Australian shipping company Wellard has secured a ship loan from the Italian bank Intesa Sanpaolo (through the bank’s Hong Kong branch) for the livestock carrier newbuilding recently delivered by Cosco Dalian shipyard.
“The 10-year loan in the amount of $59m is backed by a commercial risk insurance policy from China Export & Credit Insurance Corporation (Sinosure) and shall be funded at commercial rates,” the Fremantle-based company said in a statement. “The loan contains terms and conditions (including financial covenants) standard for such a ship finance and includes a review event if Mauro Balzarini and his related entities cease to hold, either directly or indirectly, at least 19.90% of shares of Wellard of the 36.6% he currently controls”.
As progress payments during vessel construction were largely funded by Wellard through internal cash sources, a substantial portion of the finance now raised will be added to the company’s group liquidity and working capital and available for various corporate activities.
Wellard managing director, Mauro Balzarini, said: “The long-date tenure reduces the amount of principal repayments thus enabling Wellard to use cash generated by the vessel for other general corporate activities. It also boosts our working capital headroom to fund increased livestock trading”.
A few days ago Wellard also announced it has signed an agreement with the Commonwealth Bank of Australia (CBA) to extend the maturity date of its existing $50m facility with CBA from December 2016 to December 2017. “The extended facility enables Wellard to maintain financial flexibility and capture opportunities when sourcing cattle and sheep,” the company said.
