Milbank Advises Lenders on US$573 Million Reliance Ethane Ship Financing

Milbank, Tweed, Hadley & McCloy LLP advised the Korean export credit agency, Korea Trade Insurance Corporation (“K-sure”), the ECA co-ordinator, HSBC, the commercial facility co-ordinator, Standard Chartered Bank, the K-sure covered facility lenders and the commercial facility lenders, on the structuring and documentation of a complex multi-jurisdictional ethane ship financing for Reliance, marking the company’s biggest maritime initiative in recent times.

The US$573 million loan will part finance construction of six state-of-the-art very large ethane carriers (“VLECs”), the largest ethane vessels ever built in the world.

The overall debt amount is composed of a K-sure insured tranche of US$286.5 million and a commercial tranche of US$286.5 million. The debt will be serviced through a bareboat charter structure involving Mitsui OSK and its affiliates.

The financing is part of Reliance's ethane import project which will import liquid ethane from the United States of America into the Dahej terminal in India, to be used as feedstock for Reliance's petrochemical plants at Dahej, Hazira and Nagothane.

The signing took place in Mongolia’s capital Ulan Bator in October with the first ship scheduled to be delivered in November 2016.

The cross-practice Milbank deal team was led by London partners John Dewar and Nick Swinburne and Young Joon (“YJ”) Kim from the Seoul office. The team also included senior associate Munib Hussain and associates Jon Cripps and Ben Pridgeon.

John Dewar commented “having advised the lenders and arrangers on various loan facilities over a several-year period to Reliance Industries Limited for multiple projects, we are honoured to have advised on Reliance’s next big financing. Our work on this mandate confirms once again the wide geographic footprint of the high-level project and transport financing mandates handled by our teams around the world.”

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