Stena comes to Concordia Maritime’s rescue
Having been faced with financial headwinds, Swedish tanker shipping company Concordia Maritime will now receive a helping hand from its parent company Stena.
As informed, Concordia Maritime AB has agreed upon a conditional agreement with Stena Bulk AB on a time charter of all of the company’s ten P-MAX product tankers.
Concordia and some of its lending banks have also agreed upon a conditional term sheet concerning new terms and conditions for the loan that will apply until the current loan, originally amounting to $114 million, matures in the fourth quarter of 2024.
In addition, the company has agreed upon a conditional guarantee contract whereby Stena Sessan AB guarantees to pay up to $10 million to the banks on behalf of Concordia under certain circumstances.
As stated in the interim report for the first quarter of 2021, Concordia Maritime has experienced financial difficulties due to the weak tanker market during the past six years. The term sheet, the time charter and the guarantee mean that Concordia’s imminent lack of liquidity is handled.
Specifically, the time charter ensures a stable income for the coming five years. Furthermore, it gives Concordia a possibility to profit from an, as previously stated, expected improved market through the profit-sharing mechanism under the time charter. What is more, Concordia has the right during the charter period to divest the entire fleet or parts thereof, without any fees, which ensures the company’s ability to take advantage of a stronger market.
“It is the aim of the company to divest vessels once the market has improved in order to improve the liquidity and the freedom of action for the company,” Concordia Maritime said.
Concordia and the banks are expected to enter into binding agreements on the new terms and conditions of the financing in August 2021.
Apart from the ten P-MAX product tankers, Concordia Maritime’s fleet also comprises two IMOIIMAX chemical and product tankers, one Suezmax unit and four Suezmaxes chartered in on short-term contracts.