Havila Kystruten signs term sheet for three-year €305 million facility

By Marisa Wong

Los Angeles, July 5 – Havila Kystruten AS signed on Wednesday a term sheet with a large global private credit fund for a three-year €305 million facility to cover the refinancing of all four of its vessels, according to a press release.

The facility carries a cash interest of Euribor plus 600 basis points and PIK interest of 3.5%. Subject to reaching certain financial milestones, the total interest may be reduced to Euribor plus 775 bps.

The facility will amortize with €50 million at a price of 107 after 15 months with a guaranteed settlement by Havila Holding AS, the company’s largest shareholder owning 60.42%, through the issuance of a new unsecured debt instrument. The remaining amount matures after three years at a price of 106.

The debt facility remains subject to, among other things, credit approval and final documentation, as well as the extension of the settlement date for the company’s existing debt by the U.K. court, which the company has applied for, and necessary consequential and logical updates to the licenses already granted to the company.

Together with the debt financing, the company will be seeking to raise €85 million of new capital in order to be fully funded for its refinancing and delivery of the remaining vessels from the yard.

The company said it is discussing with prospective investors to meet this remaining financing requirement, namely the possibility to raise capital through an equity placement. Havila Holding will contribute a significant part of such an amount.

The overall financing solution secures an LTV below 60% and positions the vompany well for the next coming years, the release noted.

As soon as all formalities are in place, the company will take delivery of the two remaining vessels at Tersan Shipyard. As a result, the company can say that Havila Pollux will start operations from Bergen on Aug. 12 and Havila Polaris on Aug. 17.

Arctic Securities AS, Fearnley Securities AS and Nordea Bank Abp, filial i Norge are acting as managers for the proposed refinancing.

Prior announcement

On June 27 the company announced it had received a term sheet from an institutional investor for a private debt solution that it considered more attractive than the terms of its previously proposed bond issue.

Additional institutional investors communicated that they were contemplating providing terms for a similar private bilateral debt solution. The company said, as a result, it would pursue that alternative track and engage with said parties.

In the week before that announcement, the company had announced plans to sell, through subsidiary Havila Kystruten Operations AS, €325 million of three-year senior secured first-lien bonds, as reported.

Havila Kystruten originally announced on May 31 that it was contemplating a €390 million bond sale.

After communicating with potential investors, the company revealed a revised refinancing plan, which included €325 million of bonds and a roughly €65 million private placement of stock.

An extraordinary general meeting had been summoned to resolve the equity private placement. On June 27, the company said the meeting would held as planned, but because the debt instrument differs from the originally proposed bond structure, the subscribers in the equity private placement would be asked to reconfirm their orders at a later stage.

Wikborg Rein Advokatfirma AS and Advokatfirmaet Thommessen AS are acting as legal counsel to the company and the managers, respectively.

As noted before, proceeds will be used to refinance all group debt and fund the final yard installment of Havila Polaris and Havila Pollux.

Havila Kystruten is a Fosnavag, Norway-based shipping company.

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