Singapore-listed offshore services provider Otto Marine has secured a USD26 million term-loan agreement with a US investment firm for the refinancing of multipurpose cargo vessel Surf Challenger and general working capital.
The loan agreement was sealed by Surf Subsea, a company incorporated in the United States, of which Otto Marine owned 19.2% stake indirectly through the its wholly owned subsidiary Surf Subsea Private Limited, incorporated in Singapore.
Under the loan facility, first priority will be given to the mortgage of the vessel and the balance of the fund will be used as corporate guarantee for the general working capital.
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The loan facility is linked to Otto Marine non-executive and non-independent director Craig Foster Pickett, who is also the president of the US investment firm that had lent money to Otto Marine. Other directors in Otto Marine do not have any interests, direct or indirect, in the transaction.
However, the loan conditions will be breached if one of Otto Marine’s controlling shareholders, Yaw Chee Siew, who holds 61.2% stake in Otto Marine as of 3 July, reduces his stake to less than 51%. The aggregate level of the company’s other credit facilities that may be affected by a breach of this condition is USD333 million.