Sinoceanic II fail to fully finance the purchase of MSC Altair

Sinoceanic II AS, a fully owned subsidiary of SinOceanic Shipping ASA (Sino) recently successfully raised a bond of USD 100 million in the international capital markets, to part finance the purchase of MSC Altair, a 13.100TEU container vessel scheduled for delivery on March 1st, 2012.

To complete the financing of MSC Altair, Sinoceanic II planned to raise USD 61 million as a second priority secured loan with support from Oceanus International Investments AS(Oceanus), a company ultimately owned by HNA Group Limited, China (HNA), and/or related or unrelated companies (ref Sino 4th Q report)

Sino has not yet been able to arrange such second priority secured loan, and has consequently informed the Sellers that it cannot take delivery of MSC Altair this week.

Following this, Sinoceanic II has today entered into an option agreement with the Sellers of MSC Altair enabling Sinoceanic II to purchase the vessel at anytime during the month of March 2012 at the original purchase price. SinOceanic II plans to continue the effort to raise the required second priority debt financing to complete the acquisition of MSC Altair in the near future, either with the support of Oceanus (HNA) and/or other sources

The additional cost caused by a delayed delivery of MSC Altair will be limited to interest payable to the bondholders at 10pct pr annum (usd 27.400 pr day), and certain bank expenses. The total additional cost will in any case most probably be below USD 2 million. HNA has agreed to cover this expense limited up to usd 2 million and without recourse to Sino.

Sinoceanic III AS, another single purpose company owned by Sino, has previously entered into an agreement to purchase MSC Regulus, a sister vessel of MSC Altair. This vessel is scheduled to be delivered by end April 2012. Efforts are continuing to arrange financing also for this vessel irrespective of the outcome of the MSC Altair transaction.

SinOceanic Shipping ASA press release