Pacific Radiance gets millions in gov’t-backed loans amid prolonged downturn
Singapore’s offshore support solutions provider, Pacific Radiance, has been granted S$85 million ($61.5M) in loans under two Singapore government-backed financing schemes that will help support its working capital needs over the medium term.
The two programs – the Internationalisation Finance Scheme (IFS) by International Enterprise (IE) Singapore and the Bridging Loan (BL) scheme by Spring Singapore – aim to help local offshore and marine companies gain access to working capital and financing so they can weather the current prolonged industry downturn, Pacific Radiance explained in a statement on Thursday.
Pang Yoke Min, the Executive Chairman of Pacific Radiance, said: “We are pleased to be eligible for the two schemes, which have allowed the group to secure maximum loans of S$85 million. The loan approvals from both the participating banks, DBS and UOB, and government agencies reflect their strong support to help the group overcome the downturn.”
According to the company, the IFS was enhanced in late 2016 to allow O&M companies to borrow up to S$70 million each, instead of S$30 million previously, for project or asset financing needs. For Pacific Radiance, disbursement of the IFS loan will be in stages and is subject to fulfilling of certain disbursement conditions by the group.
Further, under the BL, individual companies can borrow up to S$5 million each, subject to a maximum of S$15 million for each borrower group, and only for a maximum of six years, to finance their operations and bridge short-term cashflow gaps. The government will take on 70% of the risk share for both the IFS and BL loans.
To qualify for IE Singapore’s IFS, local O&M enterprises must fulfill a set of criteria that include having a Singapore-based global headquarters. Also, their operations must have at least three strategic business functions located locally.
As for Spring Singapore’s BL, companies are eligible to apply if they are registered and operating in Singapore with a local shareholding of at least 30%.
Longer-term outlook ‘improved’
On the industry’s prospects, Pang Yoke Min commented: “We believe the longer-term outlook has improved as OPEC and certain non-OPEC producers have sustained oil production cuts until June this year and have also agreed to extend these cuts by another nine months. This concerted effort by oil producers should enable supply and demand to balance in the medium term.
“These positive developments will take time to flow through. Even though vessel utilization and charters rates are bottoming out, market conditions will remain challenging in the near term. To withstand the headwinds ahead, we will continue to refine our cost structure, extend our reach in key markets and work closely with our lenders to manage our working capital and loan repayments to sustain our business for the long term.”