Fairstar Heavy Transport inks $247 million one-year loan led by ING

By Susanna Moon

Chicago, May 21 - Fairstar Heavy Transport NV said it signed a $247 million one-year syndicated loan facility led by ING Bank.

Interest on the loan is Libor plus 400 basis points for nine months, stepping up to Libor plus 600 bps after that.

The facility provides the "liquidity to satisfy the outstanding payment obligations to Guangzhou Shipbuilding International due under the construction contracts for the 50,000 DWT semi-submersible vessels Forte and Finesse," according to a company press release.

The facility also provides Fairstar with a $20 million tranche for the performance bonds required under the Gorgon, Ichthys and Golden Eagle contracts, the release noted.

The deal also refinances the company's loans with HSH Nordbank and ABN Amro, according to the company's treasurer Ingmar den Blanken.

"The banks will hold first mortgages over the Fairstar fleet once funding has been made. While the terms are not nearly as attractive as the DNB Bank facility we signed last year, in light of the recent disruption to our business caused by Dockwise, we are pleased to be able to satisfy our obligations to GSI as well as our obligations to our 'red box' clients," den Blanken noted in the release.

Chief executive officer Philip Adkins added, "We were very clear to the market last week that the payments we are obliged to make will be made and the performance bonds we are obliged to issue will be issued. At Fairstar, we keep our promises ... It is clear to the market that Dockwise has been trying to talk down the value of our business in order to acquire it at the cheapest possible price. Their most recent tactic was to suggest in their stock exchange release that Fairstar was unable to honor our financial commitments."

Fairstar Heavy Transport is a Rotterdam, Netherlands-based provider of long-distance ocean transportation services for the offshore and onshore industries.

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