UASC secures Burgan Bank loan for vessel fleet expansion

16 April 2012 (Last Updated April 16th, 2012 18:30)

United Arab Shipping Company (UASC) has received a $150m loan from Burgan Bank to fund its vessel fleet and network expansion plans.

UASC

United Arab Shipping Company (UASC) has received a $150m loan from Burgan Bank to fund its vessel fleet and network expansion plans.

The loan, which includes a seven-year senior term loan facility, will be invested in UASC’s expansions plans in the Asia-Middle East-Europe trade zones and other north-south markets.

UASC will utilise the loan to partly fund the series of nine A13 (13,500 teu) boxships it acquired for $1.5bn, which were booked in June 2008.

Seven of the nine vessels have been put into service since April 2011 and the company is in the process of commissioning the final two.

The vessels are equipped with green technology, such as a waste heat recovery system that transforms exhaust gases to energy, allowing a considerable reduction in the carbon footprint of the company’s vessels.

According to the company, the vessels’ special silicon paint reduces the friction with the water surface thus minimisizing the ship’s fuel consumption.

UASC chief financial and technical officer Basil Al-Zaid said the company has faced the headwinds in the international trade markets and continue to move firmly with the implementation of its expansion plans.

"We will be working closely with local and regional banks to ensure the successful implementation of our financial strategies, and expansion plans, to offer more comprehensive and cost competitive shipping solutions to our customers from around the globe," Al-Zaid said.

UASC was jointly formed between the Kingdom of Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates.

The company’s earlier deals include bilateral loans of $140m and $87m from Gulf Bank in Kuwait, and a $205m syndicated loan with Société Générale and KSure.

A club deal worth $302m with the Export-Import Bank of Korea, BNP Paribas, Industrial and Commercial Bank of China and Ahli United Bank is also a part of the earlier deals by UASC.

Image: UASC will use the loan to partly finance nine A13 model 13,500 teu boxships it acquired for $1.5bn. Photo: UASC