Ship Finance

In an effort of recapturing institutional investors in the ship finance market, the use of tax haven-based Special Purpose Vehicle (SPV) in acquiring legal title of new vessels and re-financing are getting more and more popular with shipowners in all jurisdictions, in particular, in PRC. The advantages of using SPV in financing the purchase of new vessels include:-

1. incorporation of a foreign subsidiary and advance funds to the subsidiary to

purchase the new vessel;

2. funds may be raised with international institutional investors;

3. reduce overall financing costs;

4. maximize acquisition-related tax benefits; and

5. avoid the process of establishing and perfecting ship mortgages.

The Shipping and Maritime Department have been advising clients on the use of Special Purpose Vehicle (SPV) in financing the purchase of new vessels but at the same time, continue to advise clients on the conventional aspects of ship finance including:-

1. ownership structures;

2. Memorandum of Agreements,

3. Corporate agreements;

4. Hire and purchase agreements;

5. Enforcement of mortgages;

6. Joint venture agreements; and

7. Mergers and acquisitions.

Members of the Ship Finance Team are experienced drafters of the above agreements and quality of their works are of the highest standard recognized by other practitioners in the ship finance field.