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FESCO raises $90m loan from Sumitomo Mitsui Bank

FESCO raises $90m loan from Sumitomo Mitsui Bank

Moscow: The parent group of Russia third largest ship-owner Far-Eastern Shipping Company (FESCO; which operates 67 vessels of over 900,000 tonnes) has signed a $90m syndicated loan transaction with the UK subsidiary of Sumitomo Mitsui Banking Corporation. The loan, with ING Bank N.V. and HSH Nordbank AG as part of the syndicate, was secured by the guarantee issued by FESCO and will fund the rail arm of the group: Transgarant.

The loan proceeds are to be invested in the acquisition of new rolling stock as part of the group's rail investment program for 2008. In addition, part of the funds will be used to redeem outstanding short-term debt previously raised to finance rolling stock acquisition.

According to FESCO vp and cfo Yury Gilts, "the successful syndication is an evidence of the Group's strong reputation as a reliable borrower, enabling us to efficiently raise debt financing even under the current financial markets turmoil, despite massive reviews of risks and lowering of caps".  [09/10/08]

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