to join the Singapore office as a partner in its International Project & Structured Finance Group.

Mehraab advises on all aspects of structured asset and project finance related matters particularly with regards to aviation and in the renewables, power and energy space. His recent asset experience includes: advising banks and large corporates on acquisitions and disposals of a number of “big ticket” aircraft and other leasing companies and advising lessors, lessees and manufacturers in relation to cross-border operating lease transactions, as well as advising on debt financing, joint ventures, insolvencies and restructurings. Mehraab’s recent renewable energy experience includes:  acting for a lender on the refinancing of a UK onshore wind farm, advising the lenders on the financing of a European offshore wind farm, advising the prospective purchaser of a UK offshore wind farm and acting for the developer of a portfolio of solar thermal power and photovoltaic plants.

Bumi Armada Completes USD 190 Million Fundraising

Armada Oyo has secured a five-year USD 190 million limited recourse loan facility with a club of seven mandated lead arrangers for an FPSO currently undergoing conversion and owned by its parent Bumi Armada Berhad. The loan will finance around 75% of the project cost, and remarkably was oversubscribed by more than the total project amount. Final commitments came through in springtime, with closure just in August.

SMBC acted as structuring bank, documentation bank and SACE coordinator on behalf of the team of mandated lead arrangers, which in addition to SMBC comprised Banca UBAE S.P.a., Australian and New Zealand Banking Group Limited (ANZ), ABN AMRO Bank N.V., WestLB A.G., Malayan Banking Berhad (Maybank), and Standard Chartered Bank. Watson, Farley & Williams advised Bumi Armada on the legal aspects of the transaction. Continue Reading

Export Finance Money Looks At Newbuildings

New York listed Overseas Shipholding Group has secured a USD 389 million, 12 year secured facility from the government owned Export-Import Bank of China (“China EXIM bank”), in the bank’s first loan facility extended to a US company. The borrowings will be used to finance three VLCCs and two Aframax crude oil tankers built in China.

In another transaction, the Export-Import Bank of Korea (“KEXIM”) has extended a USD 142 million pre and post delivery term loan facility for two new VLCC vessels being built at STX Shipbuilding and Marine Co., Ltd to be chartered to STX Pan Ocean Co., Ltd. The transaction team consisted of partner Chris Lowe and associate Chien Herr Lee of Singapore office of Watson, Farley & Williams LLP. Continue Reading

Watson, Farley & Williams LLP Advises in High Profile KOGAS Project Financing

The Singapore office of Watson, Farley & Williams LLP (“WFW”) advised on the high profile Korea Gas Corporation (“KOGAS”) refinancing for three 1999 built LNG carriers.  The 138,200 cbm built LNG carrier “Hanjin Muscat” is on bareboat charter to Hanjin Shipping Co., Ltd, the 138,100 cbm built LNG carrier “SK Summit” is on bareboat charter to SK Shipping Co., Ltd. and the 135,000 cbm built LNG carrier “Hyundai Technopia” is on bareboat charter to Hyundai Merchant Marine Co., Ltd.  All three LNG carriers are operating under long term contracts of affreightment with KOGAS. Continue Reading

What Happens When the Cash Runs Out?

CONSIDERATIONS FOR CREDITORS & SHIPOWNERS FACED WITH INSOLVENCY1

By Nick Hanna, Watson, Farley & Williams

It is happening all around us: Companies that own ships are staring at poor balance sheets and wondering what to do. For some, they have to restructure their debt positions with their creditors or face the real prospect of insolvency.

The purpose of this article is to provide a general overview of the sometimes tricky path of restructuring and insolvency, bearing in mind the particular nuance about shipping companies, i.e. the vessels they own are themselves exposed to direct “attachment” by certain class of creditors (either by way of contractual security or through in rem actions), who might have little regard for the rules of insolvency.

The article focuses on the rights of creditors to financially stricken shipowners and critical considerations in seeking to obtain payment of creditors’ rights. On the flipside, the article provides some guidance on the rescue and winding up mechanisms available to crippling shipowners and the effect of such options on the pack of creditors with varying abilities to bite onto the assets of the company.

1 OPTIONS AVAILABLE TO CREDITORS
(i) Secured creditors
As one will learn from business experience, the lack of security when dealing with a company that subsequently heads into financial woes can effectively result in an unsecured creditor walking away empty handed. This is because a company is often bamboozled into liquidation by a snowball of a variety of claims: secured, unsecured, preferential, in personam, in rem etc. Secured creditors have the theoretical ability of reaching for their security and grabbing it from the company’s crumbling assets, leaving unsecured creditors at the bottom of the food chain to scrap for any remaining assets on an equal basis. In so far as the realization of the security falls below the claimed amount, such a shortfall will be deemed to be an unsecured credit (and in that respect, the creditor is deemed to be an unsecured creditor). This is particularly relevant in the shipping industry when vessels deemed as security by banks at the time of entering into financial arrangements are no longer as valuable in the market today.

In that regard, banks need to have one eye on the market value of their security whilst maintaining their ability to realise their security at the hint of insolvency to avoid the complications involved in the restructuring and winding-up proceedings, as described below.

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New Finance Associate for Watson, Farley & Williams

Watson, Farley & Williams LLP (“WFW”), a leading international law firm, is pleased to announce the appointment of Stephanie Kwara to the Singapore office as an associate in its International Finance Group.  Prior to joining WFW, Stephanie was with Shook Lin & Bok LLP’s banking team.

Capital Intermodal Sells Capital Intermodal and Xines Fleet of Containers to Textainer Group

The Singapore office of Watson, Farley & Williams LLP (“WFW”) acted for Capital Intermodal Limited and its associated companies (the “Capital Group”) in the sale and transfer of the management rights of Capital Group’s 156,000 twenty-foot equivalent unit of container fleet to Textainer Group Holdings Limited (“Textainer”). The Shipping & Intermodal Investment Management (“SIIM”) team of DVB´s Investment Management division was advising the Capital Group. Continue Reading