Bunker Holding Expands Credit Facility to New Record Total
CEO Keld Demant sees the credit expansion as showing a strong commitment towards the firm's future growth strategy. Image Credit: Bunker Holding
Marine fuels conglomerate Bunker Holding has entered into a billion-dollar new credit facility, expanding its overall funding framework by a third to a new record total.
The firm has signed up to a new unsecured committed bank credit facility of $1.11 billion with an international bank syndicate, it said in an emailed statement on Thursday.
The facility takes its overall funding framework to $3.2 billion, up by 33% from its previous level and a new record for the company.
The new facility has been agreed for five years from this month. A total of 15 banks from Europe, the Middle East and Asia are behind the syndicate.
"Bunker Holding Group has for the past more than 40 years shown strong positive financial results, and we are honoured by the support and trust that our 15 banking partners worldwide have shown us," Keld Demant, CEO of Bunker Holding, said in the statement.
"This has resulted in a record-setting credit facility and shows a strong commitment towards our strategy for our future growth."
Bunker Holding sells about 30 million mt/year of marine fuels through its various units, with much of this business done on the basis of payment several weeks after delivery. That yearly sales total amounts to about $18.3 billion in cash terms, using today's global average VLSFO prices.
But prices are unlikely to remain at current levels, in particular as the bunker industry is forced to start dealing in more expensive alternative fuels as the shipping industry bears down on its carbon emissions.
"The higher credit facility allows for Bunker Holding Group to extend clients' much needed credit lines as liquidity in bunkering is pivotal, especially as the transition to alternative fuels continue to drive up prices," the company said in the statement.