Oman Shipping Company obtains $227 million financing for purchase of new tankers

By Finance

The funding covered the purchase of ten 50,000 dwt medium-range tankers, built by Hyundai Heavy Industries of South Korea.

Oman Shipping Company, wholly owned by the Sultanate of Oman, has successfully raised $227 million to finance its purchase of 10 new Medium Range Tankers, which are chartered to Shell Tankers Singapore for seven years.

Societe Generale acted as Sole Arranger and Sole Underwriter for the landmark transaction, which involved a combination of export credit agency (ECA) and commercial financing. Seven of the ten vessels were covered by Korea’s export credit agency, K-SURE.

The funding covered the purchase of ten 50,000 dwt medium-range tankers, built by Hyundai Heavy Industries of South Korea. Societe Generale underwrote the whole transaction on the basis of an innovative structure: for seven of the vessels, a 12-year ECA facility combined with a Tied Commercial Loan. The remaining three vessels were financed under a seven-year mortgage loan. Societe Generale, Crédit Agricole Corporate & Investment Bank, the Korea Development Bank and ABN Amro acted as Mandated Lead Arrangers.

Commenting on the success of the transaction, Tarik Al-Junaidi, Chief Executive Officer of Oman Shipping Company said, “We are very pleased with the successful close of this landmark transaction particularly in the current environment, a testimony to our current strategy and its robustness. Beyond the importance for OSC, this deal perfectly meets our Company’s objectives in terms of diversification of funding sources.”

Sharing similar sentiments, Venugopal Venkatesh, Chief Financial Officer of Oman Shipping Company added, “At the start we set a number of objectives that had to be fulfilled, including finding one single bank able to assist us in raising financing for the acquisition of 10 vessels, raising long-term financing to move towards the asset lifespan, obtaining competitive pricing, diversifying our banking pool and increasing the OSC Group’s visibility within the international banking market. Societe Generale’s commitment to meet all our requirements through an innovative model raised the profile of OSC and attracted liquidity to successfully close this transaction.”

Related news: Oman Shipping Company To Add Ten New MR Tankers

Source: CPI Financial