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OSC closes OMR137m term loan deal with bank muscat, BankDhofar
Times News Service
October 07, 2013 , 8 : 51 pm GST
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Out of the total transaction, Bank Muscat’s share is OMR107 million. Bank Dhofar is also a lender in the transaction with a participation of OMR30 million. – Supplied photo
Oman Shipping Company (OSC) yesterday signed an agreement with bank muscat, mandated lead arranger for a OMR137 million financing facility, along with BankDhofar as a participating bank, marking the closure of the long-term financing facility for OSC to acquire four Very Large Ore Carriers (VLOCs).
Oman Shipping Company had mandated bank muscat to arrange the debt financing facility to part-finance the acquisition of four VLOCs, which are the largest dry cargo vessels in the world with 400,000 dwt capacity each.
Dr Ahmed bin Mohammed bin Salim Al Futaisi, minister of transport and communications and deputy chairman of Oman Shipping Company; Tariq bin Mohammed bin Sultan Al Junaidi, acting chief executive of Oman Shipping Company; AbdulRazak Ali Issa, chief executive of bank muscat; and Abdul Hakeem Omar Al Ojaili, acting chief executive of BankDhofar, signed the financing agreement at a ceremony held in Grand Hyatt Muscat.
bank muscat is the mandated lead arranger, security agent and facility agent for the financing facility. Out of the total transaction, bank muscat's share is OMR107 million.
BankDhofar is also a lender in the transaction with a participation of OMR30 million. The financing facility is for a tenor of 12 years to be repaid in semi-annual installments.
Commenting on the agreement, Dr Ahmed bin Mohammed bin Salim al Futaisi said:
"Oman Shipping Company is pleased to sign the financing facility with bank muscat and BankDhofar. Our business relationship with the two leading Omani banks has grown over the years and we look forward to further mutually beneficial deals. The financing agreement comes within the scope of OSC's strategy to broaden relations with local partners to achieve the highest value for the national economy through the provision of shipping services to business partners in and outside the Sultanate."
"The agreement is a clear indication of the availability of viable financing facilities in Oman without the need to depend on external financing for major projects such as the acquisition of VLOCs which will contribute significantly to the growth of the company and implementation of its business plans. We are happy that the partnership with the private sector and cooperation between institutions will strengthen the national economy and benefit the people of Oman," he added.
AbdulRazak Ali Issa said: "bank muscat is proud to successfully close the long-term financing facility for OSC. This is a significant milestone in the long-standing relationship between bank muscat and OSC. Bank muscat is grateful to the Government of Oman and the management of OSC for the confidence in the bank. Bank muscat is focused on playing a prominent supportive role in projects that are of national importance and this association with OSC will further strengthen this approach." The new VLOCs acquired by OSC are chartered to Vale International for 20 years.
In Oman, Vale has iron ore pelletising facilities at Sohar Port with a capacity to handle 9 million tonnes per year for exports to the Indian subcontinent and South Asian countries. Oman Ship Management Company, a subsidiary of OSC, is responsible for the management of the four VLOCs based in Muscat.
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