The world's largest shipping bank, HSH Nordbank AG has entered into an agreement to sell a fleet of ten unprofitable vessels to Greek freight giant Navios Group. With the sale, HSH Nordbank would be able to cut down on its loan risks by nearly US$300 million.
Navios is a Greek shipping company that would be paying US$130 million for 40% of the loans remaining outstanding on the fleet, as well as a guarantee to operate the ten ships for at least six years. The fleet comprises of five ocean going tankers and five seaworthy container ships according to a statement from HSH.
The remaining US$170 million loan would be converted to a participating loan with a period of ten years. For the same period, the German state owned bank based in Hamburg would be receiving 80% of the revenues generated by these ten ships less operating and capital expenditures.
According to the head of HSH's restructuring unit, Wolfgang Topp, in a statement, "The insolvent vessels, or those on the brink of insolvency, are transferred to a highly professional operator that is able to secure an economically feasible operation of the vessels throughout the shipping crisis. There is a significant reduction of risk for the financing bank."
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