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Funding agreed for Samsung consortium to build new Brazilian mega-yard

Funding agreed for Samsung consortium to build new Brazilian mega-yard

Rio de Janeiro: Samsung Heavy Industies is part of the Atlantico Sul (AS) consortium which this week received news it is to receive Reais 542m ($248m) from the Brazilian National Development Bank (BNDES) to build a new shipyard capable of constructing tankers up to VLCC size.

The BNDES has confirmed this week it will hand over the cash to the AS shipyard in Suape, after several months of delays and suppliers waiting for payments. Around Reais 290m of that money will reportedly be in AS's hands "before another week is over", thereby staving off a revolt from yard suppliers.

The 'soft loan' from the BNDES will go towards the Reais 1.4bn total investment made by the AS consortium - which includes Carmargo Correa. Queiroz Galvao, PJMR group and Samsung - in building the new state-of-the-art yard, and it is in addition to the Reais 513m loaned to AS last year.

However,  Rio-based newspaper last week claimed that suppliers to AS had been waiting "months" for payments, while the BNDES hesitated to release the funds.

Once it secured the $1.2bn contract for 10 Suezmaxes from state-controlled tanker company Transpetro, AS last year increased its investment in its Pernambuco yard from $600m to $1.2bn to double its size (from 80 to 162ha). It then secured further orders, including five Aframaxes (worth $516m) from Transpetro and two VLCCs from Noroil (for $424m) and is currently sitting on an orderbook worth close to $3bn.

Samsung was originally taken on as a technical and project adviser to the SA consortium but became a full partner in June of last year. [01/05/09]