Cecon ASA ("Cecon" or the "Company") today announces that the company has received a signed loan agreement for a USDm 200 senior secured loan (the "Loan") from Export Development Canada ("EDC") for the financing of the company's three newbuildings under construction at Davie Yards, Inc. ("Davie").
The loan will allow Cecon to draw up to USDm 200 in construction financing prior to delivery of the vessels. Following delivery of the vessels, the loan will be repaid over 12 years.
The loan will be secured by a first priority mortgage on the vessels under construction.
Upon the first drawdown of the loan, Cecon will be able to recover USDm 18.34 in working capital.
Conditions precedent for drawing on the loan are among others, completion of Davie's USDm 20 equity issue, and approval of the proposed changes in the loan agreement for the Company's USDm 100 2nd priority bond loan as communicated in the Company's summons to bondholder meeting dated 22 April 2009.
Cecon has a remaining funding need of up to USDm 80 related to the final instalments on the vessels. The Company is engaged in discussions regarding this funding, and the prospects of securing such financing are viewed as positive.
Cecon's CEO Terje Tellefsen stated: "The signing of the loan agreement is an important milestone for Cecon. The EDC facility ensures the Company's ability to fund all pre-delivery instalments, and with the completion of the equity issue in Davie Yards, we are comfortable with the yard's ability to deliver our newbuildings according to the revised delivery schedule. The support from the Canadian government has been essential to ensure the continued progress of our newbuilding program."
Closing of the loan agreement is expected on or about April 28.