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Executive director, Kevin Wong, expects LNG demand to be strong, and believes that Berlian Laju will benefit from its first mover advantage as the first Indonesian shipping company with FPSOs / FSO vessels. File photo by Sim Kih

LEADING CHEMICAL TANKER player Berlian Laju Tanker has secured US$685 million of financing commitment from 6 banks, the largest credit facility ever extended to an Indonesian company.

Secured by 40 existing vessels and 3 vessels under construction, the loan will reduce its principal installment burden two-thirds during the first year the loan is granted.

Within 3 years, the chemical tanker can reduce its debt installments by US$166.9 million.

Berlian Laju has US$2.27 billion of bonds and loans maturing before the end of 2017, and its Indonesia loans and bonds will not covered by the US$685 million facility.

The latest financial deal will improve its interest coverage ratio to 1.3X (up from 1.05X).

However, finance cost will increase by 1%.

Unlike in previous debt covenants, this loan facility allows its interest coverage ratio to dip below one as long as it holds cash reserves of US$75 million or more.

Loan proceeds from the financing deal will be to used to prepay 10 existing loan facilities with outstanding amount of US$593 million and fund all its remaining payments due on the 3 vessels under construction.

This is expected to significantly increase BLT's liquidity and gearing.

The loan will also fund 81% of BLT's capital requirements for its new buildings this year, said executive director Kevin Wong at a media luncheon today.

The chemical tanker shipper is expecting to take delivery of 4 new vessels this year.

The bank consortium comprises of DnB NOR, Nordea Bank, Standard Chartered, ING, NIBC and BNP Paribas.


Related story: RENEWABLE ENERGY ASIA, DRY BULK SHIPPING, BERLIAN LAJU: What Analysts Now Say...

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