Financing of Six Stern Trawlers Initiated by Export Credit Norway

Icelandic fishing company Bergur-Huginn has been issued a loan from Export Credit Norway in connection with delivery of the Vestmannaey stern trawler from Vard’s Aukra facility in Norway. A further five loans, for five identical vessels, will be disbursed to Icelandic shipowners over the coming months.

The delivery of the Vestmannaey trawler is the first of seven identical vessels ordered from Vard’s shipyard in Aukra, Norway. The buyers are a consortium that consists of four Icelandic fishing companies. The six remaining vessels are expected to be delivered during the second half of 2019.

Export Credit Norway will provide export financing for six of the seven stern trawlers, at a total loan amount of approximately NOK 500 million, with the Icelandic bank Landsbankinn acting as guarantor for the loans.

The shipowners that will utilise financing from Export Credit Norway are Bergur-Huginn, Skinney-Thinganes, and Gjögur, who have ordered two trawlers each. The owner of the seventh vessel has secured financing elsewhere.

“Well done to Vard Aukra who has secured this valuable newbuild contract of seven vessels. The shipyard has clearly impressed the Icelandic shipowner consortium from both a technical and commercial viewpoint, and we are delighted to be able to offer competitively priced vessel financing as part of the deal,” says Olav E. Rygg, director of lending at Export Credit Norway.

The initiator behind the major order was Icelandic fishing company Bergur-Huginn, who was already familiar with the quality of fishing vessels built by Vard Aukra as well as financing options from Export Credit Norway. Subsequently, Bergur-Huginn contacted other Icelandic fishing companies to enter into a consortium that could cooperate with regards to building the vessels and secure financing of them.

“To build a series of seven identical vessels has obvious advantages with regards to reducing both cost and project execution risk. Although each shipowner is responsible for the financing of their own vessels, the consortium approach has allowed us to ‘copy & paste’ parts of the financing process, which has saved both time and energy for all parties involved,” says Olav E. Rygg.

The vessels have been designed by Vard Design in Ålesund, Norway. Each vessel will have a length of 29 metres, a beam of 12 metres, a refrigerated cargo with a capacity of 240 cubic meters and a fish processing area. They will be equipped with high-quality accommodation fittings for a crew of 13 people.

Each vessel also come with a large trawl deck with electric permanent magnet motor-driven trawl winches, a twin screw mechanical propulsion system for efficient and fuel-saving operations, large propellers and rudders to ensure smooth operations in harsh environments and safe handling of the fishing gear.

Export Credit Norway is a company that is wholly-owned by the Norwegian Ministry of Trade and Fisheries. Export Credit Norway offers Norwegian and international companies loan financing when they acquire products and services from Norwegian exporters.

Photo credited to: VARD/Kjell Stian Brunes