K Line Gets $406M Loan

Japanese shipping company Kawasaki Kisen Kaisha (K Line) has decided to raise JPY 45 billion (USD 406 million) through a new subordinate loan.

According to a stock exchange annoucement, the loan proceeds will be used for the repayment of interest-bearing debts and capital expenditures mainly for vessels.

The loan, valid from April 2019 through March 2054, has been agreed with lenders including Mizuho Bank, Development Bank of Japan and Sumitomo Mitsui Trust Bank.

"In addition to the business structural reforms set forth in the announcement dated March 7, 2019, the K Line  group has been developing its core businesses through the ongoing rebuilding portfolio strategy, with an aim to expand the stable income business and achieve a sustainable growth. As one of the measures to accomplish the goal, the group has decided to raise funds through the Subordinated Loan, which is a financing method that enhances financial foundation while maintaining capital efficiency," explained the statement.

The creditors of the Subordinated Loan shall have a claim subordinated to that of other senior debt creditors in the company’s liquidation, bankruptcy, corporate reorganization or civil rehabilitation proceedings or any equivalent proceedings under any laws other than Japanese Laws.

Any provisions stipulated in the Subordinated Loan agreement shall not be amended in any manner which would create disadvantages for any K-Line's creditors other than the creditors of the Subordinated Loan.