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CSAV Signs $347 Million Loan Deal To Help Buy Ships

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October 1, 2013

reuters_logo1SANTIAGO, Oct 1 (Reuters) – Chilean shipper Compania Sud Americana de Vapores said on Tuesday it agreed with a consortium of banks to take on $347 million in loans to help pay for the purchase of seven new ships.

Vapores, one of the oldest shipping firms in the world, plans to pay for 60 percent of the purchase with the bank loans and the remainder with $330 million in proceeds from its recent equity financing.

The bank consortium was composed of The Export-Import Bank of Korea, Korea Exchange Bank, Korea Development Bank , Banco Santander-Chile, Citibank N.A., and Deutsche Bank A.G.

In April, Vapores said it wanted to raise $500 million via a share offering to boost the company’s fleet, repay debt and advance development plans.. But with a falling share price and weakening Chilean peso, it fell short of its goal.

In recent years, Vapores has faced steep losses as it grapples with lower shipping rates, high fuel prices and expensive leases.

Under the stewardship of the Luksic family, Chile’s richest, Vapores spun off its SAAM storage and logistics unit in 2012 as part of a plan to reverse those losses.

The Luksic family became Vapores’ majority shareholders in early 2012 when the company completed a $1.2 billion capital increase.

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