Royal Caribbean seeks additional financing from Finland for ship deals

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Royal Caribbean Cruise Line (RCCL) is dealing with considerable financial problems over the financing of two large ships that are being built in Finland.
      Last week RCCL wrote in a report to the United States Securities and Exchange Commission that it wants a higher guarantee percentage for the financing of the first of the ships, Oasis of the Seas, and a new kind of re-financing arrangement for the vessel, which is scheduled for completion at the Turku Shipyard in November.
      Financing is being sought from “relevant” export credit institutions in Finland. The company says that it believes that financing will be available under reasonable terms, but it is not certain of it.
     
Both requests are directed at the state-owned Finnvera, which has already promised to guarantee 80 per cent of the long-term financing for the buyer. Finnvera now has a new instrument, the post-financing of exports, through which it can refinance credits granted by commercial banks.
      Finnvera president Pauli Heikkilä is not commenting on the matter, as he is bound by confidentiality.
     
However, Finnvera reported already in the autumn that it had offered client financing worth 80 per cent for both vessels, whose combined price tag is EUR 2 billion. In these cases the export credit rules of the OECD are used, requiring a 20 per cent cash payment.
      The full guarantee of the rest is possible, Heikkilä says, but such large guarantees are very rare “in normal times”, as he puts it.
     
The refinancing of bank loans, as requested by RCCL, would be possible from the export refinancing fund, which Parliament has approved for sums up to EUR 1.2 billion. Under consideration at present is the raising of the sum to EUR 3.7 billion.
      Deciding on this money will be Finnvera’s subsidiary, the Export Credit Agency.
      RCCL says that in addition to the two Oasis-class ships, it has ordered two Solstice-class vessels from Germany, for which it has received a 95 per cent guarantee from the German export credit institution Hermes.
      The report says nothing of the possible financing of the second Oasis ship, the Allure of the Seas.


Previously in HS International Edition:
  World´s largest cruise liner launched in Turku (24.11.2008)
  World’s largest and most expensive passenger vessel to be built in Turku (7.2.2006)

Links:
  Finnvera

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