Kim & Chang advised on a high-value transaction involving provision of term loan facilities for HMM Co., Ltd. to acquire eight 16,000 TEU container vessels to be built by Hyundai Heavy Industries. The total amount of the contract price for the eight vessels was approximately USD 1 billion. The senior loans covered about 60% of the acquisition costs.
In this transaction, Korea Ocean Business Corporation (“KOBC”) provided a guarantee for the senior lenders. Since it was the first time KOBC provided its guarantee for offshore senior lenders, Kim & Chang, as counsel to KOBC, advised on preparing English versions of KOBC’s standard terms and conditions of guarantee and answering various questions from the senior lenders on KOBC’s guarantee and from KOBC on the offshore lenders’ request which required multidimensional analysis and review of the KOBC guarantee.
Our support was crucial in this transaction because KOBC’s understanding and experience in dealing with ship financing extended by offshore lenders was limited, and the offshore lenders were not familiar with KOBC’s guarantee.
Based on our extensive experience working for and with foreign financial institutions as lenders in ship financing transactions and our expertise in advising quasi-government entities in Korea, we were able to address the questions and concerns of both of KOBC and offshore lenders to facilitate the process regarding KOBC’s guarantee in a manner that was satisfactory to both parties.
Related Topics
#Offshore #Cross-Border Deal #Term Loan Facilities #Senior Loans #Ship Financing