Ship Finance

We represent retail investors seeking equity investment opportunities as well as ship owners seeking joint venture financing.

Expertise

Ship Finance

Our clients are always exploring new and creative alternative methods of financing for their vessel acquisitions. We have helped many shipowners in this region

  • Overview
  • Experience

For many years international banks were the main source of ship finance. This is no longer the case.

Currently, there appears to be a gap in the supply of available capital to the shipping industry, and that has created an opportunity for non-traditional capital sources. Shipping companies are increasingly exploring alternative financing options, and our firm has successfully advised shipowners to apply many alternative financing models to their benefit.

With the client's confidence in our counsel, the firm has also created and successfully implemented new types of finance structures.

Private Sources of ship Finance

The structure of ship finance consists of three layers: (1) senior loan (2) mezzanine finance or junior loan and (3) equity.

We advise shipowners to access funds available from private investors through the use of joint ownership venture, finance lease, or structured financing transactions where investors can take junior and subordinate positions.

Private investors can either participate through equity or lend money directly to shipping companies. We have acted for private investors seeking the opportunity to:

  • equity investment opportunities in the maritime sector.
  • provide debt to the shipping space through fixed income structures.
      • Representing the purchasers of a 70 percent ownership interest in two new vessels financed by a bank group secured loan to be repaid from revenue provided by time charters of the two vessels for use by a Saudi oil producer.

     

      • Providing counsel to a shipping company renegotiating and restructuring a co-ownership joint venture with individual private investors.

     

    • Advising

Three roles of ECA

Related: Direct Investments
Fareya Azfar

Fareya Azfar

PARTNER

f.azfar@fareyaaraoui.com
+971 56 705 8483

Structured Leasing

We have helped our clients’ purchase vessels using leveraged and synthetic leasing arrangements, which allows them to finance the acquisition partly by traditional bank loan, and the remaining sum through long-term finance lease’s initial deposit.

A lease arrangement is one means of financing the acquisition of a vessel. The financier can utilize a bareboat charter party as the vehicle for the loan repayment agreement. We regularly advise shipowners on multiple  structured leveraged finance lease which allows them to finance the acquisition partly by traditional bank loans, and the remaining sum through long-term finance lease initial deposit.

The goal of structuring the ownership of any asset is to protect the value of the asset owners’ equity in it. Structured financing of vessels creates complex ownership interests with many beneficial owners i.e. those who obtain the ultimate, real benefit that comes from owning it.

Joint Venture

Structured joint venture financing includes the lender as an additional investor in the financing of new-builds and purchase of new ships. We have assisted a number of ship owners and retail investors to create unique joint venture structures to acquire vessels.

Limited Partnership

By investing through a partnership rather than directly in issuing firms, investors delegate to the general partners the labor-intensive responsibilities of selecting, structuring, managing and eventually liquidating private equity investments. However, limited partners must be concerned with how effectively the general partners safeguard their interest.