Seatrium refinances loan facility with $400M from DBS

SINGAPORE: Seatrium refinances loan facility with $400 million from DBS bank. The wholly-owned subsidiary of Seatrium Limited has effectively refinanced an existing loan facility set to mature in Feb 2024.

The company has secured a $400 million committed loan facility from DBS Bank, as disclosed in a bourse filing on Dec 28, as reported by The Edge Singapore.

The three-year committed loan facility features a notable inclusion – a “sustainability-linked conversion option” aligned with sustainability-linked loan principles. Seatrium highlights that this strategic move is intended to bolster the company’s pursuit of environmental, social, and governance (ESG) targets over the coming years.

Sustainability-linked loans are characteristically structured with predefined key performance indicators, referred to as sustainability performance targets. These targets commonly include objectives such as reducing electricity consumption or emissions.

Seatrium, an engineering solutions provider catering to offshore, marine, and energy industries, has successfully secured over $2 billion in sustainable and green financing in 2023 alone.

As part of its broader sustainability goals, the company aims to allocate “40% of its net order book to renewables and cleaner or green solutions.” Additionally, Seatrium has set a target to reduce greenhouse gas emissions by 40% by 2030.

Expressing satisfaction with the outcome, Paul Tan, Seatrium’s acting group finance director, stated, “We are pleased to receive the strong support from DBS to refinance our existing loan facility ahead of time. We are encouraged by the strong support of our banks to our ongoing efforts in pursuing sustainability in our business operations for long-term stakeholder value creation and driving energy transition in our industry.”

Lim Wee Seng, group head of energy, renewables, and infrastructure at DBS’s Institutional Banking Group, emphasised the significance of the maritime industry to the real economy while acknowledging it as a challenging sector in terms of sustainability. He commended Seatrium for its commitment to sustainability and overcoming challenges associated with the energy transition.

“As a purpose-driven bank, DBS is proud to be a long-time partner in Seatrium’s sustainability journey, having provided the group’s first sustainability-linked loan in 2021, and to continue working with the sector to create a sustainable, low-carbon future,” added Lim Wee Seng.

Seatrium’s shares are trading 0.3 cents higher, reflecting a 2.61% increase, reaching 11.8 cents as of Dec 28, 9:34 a.m.  /TISG