Page 160 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΜΑΙΟΣ 2023
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SHIPPING FINANCE
parties’ recourse in the eventuality of a falling
out. The shareholders’ agreement will provide for
the relevant exit and share transfer provisions as
well as remedies available in the case of an event
of default. In fact, Norton Rose Fulbright’s “Joint
Venture Survey” in 2021, found that “determina-
tion of management and control” and “deadlock
resolution” were the most controversial matters
to be negotiated in the context of JVs.
Secondly, sale and leaseback transactions have
proven to be a popular option with the pool of
lessors increasing over the years. Interestingly,
it seems that recently several companies have
sought to exercise their purchase options under
sale and leaseback transactions previously
entered into, having identified cheaper refi-
nancing opportunities or because of available
equity. However, others are looking to enter into
sale and leaseback transactions as an alterna-
tive to typical bank financing.
For the shipping company (the seller and lessee
in the context of such transactions), from a com-
mercial perspective one might take issue with
In a mature shipping having less flexibility to exit the transaction as
market such as the exercising the purchase option will typically be
Greek shipping market, more expensive (typically the purchase price in
financing opportunities this case will include a prepayment fee). Also,
go well beyond bank debt the documentation and underlying issues may
and while crises may be less familiar so can be more onerous for in
temporarily lead to the house legal teams.
lack of liquidity, they For the financier (buyer and lessor in this case),
also typically lead to a seeing as they are stepping into the shoes of
reshuffling. the owner, there will be a range of issues to
consider and to document which will differ to
those relevant to a typical financing scenario.
For instance, there will be regulatory and tax
matters to consider that may be relevant to
financial leases in the relevant jurisdiction. Also,
seeing as the financier will become the owner
of the vessel, it’s recourse is no longer one of
exercising a ship mortgage and arresting the
vessel. Rather regard will need to be had to the
legal framework for repossessing the vessel in
case of an event of default. The lessor may also
look to obtain financing on the back of the rel-
evant vessel and this will then require tripartite
arrangements between the lessee, the lessor
and its financier.
In conclusion, in our experience, in a mature
shipping market such as the Greek shipping
market, financing opportunities go well beyond
bank debt and while crises may temporarily
lead to the lack of liquidity, they also typically
lead to a reshuffling. Funding gaps are usually
quickly identified by other players and viewed
as an opportunity to enter the market.
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