November 8 - Fairstar Heavy Transport has signed a 'facility agreement' with DNB Nor, ING and HSH Nordbank.
The agreement provides financing to retire the company's current indebtedness with HSH Nordbank and ABN AMRO, fund the final payments due for the construction of the 50,000 dwt semi-submersible vessel Forte, and provide for the issuance of performance bonds required for Fairstar's growing backlog of "Red Box" transportation contracts.
The company stated that the loan terms are based on an eight-year amortisation schedule repaid five years from drawdown. The interest rate is set at LIBOR plus 300 basis points.
Fairstar has also received an irrevocable agreement with more than two thirds of its bondholders in Fairstar's NOK300 million (USD53.49 million) unsecured bond to amend the current bond agreement so that Fairstar is not in breach of any bond loan covenants. ABG Sundal Collier, acting on behalf of Fairstar as the company's financial advisor, delivered written confirmation to Fairstar from Norsk Tillitsmann that two thirds of Fairstar's bondholders had accepted Fairstar's proposal to modify the bond agreement. Norsk Tillitsmann, in its capacity as Bond Trustee will issue a summons to all bondholders to formalise the agreement.
Philip Adkins, CEO of Fairstar, added the following remarks, "In spite of the turbulent credit environment Fairstar has achieved another significant milestone in the establishment of our company. We have secured a new credit facility that provides the financial resources we need to grow. Fairstar is an energy services company and our future is inextricably linked to the development of energy infrastructure projects.
"The Gorgon LNG Project is only the beginning for Fairstar. Australia will become the principal source of stable energy for Asian economic growth for the foreseeable future. Modular construction of the energy infrastructure required to package this energy into transportable bundles, will require a fleet of modern marine heavy transport vessels. The logistical and technical complexity of these multi-billion dollar energy infrastructure projects involves an ongoing interface between the project and the marine heavy transportation sub-contractor.
"Fairstar Heavy Transport has invested its resources in the ships as well as the people required to deliver this valuable service to major energy companies like Chevron. Our strategy has been clear and consistent. We are confident that we will add additional high value, multi-voyage, long term, "Red Box" contracts in the months and years to come. We are well aware of our responsibilities to our stakeholders and are determined to continue to establish Fairstar as the genuine leader of our industry."