First Ship Lease Trust (FSL Trust) said its sponsor and controlling unitholder FSL Holdings has agreed to extend a secured, interest-bearing bridging loan of up to US$25 million (S$33.9 million) to partially finance the acquisition of two product tankers.
The trust announced in December 2018 the purchase of the tankers by its wholly owned subsidiaries, FSL-28 and FSL-29, for a total of US$97.6 million from shipbuilder Cosco Shipping Heavy Industry (Yangzhou), as part of plans to renew its fleet of vessels. It said then that the tankers are due for delivery in November 2020 and January 2021.
The bridging loan will be available for a period of six months, at an interest rate of Libor plus 4 per cent per annum to be paid in 12-month intervals, or any other agreed period. No interest or commitment fee will be charged on undrawnamounts.
An initial drawdown on the loan of US$10 million was made on Friday. FSL-28 and FSL-29 each received US$4.88 million of this amount for partial payment of the tankers, along with US$120,000 each for working capital.
FSL Trust added that the value of the interested person transaction in relation to the loan represents 1.01 per cent of its latest audited net tangible assets, which is approximately US$173.7 million as at Dec 31, 2017.
Aside from the bridging loan and payment of ship-management fees to affiliate Prime Tanker Management Inc, which amounted to US$170,000 in financial year 2018 and US$42,000 in FY19 to date, there are no other interested person transactions entered into by the group with the lender or its associates for the financial year ended Dec 31, 2018, FSL Trust added.