Lee & Ko acted as Korean legal counsel for Fortis Bank (Nederland) N.V., Singapore Branch and The Korea Development Bank as lenders and an Investment Trust (with KDB Asset Management Co., Ltd. as collective investment company and Kookmin Bank as trustee) established under the Financial Investment Services and Capital Markets Act of Korea, in connection with the Sale and Leaseback of (a) one 181,000 DWT Cape Bulker under construction at STX Offshore & Shipbuilding Co., Ltd., to be bareboat charterered by Korea Line Corporation and chartered to Grand China Shipping (HK) Co., Ltd. as charterer under a 83 to 85 month time charterparty and (b) one 180,000 DWT Cape Bulker under construction at Daewoo Shipbuilding & Marine Engineering Co., Ltd., to be bareboat chartered by Korea Line Corporation and chartered to Glovis Co., Ltd. under a 15 year consecutive voyage charter. The deal consisted of the Senior Lenders and the Junior Lenders committing loan facilities of up to USD50,000,000 and USD48,795,000, respectively, with the Investment Trust’s investment of USD36,205,000 and closed in December 2009.
This unique transaction was undertaken pursuant to the ”Let’s Go Together Shipping Fund Program” of The Korea Development Bank (”KDB”). The ”Let’s Go Together Shipping Fund Program” is a KRW2 trillion fund investment program arranged by KDB, which includes participating debt facilities provided by both domestic and offshore lenders, for the purpose of the sale and leaseback of newbuildings and second-hand vessels from shipping companies. The Program was implemented in order to promote the financial restructuring of the shipping industry which has suffered financial difficulties from tremendous decrease in trade volumes. Through the Program, the shipbuilding industry will also benefit from being able to secure a steady construction schedule. The Program is structured so as to promote cooperation amongst financial institutions, shipping companies and shipbuilders involved, and numerous deals are currently being undertaken through the ”Let’s Together Shipping Fund Program”.