UK Bank Begins Lending to India and Italy

by Paul Richardson

The Royal Bank of Scotland (RBS), generally regarded as one of the largest independent lenders toward newbuilding and secondhand shipping acquisitions, is cautiously breaking into the shipowning communities of India and Italy. Currently, Greek shipowners comprise the lion’s share of the bank’s shipping business. Up to 70-75% of the Bank’s entire portfolio involves the London-based Greeks, Rex Harrington, RBS’s director of shipping, said. And the majority of RBS newbuilding projects have been agreed in London.

But RBS is constantly looking for new financing business, and is dedicated to expanding on its Greek success. Through extended negotiations and talks with partly-privatized Indian shipowner, the Shipping Corporation of India (SCI), a financing deal worth US$52m has been put together for the purchase of a new 140,000 dwt Aframax tanker just completed at the Samsung Shipyard on Koje Island. The order to build the vessel was placed January 1993, and was one of four sisterships booked at Samsung and Hyundai for SCI. It is understood that RBS financing for the other three vessels is also being discussed at this stage.

Says Harrington on the deal, “We have been interested in expanding on the Greek market for some considerable time; and we looked at the SCI in detail as a beginning. The company is substantially government-owned, although it is in the process of being privatized. The balances were strong and the potential was there. It took many months of hard talking to firm up the deal, but we did and it has opened the door on other projects.” Harrington continues, “India is a new market for us, but we expect the possibilities of more deals being put together in the future.”

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