(Alliance News) - Taylor Maritime Investments Ltd on Wednesday said it agreed to replace its existing revolving credit facility and acquisition facility with a new RCF with Nordea Bank Abp, Filial i Norge and Skandinaviska Enskilda Banken AB.
The Guernsey-based vessel investment company said the acquisition facility related to acquiring a controlling stake in Grindrod Shipping Holdings earlier this year.
In connection with the financing, Taylor Maritime will make a net loan repayment of around USD27 million, resulting in a reduction of its debt outstanding to USD167.6 million from USD194.9 million.
Based on fair market values as at end of June, Taylor Maritime said its debt to gross assets ratio is expected to reduce to 25.1%.
Since the Grindrod transaction closed in December 2022, Taylor Maritime will have repaid a total of USD91 million of debt primarily from asset sale proceeds.
Taylor Maritime said the new RCF bears a lower margin compared with both the existing RCF and acquisition facility and matures in March 2027.
Taylor Maritime also noted positive shipping market movement since early August, with a 74% rise in adjusted Baltic Handysize Index Time Charter Average, which it said was at a five-month high of USD10,204 per day.
This was alongside the Baltic Supramax Index Time Charter Average rose by 97% over the same period to reach USD14,899 per day, which Taylor Maritime said marked "levels not seen since November 2022".
Taylor Maritime said the improvement in rates for the geared dry bulk segment has been driven by record corn exports and strong soybean exports from Brazil, while also noting that the US Gulf export season is now underway.
"There has also been some congestion caused by Panama Canal transit restrictions which has increased fleet utilisation, tying up ships for a longer duration," Taylor Maritime said.
Chief Executive Officer Edward Buttery said: "Since the Grindrod transaction, our foremost priority has been to de-lever the balance sheet. We've done this through pro-active asset sales while maintaining a balance of strategic fleet management. At Taylor Maritime, five ships have been sold this year so far including two sold to our subsidiary, Grindrod, on an arm's-length basis.
"Grindrod has also announced seven asset sales year to date, which for them has generated surplus cash as indicated by their proposed capital reduction, with any initial distribution expected in [the third quarter] of the current financial year.
"The completion of [Taylor Maritime]'s refinancing is another meaningful step forward with a net USD27 million repayment and a reduction in margin. We'll continue to reduce debt through select asset sales while keeping an optimal number of ships operational to capitalise on an improving earnings environment."
Shares in Taylor Maritime were up 0.7% to 74.50 pence each in London on Wednesday late morning.
By Greg Rosenvinge, Alliance News reporter
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Taylor Maritim (TMI)
Taylor Maritim (TMIP)