Seatrium unit secures US$500 million sustainability-linked facility
Michelle Zhu
SEATRIUM’S wholly-owned subsidiary Estaleiro Jurong Aracruz has refinanced an existing loan due December 2023 with a new US$500 million facility from Standard Chartered Bank (Singapore). The facility includes a sustainability-linked conversion option aligned to sustainability-linked loan principles.
On Monday (Oct 2), Seatrium said the new facility is expected to support the group in achieving its environmental, social and governance (ESG) targets over time through adjustments to the loan characteristics upon conversion.
The group’s chief executive Chris Ong said the new facility allows Seatrium to refinance its existing loan ahead of time with “improved terms and conditions”.
“The embedded sustainability feature provides an additional boost to our ongoing efforts in promoting sustainability in our business and supporting the industry’s energy transition towards cleaner energy sources,” he added.
Commenting on the new facility, Lim & Tan Securities said it continues to like the direction Seatrium is heading towards, as this would allow the group to “ride on the ESG wave that is currently happening”.
It noted that Seatrium has continued its winning streak of bagging contracts and delivering them successfully, despite the group’s loss-making position.
“However, we do highlight that the majority of the contributions from the (contract) completions are only expected to be much later, implying investors need to take a longer time horizon to see the result from the new contract wins and deliveries,” said the research house on Monday.
Shares of Seatrium were trading unchanged at S$0.134 as at 11.13 am on Monday, after the group’s announcement.
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