MOL obtains $987m ‘hybrid loan’

The Japanese carrier said it will use the funds to invest in its growth, boost the company’s earnings base to increase business competitiveness, and to raise funds for vessel-related facilities.    Japanese ocean carrier Mitsui O.S.K. Lines, Ltd. (MOL) has signed an agreement to procure a 100 billion yen (U.S. $987 million) “hybrid loan,” the company said Friday.
   MOL said it will use the funds to invest in its growth, boost the company’s earnings base to increase business competitiveness, and to raise funds for vessel-related facilities, mainly in the LNG carrier and offshore businesses.
   “To date, MOL has implemented business structural reforms mainly in dry bulkers and containerships. It has focused on making a swift recovery to a growth trajectory, enhancement of its earnings base targeting the next midterm management plan, and restructuring of its financial base to ensure stable, sustainable growth,” MOL said.
   The loan has a maturity date in 60 years, Oct. 7, 2076, but MOL said, “some or all of the principal amount can be repaid before the maturity date, after five years from the loan execution date, upon agreement with the lenders.”
   MOL added, “As credit rating agencies are expected to recognize the Hybrid Loan as an equity credit characteristics similar to equity instruments, this allows MOL to effectively strengthen its financial position while avoiding equity dilution.”