Schedule of Repayments of Borrowings

The Group’s Treasury function arranges financing by leveraging the Group’s balance sheet to optimise the availability of cash resources of the Group. The aggregate borrowings of the Group at 31 December 2018, which comprised secured borrowings and the liability component of convertible bonds, amounted to US$961.1 million (2017: US$881.0 million) and are denominated in United States Dollars.

Secured Borrowings – US$840.9 million (2017: US$763.3 million)

The overall increase in secured borrowings is mainly due to the drawdowns under our committed loan facilities, partially offset by scheduled loan amortisation.

During the year, we drew down all our remaining committed loan facilities.

The Group monitors the loans-to-asset value requirements on its bank borrowings. If the market values of the Group’s mortgaged assets fall below the level prescribed by our lenders, the Group may pledge additional cash or offer other additional collateral unless the banks offer waivers for technical breaches.

As at 31 December 2018:

  • The Group’s secured borrowings were secured by 105 vessels with a total net book value of US$1,688.5 million and an assignment of earnings and insurances in respect of these vessels.
  • The Group was in compliance with all its loans-to-asset value requirements.

P/L impact:

A decrease in interest to US$28.4 million (2017: US$29.1 million) was mainly due to a decrease in average secured borrowings to US$701.3 million (2017: US$794.9 million).

Certain secured borrowings are subject to floating interest rates but the Group manages these exposures by using interest rate swap contracts.

Convertible Bonds – Liability Component is US$120.2 million (2017: US$117.7 million)

As at 31 December 2018 and 31 December 2017, there remained the 3.25% p.a. coupon July 2021 convertible bonds with an outstanding principal of US$125.0 million and a prevailing conversion price of HK$3.03, whose bondholders have the option to put the bonds at 100% of the principal amount back to the Company in July 2019.

The Company has sufficient liquidity to fully repay the bonds should the bondholders exercise their put option.

P/L impact:

The US$6.5 million (2017: US$6.4 million) interest expense of the convertible bonds is calculated at an effective interest rate of 5.7% (2017: 5.7%).

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