Overview

Hanchen enters into a $26.5 million USD sale and leaseback agreement valued with Seanergy Maritime Holdings for the acquisition of the vessel 'Knightship'

Commitments (Constant USD, 2023)$26,666,852

Commitment Year•2018Country of Activity•GreeceDirect Recipient Country of Incorporation•Marshall IslandsOverseas Jurisdiction•Marshall IslandsSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Jun 28, 2018

Last repayment (originally scheduled): Jun 26, 2026

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

Loading map…

This sale and leaseback agreement supported Seanergy Maritime Holdings, which has its address at 154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece. More detailed locational information can be found at https://www.openstreetmap.org/way/561083110

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned companies

Hanchen Limited

Receiving agencies

Private Sector

Seanergy Maritime Holdings Corp.

Loan desecription

Hanchen enters into a $26.5 million USD sale and leaseback agreement valued with Seanergy Maritime Holdings for the acquisition of the vessel 'Knightship'

Interest rate (t₀)•6.50125%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•8 years

Collateral

The bareboat charter is secured by a general assignment covering earnings, insurances and requisition compensation, an account pledge agreement, a share pledge agreement of the shares of the Charterer, technical and commercial managers’ undertakings and a guarantee from the Company.

Narrative

Full Description

Project narrative

On June 28, 2018, Hanchen Limited, an affiliate of AVIC, entered into a sale and leaseback agreement valued at $26.5 million USD with Seanergy Maritime Holdings' for the acquisition of Seanergy's vessel Knightship. The ship was to be leased back to Seanergy Maritime Holdings as a bareboat charter for 8 years, with an interest rate of LIBOR plus 400 basis points. Seanergy Maritime Holdings had a purchase option to acquire the boat at any time after the second anniversary of the lease agreement. There were to be 26 consecutive quarterly installments of approximately $0.46 million USD, with a balloon payment of $5.3 million USD due on June 29, 2026. Of the $26.5 million USD purchase price, $18.6 million USD was in cash, $6.6 million USD was held by Hanchen as upfront lease payments, and $1.3 million USD was held by Hanchen as security.

Staff comments

1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 2. AidData has calculated LIBOR as being 2.496%, based on the 6-month LIBOR in June 2018 (https://www.global-rates.com/en/interest-rates/libor/american-dollar/2018.aspx). Hence, the interest rate has been calculated as (2.496% + 4% = 6.496%). 3. A "bareboat charter" is a charter in which the owner of the boat leases only the vessel (with no crew) to the charterer or lessee.