Philly Shipyard Secures Commitment for a USD 150 Million Construction Loan Facility from Cat Financial

  • December 30, 2015

Philly Shipyard, Inc. (PSINC), the sole operating subsidiary of Philly Shipyard ASA (Oslo: PHLY), announced today that it has signed a commitment letter with Caterpillar Financial Services Corporation (Cat Financial) for a USD 150 million loan facility to finance the construction of four next generation 50,000 dwt product tankers, designated as Hulls 025-028. 

The facility will be subject to a maximum borrowing amount of USD 75 million per vessel and secured by a first lien on the four vessels. The loans will accrue interest at three-month LIBOR plus 3.00% as defined in the commitment letter.

The company expects to enter into definitive agreements for this facility in Q1 2016.  This facility will be a continuation of the extensive cooperation between Philly Shipyard and Cat Financial that will include a total of 26 vessels, including both product tankers and containerships, and span a period of 15 years when Hull 028 is delivered.

All four vessels to be financed by this facility are currently under contract with Philly Tankers LLC.  As previously announced by PHLY, the shipbuilding contract for each of these vessels will be assigned at delivery by Philly Tankers LLC to a subsidiary of Kinder Morgan, Inc.

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About Philly Shipyard:

Philly Shipyard is a leading U.S. commercial shipyard constructing vessels for operation in the Jones Act market.  It possesses a state-of-the-art shipbuilding facility and has earned a reputation as the preferred provider of oceangoing merchant vessels with a track record of delivering quality ships. Philly  Shipyard is listed on the Oslo Stock Exchange and is majority-owned by Converto Capital Fund, which in turn is majority-owned by Aker ASA. Aker is a Norwegian industrial investment company that creates value through active ownership.  Aker's investment portfolio is concentrated on key Norwegian industries that are international in scope: oil and gas, fisheries and biotechnology, and marine assets. Aker's industrial holdings comprise ownership interests in Aker Solutions, Kvaerner, Det norske oljeselskap, Aker BioMarine, Ocean Yield, Havfisk and Akastor.