South Korean shipping company Hyundai Merchant Marine (HMM) has secured USD 420 million to finance the construction of five very large crude carriers (VLCC).
The funding has been provided via the financing fund worth KRW 2.6 trillion (USD 2.28 billion), which the South Korean government announced in October 2016 to help the country’s shipping industry.
Under the terms of the deal, KDB, Citibank, Bank of America Merill Lynch, and Standard Chartered Bank will invest in senior secured debts which are run by Korea Trade Insurance Corp., while Export-Import Bank of Korea and Korea Asset Management Corp. will invest in junior debts. HMM will also participate in the financing by securing USD 4.2 million by investing in junior loans.
The 300,000 dwt crude carriers have already been ordered from the compatriot shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME). Two VLCCs from the batch have secured work with oil refiner GS Caltex.
The USD 177 million contract, signed in February, will see HMM transport a total of 19 million tons of crude oil from the Middle East to South Korea over a period of five years, starting in July, 2019.
The shipbuilding deal with DSME included an option for five additional VLCCs, however, HMM decided not go through with the additional order earlier this month.
World Maritime News Staff