Lender suffers big loss in supertanker finance deal

PUBLISHED : Tuesday, 06 March, 2012, 12:00am
UPDATED : Tuesday, 06 March, 2012, 12:00am


One of South Korea's largest banks has been left more than US$40 million out of pocket after financing a massive supertanker that only fetched a fraction of the purchase price when it was auctioned off on court orders.

This emerged yesterday when Admiralty judge, Mr Justice Anselmo Reyes, granted a default judgment in favour of Shinhan Bank against Samho Shipping for at least US$68.9 million.

The tanker, the 319,360 deadweight tonne Samho Dream, was acquired by Samho Shipping for US$137.5 million in 2008 using a US$120 million loan from a syndicate led by Shinhan Bank.

The crude carrier was auctioned through the Admiralty Court in January to a new owner in Greece for US$28.3 million.

Delivering the judgment, the judge said US$67.28 million was owed on the mortgage used to finance the ship plus interest and costs of more than US$1.63 million. He conceded 'there was not much money [available] beyond the US$28 million' which represented 'less than half' the outstanding mortgage.

The judge will make an order to distribute proceeds from the sale of the ship to creditors. And while Shinhan Bank will be the major creditor, the High Court's Bailiff Office will claim for the costs of arresting and overseeing the ship in October.

Legal sources said it was unclear if the bank could take further action against the tanker's former owners to recover the US$40 million.

One partner in a Hong Kong law firm said action could be taken to seize assets held by the shipowner to enforce the judgment. But another legal expert said much would depend on the contents of the loan documents and whether the shipowner's directors gave personal guarantees.

Henry Fung Chi-man, a partner in Holman Fenwick Willan, said the law firm represented Shinhan Bank on the Samho Dream in Hong Kong only. 'As to what they are doing elsewhere, I really don't know,' he said.

In 2010, Samho Shipping paid US$9.5 million to get the tanker and 24 crew freed from Somali pirates.