REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol(s) |
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International Financial Reporting Standards as Issued by the International Accounting Standards Board ☐ |
Other ☐ |
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• | global epidemics or other health crises such as the outbreak of the novel coronavirus COVID-19 (“COVID-19”), including the impact on our business; |
• | future operating or financial results; |
• | pending acquisitions, business strategy and expected capital spending; |
• | operating expenses, availability of crew, number of off-hire days, drydocking requirements and insurance costs; |
• | fluctuations in currencies and interest rates; |
• | general market conditions and shipping market trends, including charter rates and factors affecting supply and demand; |
• | our ability to continue to comply with all our debt covenants; |
• | our financial condition and liquidity, including our ability to refinance our indebtedness as it matures or obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities; |
• | estimated future capital expenditures needed to preserve our capital base; |
• | our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of our vessels; |
• | our continued ability to enter into long-term, fixed-rate time charters with our customers; |
• | the availability and cost of low sulfur fuel oil compliant with the International Maritime Organization sulfur emission limit reductions, generally referred to as “IMO 2020,” which took effect January 1, 2020; |
• | our vessels engaging in ship to ship transfers of liquified petroleum gas (“LPG”) or petrochemical cargoes which may ultimately be discharged in sanctioned areas or to sanctioned individuals without our knowledge; |
• | changes in governmental rules and regulations or actions taken by regulatory authorities; |
• | potential liability from future litigation; |
• | our expectations relating to the payment of dividends; |
• | our ability to successfully remediate any material weaknesses in our internal control over financial reporting and our disclosure controls and procedures; |
• | our expectation regarding providing in-house technical management for certain vessels in our fleet and our success in providing such in-house technical management; |
• | our expectations regarding the financial success of the ethylene export marine terminal at Morgan’s Point, Texas (the “Marine Export Terminal”) and our related 50/50 joint venture with Enterprise Products Partners L.P (the “Export Terminal Joint Venture”) or the Luna Pool (as defined below); and |
• | other factors discussed in “Item 3—Key Information—Risk Factors” of this annual report. |
Item 1. |
Identity of Directors, Senior Management and Advisers |
Item 2. |
Offer Statistics and Expected Timetable |
Item 3. |
Key Information |
A. |
Selected Financial Data |
Navigator Holdings |
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Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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(in thousands, except per share data, fleet data and average daily results) |
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Income Statement Data: |
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Operating revenues |
$ | 294,112 | $ | 298,595 | $ | 310,046 | $ | 301,385 | $ | 319,665 | ||||||||||
Operating revenues—Luna Pool collaborative arrangements |
— | — | — | — | 12,830 | |||||||||||||||
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Total operating revenues |
$ | 294,112 | $ | 298,595 | $ | 310,046 | $ | 301,385 | $ | 332,495 | ||||||||||
Operating expenses: |
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Brokerage commissions |
5,812 | 5,368 | 5,142 | 4,938 | 5,095 | |||||||||||||||
Voyage expenses |
42,201 | 55,542 | 61,634 | 55,310 | 63,372 | |||||||||||||||
Voyage expenses—Luna Pool collaborative arrangements |
— | — | — | — | 12,418 | |||||||||||||||
Vessel operating expenses |
90,854 | 100,968 | 106,719 | 111,475 | 109,503 | |||||||||||||||
Depreciation and amortization |
62,280 | 73,588 | 76,140 | 76,173 | 76,681 | |||||||||||||||
General and administrative costs |
14,504 | 15,947 | 18,931 | 20,878 | 23,871 | |||||||||||||||
Other Income |
— | — | — | — | (199 | ) | ||||||||||||||
Insurance recoverable from vessel repairs |
504 | — | — | — | — | |||||||||||||||
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Total operating expenses |
216,155 | 251,413 | 268,566 | 268,774 | 290,741 | |||||||||||||||
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Operating income |
$ | 77,957 | $ | 47,182 | $ | 41,480 | $ | 32,611 | $ | 41,754 | ||||||||||
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Foreign currency exchange gain/(loss) on senior secured bonds |
— | — | 2,360 | 969 | (1,931 | ) | ||||||||||||||
Unrealized (loss)/gain on non-designated derivative instruments |
— | — | (5,154 | ) | (615 | ) | 2,762 | |||||||||||||
Loss on repayment of 7.75% senior unsecured bonds |
— | — | — | — | (479 | ) | ||||||||||||||
Write off of deferred financing costs |
— | — | — | (403 | ) | (155 | ) | |||||||||||||
Net interest expense |
(32,142 | ) | (41,475 | ) | (44,054 | ) | (47,691 | ) | (40,672 | ) | ||||||||||
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Income/(loss) before income taxes |
$ | 45,815 | $ | 5,707 | $ | (5,368 | ) | $ | (15,129 | ) | $ | 1,279 | ||||||||
Income taxes |
(1,177 | ) | (397 | ) | (333 | ) | (352 | ) | (617 | ) | ||||||||||
Share of result of equity accounted joint ventures |
— | — | (38 | ) | (1,126 | ) | 651 | |||||||||||||
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Net income/(loss) |
$ | 44,638 | $ | 5,310 | $ | (5,739 | ) | $ | (16,607 | ) | $ | 1,313 | ||||||||
Net income attributable to non-controlling interest |
— | — | — | (99 | ) | (1,756 | ) | |||||||||||||
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Net income/(loss) attributable to stockholders of Navigator Holdings Ltd. |
$ | 44,638 | $ | 5,310 | $ | (5,739 | ) | $ | (16,706 | ) | $ | (443 | ) | |||||||
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Navigator Holdings |
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Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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(in thousands, except per share data, fleet data and average daily results) |
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Earnings /(loss) per share |
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Basic |
$ | 0.81 | $ | 0.10 | $ | (0.10 | ) | $ | (0.30 | ) | $ | (0.01 | ) | |||||||
Diluted |
$ | 0.80 | $ | 0.10 | $ | (0.10 | ) | $ | (0.30 | ) | $ | (0.01 | ) | |||||||
Weighted average number of shares outstanding: |
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Basic |
55,418,626 | 55,508,974 | 55,629,023 | 55,792,711 | 55,885,376 | |||||||||||||||
Diluted |
55,794,481 | 55,881,454 | 55,629,023 | 55,792,711 | 55,885,376 |
Navigator Holdings |
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Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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(in thousands, except per share data, fleet data and average daily results) |
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Balance Sheet Data (at end of period): |
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Cash, cash equivalents and restricted cash |
$ | 57,272 | $ | 62,109 | $ | 71,515 | $ | 66,130 | $ | 59,271 | ||||||||||
Total assets |
1,724,843 | 1,853,887 | 1,832,751 | 1,874,253 | 1,839,408 | |||||||||||||||
Total liabilities |
768,363 | 890,674 | 877,641 | 934,351 | 897,013 | |||||||||||||||
Total Navigator Holdings Ltd. stockholders’ equity |
956,480 | 963,213 | 955,110 | 939,803 | 940,540 | |||||||||||||||
Cash Flows Data: |
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Net cash provided by operating activities |
$ | 86,748 | $ | 75,921 | $ | 77,517 | $ | 49,700 | $ | 44,673 | ||||||||||
Net cash used in investing activities |
(238,153 | ) | (183,025 | ) | (42,327 | ) | (90,409 | ) | (16,151 | ) | ||||||||||
Net cash provided by / (used in) financing activities |
120,898 | 111,941 | (25,784 | ) | 35,324 | (35,381 | ) | |||||||||||||
Fleet Data: |
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Weighted average number of vessels (2) |
31.3 | 36.2 | 38.0 | 38.0 | 38.0 | |||||||||||||||
Ownership days (3) |
11,463 | 13,228 | 13,870 | 13,870 | 13,908 | |||||||||||||||
Available days (4) |
11,255 | 13,195 | 13,767 | 13,608 | 13,684 | |||||||||||||||
Operating days (5) |
9,888 | 11,564 | 12,247 | 11,813 | 11,880 | |||||||||||||||
Fleet utilization (6) |
87.9 | % | 87.6 | % | 89.0 | % | 86.8 | % | 86.8 | % | ||||||||||
Average Daily Results: |
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Time charter equivalent rate (7) |
$ | 25,476 | $ | 21,018 | $ | 20,284 | $ | 20,831 | $ | 21,573 | ||||||||||
Daily vessel operating expenses (8) |
$ | 7,925 | $ | 7,635 | $ | 7,694 | $ | 8,037 | $ | 7,873 | ||||||||||
Other Data: |
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EBITDA (1) |
$ | 140,237 | $ | 120,770 | $ | 114,788 | $ | 107,609 | $ | 119,283 | ||||||||||
Adjusted EBITDA (1) |
$ | 140,237 | $ | 120,770 | $ | 117,582 | $ | 107,801 | $ | 124,237 |
(1) |
EBITDA and Adjusted EBITDA are not measurements prepared in accordance with U.S. GAAP (non-GAAP financial measures). EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA before foreign currency exchange gain or loss on senior secured bonds, unrealized gain or loss on non-designated derivative instruments, loss on repayment of senior unsecured bonds and the write off deferred financing costs. Management believes that EBITDA and Adjusted EBITDA are useful to investors in evaluating the operating performance of the Company. EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to consolidated net income, cash generated from operations or any measure prepared in accordance with U.S. GAAP, and our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies. |
• | EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; |
• | EBITDA and Adjusted EBITDA do not recognize the interest expense or the cash requirements necessary to service interest or principal payments on our debt; |
• | EBITDA and Adjusted EBITDA ignore changes in, or cash requirements for, our working capital needs; and |
• | other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. |
Navigator Holdings |
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Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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(in thousands) | ||||||||||||||||||||
Net income/(loss) |
$ | 44,638 | $ | 5,310 | $ | (5,739 | ) | $ | (16,607 | ) | $ | 1,313 | ||||||||
Net interest expense |
32,142 | 41,475 | 44,054 | 47,691 | 40,672 | |||||||||||||||
Income taxes |
1,177 | 397 | 333 | 352 | 617 | |||||||||||||||
Depreciation and amortization |
62,280 | 73,588 | 76,140 | 76,173 | 76,681 | |||||||||||||||
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EBITDA |
$ | 140,237 | $ | 120,770 | $ | 114,788 | $ | 107,609 | $ | 119,283 | ||||||||||
Foreign currency exchange gain on senior secured bonds |
— | — | (2,360 | ) | (969 | ) | 1,931 | |||||||||||||
Unrealized loss on non-designated derivative instruments |
— | — | 5,154 | 615 | (2,762 | ) | ||||||||||||||
Loss on repayment of 7.75% senior secured bonds |
— | — | — | — | 479 | |||||||||||||||
Write off of deferred financing costs |
— | — | — | 403 | 155 | |||||||||||||||
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Adjusted EBITDA |
$ | 140,237 | $ | 120,770 | $ | 117,582 | $ | 107,658 | $ | 119,086 | ||||||||||
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(2) | We calculate the weighted average number of vessels during a period by dividing the number of total ownership days during that period by the number of calendar days during that period. |
(3) | We define ownership days as the aggregate number of days in a period that each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and the potential amount of revenue that we record during a period. |
(4) | We define available days as ownership days less aggregate off-hire days associated with scheduled maintenance, which includes drydockings, vessel upgrades or special or intermediate surveys. We use available days to measure the aggregate number of days in a period that our vessels should be capable of generating revenues. |
(5) | We define operating days as available days less the aggregate number of days that our vessels are off-hire for any reason other than scheduled maintenance. We use operating days to measure the aggregate number of days in a period that our vessels are providing services to our customers. |
(6) | We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during that period. We use fleet utilization to measure our ability to efficiently find suitable employment for our vessels. |
(7) | Time charter equivalent, (“TCE”), rate is a measure of the average daily revenue performance of a vessel. TCE is not calculated in accordance with U.S. GAAP. For all charters, we calculate TCE by dividing total operating revenues (excluding collaborative arrangements), less any voyage expenses (excluding collaborative arrangements), by the number of operating days for the relevant period. TCE rates exclude the effects of the collaborative arrangements, as operating days and fleet utilization, on which TCE rates are based, are calculated for our owned vessels, and not the average of all Pool vessels. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters, also known as spot market charters, we pay all voyage expenses. TCE rate is a shipping industry performance measure used primarily to compare period-to-period |
Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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(in thousands, except operating days and average daily time charter equivalent rate) |
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Fleet Data: |
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Operating revenues (excluding collaborative arrangements) |
$ | 294,112 | $ | 298,595 | $ | 310,046 | $ | 301,385 | $ | 319,665 | ||||||||||
Voyage expenses (excluding collaborative arrangements) |
42,201 | 55,542 | 61,634 | 55,310 | 63,372 | |||||||||||||||
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Operating revenues less Voyage expenses |
251,911 | 243,053 | 248,412 | 246,075 | 256,293 | |||||||||||||||
Operating days |
9,888 | 11,564 | 12,247 | 11,813 | 11,880 | |||||||||||||||
Average daily time charter equivalent rate |
$ | 25,476 | $ | 21,018 | $ | 20,284 | $ | 20,831 | $ | 21,573 |
(8) | Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant time period. |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• | Charter rates for liquefied gas carriers are cyclical in nature |
• | Future growth in the demand for our services will depend on changes in supply and demand, economic growth in the world economy and demand for liquefied gas transportation relative to changes in worldwide fleet capacity. Adverse economic, political, or social developments or other global financial turmoil, could have a material adverse effect on world economic growth and thus on our business and operating results. |
• | We are partially dependent on voyage charters in the spot market, and any decrease in spot charter rates in the future may adversely affect our earnings. |
• | We operate several of our vessels through the Luna Pool. Failure by the Luna Pool to find profitable employment for these vessels could adversely affect our operations. |
• | We may be unable to charter our vessels at attractive rates. |
• | A significant portion of our revenues from a limited number of customers. |
• | The demand for liquefied gases and the seaborne transportation of liquefied gases may not grow. |
• | The expected growth in the supply of petrochemical gases, including ethane and ethylene, available for seaborne transport may not materialize, which would deprive us of the opportunity to obtain premium charters for petrochemical cargoes. |
• | The market values of our vessels may decline if market conditions deteriorate. This could cause us to incur impairment charges, which could potentially cause us to breach covenants in our debt facilities. |
• | Over the long-term, we will be required to make substantial capital expenditures to preserve the operating capacity of, and to grow, our fleet. |
• | We may be unable to make, or realize the expected benefits from, acquisitions and the failure to successfully implement our growth strategy through acquisitions could adversely affect our business, financial condition and operating results. |
• | From time to time, we may selectively pursue new strategic acquisitions or ventures we believe to be complementary to our seaborne transportation services and any strategic transactions that are a departure from our historical operations could present unforeseen challenges and result in a competitive disadvantage relative to our more-established competitors. |
• | We may be unable to realize the expected benefits from our investment in the Marine Export Terminal in the U.S. Gulf. |
• | We operate in countries which can expose us to political, governmental and economic instability. |
• | If our vessels call on ports located in countries that are subject to restrictions imposed by the U.S. government, our reputation and the market for our securities could be adversely affected. |
• | Operating our vessels in sanctioned areas or chartering our vessels to sanctioned individuals or entities could harm us. |
• | We provide in-house technical management for certain vessels in our fleet which may impose significant additional responsibilities on our management and staff. |
• | A fluctuation in fuel prices may adversely affect our charter rates for time charters and our cost structure for voyage charters and COAs. |
• | The required drydocking of our vessels could have a more significant adverse impact on our revenues than we anticipate. |
• | Our operating costs are likely to increase in the future as our vessels age. |
• | The operation of ocean going vessels entails the possibility of marine disasters including damage or destruction of the vessel due to natural disasters, accident, the loss of a vessel due to piracy or terrorism, damage or destruction of cargo and similar events that may cause a loss of revenue from affected vessels and damage our business reputation. |
• | The loss of or inability to operate any of our vessels would result in a significant loss of revenues and cash flow. |
• | Adverse global economic conditions or outbreaks of epidemic and pandemic diseases could have a material adverse effect on our business, financial condition and operating results. |
• | Due to our lack of vessel diversification, adverse developments in the seaborne liquefied gas transportation business could adversely affect our business, financial condition and operating results. |
• | If in the future our business activities involve countries, entities or individuals that are subject to restrictions imposed by the U.S. or other governments, we could be subject to enforcement action and our reputation and the market for our common stock could be adversely affected. |
• | Failure to comply with the U.S. Foreign Corrupt Practices Act, the UK Bribery Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, contract termination and an adverse effect on our business. |
• | We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could disrupt our business and adversely affect our results of operations. |
• | Our business is subject to complex and evolving laws and regulations regarding privacy and data protection. |
• | Maritime claimants could arrest our vessels, which could interrupt our cash flow. |
• | A shortage of qualified officers would make it more difficult to crew our vessels and increase our operating costs. If a shortage were to develop, it could impair our ability to operate. |
• | Compliance with safety and other vessel requirements imposed by classification societies may be very costly. |
• | Delays in deliveries of newbuildings or acquired vessels, or deliveries of vessels with significant defects, could harm our operating results and lead to the termination of any related charters that may be entered into prior to their delivery. |
• | Our growth depends on our ability to expand relationships with existing customers and obtain new customers, for which we will face substantial competition. |
• | The marine transportation industry is subject to substantial environmental and other regulations, which may limit our operations and increase our expenses. |
• | Climate change and greenhouse gas restrictions may adversely impact our operations and markets. |
• | Changes in the law and regulations relating to the use of, or a decrease in the demand for, single use plastics and waste plastics could adversely impact our business. |
• | Marine transportation is inherently risky. An incident involving significant loss of product or environmental contamination by any of our vessels could adversely affect our reputation, business, financial condition and operating results. |
• | Competition from more technologically advanced liquefied gas carriers could reduce our charter hire income and the value of our vessels. |
• | Acts of piracy on any of our vessels or on ocean going vessels could adversely affect us. |
• | Terrorist attacks, increased hostilities, piracy or war could lead to further economic instability, increased costs and disruption of business. |
• | Exposure to currency exchange rate fluctuations results in fluctuations in cash flows and operating results. |
• | Our insurance may be insufficient to cover losses that may occur to our vessels or result from our operations. |
• | Restrictive covenants in our secured term loan facilities and revolving credit facilities and in our secured and unsecured bonds and our Terminal Facility impose, and any future debt facilities will impose, financial and other restrictions on us. |
• | The secured term loan facilities and the Terminal Facility are reducing facilities. The required repayments under the secured term loan facilities and the Terminal Facility may adversely affect our business, financial condition and operating results. |
• | Our consolidated variable interest entity may enter into different financing arrangements. |
• | If interest rates increase, it will affect the interest rates under our credit facilities, which could affect our operating results. |
• | The derivative contracts we have or may enter into to hedge our exposure to fluctuations in interest rates could result in higher than market interest rates and reductions in our shareholders’ equity, as well as charges against our income. |
• | Our business depends upon certain key employees. |
• | Our major shareholder may exert considerable influence on the outcome of matters on which our shareholders will be entitled to vote, and its interests may be different from yours. |
• | We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations. |
• | We may issue additional equity securities without your approval, which would dilute your ownership interests. |
• | Future sales of our common stock could cause the market price of our common stock to decline. |
• | We have no current plans to pay dividends on our common stock. Consequently, your only opportunity to achieve a return on your investment is if the price of our common stock appreciates. |
• | The obligations associated with being a public company requires significant resources and management attention. |
• | We have identified a material weakness in our internal control over financial reporting. If we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, it could result in material misstatements of our financial statements. |
• | We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses. |
• | We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law. |
• | Because we are a Marshall Islands corporation, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management. |
• | Provisions of our articles of incorporation and bylaws may have anti-takeover effects. |
• | We may be subject to additional taxes, which could adversely impact our business and financial results. |
• | U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. shareholders. |
• | We may have to pay tax on U.S. source income with respect to the operation of our vessels, and business conducted within the United States, which would reduce our cash flow. |
• | changes in the supply of vessel capacity for the seaborne transportation of liquefied gases, which is influenced by the following factors: |
• | the number of newbuilding deliveries and the ability of shipyards to deliver newbuildings by contracted delivery dates and capacity levels of shipyards; |
• | the scrapping rate of older vessels; |
• | the number of vessels that are out of service, as a result of vessel casualties, repairs and drydockings; |
• | changes in environmental and other regulations that may limit the useful lives of vessels; and |
• | changes in liquefied gas carrier prices. |
• | changes in the level of demand for seaborne transportation of liquefied gases, which is influenced by the following factors: |
• | the level of production of liquefied gases in net export regions; |
• | the level of demand for liquefied gases in net import regions such as Asia, Europe, Latin America and India; |
• | the level of internal demand for petrochemicals to supply integrated petrochemical facilities in net export regions; |
• | a reduction in global demand for petrochemicals due to ecological or environmental concerns about the use of single use plastics and waste plastics; |
• | a reduction in global or general industrial activity specifically in the plastics and chemical industry; |
• | changes in the cost of petroleum and natural gas from which liquefied gases are derived; |
• | prevailing global and regional economic conditions; |
• | political changes and armed conflicts in the regions traveled by our vessels and the regions where the cargoes we carry are produced or consumed that interrupt production, trade routes or consumption of liquefied gases and associated products; |
• | developments in international trade; |
• | the distances between exporting and importing regions over which liquefied gases are to be transported by sea; |
• | infrastructure to support seaborne liquefied gases, including pipelines, railways and terminals; |
• | the availability of alternative transportation means, including pipelines; |
• | changes in seaborne and other transportation patterns; and |
• | changes in environmental and other regulations that may limit the production or consumption of liquefied gases. |
• | increases in the demand for industrial and residential natural gas in areas linked by pipelines to producing areas, or the conversion of existing non-gas pipelines to natural gas pipelines in those markets; |
• | increases in demand for chemical feedstocks in net exporting regions, leading to less liquefied gases for export; |
• | decreases in the consumption of petrochemical gases; |
• | decreases in the consumption of LPG due to increases in its price relative to other energy sources or other factors making consumption of liquefied gas less attractive; |
• | the availability of competing, alternative energy sources, transportation fuels or propulsion systems; |
• | decreases in demand for liquefied gases resulting from changes in feedstock capabilities of petrochemical plants in net importing regions; |
• | changes in the relative values of hydrocarbon and liquefied gases; |
• | a reduction in global industrial activity, especially in the plastics and petrochemical industries, particularly in regions with high demand growth for liquefied gas, such as Asia; |
• | adverse global or regional economic or political conditions, particularly in liquefied gas exporting or importing regions, which could reduce liquefied gas shipping or energy consumption; |
• | changes in governmental regulations, such as the elimination of economic incentives or initiatives designed to encourage the use of liquefied gases over other fuel sources; or |
• | decreases in the capacity of petrochemical plants and crude oil refineries worldwide or the failure of anticipated new capacity to come online. |
• | the location and required repositioning of the vessel; |
• | the cost of labor and materials; |
• | the types of vessels in our fleet; |
• | the age of the vessels in our fleet; |
• | governmental regulations and maritime self-regulatory organization standards relating to safety, security or the environment; |
• | competitive standards; and |
• | high demand for drydock usage. |
• | fail to realize anticipated benefits of acquisitions, such as new customer relationships, cost savings or increased cash flow; |
• | not be able to obtain charters at favorable rates or at all; |
• | be unable to hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business and fleet; |
• | fail to integrate investments of complementary assets or vessels in capacity ranges outside our current operations in a profitable manner; |
• | not have adequate operating and financial systems in place as we implement our expansion plan; |
• | decrease our liquidity through the use of a significant portion of available cash or borrowing capacity to finance acquisitions; |
• | significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions; or |
• | incur or assume unanticipated liabilities, losses or costs associated with the business or vessels acquired. |
• | delays in obtaining regulatory approvals, licenses or permits from different governmental or regulatory authorities, including environmental permits; |
• | unexpected cost increases or shortages in the equipment, materials or labor required for the venture, which could cause the venture to become economically unfeasible; and |
• | unforeseen engineering, design or environmental problems. |
• | any inability of the Marine Export Terminal to operate due to operational issues; |
• | any inability of the Marine Export Terminal to operate due to adverse weather conditions or due to damage as a result of storms, flooding or other adverse weather events; and |
• | any existing customers not renewing their contracts at the end of their existing terms, or any inability of the Marine Export Terminal to otherwise obtain or maintain fully committed throughput. |
• | damage or destruction of vessel due to natural disasters; |
• | damage or destruction of vessel due to marine disasters such as a collision; |
• | the loss of a vessel due to piracy and terrorism; |
• | cargo and property losses or damage as a result of the foregoing or less drastic causes such as human error, cargo contamination, mechanical failure, grounding, fire, explosions and bad weather; |
• | environmental accidents as a result of the foregoing; |
• | risks to the onboard vessel management personnel as a result of the foregoing; and |
• | business interruptions and delivery delays caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions. |
• | quality or engineering problems; |
• | changes in governmental regulations or maritime self-regulatory organization standards; |
• | work stoppages or other labor disturbances at the shipyard; |
• | bankruptcy or other financial crisis of the shipbuilder; |
• | hostilities or political or economic disturbances in the locations where the vessels are being built; |
• | weather interference or catastrophic event, such as a major earthquake or fire; |
• | our requests for changes to the original vessel specifications; |
• | shortages of, or delays in the receipt of necessary construction materials, such as steel; |
• | our inability to obtain sufficient finance for the purchase of the vessels or to make timely payments; or |
• | our inability to obtain requisite permits or approvals. |
• | the shipowner’s industry relationships, experience and reputation for customer service, quality operations and safety; |
• | the competitiveness of the bid in terms of the vessel’s overall economics; |
• | the quality, experience and technical capability of the crew; |
• | the age, type, capability and versatility of our vessels; and |
• | the shipowner’s willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events. |
• | marine disasters; |
• | severe weather such as storms, flooding and hurricanes; |
• | business interruption caused by mechanical failures; |
• | grounding, capsizing, fire, explosions and collisions; |
• | war, terrorism, piracy, cyber-attack; and |
• | human error. |
• | death or injury to persons, loss of property or damage to the environment and natural resources; |
• | delays in the delivery of cargo; |
• | loss of revenues; |
• | higher than anticipated expenses, or liabilities or costs to recover any spilled cargo and to restore the ecosystem where the spill occurred; |
• | governmental fines, penalties or restrictions on conducting business; |
• | higher insurance rates; and |
• | damage to our reputation and customer relationships generally. |
• | pay dividends out of operating revenues generated by the vessels securing indebtedness under the facility, redeem any shares or make any other payment to our equity holders, if there is a default under any secured term loan facility, revolving credit facility or secured term loan and revolving credit facility; |
• | incur additional indebtedness, including through the issuance of guarantees; |
• | create liens on our assets; |
• | sell our vessels; |
• | merge or consolidate with, or transfer all or substantially all our assets to, another person; |
• | change the flag, class or management of our vessels; and |
• | enter into a new line of business. |
• | our shareholders’ proportionate ownership interest in us will decrease; |
• | the relative voting strength of each previously outstanding share may be diminished; and |
• | the market price of the common stock may decline. |
Item 4. |
Information on the Company |
A. |
History and Development of the Company |
B. |
Business Overview |
• | Delivering a safe and sustainable future. |
• | Maximize the throughput of the Marine Export Terminal |
• | Maintain a customer-driven chartering strategy. |
• | Capitalize on the increasing demand for seaborne transportation of ethane and ethylene. |
• | Taking business and asset efficiencies to the next level |
• | Maintain reputation for operational excellence. |
• | Provide a strong in-house technical management function.in-house technical management for 17 of our 38 vessels, as we continue to refine and improve our systems, whilst understanding the importance of complying with health, safety and environmental regulations as well as operating to the highest standards transporting cargoes safely, reliably and efficiently around the globe. |
• | Maintain a strong balance sheet with manageable debt levels. |
Operating Vessel |
Year Built |
Vessel Size (CBM) |
Employment Status |
Current Cargo |
Charter Expiration Date | |||||
Ethylene/ethane capable semi-refrigerated |
||||||||||
Navigator Orion* |
2000 | 22,085 | Spot market | Ethane | — | |||||
Navigator Neptune* |
2000 | 22,085 | Spot market | Ethylene | — | |||||
Navigator Pluto |
2000 | 22,085 | Time charter | LPG | June 2021 | |||||
Navigator Saturn* |
2000 | 22,085 | Spot market | Ethane | — | |||||
Navigator Venus* |
2000 | 22,085 | Spot market | Ethylene | — | |||||
Navigator Atlas* |
2014 | 21,000 | Spot market | Ethane | — | |||||
Navigator Europa* |
2014 | 21,000 | Spot market | Ethylene | — | |||||
Navigator Oberon* |
2014 | 21,000 | Contract of affreightment | Ethylene | — | |||||
Navigator Triton* |
2015 | 21,000 | Spot market | Ethane |
— | |||||
Navigator Umbrio* |
2015 | 21,000 | Spot market | LPG | — | |||||
Navigator Aurora |
2016 | 37,300 | Time charter | Ethane | December 2026 | |||||
Navigator Eclipse |
2016 | 37,300 | Time charter | Ethane | March 2022 | |||||
Navigator Nova |
2017 | 37,300 | Time charter | Ethane | September 2023 | |||||
Navigator Prominence |
2017 | 37,300 | Time charter | Ethane | December 2021 | |||||
Semi-refrigerated |
||||||||||
Navigator Magellan |
1998 | 20,928 | Spot market | Propylene | — | |||||
Navigator Aries |
2008 | 20,550 | Time charter | LPG | November 2021 | |||||
Navigator Capricorn |
2008 | 20,600 | Spot market | LPG | — | |||||
Navigator Gemini |
2009 | 20,750 | Spot market | Butadiene | — | |||||
Navigator Pegasus |
2009 | 22,200 | Time charter | Propylene | March 2022 | |||||
Navigator Phoenix |
2009 | 22,200 | Time charter | LPG | May 2022 | |||||
Navigator Scorpio |
2009 | 20,665 | Spot market | — | — | |||||
Navigator Taurus |
2009 | 20,750 | Spot market | LPG | — | |||||
Navigator Virgo |
2009 | 20,750 | Spot market | LPG | — | |||||
Navigator Leo |
2011 | 20,647 | Time charter | LPG | December 2023 | |||||
Navigator Libra |
2012 | 20,647 | Time charter | LPG | December 2023 | |||||
Navigator Centauri |
2015 | 22,000 | Time charter | LPG | May 2022 | |||||
Navigator Ceres |
2015 | 22,000 | Time charter | LPG | June 2022 | |||||
Navigator Ceto |
2016 | 22,000 | Time charter | LPG | May 2022 | |||||
Navigator Copernico |
2016 | 22,000 | Drydock | — | — | |||||
Navigator Luga |
2017 | 22,000 | Time charter | LPG | February 2022 | |||||
Navigator Yauza |
2017 | 22,000 | Time charter | LPG | April 2022 | |||||
Fully-refrigerated |
||||||||||
Navigator Glory |
2010 | 22,500 | Time charter | Ammonia | May 2022 | |||||
Navigator Grace |
2010 | 22,500 | Time charter | LPG | June 2021 | |||||
Navigator Galaxy |
2011 | 22,500 | Time charter | Ammonia | November 2021 | |||||
Navigator Genesis |
2011 | 22,500 | Time charter | LPG | July 2021 | |||||
Navigator Global |
2011 | 22,500 | Time charter | LPG | January 2022 | |||||
Navigator Gusto |
2011 | 22,500 | Time charter | LPG | December 2021 | |||||
Navigator Jorf |
2017 | 38,000 | Time charter | Ammonia | August 2027 |
• | Major Oil and Gas Companies, |
• | Chemical Companies, |
• | Energy Trading Companies, |
• | technical breakdowns; drydocking for repairs, maintenance or inspections; equipment breakdowns; or delays due to accidents, strikes, certain vessel detentions or operational issues; or |
• | our failure to maintain the vessel in compliance with its specifications and contractual standards or to provide the required crew. |
• | provide competent personnel to operate and supervise the maintenance and general efficiency of our vessels; |
• | arrange and supervise the maintenance, drydockings, repairs, alterations and upkeep of our vessels to the standards required by us and in accordance with all requirements and recommendations of our vessels’ classification society, flag state and applicable national and international regulations; |
• | ensure that our vessels comply with the law of their flag state; |
• | arrange the supply of necessary stores, spares and lubricating oil for our vessels; |
• | appoint such surveyors and technical consultants as they may consider from time to time necessary; |
• | operate the vessels in accordance with the ISM Code and The International Security Code for Ports and Ships (“ISPS Code”); |
• | develop, implement and maintain a safety management system in accordance with the ISM Code; |
• | arrange the sampling and testing of bunkers; |
• | install planned maintenance system software on-board our vessels; |
• | provide emergency response services and support to our vessels in case of an incident or accident; and |
• | operate our vessels in accordance with the agreed budgets. |
• | they do not receive amounts payable by us under the agreement within the time period specified for payment thereof, or if the vessels are repossessed by any vessel mortgagees; or |
• | after notice to us of the default and a reasonable amount of time to remedy, we fail to: |
• | comply with our obligation to indemnify them for any expenses attributable to us or defend them (and their related companies) against any third-party claims based on a breach or alleged breach of an obligation of ours to a third-party; or |
• | cease the employment of our vessels in the transportation of contraband, blockage running, or in an unlawful trade, or on a voyage that in their reasonable opinion is unduly hazardous or improper. |
• | select and supply a suitably qualified crew for each vessel in our fleet; |
• | pay all crew wages and salaries; |
• | ensure that the applicable requirements of the laws of our vessels’ flag states are satisfied in respect of the rank, qualification and certification of the crew; |
• | pay the costs of obtaining all documentation necessary for the crew’s employment, such as vaccination certificates, passports, visas and licenses; and |
• | pay all costs and expenses of transportation of the crews to and from the vessels while traveling. |
• | natural resource damages and related assessment costs; |
• | real and personal property damages; |
• | net loss of taxes, royalties, rents, profits or earnings capacity; |
• | net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and |
• | loss of subsistence use of natural resources. |
• | on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status; |
• | on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; |
• | the development of vessel security plans; |
• | ship identification number to be permanently marked on a vessel’s hull; |
• | a continuous synopsis record kept on-board showing a vessel’s history including, the name of the ship and of the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and |
• | compliance with flag state security certification requirements. |
• | we are organized in a jurisdiction outside the United States that grants an equivalent exemption from tax to corporations organized in the United States with respect to the types of U.S. Source International Transportation Income that we earn, or an “Equivalent Exemption”; |
• | we satisfy the Publicly Traded Test (as described below); and |
• | we meet certain substantiation, reporting and other requirements (or the “Substantiation Requirement”). |
• | individual residents of jurisdictions that grant an Equivalent Exemption; |
• | non-U.S. corporations organized in jurisdictions that grant an Equivalent Exemption and that meet the Publicly Traded Test; and |
• | certain other qualified persons described in the Section 883 Regulations. |
C. |
Organizational Structure |
D. |
Property, Plant and Equipment |
Item 4A. |
Unresolved Staff Comments |
Item 5. |
Operating and Financial Review and Prospects |
A. |
Operating Results |
• | charges related to the depreciation of the historical cost of our fleet (or the revalued amount), less the estimated residual value of our vessels, calculated on a straight-line basis over their useful life, which is estimated to be 30 years; and |
• | charges related to the amortization of capitalized drydocking expenditures relating to our fleet over the period between drydockings. |
• | Investment in Export Terminal Joint Venture |
1,000 tons per hour. The results from the Export Terminal Joint Venture are shown as “Share of results of equity accounted joint ventures” on our consolidated statements of operations. |
• | Luna Pool |
• | We will have different financing arrangements. |
• | Our results are affected by fluctuations in the fair value of our derivative instruments. |
• | Changes in Accounting Standards. |
• | Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326). |
modified retrospective method approach, we have made an adjustment to the consolidated statements of shareholders’ equity which represents the amount of provision for credit losses that would not have been recognized in retained earnings for the year ended December 31, 2019 under ASU 2016-13. Consequently, the comparable amounts for the year ended December 31, 2019 have not been adjusted and continue to be reported in accordance with previously applicable GAAP. The adoption of this standard and subsequent amendments did not have a material impact on our consolidated financial statements or related disclosures. |
• | Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). |
Year Ended December 31, 2019 |
Year Ended December 31, 2020 |
Percentage Change |
||||||||||
(in thousands, except percentages) | ||||||||||||
Operating revenues |
$ | 301,385 | $ | 319,665 | 6.1 | % | ||||||
Operating revenues—Luna Pool collaborative arrangements |
— | 12,830 | — | |||||||||
|
|
|
|
|||||||||
Total operating revenues |
$ | 301,385 | $ | 332,495 | 10.3 | % | ||||||
Operating expenses: |
||||||||||||
Brokerage commissions |
4,938 | 5,095 | 3.2 | % | ||||||||
Voyage expenses |
55,310 | 63,372 | 14.6 | % | ||||||||
Voyage expenses—Luna Pool collaborative arrangements |
— | 12,418 | — | |||||||||
Vessel operating expenses |
111,475 | 109,503 | (1.8 | %) | ||||||||
Depreciation and amortization |
76,173 | 76,681 | 0.7 | % | ||||||||
General and administrative costs |
20,878 | 23,871 | 14.3 | % | ||||||||
Other income |
— | (199 | ) | — | ||||||||
|
|
|
|
|||||||||
Total operating expenses |
$ | 268,774 | $ | 290,741 | 8.2 | % | ||||||
|
|
|
|
|||||||||
Operating income |
$ | 32,611 | $ | 41,754 | 28.0 | % | ||||||
Foreign currency exchange gain / (loss) on senior secured bonds |
969 | (1,931 | ) | — | ||||||||
Unrealized (loss) / gain on non-designated derivative instruments |
(615 | ) | 2,762 | — | ||||||||
Interest expense |
(48,611 | ) | (41,080 | ) | (15.5 | %) | ||||||
Loss on repayment of 7.75% senior unsecured bonds |
— | (479 | ) | — | ||||||||
Write off of deferred financing costs |
(403 | ) | (155 | ) | (61.5 | %) | ||||||
Interest income |
920 | 408 | (55.7 | %) | ||||||||
|
|
|
|
|||||||||
(Loss)/Income before income taxes and share of result of equity accounted joint ventures |
$ | (15,129 | ) | $ | 1,279 | — | ||||||
Income taxes |
(352 | ) | (617 | ) | 75.3 | % | ||||||
Share of result of equity accounted joint ventures |
(1,126 | ) | 651 | — | ||||||||
|
|
|
|
|||||||||
Net (loss)/income |
$ | (16,607 | ) | $ | 1,313 | — | ||||||
Net income attributable to non-controlling interest |
(99 | ) | (1,756 | ) | 1673.7 | % | ||||||
|
|
|
|
|||||||||
Net loss attributable to stockholders of Navigator Holdings Ltd. |
$ | (16,706 | ) | $ | (443 | ) | (97.3 | %) | ||||
|
|
|
|
• | an increase in operating revenues of approximately $8.8 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately $656,193 per vessel per calendar month ($21,573 per day) for the year ended December 31, 2020, compared to an |
average of approximately $633,584 per vessel per calendar month ($20,831 per day) for the year ended December 31, 2019; |
• | an increase in operating revenues of approximately $8.1 million primarily attributable to an increase in pass through voyage costs, as the number and duration of voyage charters during the year ended December 31, 2020 increased, compared to the year ended December 31, 2019; |
• | an increase in operating revenues of approximately $1.4 million attributable to an increase in vessel available days of 76 days or 0.6% for the year ended December 31, 2020, compared to the year ended December 31, 2019. As well as an additional 38 vessel available days being available during the year ended December 31, 2020 as a result of being a leap year, there were a total of 224 drydock days, including repositioning days, during the year ended December 31, 2020, compared to 262 days the year ended December 31, 2019. |
• | Fleet utilization was 86.8% for the year ended December 31, 2020, being principally the same as for the year ended December 31, 2019 but resulted in a minor increase of $0.01 million in operating revenues. |
Fleet Data: |
Year Ended December 31, 2019 |
Year Ended December 31, 2020 |
||||||
Weighted average number of vessels |
38.0 | 38.0 | ||||||
Ownership days |
13,870 | 13,908 | ||||||
Available days |
13,608 | 13,684 | ||||||
Operating days |
11,813 | 11,880 | ||||||
Fleet utilization |
86.8 | % | 86.8 | % | ||||
Average daily time charter equivalent rate (*) |
$ | 20,831 | $ | 21,573 |
* |
Non-GAAP Financial Measure -Time charter equivalent: period-to-period |
Fleet Data: |
Year Ended December 31, 2019 |
Year Ended December 31, 2020 |
||||||
Operating revenues (excluding collaborative arrangements) |
$ | 301,385 | $ | 319,665 | ||||
Voyage expenses (excluding collaborative arrangements) |
55,310 | 63,372 | ||||||
|
|
|
|
|||||
Operating revenues less Voyage expenses |
$ | 246,075 | $ | 256,293 | ||||
Operating days |
11,813 | 11,880 | ||||||
Average daily time charter equivalent rate |
$ | 20,831 | $ | 21,573 |
Year Ended December 31, 2018 |
Year Ended December 31, 2019 |
Percentage Change |
||||||||||
(in thousands, except percentages) | ||||||||||||
Operating revenues |
$ | 310,046 | $ | 301,385 | (2.8 | %) | ||||||
Operating expenses: |
||||||||||||
Brokerage Commissions |
5,142 | 4,938 | (4.0 | %) | ||||||||
Voyage expenses |
61,634 | 55,310 | (10.3 | %) | ||||||||
Vessel operating expenses |
106,719 | 111,475 | 4.5 | % | ||||||||
Depreciation and amortization |
76,140 | 76,173 | 0.0 | % | ||||||||
General and administrative costs |
18,931 | 20,878 | 10.3 | % | ||||||||
|
|
|
|
|||||||||
Total operating expenses |
$ | 268,566 | $ | 268,774 | 0.1 | % | ||||||
|
|
|
|
|||||||||
Operating income |
$ | 41,480 | $ | 32,611 | (21.4 | %) | ||||||
Foreign currency exchange gain on senior secured bonds |
2,360 | 969 | (58.9 | %) | ||||||||
Unrealized loss on non-designated derivative instruments |
(5,154 | ) | (615 | ) | (88.1 | %) | ||||||
Interest expense\ |
(44,908 | ) | (48,611 | ) | 8.2 | % | ||||||
Write off of deferred financing costs |
— | (403 | ) | — | ||||||||
Interest income |
854 | 920 | 7.7 | % | ||||||||
|
|
|
|
|||||||||
Loss before income taxes and share of result of equity accounted joint ventures |
$ | (5,368 | ) | $ | (15,129 | ) | 181.8 | % | ||||
Income taxes |
(333 | ) | (352 | ) | 5.7 | % | ||||||
Share of result of equity accounted joint ventures |
(38 | ) | (1,126 | ) | 2863.2 | % | ||||||
|
|
|
|
|||||||||
Net loss |
$ | (5,739 | ) | $ | (16,607 | ) | 189.4 | % | ||||
Net income attributable to non-controlling interest |
— | (99 | ) | — | ||||||||
|
|
|
|
|||||||||
Net loss attributable to stockholders of Navigator Holdings Ltd. |
$ | (5,739 | ) | $ | (16,706 | ) | 191.1 | % | ||||
|
|
|
|
• | a decrease in operating revenues of approximately $6.1 million attributable to a decrease in fleet utilization from 89.0% for the year ended December 31, 2018 to 86.8% for the year ended December 31, 2019, primarily due to the weak LPG and petrochemical markets; |
• | a decrease in operating revenues of approximately $6.3 million primarily attributable to a decrease in pass through voyage costs, as the number and duration of voyage charters during the year ended December 31, 2019 decreased, compared to the year ended December 31, 2018; |
• | a decrease in operating revenues of approximately $2.9 million attributable to a decrease in vessel available days of 159 days or 1.2% for the year ended December 31, 2019 due to an increase in the number and duration of vessel drydocks when the vessels are unavailable for charter, compared to the year ended December 31, 2018; and |
• | an increase in operating revenues of approximately $6.6 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately $633,584 per vessel per calendar month ($20,831 per day) for the year ended December 31, 2019, compared to an average of approximately $616,965 per vessel per calendar month ($20,284 per day) for the year ended December 31, 2018. |
Fleet Data: |
Year Ended December 31, 2018 |
Year Ended December 31, 2019 |
||||||
Weighted average number of vessels |
38.0 | 38.0 | ||||||
Ownership days |
13,870 | 13,870 | ||||||
Available days |
13,767 | 13,608 | ||||||
Operating days |
12,247 | 11,813 | ||||||
Fleet utilization |
89.0 | % | 86.8 | % | ||||
Average daily time charter equivalent rate (*) |
$ | 20,284 | $ | 20,831 |
* |
Non-GAAP Financial Measure -Time charter equivalent: period-to-period |
Fleet Data: |
Year Ended December 31, 2018 |
Year Ended December 31, 2019 |
||||||
Operating revenues |
310,046 | 301,385 | ||||||
Voyage expenses |
61,634 | 55,310 | ||||||
|
|
|
|
|||||
Operating revenues less Voyage expenses |
248,412 | 246,075 | ||||||
Operating days |
12,247 | 11,813 | ||||||
Average daily time charter equivalent rate |
$ | 20,284 | $ | 20,831 |
B. |
Liquidity and Capital Resources |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
(in thousands) | ||||||||||||
Net cash provided by operating activities |
$ | 77,517 | $ | 49,700 | $ | 44,673 | ||||||
Net cash used in investing activities |
(42,327 | ) | (90,409 | ) | (16,151 | ) | ||||||
Net cash provided by / (used in) financing activities |
(25,784 | ) | 35,324 | (35,381 | ) | |||||||
Net increase / (decrease) in cash, cash equivalents and restricted cash |
9,406 | (5,385 | ) | (6,859 | ) |
Facility agreement date |
Original facility amount |
Principal amount outstanding |
Undrawn amount at December 31, 2020 |
Interest rate |
Loan maturity date | |||||||||||
(in millions) | ||||||||||||||||
March 2019 |
$ | 75.0 | $ | 51.0 | $ | 18.0 | US LIBOR + 250 to 300 BPS | December 2025 |
Facility agreement date |
Original facility amount |
Principal amount outstanding |
Undrawn amount at December 31, 2020 |
Interest rate |
Loan maturity date |
|||||||||||||||
January 2015* |
$ | 278.1 | $ | 99.8 | $ | — | US Libor + 270 BPS | March 2022—April 2023 | ||||||||||||
October 2016 |
220.0 | 94.7 | 20.0 | US Libor + 260 BPS | November 2023 | |||||||||||||||
June 2017 |
160.8 | 103.1 | — | US Libor + 230 BPS | June 2023 | |||||||||||||||
March 2019 |
107.0 | 91.0 | — | US Libor + 240 BPS | March 2025 | |||||||||||||||
September 2020 |
210.0 | 185.0 | 17.7 | US Libor + 250 BPS | September 2024 | |||||||||||||||
October 2019** |
69.1 | 61.4 | — | US Libor + 185 BPS | October 2026 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 1,045.0 | $ | 635.0 | $ | 37.7 |
* | The January 2015 facility has tranches that mature over a range of dates, from March 2022 to April 2023. |
** | The October 2019 loan facility relates to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity (Please read Note 9—Variable Interest Entities to our consolidated financial statements). |
• | the borrowers have liquidity (including undrawn available lines of credit with a maturity exceeding 12 months) of no less than (i) $25.0 or $35.0 million, or (ii) 5% of Net Debt or total debt, as applicable, whichever is greater; |
• | the ratio of EBITDA to Interest Expense (each as defined in the applicable secured term loan facility and revolving credit facility or as amended), on a trailing four quarter basis, is no less than 2.50 to 1.00 or 3.00 to 1.00; and |
• | the borrower must maintain a minimum ratio of shareholder equity to total assets of 30%; |
• | we and our subsidiaries maintain a minimum liquidity of no less than $25.0 million; and |
• | we and our subsidiaries maintain an Equity Ratio of at least 30%. |
• | we and our subsidiaries maintain a minimum liquidity of no less than $35.0 million; and |
• | we and our subsidiaries maintain an Equity Ratio (as defined in the 2020 Bond Agreement) of at least 30%. |
C. |
Research and Development Patents and Licenses etc. |
D. |
Trend Information |
E. |
Off-Balance Sheet Arrangements |
F. |
Tabular Disclosure of Contractual Obligations |
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Marine Export Terminal capital contributions 1 |
4,000 | — | — | — | — | — | 4,000 | |||||||||||||||||||||
Secured term loan facilities and revolving credit facilities |
67,936 | 124,479 | 202,353 | 175,413 | 54,388 | — | 624,569 | |||||||||||||||||||||
2020 Bonds |
— | — | — | — | 100,000 | — | 100,000 | |||||||||||||||||||||
2018 Bonds |
— | — | 71,697 | — | — | — | 71,697 | |||||||||||||||||||||
Office operating leases 2 |
1,572 | 252 | — | — | — | — | 1,824 | |||||||||||||||||||||
Navigator Aurora Facility 3 |
— | — | — | — | — | 61,361 | 61,361 | |||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total contractual obligations |
$ | 73,508 | $ | 124,731 | $ | 274,050 | $ | 175,413 | $ | 154,388 | $ | 61,361 | $ | 863,451 | ||||||||||||||
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|
|
|
|
1 |
On January 21, 2021, the Company made a capital contribution of $4.0 million to the Export Terminal Joint Venture, by drawing down on the Terminal Facility, being the final contribution for our expected full share of the capital cost for the construction of the Marine Export Terminal. |
2 |
The Company occupies office space in London with a lease that commenced in January 2017 for a period of 10 years with a mutual break option in January 2022, the fifth anniversary from the lease commencement date. This break option is recognized in the table above but has not been included as part of the right-of-use |
3 |
The Navigator Aurora Facility is a loan facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity Please read Note 9—Variable Interest Entities to our consolidated financial statements |
G. |
Safe Harbor |
Operating Vessel |
December 31, 2020 Carrying Value |
|||
(in millions) |
||||
Navigator Aries |
$ | 38.3 | ||
Navigator Atlas |
43.1 | |||
Navigator Aurora |
71.0 | |||
Navigator Capricorn |
33.9 | |||
Navigator Centauri |
40.0 | |||
Navigator Ceres |
40.2 | |||
Navigator Ceto |
39.2 | |||
Navigator Copernico |
39.7 | |||
Navigator Eclipse |
71.6 | |||
Navigator Europa |
42.8 | |||
Navigator Galaxy |
33.9 | |||
Navigator Gemini |
39.9 | |||
Navigator Genesis |
34.0 | |||
Navigator Global |
34.0 | |||
Navigator Glory |
33.4 | |||
Navigator Gusto |
34.3 | |||
Navigator Grace |
33.2 | |||
Navigator Jorf |
47.3 | |||
Navigator Leo |
39.3 | |||
Navigator Libra |
39.6 | |||
Navigator Luga |
47.8 | |||
Navigator Magellan |
17.2 | |||
Navigator Mars |
27.8 | |||
Navigator Neptune |
26.3 | |||
Navigator Nova |
72.7 | |||
Navigator Oberon |
43.4 | |||
Navigator Pegasus |
36.7 | |||
Navigator Phoenix |
37.6 | |||
Navigator Pluto |
26.5 | |||
Navigator Prominence |
76.7 | |||
Navigator Saturn |
26.2 | |||
Navigator Scorpio |
36.4 | |||
Navigator Taurus |
40.9 | |||
Navigator Triton |
44.0 | |||
Navigator Umbrio |
44.2 | |||
Navigator Venus |
27.7 | |||
Navigator Virgo |
36.9 | |||
Navigator Yauza |
48.0 |
Item 6. |
Directors, Senior Management and Employees |
A. |
Directors and Senior Management |
Name |
Age |
Position | ||
David J. Butters | 80 | Chairman of the Board | ||
Dr. Henry Deans | 53 | Director and Chief Executive Officer | ||
Andreas Beroutsos | 55 | Director | ||
Dr. Heiko Fischer | 53 | Director | ||
David Kenwright | 73 | Director | ||
Alexander Oetker | 46 | Director | ||
Florian Weidinger | 40 | Director |
Name |
Age |
Position | ||
David J. Butters | 80 | Executive Chairman | ||
Dr. Henry Deans | 53 | Chief Executive Officer | ||
Niall Nolan | 57 | Chief Financial Officer | ||
Oeyvind Lindeman | 42 | Chief Commercial Officer | ||
Paul Flaherty | 57 | Director of Fleet & Technical Operations | ||
Barre Browne | 41 | Director of Commercial Operations |
B. |
Compensation |
C. |
Board Practices |
D. |
Employees |
E. |
Share Ownership |
Item 7. |
Major Shareholders and Related Party Transactions |
A. |
Major Shareholders |
• | each person known by us to be a beneficial owner of more than 5.0% of our common stock; |
• | each of our directors; |
• | each of our named executive officers; and |
• | all directors and executive officers as a group. |
Common Stock Beneficially Owned |
||||||||
Name of Beneficial Owner |
Shares (1) |
Percent |
||||||
BW Group (2) |
21,868,857 | 39.1 | % | |||||
David J. Butters (3) |
2,212,670 | 4.0 | % | |||||
Dr. Henry Deans |
15,081 | * | ||||||
Andreas Beroutsos |
— | — | ||||||
Dr. Heiko Fischer (4) |
66,366 | * | ||||||
David Kenwright |
47,766 | * | ||||||
Alexander Oetker |
7,595 | * | ||||||
Florian Weidinger |
44,266 | * | ||||||
Barre Browne |
— | — | ||||||
Paul Flaherty |
20,998 | * | ||||||
Oeyvind Lindeman |
20,349 | * | ||||||
Niall Nolan |
133,229 | * | ||||||
All executive officers and directors as a group (11 persons) |
2,568,320 | 4.6 | % |
* | Less than 1%. |
(1) | Unless otherwise indicated, all shares of common stock are owned directly by the named holder and such holder has sole power to vote and dispose of such shares. Unless otherwise noted, the address for each beneficial owner named above is: 650 Madison Avenue, 25 th Floor, New York, New York 10022. |
(2) | Represents 21,868,857 shares of common stock held directly by BW Group. The address of entity and person identified in this note is c/o Inchona Services Limited, Washington Mall Phase 2, 4th Floor, Suite 400, 22 Church Street, HM 1189, Hamilton HMEX, Bermuda. |
(3) | Includes 150,000 shares of common stock that are owned by the spouse of Mr. Butters, for which he disclaims beneficial ownership. |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
Item 8. |
Financial Information |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
Item 9. |
The Offer and Listing |
A. |
Offer and Listing Details |
B. |
Plan of distribution |
C. |
Markets |
Item 10. |
Additional Information |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
C. |
Material Contracts |
(1) | Investor Rights Agreement, dated November 5, 2013, among Navigator Holdings Ltd., WL Ross & Co. LLC and certain of its affiliates named therein. See “Item 7—Major Shareholders and Related Party Transactions—Related Party Transactions—Investor Rights Agreement”. |
(2) | Joint Venture Agreement, dated August 4, 2010, among PT Persona Sentra Utama, PT Mahameru Kencana Abadi, Navigator Gas Invest Limited and PT Navigator Khatulistiwa. On August 4, 2010, PT Persona Sentra Utama, PT Mahameru Kencana Abadi, Navigator Gas Invest Limited and PT Navigator Khatulistiwa, an Indonesian limited liability company, or “PTNK,” entered into a Joint Venture Agreement, or the “JV Agreement.” Our operations in Indonesia are subject, among other things, to the Indonesian Shipping Act. That law generally provides that in order for certain vessels involved in Indonesian cabotage to obtain the requested licenses, the owners must either be wholly Indonesian owned or have a majority Indonesian shareholding. Navigator Pluto Navigator Aries |
(3) | Supplemental Deed, dated February 13, 2014, among PT Navigator Khatulistiwa, PT Persona Sentra Utama, PT Mahameru Kencana Abadi, Navigator Gas Invest Limited, Falcon Funding Ptd. Ltd. and Navigator Gas L.L.C. On February 13, 2014, PTNK, PT Persona Sentra Utama, PT Mahameru Kencana Abadi, Navigator Gas Invest Limited, Falcon Funding Pte. Ltd and Navigator Gas L.L.C. entered into a Supplemental Deed under which the JV Agreement was amended to include Navigator Global Navigator Pluto Navigator Aries |
(4) | $278.1 million Facility Agreement, by and among Navigator Atlas L.L.C, Navigator Europa L.L.C., Navigator Oberon L.L.C., Navigator Triton L.L.C., Navigator Umbrio L.L.C., Navigator Centauri L.L.C., Navigator Ceres L.L.C., Navigator Ceto L.L.C. and Navigator Copernico L.L.C, Navigator Holdings Ltd. and Navigator Gas L.L.C., Credit Agricole Corporate and Investment Bank, HSH Nordbank Ag and NIBC Bank N.V. as the arrangers and Credit Agricole as agent, and a group of financial institutions as lenders, dated as of January 27, 2015. See Item 5 “Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—January 2015 Secured Term Loan Facility.” |
(5) | $290.0 million Facility Agreement, by and among Navigator Gas L.L.C., Nordea Bank AB, ABN Amro Bank N.V., Danmarks Skibskredit A/S, National Australia Bank Limited, ING Bank N.V. and Credit Agricole Corporate and Investment Bank as the arrangers and Nordea Bank AB and ABN Amro Bank N.V as agent and a group of financial institutions as lenders, dated as of December 21, 2015. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—December 2015 Revolving Credit Facility.” |
(6) | Bond Agreement between Navigator Holdings Ltd. and Nordic Trustee AS on behalf of the Bondholders in the bond issue of 7.75% Navigator Holdings Ltd. Senior Unsecured Callable Bonds dated February 10, 2017. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—2017 Senior Unsecured Bonds.” |
(7) | Amendment to the Bond Agreement, dated September 30, 2019 by and among Navigator Holdings Ltd. and the Nordic Trustee, relating to Bond agreement between Navigator Holdings Ltd. and Nordic Trustee AS on behalf of the Bondholders in the bond issue of 7.75% Navigator Holdings Ltd. Senior Unsecured Callable Bonds dated February 10, 2017. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—2017 Senior Unsecured Bonds.” |
(8) | $220.0 million Secured Facility Agreement, dated October 28, 2016, by and among Navigator Gas L.L.C. as borrower, Navigator Holdings Ltd., as guarantor, and the lenders named therein. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—October 2016 Secured Term Loan Facility.” |
(9) | $160.8 million Secured Facility Agreement dated June 30, 2017, by and among Navigator Gas L.L.C. as borrower, Navigator Holdings Ltd., as guarantor, and the lenders named therein. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—June 2017 Secured Term Loan Facility.” |
(10) | Bond Terms between Navigator Holdings Ltd., as issuer, and Nordic Trustee AS, as bond trustee and security agent, in the bond issue of NIBOR+6.0% Navigator Holdings Ltd. Senior Secured Callable NOK Bonds dated November 1, 2018. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—2018 Senior Secured Bonds.” |
(11) | $107.0 million Secured Facility Agreement, dated March 25, 2019, by and among Navigator Atlas L.L.C., Navigator Europa L.L.C., Navigator Oberon L.L.C. and Navigator Triton L.L.C. as borrowers, Navigator Gas L.L.C. and Navigator Holdings Ltd. as guarantors, Credit Agricole Corporate and Investment Bank, ING Bank, a branch of ING—DIBA AG and Skandinaviska Enskilda Banken AB (Publ), as arrangers and Credit Agricole Corporate and Investment Bank, as agent. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—March 2019 Secured Term Loan Facility.” |
(12) | $75.0 million Credit Agreement dated March 29, 2019, between Navigator Ethylene Terminals L.L.C. as borrower, and ING Capital L.L.C. and SG Americas Securities L.L.C. as arrangers. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Terminal Facility.” |
(13) | $210.0 million Facility Agreement, by and among Navigator Gas L.L.C. as borrower and Nordea Bank AB, ABN Amro Bank N.V., BNP Paribas S.A., ING Bank N.V., London Branch; National Australia Bank Limited and Credit Agricole Corporate and Investment Bank as lead arrangers and a group of financial institutions as lenders, dated as of September 17, 2020. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—September 2020 Revolving Credit Facility.” |
(14) | Bond Agreement between Navigator Holdings Ltd. and Nordic Trustee AS on behalf of the Bondholders in the bond issue of 8.0% Navigator Holdings Ltd. Senior Unsecured Callable Bonds dated September 9, 2020. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—2020 Senior Unsecured Bonds.” |
(15) | Investor Rights Agreement, dated December 22, 2020, among Navigator Holdings Ltd. and BW Group. See “Item 7—Major Shareholders and Related Party Transactions—Related Party Transactions—Investor Rights Agreement”. |
D. |
Exchange Controls |
E. |
Taxation |
• | an individual U.S. citizen or resident (as determined for U.S. federal income tax purposes); |
• | a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) organized under the laws of the United States or its political subdivisions; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. person for U.S. federal income tax purposes. |
• | at least 75.0% of our gross income (including the gross income of our vessel-owning subsidiaries) for such taxable year consists of passive income (e.g., dividends, interest, capital gains from the sale or exchange of investment property and rents derived other than in the active conduct of a rental business), or |
• | at least 50.0% of the average value of the assets held by us (including the assets of our vessel-owning subsidiaries) during such taxable year produce, or are held for the production of, passive income. |
• | the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common stock; |
• | the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income; and |
• | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayers for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such year. |
• | fails to provide an accurate taxpayer identification number; |
• | is notified by the IRS that he has failed to report all interest or corporate distributions required to be reported on their U.S. federal income tax returns; or |
• | in certain circumstances, fails to comply with applicable certification requirements. |
F. |
Dividends and Paying Agents |
G. |
Statements by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
Item 11. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 12. |
Description of Securities Other than Equity Securities |
Item 13. |
Defaults, Dividend Arrearages and Delinquencies |
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. |
Controls and Procedures |
• | a lack of sufficient effective controls over prospective financial information used in the Company’s going concern assessment; |
• | a lack of sufficient accounting and financial reporting personnel with requisite knowledge and experience in the application of U.S. GAAP and SEC financial reporting requirements; and |
• | manage access and manage change for IT systems at one of the Company’s third party technical managers. |
Item 16A. |
Audit Committee Financial Expert |
Item 16B. |
Code of Ethics |
Item 16C. |
Principal Accountant Fees and Services |
Item 16D. |
Exemptions from the Listing Standards for Audit Committees |
Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Item 16F. |
Change in Registrant’s Certifying Accountant |
Item 16G. |
Corporate Governance |
Item 16H. |
Mine Safety Disclosure |
Item 17. |
Financial Statements |
Item 18. |
Financial Statements |
F-8 |
||||
F-9 |
||||
F-10 |
||||
F-11 |
||||
F-12 |
||||
F-13 |
Item 19. |
Exhibits |
Exhibit Number |
Description | |
8.1* | List of Subsidiaries of Navigator Holdings Ltd. | |
12.1* | Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer. | |
12.2* | Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer. | |
13.1* | Certification under Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer. | |
13.2* | Certification under Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer. | |
15.1* | Consent of Independent Registered Public Accounting Firm, EY LLP | |
15.2* | Consent of Independent Registered Public Accounting Firm, KPMG LLP | |
15.3* | Consent of Independent Registered Public Accounting Firm, DELOITTE & TOUCHE LLP | |
101. INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
101. SCH* | Inline XBRL Taxonomy Extension Schema | |
101. CAL* | Inline XBRL Taxonomy Extension Schema Calculation Linkbase | |
101. DEF* | Inline XBRL Taxonomy Extension Schema Definition Linkbase | |
101. LAB* | Inline XBRL Taxonomy Extension Schema Label Linkbase | |
101. PRE* | Inline XBRL Taxonomy Extension Schema Presentation Linkbase | |
104* | Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith. |
NAVIGATOR HOLDINGS LTD. | ||||||
Date: May 17, 2021 | By: | /s/ Niall Nolan | ||||
Name: | Niall Nolan | |||||
Title: | Chief Financial Officer (Principal Financial Officer) |
NAVIGATOR HOLDINGS LTD. |
||||
AUDITED CONSOLIDATED FINANCIAL STATEMENTS |
||||
F-2 to F-5 |
||||
F-6 |
||||
F-7 |
||||
F-8 |
||||
F-9 |
||||
F-10 |
||||
F-11 |
||||
F-12 |
||||
F-13 |
December 31, 2019 | December 31, 2020 | |||||||
(in thousands, except share data) | ||||||||
Assets |
||||||||
Current assets |
||||||||
Cash, cash equivalents and restricted cash |
$ | $ | ||||||
Accounts receivable, net of allowance for credit losses of $ |
||||||||
Accrued income |
||||||||
Prepaid expenses and other current assets |
||||||||
Bunkers and lubricant oils |
||||||||
Insurance receivable |
||||||||
Amounts due from related parties |
— | |||||||
Total current assets |
||||||||
Non-current assets |
||||||||
Vessels, net |
||||||||
Property, plant and equipment, net |
||||||||
Intangible assets, net of accumulated amortization of $ |
||||||||
Investment in equity accounted joint ventures |
||||||||
Right-of-use |
||||||||
Prepaid expenses and other non- current assets |
— | |||||||
Total non-current assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities |
||||||||
Current portion of secured term loan facilities, net of deferred financing costs |
$ | $ | ||||||
Current portion of operating lease liabilities |
||||||||
Accounts payable |
||||||||
Accrued expenses and other liabilities |
||||||||
Accrued interest |
||||||||
Deferred income |
||||||||
Amounts due to related parties |
||||||||
Total current liabilities |
||||||||
Non-current liabilities |
||||||||
Secured term loan facilities and revolving credit facilities, net of current portion and deferred financing costs |
||||||||
Senior secured bond, net of deferred financing costs |
||||||||
Senior unsecured bond, net of deferred financing costs |
||||||||
Derivative liabilities |
||||||||
Operating lease liabilities, net of current portion |
||||||||
Amounts due to related parties |
||||||||
Total non-current liabilities |
||||||||
Total Liabilities |
||||||||
Commitments and contingencies (see note 15) |
||||||||
Stockholders’ equity |
||||||||
Common stock—$ par value per share; |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Retained earnings |
||||||||
Total Navigator Holdings Ltd. stockholders’ equity |
||||||||
Non-controlling interest |
||||||||
Total equity |
||||||||
Total liabilities and equity |
$ | $ | ||||||
Year ended December 31, 2018 |
Year ended December 31, 2019 |
Year ended December 31, 2020 |
||||||||||
(in thousands, except per share data) | ||||||||||||
Revenues |
||||||||||||
Operating revenues |
$ | $ | $ | |||||||||
Operating revenues—Luna Pool collaborative arrangements |
— | — | ||||||||||
Total operating revenues |
||||||||||||
Expenses |
||||||||||||
Brokerage commissions |
||||||||||||
Voyage expenses |
||||||||||||
Voyage expenses—Luna Pool collaborative arrangements |
— | — | ||||||||||
Vessel operating expenses |
||||||||||||
Depreciation and amortization |
||||||||||||
General and administrative costs |
||||||||||||
Other Income |
— | — | ( |
) | ||||||||
Total operating expenses |
||||||||||||
Operating income |
||||||||||||
Other income/(expense) |
||||||||||||
Foreign currency exchange gain/(loss) on senior secured bonds |
( |
) | ||||||||||
Unrealized (loss)/gain on non-designated derivative instruments |
( |
) | ( |
) | ||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Loss on repayment of senior unsecured bonds |
— | — | ( |
) | ||||||||
Write off of deferred financing costs |
— | ( |
) | ( |
) | |||||||
Interest income |
||||||||||||
(Loss)/income before income taxes and share of result of equity accounted joint ventures |
( |
) | ( |
) | ||||||||
Income taxes |
( |
) | ( |
) | ( |
) | ||||||
Share of result of equity accounted joint ventures |
( |
) | ( |
) | ||||||||
Net (loss)/income |
( |
) | ( |
) | ||||||||
Net income attributable to non-controlling interest |
— | ( |
) | ( |
) | |||||||
Net loss attributable to stockholders of Navigator Holdings Ltd. |
( |
) | ( |
) | ( |
) | ||||||
Loss per share attributable to stockholders of Navigator Holdings Ltd.: |
||||||||||||
Basic and diluted: |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Weighted average number of shares outstanding: |
||||||||||||
Basic: |
||||||||||||
Diluted: |
||||||||||||
Year ended December 31, 2018 (in thousands) |
Year ended December 31, 2019 (in thousands) |
Year ended December 31, 2020 (in thousands) |
||||||||||
Net (loss)/ income |
$ | ( |
) | $ | ( |
) | $ | |||||
Other comprehensive income/(loss): |
||||||||||||
Foreign currency translation (loss)/gain |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total comprehensive (loss)/ income |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
|||||||
Other comprehensive (loss)/income attributable to: |
||||||||||||
Stockholders of Navigator Holdings Ltd: |
( |
) | ( |
) | ( |
) | ||||||
Non-controlling interests: |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total comprehensive (loss)/income |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
Common stock | ||||||||||||||||||||||||||||
Number of shares (Note 13) |
Amount 0.01 par value (Note 13) |
Additional Paid-in Capital (Note 13) |
Accumulated Other Comprehensive Income/(Loss) |
Retained Earnings |
Non-controlling interest |
Total | ||||||||||||||||||||||
January 1, 2018 |
$ | $ | $ | ( |
) | $ | $ | — | $ | |||||||||||||||||||
Adjustment to equity for the adoption of the new revenue standard |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
Forfeited shares-2013 long-term equity incentive plan |
( |
) | — | — | — | — | — | — | ||||||||||||||||||||
Restricted shares issued March 20, 2018 |
— | — | — | — | ||||||||||||||||||||||||
Net income |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
Foreign currency translation |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
Share-based compensation plan |
— | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
December 31, 2018 |
$ | $ | $ | ( |
) | $ | $ | — | $ | |||||||||||||||||||
Adjustment to equity for the adoption of the new lease standard |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
Restricted shares issued March 20, 2019 |
— | — | — | — | ||||||||||||||||||||||||
Restricted shares cancelled August 14, 2019 |
( |
) | — | — | — | — | — | — | ||||||||||||||||||||
Net income |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
Foreign currency translation |
— | — | — | — | — | |||||||||||||||||||||||
Share-based compensation plan |
— | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
December 31, 2019 |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||
Adjustment to equity for the adoption of the new credit losses standard |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
Restricted shares issued March 19, 2020 |
— | — | — | — | ||||||||||||||||||||||||
Restricted shares cancelled April 14, 2020 |
( |
) | — | — | — | — | — | — | ||||||||||||||||||||
Restricted shares cancelled October 19, 2020 |
( |
) | — | — | — | — | — | — | ||||||||||||||||||||
Net income |
— | — | — | — | ( |
) | ||||||||||||||||||||||
Foreign currency translation |
— | — | — | — | — | |||||||||||||||||||||||
Share-based compensation plan |
— | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
December 31, 2020 |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2018 (in thousands) |
Year ended December 31, 2019 (in thousands) |
Year ended December 31, 2020 (in thousands) |
||||||||||
Cash flows from operating activities |
||||||||||||
Net (loss)/income |
$ | ( |
) | $ | ( |
) | $ | |||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities |
||||||||||||
Unrealized loss/(gain) on non-designated derivative instruments |
( |
) | ||||||||||
Depreciation and amortization |
||||||||||||
Payment of drydocking costs |
( |
) | ( |
) | ( |
) | ||||||
Amortization of share-based compensation |
||||||||||||
Amortization of deferred financing costs |
||||||||||||
Share of result of equity accounted joint ventures |
( |
) | ||||||||||
Call option premium on redemption of |
— | — | ||||||||||
Insurance claim receivable |
( |
) | ( |
) | ( |
) | ||||||
Unrealized foreign exchange (gain)/loss on senior secured bonds |
( |
) | ( |
) | ||||||||
Other unrealized foreign exchange (loss)/gain |
( |
) | ||||||||||
Changes in operating assets and liabilities |
— | |||||||||||
Accounts receivable |
( |
) | ( |
) | ||||||||
Bunkers and lubricant oils |
( |
) | ( |
) | ||||||||
Accrued income, prepaid expenses and other current assets |
( |
) | ( |
) | ||||||||
Accounts payable, accrued interest, accrued expenses and other liabilities |
( |
) | ||||||||||
Amounts due from related parties |
— | — | ( |
) | ||||||||
Net cash provided by operating activities |
||||||||||||
Cash flows from investing activities |
||||||||||||
Additions to vessels and equipment |
( |
) | ( |
) | ( |
) | ||||||
Investment in equity accounted joint ventures |
( |
) | ( |
) | ( |
) | ||||||
Purchase of other property, plant and equipment and intangibles |
( |
) | ( |
) | ( |
) | ||||||
Insurance recoveries |
||||||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
Cash flows from financing activities |
||||||||||||
Proceeds from secured term loan facilities and revolving credit facilities |
||||||||||||
Proceeds from revolving loan facility |
— | — | ||||||||||
Proceeds from refinancing of vessel to related parties |
— | — | ||||||||||
Issuance of senior secured bonds |
— | — | ||||||||||
Issuance of |
— | — | ||||||||||
Issuance cost of senior secured bonds |
( |
) | ( |
) | ( |
) | ||||||
Issuance costs of unsecured bond amendment |
— | ( |
) | — | ||||||||
Issuance cost of |
— | — | ( |
) | ||||||||
Issuance cost of refinancing of vessel |
— | ( |
) | ( |
) | |||||||
Direct financing cost of secured term loan and revolving credit facilities |
( |
) | ( |
) | ( |
) | ||||||
Direct financing cost of terminal credit facility |
— | ( |
) | ( |
) | |||||||
Repayment of |
— | — | ( |
) | ||||||||
Repayment of secured term loan facilities and revolving credit facilities |
( |
) | ( |
) | ( |
) | ||||||
Repayment of refinancing of vessel to related parties |
— | ( |
) | ( |
) | |||||||
Net cash (used in)/provided by financing activities |
( |
) | ( |
) | ||||||||
Net increase/(decrease) in cash, cash equivalents and restricted cash |
( |
) | ( |
) | ||||||||
Cash, cash equivalents and restricted cash at beginning of year |
||||||||||||
Cash, cash equivalents and restricted cash at end of year |
$ | $ | $ | |||||||||
Supplemental Information |
||||||||||||
Total interest paid during the year, net of amounts capitalized |
$ | $ | $ | |||||||||
Total tax paid during the year |
$ | $ | $ | |||||||||
(in thousands) | ||||
Beginning balance as of December 31, 2019 |
$ | — | ||
Allowance recognized on transition |
||||
Current period provision for expected credit losses |
||||
Ending balance as of December 31, 2020 |
$ | |||
December 31, 2019 | December 31, 2020 | |||||||||||
Fair Value Hierarchy Level |
Fair Value Hierarchy Level |
Fair Value Asset (Liability) |
Fair Value Asset (Liability) |
|||||||||
(in thousands) |
||||||||||||
Cross-currency interest rate swap agreement |
Level 2 | $ | ( |
) | $ | ( |
) | |||||
Interest rate swap agreements |
Level 2 | — | ( |
) |
December 31, 2019 | December 31, 2020 | |||||||||||||||||||
Fair Value Hierarchy Level |
Fair Value Hierarchy Level |
Carrying Amount Asset (Liability) |
Fair Value Asset (Liability) |
Carrying Amount Asset (Liability) |
Fair Value Asset (Liability) |
|||||||||||||||
(in thousands) |
||||||||||||||||||||
2018 Bonds (note 11) |
Level 2 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
2017 Bonds (note 12) |
Level 2 | ( |
) | ( |
) | — | — | |||||||||||||
2020 Bonds (note 12) |
Level 2 | — | — | ( |
) | ( |
) | |||||||||||||
Secured term loan facilities and revolving credit facilities (note 10) |
Level 2 | ( |
) | ( |
) | ( |
) | ( |
) |
Year ended December 31, (in thousands) |
||||||||||||
2018 | 2019 | 2020 | ||||||||||
Operating revenues: |
||||||||||||
Time charters |
$ | $ | $ | |||||||||
Time charters from Luna Pool collaborative arrangements |
— | — | ||||||||||
Voyage charters |
||||||||||||
Voyage charters from Luna Pool collaborative arrangements |
— | — | ||||||||||
|
|
|
|
|
|
|||||||
Total operating revenues |
$ | $ | $ |
(in thousands) | ||||
2021:* |
$ | |||
2022: |
$ | |||
2023: |
$ | |||
2024: |
$ | |||
2025: |
$ | |||
2026 onwards: |
$ |
* | The committed time charter revenue for the period ended December 31, 2021 includes an extension to a charter party agreement agreed on January 5, 2021 with a new rate applicable from December 23, 2020. |
Vessel (in thousands) |
Drydocking (in thousands) |
Total (in thousands) |
||||||||||
Cost |
||||||||||||
December 31, 2018 |
$ | $ | $ | |||||||||
Additions |
||||||||||||
Write-offs of fully amortized assets |
— | ( |
) | ( |
) | |||||||
December 31, 2019 |
||||||||||||
Additions |
||||||||||||
Write-offs of fully amortized assets |
— | ( |
) | ( |
) | |||||||
December 31, 2020 |
$ | $ | $ | |||||||||
Accumulated Depreciation |
||||||||||||
December 31, 2018 |
$ | $ | $ | |||||||||
Charge for the period |
||||||||||||
Write-offs of fully amortized assets |
— | ( |
) | ( |
) | |||||||
December 31, 2019 |
||||||||||||
Charge for the period |
||||||||||||
Write-offs of fully amortized assets |
— | ( |
) | ( |
) | |||||||
December 31, 2020 |
$ | $ | $ | |||||||||
Net Book Value |
||||||||||||
December 31, 2018 |
$ | $ | $ | |||||||||
December 31, 2019 |
$ | $ | $ | |||||||||
December 31, 2020 |
$ | $ | $ | |||||||||
December 31, | December 31, | |||||||
2019 | 2020 | |||||||
Enterprise Navigator Ethylene Terminal L.L.C. (“Export Terminal Joint Venture”) |
% | % | ||||||
Luna Pool Agency Limited. (“Pool Agency”) |
— | % |
2019 | 2020 | |||||||
(in thousands) |
||||||||
Investment in equity accounted joint venture at January 1 |
$ | $ | ||||||
Equity contributions to joint venture entity |
||||||||
Share of results |
( |
) | ||||||
Capitalized interest and deferred financing costs |
||||||||
Total investment in equity accounted joint venture at December 31 |
$ | $ | ||||||
Corporation Name |
Percentage Ownership as of December 31, |
Country of Incorporation |
Subsidiary of Limited Liability Company |
|||||||||||||
2019 | 2020 | |||||||||||||||
- Navigator Gas U.S. L.L.C. |
% | % | ||||||||||||||
- Navigator Gas L.L.C. |
% | % | ||||||||||||||
~ Navigator Aries L.L.C. |
% | % | ||||||||||||||
~ Navigator Atlas L.L.C. |
% | % | ||||||||||||||
~ Navigator Aurora L.L.C. |
% | % | ||||||||||||||
~ Navigator Centauri L.L.C. |
% | % | ||||||||||||||
~ Navigator Ceres L.L.C. |
% | % | ||||||||||||||
~ Navigator Ceto L.L.C. |
% | % | ||||||||||||||
~ Navigator Copernico L.L.C. |
% | % | ||||||||||||||
~ Navigator Capricorn L.L.C. |
% | % | ||||||||||||||
~ Navigator Eclipse L.L.C. |
% | % | ||||||||||||||
~ Navigator Europa L.L.C. |
% | % | ||||||||||||||
~ Navigator Galaxy L.L.C. |
% | % | ||||||||||||||
~ Navigator Gemini L.L.C. |
% | % | ||||||||||||||
~ Navigator Genesis L.L.C. |
% | % | ||||||||||||||
~ Navigator Glory L.L.C. |
% | % | ||||||||||||||
~ Navigator Grace L.L.C. |
% | % | ||||||||||||||
~ Navigator Gusto L.L.C. |
% | % | ||||||||||||||
~ Navigator Jorf L.L.C. |
% | % | ||||||||||||||
~ Navigator Leo L.L.C. |
% | % | ||||||||||||||
~ Navigator Libra L.L.C. |
% | % | ||||||||||||||
~ Navigator Luga L.L.C. |
% | % | ||||||||||||||
~ Navigator Magellan L.L.C. |
% | % | ||||||||||||||
~ Navigator Mars L.L.C. |
% | % | ||||||||||||||
~ Navigator Neptune L.L.C. |
% | % | ||||||||||||||
~ Navigator Nova L.L.C. |
% | % | ||||||||||||||
~ Navigator Oberon L.L.C. |
% | % | ||||||||||||||
~ Navigator Pegasus L.L.C. |
% | % | ||||||||||||||
~ Navigator Phoenix L.L.C. |
% | % | ||||||||||||||
~ Navigator Prominence L.L.C. |
% | % | ||||||||||||||
~ Navigator Saturn L.L.C. |
% | % | ||||||||||||||
~ Navigator Scorpio L.L.C. |
% | % | ||||||||||||||
~ Navigator Taurus L.L.C. |
% | % | ||||||||||||||
~ Navigator Triton L.L.C. |
% | % | ||||||||||||||
~ Navigator Umbrio L.L.C. |
% | % | ||||||||||||||
~ Navigator Venus L.L.C. |
% | % | ||||||||||||||
~ Navigator Virgo L.L.C. |
% | % | ||||||||||||||
~ Navigator Yauza L.L.C. |
% | % | ||||||||||||||
~ NGT Services (UK) Ltd |
% | % | ||||||||||||||
~ NGT Services (Poland) Sp. z.o.o. |
% | % | ||||||||||||||
~ Navigator Gas Ship Management Ltd. |
% | % | ||||||||||||||
~ Falcon Funding PTE Ltd |
% | % | ||||||||||||||
~ Navigator Gas Invest Ltd |
% | % | ||||||||||||||
- PT Navigator Khatulistiwa * |
% | % | ||||||||||||||
~ Navigator Terminals L.L.C. |
% | % | ||||||||||||||
~ Navigator Terminal Invest Ltd |
% | % | ||||||||||||||
- Navigator Ethylene Terminals L.L.C. |
% | % | Delaware |
(USA) |
* | PT Navigator Khatulistiwa is a consolidated VIE where the Company is deemed to be the primary beneficiary. |
December 31, 2019 |
December 31, 2020 |
|||||||
(in thousands) |
||||||||
Assets |
||||||||
Cash, cash equivalents and restricted cash |
$ | $ | ||||||
Liabilities |
||||||||
Amounts due to related parties, current |
$ | ( |
) | $ | ( |
) | ||
Amounts due to related parties, non-current |
( |
) | ( |
) | ||||
$ | ( |
) | $ | ( |
) | |||
December 31, 2019 |
December 31, 2020 |
|||||||
(in thousands) | ||||||||
Due within one year |
$ | $ | ||||||
Due in two years |
||||||||
Due in three years |
||||||||
Due in four years |
||||||||
Due in five years |
||||||||
Due in more than five years* |
||||||||
Total secured term loans and revolving credit facilities |
$ | $ | ||||||
Less: current portion |
||||||||
Secured term loan facilities and revolving credit facility, non-current portion* |
$ | $ | ||||||
* | Includes amounts relating to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity (Please read Note 9—Variable Interest Entities to our consolidated financial statements) |
December 31, 2019 |
December 31, 2020 |
|||||||
(in thousands) |
||||||||
Current Liability |
||||||||
Current portion of secured term loan facilities |
$ | $ | ||||||
Less: current portion of deferred financing costs |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Current portion of secured term loan facilities, net of deferred financing costs |
$ | $ | ||||||
|
|
|
|
|||||
Non-Current Liability |
||||||||
Secured term loan facilities and revolving credit facilities net of current portion* |
$ | $ | ||||||
Less: non-current portion of deferred financing costs* |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Non-current secured term loan facilities and revolving credit facilities, net of current portion and non-current deferred financing costs |
$ | $ | ||||||
|
|
|
|
* | Includes amounts relating to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with a financial institution) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity Please read Note 9—Variable Interest Entities to our consolidated financial statements. |
December 31, 2019 |
December 31, 2020 |
|||||||
(in thousands) | ||||||||
Senior Secured Bond |
||||||||
Total Bond |
$ | $ | ||||||
Less deferred financing costs |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Bond, net of deferred financing costs |
$ | $ | ||||||
|
|
|
|
December 31, 2019 |
December 31, 2020 |
|||||||
(in thousands) | ||||||||
Senior Unsecured Bonds |
||||||||
Total 2017 Bonds |
$ | $ | — | |||||
Total 2020 Bonds |
— | |||||||
Less deferred financing costs |
( |
) | ( |
) | ||||
Total Bonds, net of deferred financing costs |
$ | $ | ||||||
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
Basic and diluted loss available to common stockholders (in thousands) |
( |
) | ( |
) | ( |
) | ||||||
Basic weighted average number of shares |
||||||||||||
Effect of dilutive potential share options*: |
||||||||||||
Diluted weighted average number of shares |
* | Due to a loss for the years ended December 31, 2018, 2019 and 2020, |
Number of non-vested restricted shares |
Weighted average grant date fair value |
Weighted average remaining contractual term |
||||||||||
Balance as of January 1, 2019 |
$ | |||||||||||
Granted |
||||||||||||
Vested |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
Balance as of December 31, 2019 |
$ | |||||||||||
Granted |
||||||||||||
Forfeited |
( |
) | ||||||||||
Vested |
( |
) | ||||||||||
Balance as of December 31, 2020 |
$ | |||||||||||
Options |
Number of options outstanding |
Weighted average exercise price per share |
Aggregate intrinsic value |
|||||||||
Balance as of January 1, 2019 |
$ | — | ||||||||||
Granted during the year |
— | |||||||||||
Balance as of December 31, 2019 |
$ | — | ||||||||||
Forfeited during the period |
( |
) | — | |||||||||
Balance as of December 31, 2020 |
$ | — | ||||||||||
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||
Marine Export Terminal capital contributions 1 |
— | — | — | — | — | |||||||||||||||||||||||
Secured term loan facilities and revolving credit facilities |
— | |||||||||||||||||||||||||||
2020 Bonds |
— | — | — | — | — | |||||||||||||||||||||||
2018 Bonds |
— | — | — | — | — | |||||||||||||||||||||||
Office operating leases 2 |
— | — | — | — | ||||||||||||||||||||||||
Navigator Aurora Facility 3 |
— | — | — | — | — | |||||||||||||||||||||||
Total contractual obligations |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
1 |
On January 21, 2021, the Company made a capital contribution of $ |
2 |
The Company occupies office space in London with a lease that commenced in January 2017 for a period of right-of-use |
The Company entered into a lease for office space in New York that now expires on |
The lease term for our representative office in Gdynia, Poland is for a period of |
The weighted average remaining contractual lease term for the above three office leases on December 31, 2020 was |
3 |
The Navigator Aurora Facility is a loan facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. Please read Note 9—Variable Interest Entities to our consolidated financia l statements. |
December 31, 2019 | December 31, 2020 | |||||||
(in thousands) | ||||||||
One year |
$ | $ | ||||||
Two years |
||||||||
Three years |
||||||||
Four years |
||||||||
Five years |
||||||||
Six years and thereafter |
||||||||
|
|
|
|
|||||
Total undiscounted operating lease commitments |
$ | $ | ||||||
Less: Discount adjustment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total operating lease liabilities |
$ | $ | ||||||
Less: current portion |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Operating lease liabilities, non-current portion |
$ | $ | ||||||
|
|
|
|
2018 (in thousands) |
2019 (in thousands) |
2020 (in thousands) |
||||||||||
(Loss)/income before income taxes and share of result of equity accounted joint ventures |
$ | ( |
) | $ | ( |
) | $ | |||||
Tax expense at statutory rate |
||||||||||||
Total statutory tax charge |
||||||||||||
Tax charge in UK subsidiaries |
||||||||||||
Tax charge in Polish subsidiary |
( |
) | ( |
) | ||||||||
Tax charge in Singapore subsidiary |
||||||||||||
Tax charge in Maltese VIE ( note 9 |
||||||||||||
Total tax charge |
$ | $ | $ | |||||||||
2019 (in thousands) |
2020 (in thousands) |
|||||||
Deferred tax asset |
||||||||
Net operating losses carry forwards |
$ | $ | ||||||
Total deferred tax assets |
||||||||
Less valuation allowance |
( |
) | ( |
) | ||||
Deferred tax asset, net of valuation allowance |
||||||||
Deferred tax liabilities |
||||||||
Investment in joint venture |
||||||||
Other temporary differences |
||||||||
Total deferred tax liabilities |
$ | $ | ||||||
Net deferred tax asset |
||||||||
December 31, 2019 |
December 31, 2020 |
|||||||
(in thousands) | ||||||||
Cash, Cash Equivalents and Restricted Cash |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Cash and cash equivalents held by the lessor VIE ( note 9 |
||||||||
Restricted cash |
||||||||
Total cash, cash equivalents and restricted cash |
$ | $ | ||||||
Year ended December 31, 2019 |
Year ended December 31, 2020 |
|||||||
(in thousands) | ||||||||
Net income / (expenses) |
||||||||
Luna Pool Agency Limited |
$ | — | $ | — | ||||
Ocean Yield Malta Limited |
( |
) | ( |
) | ||||
Total |
$ | ( |
) | $ | ( |
) | ||
December 31, 2019 |
December 31, 2020 |
|||||||
(in thousands) | ||||||||
Receivables / (payables) |
||||||||
Luna Pool Agency Limited |
$ | $ | ||||||
Ocean Yield Malta Limited |
( |
) | ( |
) | ||||
Year ended December 31, 2020 |
||||
(in thousands) | ||||
Income / (expenses) |
||||
Time and Voyage Charter Revenues |
$ | |||
Time and Voyage charter revenues from Luna Pool collaborative arrangements |
||||
Brokerage Commissions |
( |
) | ||
Voyage Expenses |
( |
) | ||
Voyage Expenses – Luna Pool collaborative arrangements |
( |
) | ||
Total net operating income from the Luna Pool |
||||
Other Income |
||||
Total net income from the Luna Pool |
$ | |||
December 31, 2020 |
||||
(in thousands) | ||||
Receivables / (payables) |
||||
Other assets |
$ | |||
Total assets |
$ | |||
Year ended December 31, 2019 |
Year ended December 31, 2020 |
|||||||
(in thousands) | ||||||||
Income / (expenses) |
||||||||
General and administrative expenses |
$ | ( |
) | $ | ( |
) | ||
Interest expense |
( |
) | ( |
) | ||||
Total |
$ | ( |
) | $ | ( |
) | ||
December 31, 2019 |
December 30, 2020 |
|||||||
(in thousands) | ||||||||
Receivables / (payables) |
||||||||
Accrued interest and trade payables |
$ | ( |
) | $ | ( |
) | ||
Navigator Aurora Facility, net of deferred financing costs |
( |
) | ( |
) | ||||
Other non-current payables |
( |
) | ( |
) | ||||
Total liabilities |
$ | ( |
) | $ | ( |
) | ||
Exhibit 2.3
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
Capitalized terms used but not defined herein have the meanings set forth in the Annual Report on Form 20-F to which this Exhibit is attached. References to we, our and us refer to Navigator Holdings Ltd., unless the context otherwise requires. References to shareholders refer to holders of our common stock, unless the context otherwise requires. WLR Group refers collectively to WL Ross & Co. LLC and certain of its affiliated investment funds and BW Group refers to BW Group Limited. On December 22, 2020, the WLR Group, our previous major shareholder, sold all of the 21,863,874 shares of our common stock then owned by the WLR Group to the BW Group (the BW Group Sale).
As of December 31, 2020, we had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act): common stock, par value $0.01 per share (common stock). Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol NVGS.
The following contains a description of our common stock, as well as certain related additional information. The following summary does not purport to be complete and is qualified in its entirety by reference to the provisions of applicable law and to our Second Amended and Restated Bylaws and Amended and Restated Articles of Incorporation, which we refer to as our bylaws and our articles of incorporation, respectively, and to the other agreements described herein. Our corporate affairs are governed by our articles of incorporation and bylaws and by the Marshall Islands Business Corporations Act, or the BCA. Our bylaws and articles of incorporation as they exist on the date of this Annual Report on Form 20-F, and any other agreements described herein, are incorporated by reference or filed as an exhibit to the Annual Report on Form 20-F of which this Exhibit is a part, and amendments or restatements of each will be filed with the Securities and Exchange Commission (the SEC) in future periodic or current reports in accordance with the rules of the SEC. You are encouraged to read these documents.
Authorized Capitalization
As of December 31, 2020, our authorized share capital consists of 400,000,000 shares of common stock, of which 55,893,618 shares were issued and outstanding and 40,000,000 shares of preferred stock, par value $0.01 per share, of which no shares were issued and outstanding. All of our shares are in registered form.
Common Stock
Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding preferred stock, holders of common stock are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends. We do not anticipate declaring or paying any cash dividends to holders of our common stock in
the near term. We may, however, adopt in the future a policy to make cash dividends. Our future dividend policy is within the discretion of our board of directors. Agreements governing our indebtedness impose restrictions on us, including, among other things, limiting our ability to pay dividends out of operating revenues generated by the vessels securing such indebtedness, redeem any shares or make any other payment to our equity holders, if there is a default under such agreements.
Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of common stock are entitled to ratably receive the assets available for distribution to the shareholders after payment of liabilities and the liquidation preference of any of our outstanding shares of preferred stock. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of our common stock are fully paid and non-assessable.
Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any preferred stock which we may issue in the future.
Anti-takeover Effects of Certain Provisions of Our Articles of Incorporation and Bylaws
Certain provisions of our articles of incorporation and bylaws, which are summarized in the following paragraphs, may have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a shareholder might consider in its best interest, including those attempts that might result in a premium over the market price for the common stock held by shareholders.
Election and Removal of Directors; Vacancies
Subject to the rights of the holders of any series of preferred shares in us, directors shall be elected by a plurality of the votes cast at a meeting of shareholders by the shareholders entitled to vote in the election. Our articles of incorporation provide that, subject to any rights of holders of preferred shares, directors will be elected at each annual meeting of shareholders to serve until the next annual meeting of shareholders and until his or her successor shall have been duly elected and qualified, except in the event of his or her death, resignation, removal or the earlier termination of his or her term of office. Our articles of incorporation provide that, subject to any rights of holders of preferred shares, no director may be removed except both for cause and with the affirmative vote of the holders of not less than a majority of the voting power of all outstanding shares entitled to vote in the election of directors.
Subject to the following sentence, vacancies and newly created directorships resulting from any increase in the authorized number of directors or from any other cause (other than vacancies and newly created directorships which the holders of any class or classes of shares or series thereof are expressly entitled by our by articles of incorporation to fill) shall be filled by, and only by, a vote of not less than the majority of the directors then in office, although less than a quorum, or by the sole remaining director. Any director appointed to fill a vacancy or a newly created directorship shall hold office until the next annual meeting of shareholders and until his or her successor is elected and qualified or until his or her earlier resignation or removal.
On December 22, 2020, in connection with the BW Group Sale, we entered into an Investor Rights Agreement with BW Group (the BW Group Investor Rights Agreement), which provides BW Group with the right to designate two members of our board of directors (provided that BW Group maintains certain share ownership levels) and with certain registration rights and informational rights. The BW Group Investor Rights Agreement also provides that, until May 18, 2022 and subject to certain exceptions, BW Group will not acquire common shares that increase its current voting power in us.
Notwithstanding the foregoing, in the event that the holders of any class or series of preferred shares shall be entitled, voting separately as a class, to elect any of our directors, then the number of directors that may be elected by such holders voting separately as a class shall be in addition to the number otherwise fixed pursuant to resolution of the our board of directors. Notwithstanding the foregoing, except as otherwise provided in the terms of such class or series, (i) the term of the directors elected by such holders voting separately as a class shall expire at the next annual meeting of shareholders and (ii) any director or directors elected by such holders voting separately as a class may be removed, with or without cause, by the holders of a majority of the voting power of all outstanding shares of us entitled to vote separately as a class in an election of such directors.
No Cumulative Voting
The BCA provides that shareholders are not entitled to the right to cumulate votes in the election of directors unless our articles of incorporation provides otherwise. Our articles of incorporation do not provide for cumulative voting.
Advance Notice Requirements for Shareholder Proposals and Director Nominations
Our bylaws provide that, with a few exceptions, shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary.
Generally, to be timely, a shareholders notice must be received at our principal executive office not less than 90 days nor more than 120 days prior to the first anniversary date of the immediately preceding annual meeting of shareholders. Our bylaws also specify requirements as to the form and content of a shareholders notice. These provisions may impede shareholders ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.
Calling of Special Meetings of Shareholders
Our bylaws provide that special meetings of our shareholders may be called only by our board of directors.
Amendments to Our Bylaws
Our articles of incorporation and bylaws grant our board of directors the authority to amend and repeal our bylaws without a shareholder vote in any manner not inconsistent with the laws of the Republic of the Marshall Islands.
Blank Check Preferred Stock
Under the terms of our articles of incorporation, our board of directors has authority, without any further vote or action by our shareholders, to issue preferred stock and to determine, with respect to any series of preferred stock, the terms and rights of that series. Our board of directors may issue preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.
Dissenters Rights of Appraisal and Payment
Under the BCA, our shareholders have the right to dissent from various corporate actions, including certain mergers or consolidations or sales of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares, subject to exceptions. For example, the right of a dissenting shareholder to receive payment of the fair value of his shares is not available if for the shares of any class or series of stock, which shares at the record date fixed to determine the shareholders entitled to receive notice of and vote at the meeting of shareholders to act upon the agreement of merger or consolidation, were either (1) listed on a securities exchange or admitted for trading on an interdealer quotation system or (2) held of record by more than 2,000 holders. In the event of any further amendment of our articles of incorporation, a shareholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting shareholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the High Court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which the companys shares are primarily traded on a local or national securities exchange. The value of the shares of the dissenting shareholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.
Shareholders Derivative Actions
Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder bringing the action is a holder of our shares both at the time the derivative action is commenced and at the time of the transaction to which the action relates or that his shares devolved upon him by operation of law.
Limitations on Liability and Indemnification of Officers and Directors
The BCA authorizes corporations to limit or eliminate the personal liability of directors to corporations and their shareholders for monetary damages for breaches of directors fiduciary duties, subject to certain exceptions. Our articles of incorporation include a provision that eliminates the personal liability of directors and officers for monetary damages for actions taken as a director or officer to the fullest extent permitted by law.
Our articles of incorporation provide that we must indemnify our directors and officers to the fullest extent authorized by law. We are also expressly authorized to advance certain expenses (including attorneys fees) to our directors and officers and carry directors and officers insurance providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.
The limitation of liability and indemnification provisions in our articles of incorporation may discourage shareholders from bringing a lawsuit against directors or officers for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
Transfer Agent
The registrar and transfer agent for the common stock is the American Stock Transfer & Trust Company, LLC.
Listing
Our common stock is listed on the NYSE under the symbol NVGS.
Exhibit 4.10
Dated 17th September 2020
NAVIGATOR GAS L.L.C.
as Borrower
NORDEA BANK ABP, FILIAL I NORGE; ABN AMRO BANK N.V.; BNP PARIBAS S.A.; ING BANK N.V., LONDON BRANCH; NATIONAL AUSTRALIA BANK; and CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Mandated Lead Arrangers
with
NORDEA BANK ABP, FILIAL I NORGE
as Bookrunner
NORDEA BANK ABP, FILIAL I NORGE
as Agent
NORDEA BANK ABP, FILIAL I NORGE
as Security Agent
ABN AMRO BANK N.V.
as Sustainability Agent
and
The banks and financial institutions named herein
as Original Lenders
guaranteed by
NAVIGATOR HOLDINGS LTD
as Parent
FACILITY AGREEMENT
for a revolving credit facility of up to $210,000,000
Contents
Clause | Page | |||||
SECTION 1 - INTERPRETATION |
1 | |||||
1 |
Definitions and interpretation |
1 | ||||
SECTION 2 - THE FACILITIES |
27 | |||||
2 |
The Facility |
27 | ||||
3 |
Purpose |
29 | ||||
4 |
Conditions of Utilisation |
29 | ||||
SECTION 3 - UTILISATION |
31 | |||||
5 |
Utilisation |
31 | ||||
SECTION 4 - REPAYMENT, PREPAYMENT AND CANCELLATION |
33 | |||||
6 |
Repayment and reduction |
33 | ||||
7 |
Illegality, prepayment and cancellation |
34 | ||||
SECTION 5 - COSTS OF UTILISATION |
40 | |||||
8 |
Interest |
40 | ||||
9 |
Interest Periods |
41 | ||||
10 |
Changes to the calculation of interest |
42 | ||||
11 |
Fees |
43 | ||||
SECTION 6 - ADDITIONAL PAYMENT OBLIGATIONS |
44 | |||||
12 |
Tax gross-up and indemnities |
44 | ||||
13 |
Increased Costs |
48 | ||||
14 |
Other indemnities |
49 | ||||
15 |
Mitigation by the Lenders |
52 | ||||
16 |
Costs and expenses |
53 | ||||
SECTION 7 - GUARANTEE |
54 | |||||
17 |
Guarantee and indemnity |
54 | ||||
SECTION 8 - REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT |
57 | |||||
18 |
Representations |
57 | ||||
19 |
Information undertakings |
64 | ||||
20 |
Financial covenants |
68 | ||||
21 |
General undertakings |
69 | ||||
22 |
Dealings with Ship |
73 | ||||
23 |
Condition and operation of Ship |
75 | ||||
24 |
Insurance |
79 | ||||
25 |
Minimum security value |
84 | ||||
26 |
Chartering undertakings |
86 | ||||
27 |
Bank accounts |
88 | ||||
28 |
Business restrictions |
89 | ||||
29 |
Hedging Contracts |
93 |
30 |
Events of Default |
94 | ||||
31 |
Position of Hedging Provider |
98 | ||||
SECTION 9 - CHANGES TO PARTIES |
100 | |||||
32 |
Changes to the Lenders |
100 | ||||
33 |
Assignments and transfers by Obligors |
103 | ||||
SECTION 10 - THE FINANCE PARTIES |
104 | |||||
34 |
Roles of Agent, Security Agent and Arrangers |
104 | ||||
35 |
Conduct of business by the Finance Parties |
119 | ||||
36 |
Sharing among the Finance Parties |
120 | ||||
SECTION 11 - ADMINISTRATION |
122 | |||||
37 |
Payment mechanics |
122 | ||||
38 |
Set-off |
125 | ||||
39 |
Notices |
125 | ||||
40 |
Calculations and certificates |
127 | ||||
41 |
Partial invalidity |
127 | ||||
42 |
Remedies and waivers |
127 | ||||
43 |
Amendments and grant of waivers |
128 | ||||
44 |
Counterparts |
132 | ||||
45 |
Confidentiality |
132 | ||||
SECTION 12 - GOVERNING LAW AND ENFORCEMENT |
135 | |||||
46 |
Governing law |
135 | ||||
47 |
Enforcement |
135 | ||||
Schedule 1 The parties |
136 | |||||
Schedule 2 Ship information |
144 | |||||
Schedule 3 Conditions precedent |
146 | |||||
Schedule 4 Utilisation Request |
152 | |||||
Schedule 5 Form of Transfer Certificate |
153 | |||||
Schedule 6 Form of Compliance Certificate |
155 | |||||
Schedule 7 Form of Increase Confirmation |
156 | |||||
Schedule 8 Scheduled Reduction Amounts |
158 | |||||
Schedule 9 Sustainability Margin Adjustment |
159 | |||||
Schedule 10 Form of Sustainability Certificate |
161 |
THIS AGREEMENT is dated 2020 and made between:
(1) | NAVIGATOR GAS L.L.C. as borrower (the Borrower); |
(2) | NAVIGATOR HOLDINGS LTD (the Parent); |
(3) | NORDEA BANK ABP, FILIAL I NORGE; ABN AMRO BANK N.V.; BNP PARIBAS S.A.; ING BANK N.V., LONDON BRANCH; NATIONAL AUSTRALIA BANK; and CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK as mandated lead arrangers (whether acting individually or together, the Arrangers); |
(4) | NORDEA BANK ABP, FILIAL I NORGE as bookrunner (the Bookrunner); |
(5) | THE FINANCIAL INSTITUTIONS listed in Part 1 of Schedule 1 as lenders (the Original Lenders); |
(6) | NORDEA BANK ABP, FILIAL I NORGE as facility agent for the other Finance Parties (the Agent); |
(7) | NORDEA BANK ABP, FILIAL I NORGE as security agent for the other Finance Parties (the Security Agent); and |
(8) | ABN AMRO BANK N.V., as sustainability agent for the other Finance Parties (the Sustainability Agent). |
IT IS AGREED as follows:
SECTION 1INTERPRETATION
1 | Definitions and interpretation |
1.1 | Definitions |
In this Agreement and (unless otherwise defined in the relevant Finance Document) the other Finance Documents:
Account Bank means, in relation to the Earnings Account:
(a) | Nordea Bank Abp, filial i Norge; or |
(b) | another bank or financial institution approved by all the Lenders at the request of the Borrower. |
Account Security means the deed, pledge or other instrument executed by the Borrower in favour of the Security Agent in the agreed form conferring a Security Interest over the Earnings Account.
Accounting Reference Date means 31 December or such other date as may be approved by the Lenders.
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
1
Agent means Nordea Bank Abp, filial i Norge or any person who may be appointed as such under clause 34.1 (Appointment of the Agent).
Applicable Fraction has the meaning given to it in clause 7.6(c).
Approved Valuer means any of Fearnleys, Braemar ACM, Poten & Partners, Grieg Shipbrokers, Clarksons Platou, STEEM 1960 and E.A. Gibson Shipbrokers Ltd. or such other independent reputable ship broker nominated by the Borrower and approved by the Agent (acting on the instructions of the Majority Lenders) from time to time.
Auditors means one of PricewaterhouseCoopers, Ernst & Young, KPMG, Deloitte Touche Tohmatsu, BDO and Advisors or another firm approved by the Agent (acting on the instructions of the Majority Lenders) from time to time.
Availability Period means the period starting on the date of this Agreement to and including the date falling 30 days prior to the Final Repayment Date, provided that for this purpose if no Utilisation has occurred by 25 September 2020 the availability period shall end on that date and the Total Commitments shall be cancelled and shall immediately be reduced to zero.
Bail-In Action means the exercise of any Write-down and Conversion Powers.
Bail-In Legislation means in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time.
Basel II Accord means the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 as updated prior to, and in the form existing on, the date of this Agreement, excluding any amendment thereto arising out of the Basel III Accord.
Basel II Approach means, in relation to any Finance Party, either the Standardised Approach or the relevant Internal Ratings Based Approach (each as defined in the Basel II Regulations applicable to such Finance Party) adopted by that Finance Party (or any of its Affiliates) for the purposes of implementing or complying with the Basel II Accord.
Basel II Regulation means:
(a) | any law or regulation in force as at the date hereof implementing the Basel II Accord, (including the relevant provisions of CRD IV and CRR) to the extent only that such law or regulation re-enacts and/or implements the requirements of the Basel II Accord but excluding any provision of such law or regulation implementing the Basel III Accord; and |
(b) | any Basel II Approach adopted by a Finance Party or any of its Affiliates. |
Basel III Accord means, together:
(a) | the agreements on capital requirements, a leverage ratio and liquidity standards contained in Basel III: A global regulatory framework for more resilient banks and banking systems, Basel III: International framework for liquidity risk measurement, standards and monitoring and Guidance for national authorities operating the countercyclical capital buffer published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; |
2
(b) | the rules for global systemically important banks contained in Global systemically important banks: assessment methodology and the additional loss absorbency requirementRules text published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and |
(c) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to Basel III. |
Basel III Increased Cost means an Increased Cost which is attributable to the implementation or application of or compliance with any Basel III Regulation (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).
Basel III Regulation means any law or regulation implementing the Basel III Accord (including the relevant provisions of CRD IV and CRR) save to the extent that such law or regulations re-enacts a Basel II Regulation.
Break Costs means the amount (if any) by which:
(a) | the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of a Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period; |
exceeds:
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period. |
Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Oslo and New York and in the case of clause 5.1(a) only, a day (other than a Saturday or Sunday) on which banks are open for general business in London, Oslo, Paris, Amsterdam, Sydney and New York.
Change of Control occurs when:
(a) | without the prior approval of the Lenders, two or more persons acting in concert or any individual person (other than the Permitted Holder) acquires legally and/or beneficially, and either directly or indirectly, in excess of 50% of the issued share capital or membership interests of the Parent; or |
(b) | without the prior approval of the Lenders, two or more persons acting in concert or any individual person (other than the Permitted Holder) has the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board or directors (or equivalent) of the Parent. |
Charged Property means all of the assets of the Obligors which from time to time are, or are expressed or intended to be, the subject of the Security Documents.
Charter means, in relation to a Ship, any time charter with a charter term (excluding any options to extend) exceeding 36 calendar months in respect of that Ship entered into between the relevant Owner and the relevant Charterer.
Charter Assignment means, in relation to a Ship and its Charter Documents, any assignment by the relevant Owner of its interest in such Charter Documents in favour of the Security Agent in the agreed form pursuant to clause 22.8 (Chartering).
3
Charter Documents means, in relation to a Ship, any Charter of that Ship, any documents supplementing it and any guarantee or security given by any person for the relevant Charterers obligations under it.
Charterer means, in relation to a Ship, a charterer of that Ship pursuant to a Charter.
Classification means, in relation to a Ship, the classification specified in respect of such Ship in Schedule 2 (Ship information) with the relevant Classification Society or another classification approved by the Majority Lenders as its classification, at the request of the relevant Owner.
Classification Society means, in relation to a Ship, the classification society specified in respect of such Ship in Schedule 2 (Ship information) or another classification society (being either ABS, DNVGL, BV, Lloyds or NK) or, if such association no longer exists, any similar association nominated by the Agent) approved by the Majority Lenders as its Classification Society, at the request of the relevant Owner.
Code means the US Internal Revenue Code of 1986.
Commitments means:
(a) | in relation to an Original Lender, the amount set in a column adjacent to its name under the table with the heading The Original Lenders and their Commitments in Part 1 of Schedule 1 (The original parties) and the amount of any other Commitment assigned to it under this Agreement; and |
(b) | in relation to any other Lender, the amount of any Commitment assigned to it under this Agreement, |
to the extent not cancelled, reduced or assigned by it under clause 6.3 (Reduction of Facility), clause 7.8 (Automatic cancellation) or any other provision of this Agreement.
Compliance Certificate means a certificate substantially in the form set out in Schedule 6 (Form of Compliance Certificate) or otherwise approved.
Confirmation shall have, in relation to any Hedging Transaction, the meaning given to it in the relevant Hedging Master Agreement.
Confidential Information means all information relating to an Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
(a) | any member of the Group or any of its advisers; or |
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers, |
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 45 (Confidentiality); or |
4
(ii) | is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or |
(iii) | is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (i) or (ii) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality. |
Constitutional Documents means, in respect of an Obligor, such Obligors articles of incorporation, certificate of formation, bylaws, limited liability company agreement or other constitutional documents including as referred to in any certificate relating to an Obligor delivered pursuant to Schedule 3 (Conditions precedent).
CRD IV means the directive 2013/36/EU of the European Union on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.
CRR means regulation 575/2013 of the European Union on prudential requirements for credit institutions and investment firms.
Default means an Event of Default or any event or circumstance specified in clause 30 (Events of Default) which would, with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of the foregoing, be an Event of Default.
Defaulting Lender means any Lender:
(a) | which has failed to make its participation in a Loan available or has notified the Agent that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with clause 5.4 (Lenders participation); |
(b) | which has otherwise rescinded or repudiated a Finance Document; or |
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
unless, in the case of paragraph (a) above:
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Payment Disruption Event; and, |
payment is made within five Business Days of its due date; or
(d) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
Disposal Repayment Date means in relation to:
(a) | a Total Loss of a Mortgaged Ship, the applicable Total Loss Repayment Date; or |
(b) | a sale of a Mortgaged Ship by the relevant Owner, the date upon which such sale is completed by the transfer of title to the purchaser in exchange for payment of all or part of the relevant purchase price. |
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Earnings means, in relation to a Ship and a person, all money at any time payable to that person for or in relation to the use or operation of such Ship including freight, hire and passage moneys, money payable to that person for the provision of services by or from such Ship or under any charter or pool commitment, requisition for hire compensation, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach and payments for termination or variation of any charter commitment.
Earnings Account means the bank account of the Borrower held with the Account Bank with account number 6040.04.42730, IBAN NO9660400442730 and any bank account, deposit or certificate of deposit opened, made or established in accordance with, and designated as an Earnings Account, under clause 27 (Bank accounts).
EEA Member Country means any member state of the European Union, Iceland, Liechtenstein and Norway.
Enforcement Costs means any costs, expenses, liabilities or other amounts in respect of which any amount is payable under clauses 14.4 (Indemnity concerning security) or 16.3 (Enforcement and preservation costs) or under any other Finance Document to which those provisions apply and any remuneration payable to a Receiver in connection with any Security Documents.
Environmental Claims means:
(a) | enforcement, clean-up, removal or other governmental or regulatory action or orders or claims instituted or made pursuant to any Environmental Laws or resulting from a Spill; or |
(b) | any claim made by any other person relating to a Spill. |
Environmental Incident means any Spill from any vessel in circumstances where:
(a) | any Ship or its Owner may be liable for Environmental Claims arising from the Spill (other than Environmental Claims arising and fully satisfied before the date of this Agreement); and/or |
(b) | any Ship may be arrested or attached in connection with any such Environmental Claim. |
Environmental Laws means all laws, regulations and conventions concerning pollution or protection of human health or the environment.
EU Bail-In Legislation Schedule means the document described as such and published by the Loan Market Association (or any successor person) from time to time.
Event of Default means any event or circumstance specified as such in clause 30 (Events of Default).
Existing Credit Facility means the existing $290m credit facility dated 21 December 2015 (as amended or supplemented from time to time) made available to the Borrower in respect of the Ships.
Facility means the revolving credit facility made available under this Agreement as described in Clause 2 (the Facility) and as the same shall be reduced in accordance with clause 6.3 (Reduction of Facility).
Facility Extension has the meaning given to it in clause 6.2 (Extension of Facility).
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Facility Office means the office or offices notified by a Lender or any other Finance Party to the Agent in writing on or before the date it becomes a Lender or, as the case may be, Finance Party (or, following that date, by not less than five Business Days written notice) as the office through which it will perform its obligations under this Agreement.
Facility Period means the period from and including the date of this Agreement to and including the date on which the Total Commitments have reduced to zero and all indebtedness of the Obligors under the Finance Documents has been fully paid and discharged.
Fair Market Value means, as at any relevant date, the value of each Mortgaged Ship which has not become a Total Loss as at such date as most recently determined in accordance with clause 25 (Minimum Security Value).
FATCA means:
(a) | sections 1471 to 1474 of the Code or any associated regulations; |
(b) | any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or |
(c) | any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction. |
FATCA Application Date means:
(a) | in relation to a withholdable payment described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; or |
(b) | in relation to a passthru payment described in section 1471(d)(7) of the Code not falling within paragraph (a) above, the first date from which such payment may become subject to a deduction or withholding required by FACTA. |
FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA.
FATCA Exempt Party means a party to a Finance Document that is entitled to receive payments free from any FATCA Deduction.
Fee Letter means any letter dated on or about the date of this Agreement between the Agent and/or the Arrangers and the Borrower setting out certain fees payable by the Borrower in respect of any Facility.
Final Repayment Date means, subject to clause 37.7 (Business Days):
(a) | the date which falls four (4) years after the date of this Agreement; or |
(b) | where the Facility Extension applies in accordance with clause 6.2 (Extension of Facility), the date which falls five (5) years after the date of this Agreement. |
Finance Documents means this Agreement, any Fee Letter, the Security Documents, any Hedging Contract, any Hedging Master Agreement, any Transfer Certificate and any other document designated as such by the Agent and the Borrower.
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Finance Party means the Agent, the Security Agent, the Sustainability Agent, the Bookrunner, any Arranger, any Hedging Provider or a Lender.
Financial Indebtedness means any indebtedness for or in respect of:
(a) | moneys borrowed and debit balances at banks or other financial institutions; |
(b) | any amount raised by acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent); |
(c) | any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; |
(d) | the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP be treated as a balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease); |
(e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); |
(f) | any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account); |
(g) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; |
(h) | any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the issuer) before the Final Repayment Date or are otherwise classified as borrowings under GAAP or, as the case may be, IFRS; |
(i) | any amount of any liability under an advance or deferred purchase agreement if (a) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question (b) the agreement is in respect of the supply of assets or services and payment is due more than 180 days after the date of supply; |
(j) | any amount raised under any other transaction (including any forward sale or purchase, sale and sale back, sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP or, as the case may be, IFRS; and |
(k) | the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (i) above, without double counting. |
Flag State means Liberia, the Republic of the Marshall Islands, Bahamas, Bermuda or the United Kingdom, or such other state or territory as may be approved by the Lenders, at the request of the relevant Owner, as being the Flag State of a Ship for the purposes of the Finance Documents.
GAAP means generally accepted accounting principles in the United States.
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General Assignment means, in relation to a Ship, a first assignment of its interest in the Ships Insurances and Earnings and Requisition Compensation by the relevant Owner in favour of the Security Agent in the agreed form.
Group means the Parent and its Subsidiaries for the time being and, for the purposes of clause 19.1 (Financial statements) and clause 20 (Financial covenants), any other entity required to be treated as a subsidiary in its consolidated accounts in accordance with GAAP or, as the case may be, IFRS, and/or any applicable law.
Group Member means any Obligor and any other entity which is part of the Group.
Guarantors means the Parent and the companies described as such in Schedule 1 (Original Parties) and Guarantor means any one of them.
Hedging Contract means any Hedging Transaction between the Borrower and any Hedging Provider pursuant to any Hedging Master Agreement and includes any Hedging Master Agreement and any Confirmations from time to time exchanged under it and governed by its terms relating to that Hedging Transaction and any contract in relation to such a Hedging Transaction constituted and/or evidenced by them and Hedging Contracts means all of them.
Hedging Exposure means, as at any relevant date, the aggregate of the amount certified by each of the Hedging Providers to the Agent to be the net amount in dollars (a) in relation to all Hedging Contracts that have been closed out on or prior to the relevant date, that is due and owing by the Borrower to the Hedging Providers in respect of such Hedging Contracts on the relevant date and (b) in relation to all Hedging Contracts that are continuing on the relevant date, that would be payable by the Borrower to the Hedging Providers under (and calculated in accordance with) the early termination provisions of the Hedging Contracts as if an Early Termination Date (as defined in the relevant Hedging Master Agreement) had occurred on the relevant date in relation to all such continuing Hedging Contracts.
Hedging Master Agreements means the agreements made or (as the context may require) to be made between the Borrower and the Hedging Providers in relation to the purposes set out in clause 29.1, each comprising an ISDA 2002 Master Agreement and Schedule thereto in the agreed form and Hedging Master Agreement means any of them.
Hedging Providers means any bank or financial institution which is a Lender or an Affiliate of a Lender who may at any time enter into or provide a Hedging Transaction and who accedes to the terms of this Agreement pursuant to clause 31.1 and includes their respective successors in title and Hedging Provider means any of them.
Hedging Transaction has, in relation to any Hedging Master Agreement, the meaning given to the term Transaction in that Hedging Master Agreement.
Holding Company means, in relation to a person, any other person in respect of which it is a Subsidiary.
IFRS means international accounting standards within the meaning of IAS Regulation 1606/2002.
Increase Confirmation means a confirmation substantially in the form set out in Schedule 7 (Increase Confirmation).
Increase Lender has the meaning given to it in clause 2.2 (Increase).
Increased Costs has the meaning given to it in clause 13.1(b) (Increase Costs).
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Indemnified Person means:
(a) | each Finance Party and each Receiver and any attorney, agent or other person appointed by them under the Finance Documents; |
(b) | each Affiliate of each Finance Party and each Receiver; and |
(c) | any officers, employees or agents of each Finance Party, each Receiver and any of the Affiliates of each Finance Party and each Receiver. |
Insolvency Event in relation to a Finance Party means that the Finance Party:
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or a petition is presented for its winding up or liquidation by it or such regulator, supervisor or similar official, other than, in each case, any Undisclosed Administration; |
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or a petition is presented for its winding up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding up or liquidation; or |
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
(f) | has a resolution passed for its winding up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(g) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets, other than, in each case, any Undisclosed Administration; |
(h) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; |
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(i) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (i) above; or |
(j) | takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. |
Insurance Notice means, in relation to a Ship, a notice of assignment in the form scheduled to the General Assignment for that Ship or in another approved form.
Insurances means, in relation to a Ship:
(a) | all policies and contracts of insurance; and |
(b) | all entries in a protection and indemnity or war risks or other mutual insurance association |
in the name of such Ships owner or the joint names of its owner and any other person in respect of or in connection with such Ship and includes all benefits thereof (including the right to receive claims and to return of premiums).
Interbank Market means the London interbank market
Interest Period means, in relation to a Loan, each period determined in accordance with clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with clause 8.4 (Default interest).
Interpolated Screen Rate means, in relation to any Loan, the rate which results from interpolating on a linear basis between:
(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan, |
each as of the Specified Time for dollars.
Legal Reservations means:
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; |
(b) | the time barring of claims under the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for, or indemnify a person against, non-payment of UK stamp duty may be void and defences of set-off or counterclaim; and |
(c) | similar principles, rights and defences under the laws of any Relevant Jurisdiction. |
Lender means:
(a) | any Original Lender; and |
(b) | any bank or financial institution which has become a Party in accordance with clause 2.2 (Increase) and clause 32 (Changes to the Lenders), |
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which in each case has not ceased to be a Party in accordance with the terms of this Agreement.
LIBOR means, in relation to any Loan or any part of a Loan or any Unpaid Sum:
(a) | the applicable Screen Rate as of the Specified Time for the offering of deposits in dollars for a period comparable to the Interest Period for that Loan or relevant part of it or Unpaid Sum; or |
(b) | as otherwise determined pursuant to clause 10.1 (Unavailability of Screen Rate), |
and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.
LLC Interests Security means the document constituting a first Security Interest by the Borrower in favour of the Security Agent in the agreed form in respect of all of the limited liability company interests in the Owners.
Loan means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan under the Facility.
Losses means any costs, expenses, payments, charges, losses, demands, liabilities, claims, actions, proceedings, penalties, fines, damages, judgments, orders or other sanctions.
Loss Payable Clauses means, in relation to a Ship, the provisions concerning payment of claims under the Ships Insurances in the form scheduled to the General Assignment in respect of that Ship or in another approved form.
Major Casualty means any casualty to a vessel for which the total insurance claim, inclusive of any deductible, exceeds or may exceed the Major Casualty Amount.
Major Casualty Amount means, in relation to a Ship, the amount specified as such against the name of that Ship in Schedule 2 (Ship information) or the equivalent in any other currency.
Majority Lenders means (if no part of the Loans is then outstanding), a Lender or Lenders whose Commitments aggregate more than 66 2/3% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66 2/3% of the Total Commitments immediately prior to the reduction) or (at any other time), a Lender or Lenders whose participations in the Loans aggregate more than 66 2/3% of the Loans.
Manager means, in relation to a Ship, a technical or commercial or crewing manager of that Ship acceptable to the Agent (acting on the instructions of the Majority Lenders) pursuant to the provisions of clause 22.4 (Manager) and/or clause 26.8 (Charterers manager).
Managers Undertaking means, in relation to a Ship, an undertaking by any manager of the Ship to the Security Agent in the agreed form.
Margin means:
(a) | two point five per cent (2.50%) per annum; and |
(b) | such other amount as may be determined from time to time in accordance with clause 8.2 (Sustainability margin adjustment). |
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Material Adverse Effect means, in the reasonable opinion of the Majority Lenders, a material adverse effect on:
(a) | the business, operations, property, condition (financial or otherwise) or prospects of the Group taken as a whole; or |
(b) | the ability of an Obligor to perform its obligations under the Finance Documents; or |
(c) | the validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents. |
Minimum Value means, at any time, the amount in dollars which is at that time 125% of the Total Commitments at such time but, where any Mortgaged Ship has become a Total Loss but the Disposal Repayment Date for that Mortgaged Ship has not then occurred, minus such proportion of the aggregate Loans for the Mortgaged Ships as the Fair Market Value of such Mortgaged Ship bore to the aggregate Fair Market Value of all the Mortgaged Ships (including the relevant Mortgaged Ship) immediately before its Total Loss.
Mortgage means, in relation to a Ship, a first mortgage of that Ship in the agreed form by the relevant Owner in favour of the Security Agent.
Mortgage Period means, in relation to a Mortgaged Ship, the period from the date the Mortgage over that Ship is executed and registered until the date such Mortgage is released and discharged or, if earlier, its Total Loss Date.
Mortgaged Ship means, at any relevant time, any Ship which is subject to a Mortgage and/or whose Earnings, Insurances and Requisition Compensation are subject to a Security Interest under the Finance Documents.
New Loan has the meaning given to it in clause 5.4 (Automatic Utilisation).
Obligors means the parties to the Finance Documents (other than Finance Parties and a Manager that is not a member of the Group) and Obligor means any one of them.
Original Financial Statements means the audited consolidated financial statements of the Group for its financial year ended 31 December 2019.
Original Jurisdiction means, in relation to an original Obligor, the jurisdiction under whose laws that Obligor is incorporated or formed as at the date of this Agreement or, in the case of any other Obligor, as at the date on which that Obligor becomes an Obligor.
Owner means, in relation to a Ship, the person specified against the name of that Ship in Schedule 2 (Ship information) and Owners means all of them.
Parent means the company described as such in Part 1 of Schedule 1 (The original parties).
Party means a party to this Agreement.
Payment Disruption Event means either or both of:
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
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(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
Permitted Holder means W.L. Ross & Co. L.L.C. (or its successor in title), any investment funds or other entities wholly owned and/or operated by W.L. Ross & Co L.L.C. (or its successor in title), and their respective Affiliates.
Permitted Liens means, in relation to a Ship:
(a) | unless a Default is continuing, any ship repairers or outfitters possessory lien in respect of such Ship for an amount not exceeding $2,000,000 (or its equivalent in any other currency or currencies); |
(b) | any lien on such Ship for masters, officers or crews wages outstanding in the ordinary course of its trading; |
(c) | any lien on such Ship for salvage; |
(d) | any lien arising by operation of law for not more than two months prepaid hire under any charter in relation to a Ship not prohibited by this Agreement; |
(e) | liens for masters disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Owners in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to clause 23.15 (Repairers liens); |
(f) | any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the Owners are actively prosecuting or defending such proceedings or arbitration in good faith so long as any such proceedings or the continued existence of such Security Interest shall not and may reasonably be considered unlikely to lead to the arrest, sale, forfeiture or loss of, the Ship or any interest in the Ship; and |
(g) | any Security Interest arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made so long as any such proceedings or the continued existence of such Security Interest shall not and may reasonably be considered unlikely to lead to the arrest, sale, forfeiture or loss of, the Ship or any interest in the Ship. |
Permitted Security Interests means, in relation to any Mortgaged Ship, any Security Interest over it which is:
(a) | granted by the Finance Documents; or |
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(b) | a Permitted Lien; or |
(c) | is approved by the Majority Lenders. |
Pollutant means and includes crude oil and its products, any other polluting, toxic or hazardous substance and any other substance whose release into the environment is regulated or penalised by Environmental Laws.
Quarter Date means 31 March, 30 June, 30 September and 31 December.
Quotation Day means, in relation to any period for which LIBOR is to be determined under this Agreement, the date on which quotations would customarily be provided by leading banks in the Interbank Market for deposits in the relevant currency for delivery on the first day of that period.
Receiver means a receiver or a receiver and manager or an administrative receiver appointed in relation to the whole or any part of any Charged Property under any relevant Security Document.
Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks as the rate at which the relevant Reference Banks could borrow funds in the Interbank Market, in the relevant currency and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.
Reference Banks means in relation to LIBOR the principal London offices of Nordea Bank AB, London Branch and/or such other banks as may be appointed by the Agent in consultation with the Borrower.
Registry means, in relation to each Ship, such registrar, commissioner or representative of the relevant Flag State who is duly authorised and empowered to register the relevant Ship, the relevant Owners title to such Ship and the relevant Mortgage under the laws of its Flag State.
Relevant Jurisdiction means, in relation to an Obligor:
(a) | its Original Jurisdiction; |
(b) | any jurisdiction where any Charged Property owned by it is situated; |
(c) | any jurisdiction where it conducts its business; and |
(d) | any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it. |
Relevant Nominating Body means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
Repeating Representations means each of the representations and warranties set out in clauses 18.1 (Status) to 18.10 (Ranking and effectiveness of security) (except for clauses 18.7 (Information) and 18.8 (Original Financial Statements)).
Replacement Benchmark means a benchmark rate which is:
(a) | formally designated, nominated or recommended as the replacement for a Screen Rate by: |
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(i) | the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or |
(ii) | any Relevant Nominating Body, |
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the Replacement Benchmark will be the replacement under paragraph (ii) above;
(b) | in the opinion of the Majority Lenders and the Borrower, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Screen Rate; or |
(c) | in the opinion of the Majority Lenders and the Borrower, an appropriate successor to a Screen Rate. |
Representative means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
Requisition Compensation means, in relation to a Ship, any compensation paid or payable by a government entity for the requisition for title, confiscation or compulsory acquisition of such Ship.
Resolution Authority means any body which has authority to exercise any Write-down and Conversion Powers.
Restricted Party means a person:
(a) | that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person); |
(b) | that is domiciled, registered as located or has its main place of business in, or is incorporated under the laws of, a country or territory which is subject to country-wide or, as the case may be, territory-wide, Sanctions Laws which attach legal effect to being domiciled, registered as located or having its main place of business in such country or, as the case may be, territory; |
(c) | that is directly or indirectly owned or controlled by or acting on behalf of a person referred to in (a) and/or (b) above; or |
(d) | with which any Obligor is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws. |
Sanctions Authority means:
(a) | the Norwegian State; |
(b) | the United Kingdom; |
(c) | the United Nations; |
(d) | the European Union; |
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(e) | where the Facility Office of any Lender is in the European Union, each member state of the European Union where each such Facility Office is located; |
(f) | the relevant authority in any country where an Obligor is incorporated or has its principal place of business; and |
(g) | the United States of America, |
and any governmental institutions, agencies or other authority acting on behalf of any of the foregoing in connection with Sanctions Laws (including but not limited to the Office of Foreign Assets Control of the US Department of Treasury (OFAC), the United States Department of State, and Her Majestys Treasury (HMT)).
Sanctions Laws means any trade, economic or financial sanctions laws and/or regulations, embargoes or other restrictive measures imposed, administered, enacted and/or enforced by any Sanctions Authority.
Sanctions List means any list of persons or entities issued or maintained or published in connection with Sanctions Laws by or on behalf of any Sanctions Authority (including but not limited to the Specially Designated Nationals and Blocked Persons list issued by OFAC and the Consolidated List of Financial Sanctions Targets and Investment Ban List issued by HMT).
Screen Rate means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars and the relevant period displayed (before any correction, recalculation or republication by the administrator) on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrower and the Lenders.
Screen Rate Replacement Event means, in relation to a Screen Rate:
(a) | the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders and the Borrower materially changed; |
(b) |
(i) |
(A) | the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or |
(B) | information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent, provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate; |
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(ii) the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate;
(iii) the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or
(iv) the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or
(c) | the administrator of that Screen Rate determines that that Screen Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either: |
(i) | the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Majority Lenders and the Borrower) temporary; or |
(ii) | that Screen Rate is calculated in accordance with any such policy or arrangement for a period no less than five Business Days; or |
(d) | in the opinion of the Majority Lenders and the Borrower, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement. |
Security Agent means Nordea Bank Abp, filial i Norge or any person who may be appointed as such under clause 34.11 (Resignation of the Agent), having regard to clause 34.18 (Application of certain clauses to Security Agent).
Security Documents means:
(a) | the Mortgages over the Ships; |
(b) | the General Assignments in relation to the Ships; |
(c) | the Shipowner Guarantees from each of the Owners; |
(d) | the LLC Interests Security; |
(e) | any Charter Assignment; |
(f) | the Account Security; |
(g) | any Subordination Agreement; |
(h) | any Managers Undertakings; and |
(i) | any other document as may be executed to guarantee and/or secure any amounts owing to the Finance Parties under this Agreement or any other Finance Document. |
Security Interest means a mortgage, charge, pledge, lien, assignment, trust, hypothecation or other security interest of any kind securing any obligation of any person or any other agreement or arrangement having a similar effect
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Security Value means, at any time, the amount in dollars which, at that time, is the aggregate of (a) the aggregate Fair Market Value of all of the Mortgaged Ships which have not then become a Total Loss and (b) the value of any additional security then held by the Security Agent provided under clause 25 (Minimum security value), in each case as most recently determined in accordance with this Agreement.
Semi-annual Date means 30 June and 31 December.
Semi-annual Reduction Date means, each Semi-annual Date falling during the period between the first Utilisation Date of the Facility and the Final Repayment Date.
Ships means each of the ships as described in Schedule 2 (Ship information) and Ship means any of them.
Ship Representations means each of the representations and warranties set out in clauses 18.17 (Environmental matters), 18.28 (Ship status) and 18.29 (Ships employment).
Shipowner Guarantee means, in relation to an Owner, a guarantee by that Owner in favour of the Security Agent in the agreed form.
Specified Time means 11.00 am (London time) on the Quotation Day.
Spill means any actual or threatened spill, release or discharge of a Pollutant into the environment.
Subordination Agreement means an agreement in the agreed form fully subordinating the Borrowers and the Parents rights and interest in and to all Financial Indebtedness incurred by an Obligor (except for the Parent) to the Borrower or the Parent to the Finance Parties under the Finance Documents.
Subsidiary of a person means any other person:
(a) | directly or indirectly controlled by such person; or |
(b) | of whose dividends or distributions on ordinary voting share capital or membership interests such person is entitled to receive more than 50 per cent. |
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
Tax Credit means a credit against, relief or remission for, or repayment of any Tax.
Total Commitments means the lower of the aggregate of the Commitments (being $210,000,000 at the date of this Agreement) and 65% of the fair market value of the Ships as determined on or around (but before) the date of this Agreement by reference to the market valuations of the Ships obtained in accordance with clause 25 (Minimum Security Value) and which are dated not more than 30 days prior to the date of this Agreement (or such earlier date approved by the Agent).
Total Loss means, in relation to a Ship, its:
(a) | actual, constructive, compromised or arranged total loss; or |
(b) | requisition for title, confiscation or other compulsory acquisition by a government entity; or |
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(c) | hijacking, theft, condemnation, capture, seizure, arrest or detention for more than 60 days or, where there has been a hijacking, theft, capture, seizure or detention of the Ship as a result of an act of piracy, 365 days or, if earlier, the date on which the insurance proceeds are paid by the insurers in respect of such hijack, theft, capture, seizure or detention as a result of privacy. |
Total Loss Date means, in relation to the Total Loss of a Ship:
(a) | in the case of an actual total loss, the date it happened or, if such date is not known, the date on which that Ship was last reported; |
(b) | in the case of a constructive, compromised, agreed or arranged total loss, the earliest of: |
(i) | the date notice of abandonment of that Ship is given to its insurers; or |
(ii) | if the insurers do not admit such a claim, the date later determined by a competent court of law to have been the date on which the total loss happened; or |
(iii) | the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the vessels insurers; |
(c) | in the case of a requisition for title, confiscation or compulsory acquisition, the date it happened; and |
(d) | in the case of hijacking, theft, condemnation, capture, seizure, arrest or detention, the date 60 days or, in respect of any hijacking, theft, capture, seizure or detention of the Ship as a result of an act of piracy, 365 days after the date upon which it happened or, if earlier, the date on which the insurance proceeds are paid by the insurers in respect of such hijack, theft, capture, seizure or detention as a result of privacy. |
Total Loss Repayment Date means where a Mortgaged Ship has become a Total Loss the earlier of:
(a) | the date 120 days after its Total Loss Date; and |
(b) | the date upon which insurance proceeds or Requisition Compensation for such Total Loss are paid by insurers or the relevant government entity. |
Transfer Certificate means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower.
Transfer Date means, in relation to a transfer, the later of:
(a) | the proposed Transfer Date specified in the Transfer Certificate; and |
(b) | the date on which the Agent executes the Transfer Certificate. |
Treasury Transaction means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.
Trust Property means, collectively:
(a) | all moneys duly received by the Security Agent under or in respect of the Finance Documents; |
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(b) | any portion of the balance on the Earnings Account held by or charged to the Security Agent at any time; |
(c) | the Security Interests, guarantees, security, powers and rights given to the Security Agent under and pursuant to the Finance Documents including, without limitation, the covenants given to the Security Agent in respect of all obligations of any Obligor; |
(d) | all assets paid or transferred to or vested in the Security Agent or its agent or received or recovered by the Security Agent or its agent in connection with any of the Finance Documents whether from any Obligor or any other person; and |
(e) | all or any part of any rights, benefits, interests and other assets at any time representing or deriving from any of the above, including all income and other sums at any time received or receivable by the Security Agent or its agent in respect of the same (or any part thereof). |
Undisclosed Administration means, in relation to a Lender, the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the laws of the country where that Lender is subject to home jurisdiction supervision and/or regulation, if applicable law requires that such appointment is not to be publicly disclosed.
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents.
Utilisation means a utilisation of the Facility by the borrowing of a Loan.
Utilisation Date means the date on which a Utilisation is made.
Utilisation Request means a notice substantially in the form set out in Schedule 4 (Utilisation Request).
VAT means:
(a) | any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and |
(b) | any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere. |
Write-down and Conversion Powers means:
(a) | in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and |
(b) | in relation to any other applicable Bail-In Legislation: |
(i) | any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and |
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(c) | any similar or analogous powers under that Bail-In Legislation. |
1.2 | Construction |
(a) | Unless a contrary indication appears, any reference in any of the Finance Documents to: |
(i) | Sections, clauses and Schedules are to be construed as references to the Sections and clauses of, and the Schedules to, the relevant Finance Document and references to a Finance Document include its Schedules; |
(ii) | a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as it may from time to time be amended, restated, novated or replaced, however fundamentally; |
(iii) | words importing the plural shall include the singular and vice versa; |
(iv) | a time of day are to London time; |
(v) | any person includes its successors in title, permitted assignees or transferees; |
(vi) | the knowledge, awareness and/or beliefs (and similar expressions) of any Obligor shall be construed so as to mean the knowledge, awareness and beliefs of the director and officers of such Obligor, having made due and careful enquiry; |
(vii) | agreed form means: |
(A) | where a Finance Document has already been executed by all of the relevant parties, such Finance Document in its executed form; |
(B) | prior to the execution of a Finance Document, the form of such Finance Document separately agreed in writing between the Agent and the Borrower as the form in which that Finance Document is to be executed or another form approved at the request of the Borrower or, if not so agreed or approved, is in the form specified by the Agent; |
(viii) | approved by the Majority Lenders or approved by the Lenders means approved in writing by the Agent acting on the instructions of the Majority Lenders or, as the case may be, all of the Lenders (on such conditions as they may respectively impose) and otherwise approved means approved in writing by the Agent (on such conditions as the Agent may impose) and approval and approve shall be construed accordingly; |
(ix) | assets includes present and future properties, revenues and rights of every description; |
(x) | an authorisation means any authorisation, consent, concession, approval, resolution, licence, exemption, filing, notarisation or registration; |
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(xi) | charter commitment means, in relation to a vessel, any charter or contract for the use, employment or operation of that vessel or the carriage of people and/or cargo or the provision of services by or from it and includes any agreement for pooling or sharing income derived from any such charter or contract; |
(xii) | control of an entity means: |
(A) | the power (whether by way of ownership of shares, membership interests, proxy, contract, agency or otherwise) to: |
(1) | cast, or control the casting of, more than 30% of the maximum number of votes that might be cast at a general meeting of that entity; or |
(2) | appoint or remove all, or the majority, of the directors or other equivalent officers of that entity; or |
(3) | give directions with respect to the operating and financial policies of that entity with which the directors or other equivalent officers of that entity are obliged to comply; and/or |
(xiii) | the holding beneficially of more than 30% of the issued share capital or membership interests of that entity (excluding any part of that issued share capital or membership interests that carries no right to participate beyond a specified amount in a distribution of either profits or capital) (and, for this purpose, any Security Interest over share capital or membership interests shall be disregarded in determining the beneficial ownership of such share capital or membership interests); |
and controlled shall be construed accordingly;
(xiv) | the term disposal or dispose means a sale, transfer or other disposal (including by way of lease or loan but not including by way of loan of money) by a person of all or part of its assets, whether by one transaction or a series of transactions and whether at the same time or over a period of time, but not the creation of a Security Interest; |
(xv) | dollars/$ means the lawful currency of the United States of America; |
(xvi) | the equivalent of an amount specified in a particular currency (the specified currency amount) shall be construed as a reference to the amount of the other relevant currency which can be purchased with the specified currency amount in the London foreign exchange market at or about 11 a.m. on the date the calculation falls to be made for spot delivery, as conclusively determined by the Agent (with the relevant exchange rate of any such purchase being the Agents spot rate of exchange); |
(xvii) | a government entity means any government, state or agency of a state; |
(xviii) | a guarantee means any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness; |
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(xix) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; |
(xx) | month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that: |
(A) | if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that month (if there is one) or on the immediately preceding Business Day (if there is not); and |
(B) | if there is no numerically corresponding day in that month, that period shall end on the last Business Day in that month |
and the above rules in paragraphs (i) to (ii) will only apply to the last month of any period;
(xxi) | an obligation means any duty, obligation or liability of any kind; |
(xxii) | something being in the ordinary course of business of a person means something that is in the ordinary course of that persons current day-to-day operational business (and not merely anything which that person is entitled to do under its Constitutional Documents); |
(xxiii) | in clause 28 (Business restrictions) includes by way of set-off, combination of accounts or otherwise; |
(xxiv) | a person includes any individual, firm, company, corporation, government entity or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality); |
(xxv) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation and includes (without limitation) any Basel II Regulation or Basel III Regulation; |
(xxvi) | right means any right, privilege, power or remedy, any proprietary interest in any asset and any other interest or remedy of any kind, whether actual or contingent, present or future, arising under contract or law, or in equity; |
(xxvii) | trustee, fiduciary and fiduciary duty has in each case the meaning given to such term under applicable law; |
(xxviii) | the winding up, dissolution, or administration of person or (ii) a receiver or administrative receiver or administrator in the context of insolvency proceedings or security enforcement actions in respect of a person shall be construed so as to include any equivalent or analogous proceedings or any equivalent and analogous person or appointee (respectively) under the law of the jurisdiction in which such person is established or incorporated or any jurisdiction in which such person carries on business including (in respect of proceedings) the seeking or occurrences of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors; |
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(xxix) | a provision of law is a reference to that provision as amended or re-enacted; and |
(xxx) | a reference to costs in the context of enforcement in a Finance Document shall include fees, costs and expenses of legal advisers, financial advisers and insurance and other consultants, brokers, surveyors and advisers. |
(xxxi) | Where in this Agreement a provision includes a monetary reference level in one currency, unless a contrary indication appears, such reference level is intended to apply equally to its equivalent in other currencies as of the relevant time for the purposes of applying such reference level to any other currencies. |
(xxxii) | Section, clause and Schedule headings are for ease of reference only. |
(xxxiii) | Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. |
(xxxiv) | A Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been waived or, if in the opinion of the Agent such Event of Default is capable of being remedied, remedied to the satisfaction of the Agent. |
(xxxv) | Unless a contrary indication appears, in the event of any inconsistency between the terms of this Agreement and the terms of any other Finance Document when dealing with the same or similar subject matter, the terms of this Agreement shall prevail. |
1.3 | Third party rights |
(a) | Unless expressly provided to the contrary in a Finance Document for the benefit of a Finance Party or another Indemnified Person, a person who is not a party to a Finance Document has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or to enjoy the benefit of any term of the relevant Finance Document. |
(b) | Any Finance Document may be rescinded or varied by the parties to it without the consent of any person who is not a party to it (unless otherwise provided by this Agreement). |
(c) | An Indemnified Person who is not a party to a Finance Document may only enforce its rights under that Finance Document through a Finance Party and if and to the extent and in such manner as the Finance Party may determine. |
1.4 | Finance Documents |
Where any other Finance Document provides that this clause 1.4 shall apply to that Finance Document, any other provision of this Agreement which, by its terms, purports to apply to all or any of the Finance Documents and/or any Obligor shall apply to that Finance Document as if set out in it but with all necessary changes.
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1.5 | Conflict of documents |
The terms of the Finance Documents other than as relates to the creation and/or perfection of security) are subject to the terms of this Agreement and, in the event of any conflict between any provision of this Agreement and any provision of any Finance Document (other than in relation to the creation and/or perfection of security) the provisions of this Agreement shall prevail.
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SECTION 2 - THE FACILITIES
2 | The Facility |
2.1 | The Revolving Credit Facility |
Subject to the terms of this Agreement, the Lenders make available to the Borrower a revolving credit facility in an aggregate principal amount of up to the Total Commitments.
2.2 | Increase |
(a) | The Borrower may by giving prior notice to the Agent by no later than the date falling five Business Days after the effective date of a cancellation of: |
(i) | the undrawn Commitments of a Defaulting Lender in accordance with clause 7.5(g); or |
(ii) | the Commitments of a Lender in accordance with clause 7.1 (Illegality), |
request that the Total Commitments be increased (and the Commitments under the Facility shall be so increased rateably) in an aggregate amount of up to the amount of the Commitment so cancelled as follows:
(i) | the increased Commitments will be assumed by one or more Lenders or other banks or financial institutions (each an Increase Lender) selected by the Borrower (each of which shall not be a member of the Group and which is further acceptable to the Agent (acting reasonably)) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender; |
(iii) | each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(iv) | each Increase Lender shall become a Party as a Lender and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(v) | the Commitments of the other Lenders shall continue in full force and effect; and |
(vi) | any increase in the Total Commitments shall take effect on the date specified by the Borrower in the notice referred to above or any later date on which the conditions set out in clause 2.2(b) are satisfied. |
(b) | An increase in the Total Commitments will only be effective on: |
(i) | the execution by the Agent of an Increase Confirmation from the relevant Increase Lender; |
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(ii) | in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase the performance by the Agent of all necessary know your customer or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Agent shall promptly notify to the Borrower and the Increase Lender. |
(c) | Each of the other Finance Parties hereby appoint the Agent as its agent to execute on its behalf any Increase Confirmation delivered to the Agent in accordance with this clause 2.2. |
(d) | Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective. |
(e) | Unless the Agent otherwise agrees or the increased Commitments are assumed by an existing Lender, the Borrower shall, on the date upon which the increase takes effect, pay to the Agent (for its own account) a fee of $5,000 and the Borrower shall promptly on demand pay the Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this clause 2.2. |
(f) | The Borrower may pay to the Increase Lender a fee in the amount and at the times agreed between the Borrower and the Increase Lender in a letter between the Borrower and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this clause 2.2(f). |
(g) | Clause 32.4 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this clause 2.2(g) in relation to an Increase Lender as if references in that clause to: |
(i) | an Existing Lender were references to all the Lenders immediately prior to the relevant increase; |
(ii) | the New Lender were references to that Increase Lender; and |
(iii) | a re-assignment were references to an assignment. |
2.3 | Finance Parties rights and obligations |
(a) | The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents. |
(b) | The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights (subject to clause 34.22 (All enforcement action through the Agent)) in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Partys participation in the Facility or its role under a Finance Document (including any such amount payable to the Agent on its behalf) is a debt owing to that Finance Party by that Obligor. |
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(c) | A Finance Party may, except as otherwise stated in the Finance Documents (including clauses 34.22 (All enforcement action through the Agent)) and 35.2 (Finance Parties acting together), separately enforce its rights under the Finance Documents. |
3 | Purpose |
3.1 | Purpose |
(a) | The Borrower shall apply all amounts borrowed under the Facility in accordance with this clause 3 (Purpose). |
(b) | The Facility shall be made available to the Borrower for the purposes of refinancing the Existing Credit Facility and for its general corporate and working capital purposes. |
3.2 | Monitoring |
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4 | Conditions of Utilisation |
4.1 | Initial conditions precedent |
The Lenders will only be obliged to comply with clause 5.4 (Lenders participation) in relation to any Utilisation if on or before the date that the Borrower delivers the first Utilisation Request under this Agreement, all of the documents and other evidence listed in Part 1 of Schedule 3 (Conditions precedent to any Utilisation) in form and substance satisfactory to the Agent.
4.2 | Ship and security conditions precedent |
The Total Commitments shall only become available for borrowing under this Agreement if the Agent, or its duly authorised representative, has received all of the documents and evidence listed in Part 2 of Schedule 3 (Ship and security conditions precedent) in form and substance satisfactory to the Agent.
4.3 | Notice to Lenders |
The Agent shall notify the Borrower and the Lenders promptly upon receiving and being satisfied with all of the documents and evidence referred to in this clause 4 in form and substance satisfactory to it. Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives any such notification, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
4.4 | Further conditions precedent |
The Lenders will only be obliged to comply with clause 5.4 (Lenders participation) if:
(a) | in respect of any Utilisation, on the date of the Utilisation Request and on the proposed Utilisation Date no Event of Default is continuing or would result from the proposed Utilisation; |
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(b) | on the date of any Utilisation Request and on the proposed Utilisation Date the Repeating Representations are true and, in relation to the first Utilisation, all of the other representations set out in clause 18 (Representations), are true; and |
(c) | in the case of the first Utilisation, the Ship Representations for the Ships are true on the proposed Utilisation Date. |
4.5 | Waiver of conditions precedent |
The conditions in this clause 4 are inserted solely for the benefit of the Finance Parties and may be waived on their behalf in whole or in part and with or without conditions by the Agent acting:
(a) | in respect of the conditions in clause 4.1 (Initial conditions precedent) and 4.2 (Ship and security conditions precedent) on the instructions of all the Lenders; or |
(b) | in respect of the conditions in clause 4.4 (Further conditions precedent) on the instructions of the Majority Lenders. |
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SECTION 3 - UTILISATION
5 | Utilisation |
5.1 | Delivery of a Utilisation Request |
(a) | The Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request: |
(i) | in respect of the first Utilisation, not later than 11:00 a.m. three Business Days before the proposed Utilisation Date; and |
(ii) | in respect of each subsequent Utilisation, not later than 11:00 a.m. three Business Days before the proposed Utilisation Date. |
(b) | The Borrower may, subject to clauses 5.1(c) and 5.4 (Automatic Utilisation), borrow a Loan by giving to the Agent a duly completed Utilisation Request. |
(c) | The Borrower may not deliver a Utilisation Request if as a result of the proposed amount of the Utilisation, more than five Loans would be outstanding or if as a result of the proposed Utilisation, the Borrower would not be in compliance with its obligations under clause 25 (Minimum security value) on the proposed Utilisation Date. |
5.2 | Completion of a Utilisation Request |
A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(a) | the proposed Utilisation Date is a Business Day falling within the Availability Period; |
(b) | the currency and amount of the Utilisation comply with clause 5.3 (Currency and amount); and |
(c) | the proposed Interest Period complies with clause 9 (Interest Periods). |
5.3 | Currency and amount |
(a) | The currency specified in a Utilisation Request must be dollars. |
(b) | On each relevant Utilisation Date under the Facility the amount of the proposed Loan must be in a minimum amount of $5,000,000 or, if less, the amount of the Total Commitments and must not exceed (when aggregated with all outstanding Loans at such time) the Total Commitments. |
(c) | If the amount requested in a Utilisation Request is greater than the amount capable of being advanced as a result of compliance with the requirements of clause 5.3(b), then only the lower amount shall be available to be advanced (and the Utilisation Request shall be construed by reference to this lower amount). |
5.4 | Automatic Utilisation |
(a) | If, not later than 11:00 am three Business Days before the last day of an Interest Period for a maturing Loan (the Maturing Loan), the Agent has not received either: |
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(i) | a Utilisation Request pursuant to clause 5.1(a) indicating that the Borrower wishes to rollover the Maturing Loan pursuant to clause 6.2(b) but on different terms to those on which the Maturing Loan is currently borrowed; or |
(ii) | notice in writing from the Borrower that the Borrower wishes to repay the Maturing Loan at the end of that Interest Period, |
then the Borrower shall automatically be deemed to have delivered an irrevocable Utilisation Request to the Agent requesting that a new Loan (the New Loan) be made available under the same Facility as the Maturing Loan on the following terms:
(A) | the amount of the New Loan shall, subject to clauses 6.2 (Reduction of Credit Facility) and 25.12 (Security Shortfall) (having regard to any reduction in the Commitments arising as a result of such clauses) be equal to the Maturing Loan and if clauses 6.2 and/or 25.12 apply then the New Loan shall be reduced to reflect the application of such clauses and clause 6.1(b)(ii)(C) shall apply with respect to the resulting difference between the New Loan and the Maturing Loan; |
(B) | the proposed Utilisation Date shall be the last day of an Interest Period for the Maturing Loan; and |
(C) | the Interest Period for the New Loan shall be the same period as the then current Interest Period applicable to the Maturing Loan unless that would cause the Interest Period to extend longer than the Final Repayment Date in which case the Interest Period shall be a period which would expire on the Final Repayment Date of the New Loan. |
(b) | On the Utilisation Date of the New Loan, the Agent shall refinance the Maturing Loan with the New Loan and the provisions of clause 6.2(a) shall otherwise apply. |
5.5 | Lenders participation |
(a) | If the conditions set out in this Agreement have been met, each Lender shall make its participation in a Loan available by the Utilisation Date through its Facility Office. |
(b) | The amount of each Lenders participation in a Loan will be equal to the proportion borne by its undrawn Commitment to the undrawn Commitments under the Facility immediately prior to making the Loan. |
(c) | The Agent shall promptly notify each Lender of the amount of a Loan and the amount of its participation in the Loan, in each case by 11:00 a.m. on the Quotation Day. |
(d) | The Agent shall pay all amounts received by it in respect of each Loan (and its own participation in it, if any) to the Borrower or for its account in accordance with the instructions contained in the Utilisation Request. |
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SECTION 4 - REPAYMENT, PREPAYMENT AND CANCELLATION
6 | Repayment and reduction |
6.1 | Repayment of Loans |
(a) | The Borrower shall repay each Loan on the last day of its Interest Period. |
(b) | Without prejudice to the Borrowers obligation under clause 6.1(a) above, if: |
(i) | a new Loan is to be made available to the Borrower under the Facility: |
(A) | on the same day that a maturing Loan is due to be repaid by the Borrower; and |
(B) | in whole or in part for the purpose of refinancing the maturing Loan; and |
(ii) | the proportion borne by each Lenders participation in the maturing Loan to the amount of that maturing Loan is the same as the proportion borne by that Lenders participation in the new Loan to the aggregate amount of the new Loan, |
the aggregate amount of the new Loan shall, unless the Borrower notifies the Agent to the contrary in the relevant Utilisation Request, be treated as if applied in or towards repayment of the maturing Loan so that:
(C) | if the amount of the maturing Loan exceeds the amount of the new Loan: |
(1) | the Borrower will only be required to make a payment under clause 37.1 (Payments to the Agent) in an amount equal to that excess; and |
(2) | each Lenders participation in the new Loan shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lenders participation in the maturing Loan and that Lender will not be required to make a payment under clause 37.1 (Payments to the Agent) in respect of its participation in the new Loan; and |
(D) | if the amount of the maturing Loan is equal to or less than the new Loan: |
(1) | the Borrower will not be required to make a payment under clause 37.1 (Payments to the Agent); and |
(2) | each Lender will be required to make a payment under clause 37.1 (Payments to the Agent) in respect of its participation in the new Loan only to the extent that its participation in the new Loan exceeds that Lenders participation in the maturing Loan and the remainder of that Lenders participation in the new Loan shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lenders participation in the maturing Loan. |
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6.2 | Extension of Facility |
(a) | At any time during the period falling between 12 and 36 months after the date of this Agreement the Borrower may by written notice to the Agent request that the Final Repayment Date be extended by a further period of one year (the Facility Extension). The Final Repayment Date shall in no event extend beyond the date falling five years from the date of this Agreement. |
(b) | Where a request is made by the Borrower pursuant to (a) above the Lenders shall determine in their sole discretion whether to consent to the Facility Extension request and the Agent shall advise the Borrower of the decision of the Lenders in writing no later than 30 days following receipt of the Borrowers request. If the Lenders agree to the Facility Extension request paragraph (b) of the definition of Final Repayment Date shall apply and this Agreement and any of the other Finance Documents shall be construed accordingly. |
(c) | The Borrower agrees to execute (or procure the execution of) any documentation supplemental to this Agreement and any other Finance Document as the Agent or any Lender may reasonably require for the purposes of reflecting the Facility Extension and the amendment to the Final Repayment Date. |
6.3 | Reduction of Facility |
The Facility and the Commitments shall be reduced on each Semi-annual Reduction Date by an amount equal to the scheduled reduction amounts set out in Schedule 8 (Scheduled Reduction Amounts). If (a) the amount of the available facility is less than $210,000,000 due to a reduction in the Total Commitments at the signing date of this Agreement or from time to time thereafter or (b) where the Facility Extension applies in accordance with clause 6.2 (Extension of Facility), then Schedule 8 (Scheduled Reduction Amounts) shall be updated at such time to reflect the revised scheduled reduction amounts. If at the time of any reduction in the Commitments the amount of any outstanding Loan exceeds the Total Commitments at the time of that reduction, the Borrower shall at such time prepay such Loan in an amount equal to the relevant excess and any reduction in the Commitments shall reduce rateably the Commitment of each Lender at such time.
6.4 | Final Repayment Date |
On the Final Repayment Date (without prejudice to any other provision of this Agreement), all outstanding amounts under this Agreement and the Security Documents (including, but not limited to the outstanding amount of the Loans) shall be repaid in full and the Total Commitments shall be reduced to zero.
7 | Illegality, prepayment and cancellation |
7.1 | Illegality |
If, in any applicable jurisdiction, it becomes unlawful and/or contrary to Sanctions Laws (or declared by any Sanctions Authority to be contrary to Sanctions Laws or sanctionable by any Sanctions Authority) applicable to the relevant Lender or otherwise impossible for any Lender to perform any of its obligations as contemplated by this Agreement or any of the other Finance Documents, or for any Lender to fund or maintain its participation in the Facility and in the Loans:
(a) | that Lender shall promptly notify the Agent upon becoming aware of that event; |
(b) | upon the Agent notifying the Borrower (which notice shall be given as soon as reasonably practicable following receipt by the Agent of the notice referred to in paragraph (a) above), the Commitment of that Lender will be immediately cancelled and the remaining Total Commitments shall each be reduced rateably; and |
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(c) | the Borrower shall repay that Lenders participation in the Loans on the last day of the Interest Period for each Loan occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law). |
7.2 | Change of control |
(a) | The Borrower shall promptly notify the Agent upon any Obligor becoming aware of a Change of Control. |
(b) | If a Change of Control occurs and unless the Agent has previously approved the Change of Control (acting on the instructions of the Majority Lenders, whose consent shall not be unreasonably withheld or delayed) the Total Commitments shall be cancelled with effect from the date such Change of Control occurs and the Loans shall be prepaid in full on or before the date falling 60 days after the date on which such Change of Control occurs (together with all other outstanding amounts under this Agreement and any of the Security Documents then due and payable at such time). |
7.3 | Voluntary cancellation |
The Borrower may, if it gives the Agent not less than three Business Days (or such shorter period as the Majority Lenders may agree) prior written notice, cancel the whole or any part (being a minimum amount of $1,000,000 and a multiple of $1,000,000) of a Commitment. Upon any such cancellation, the Total Commitments shall be reduced by the same amount. Any cancellation under this clause 7.3 shall reduce the Commitments of the Lenders rateably.
The Borrower shall only be entitled to cancel the whole or any part of the Total Commitments which is then drawn if the Borrower prepays such amount of a Loan as may be necessary to ensure that the outstanding Loans after the date of such cancellation will not exceed the Total Commitments (as reduced by this clause 7.3).
7.4 | Voluntary prepayment of Loans |
For the purpose of clause 25.12(b) (Security shortfall) the Borrower may, if it gives the Agent not less than three Business Days (or such shorter period as the Majority Lenders may agree) prior written notice, prepay either the whole or any part of any Loan (but if in part, being an amount that reduces the Loan by a minimum amount of $1,000,000 and which is a multiple of $1,000,000 or such other amount as is acceptable to the Agent).
7.5 | Right of replacement or cancellation and prepayment in relation to a single Lender |
(a) | If: |
(i) | any Lender notifies the Agent pursuant to clause 7.1; |
(ii) | any sum payable to any Lender by an Obligor is required to be increased under clause 12.2 (Tax gross-up); |
(iii) | any Lender claims indemnification from the Borrower under clause 12.3 (Tax indemnity) or clause 13.1 (Increased Costs); |
(iv) | any Lender refuses to consent to any amendments or waivers requested by the Borrower pursuant to any provision of this Agreement where such provision is expressed to require the consent of such Lender; or |
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(v) | during a Market Disruption Event, any Lender notifies the Agent of a sum under clause 10.3(ii) and that sum is materially greater than the equivalent sums notified by the other Lenders to the Agent under the same clause 10.3(ii), |
the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lenders participation in the Loans or give the Agent notice of its intention to replace that Lender in accordance with clause 7.5(d).
(b) | On receipt of a notice referred to in clause 7.5(a) above, the Commitment of that Lender shall immediately be reduced to zero and (unless the Commitment of the relevant Lender is replaced in accordance with clause 7.5(d)) the remaining Total Commitments shall each be reduced rateably. |
(c) | On the last day of each Interest Period which ends after the Borrower has given notice under clause 7.5(a) above in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lenders participation in the Loans. |
(d) | The Borrower may, in the circumstances set out in clause 7.5(a), with 10 Business Days prior notice to the Agent and that Lender, replace that Lender by requiring that Lender to transfer (and, to the extent permitted by law, that Lender shall transfer) pursuant to clause 32 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Borrower which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with clause 32 (Changes to the Lenders) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the aggregate of: |
(i) | the outstanding principal amount of such Lenders participation in the Loans; |
(ii) | all accrued interest owing to such Lender; |
(iii) | the Break Costs which would have been payable to such Lender pursuant to clause 10.5 (Break Costs) had the Borrower prepaid in full that Lenders participation in the Loans on the date of the transfer; and |
(iv) | all other amounts payable to that Lender under the Finance Documents on the date of the transfer. |
(e) | The replacement of a Lender pursuant to clause 7.5(d) shall be subject to the following conditions: |
(i) | the Borrower shall have no right to replace the Agent; |
(ii) | neither the Agent nor any Lender shall have any obligation to find a replacement Lender; |
(iii) | in no event shall the Lender replaced under clause 7.5(d) be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and |
(iv) | the Lender shall only be obliged to assign its rights pursuant to clause 7.5(d) above once it is satisfied that it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations in relation to that assignment and the Agent has approved such know your customer or other similar checks. |
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(f) | A Lender shall perform the checks described in clause 7.5(e)(iv) above as soon as reasonably practicable following delivery of a notice referred to in clause 7.5(d) above and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks. |
(g) | If any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 5 Business Days notice of cancellation of the undrawn Commitments of that Lender. |
(h) | On such notice becoming effective: |
(i) | the undrawn Commitments of the Defaulting Lender shall immediately be reduced to zero; |
(ii) | the undrawn Total Commitments shall then be reduced by a corresponding amount pro rata; and |
(iii) | the Agent shall as soon as practicable after receipt of such notice, notify all the Lenders. |
7.6 | Sale or Total Loss |
(a) | If a Ship becomes a Total Loss before the Total Commitments have become available for borrowing under this Agreement, the Total Commitments shall be reduced by the Applicable Fraction of the Total Commitments respectively immediately prior to the Total Loss. |
(b) | On a Mortgaged Ships Disposal Repayment Date: |
(i) | the Total Commitments shall be permanently reduced by the Applicable Fraction of the Total Commitments immediately prior to the Mortgaged Ships Disposal Repayment Date; and |
(ii) | the Borrower shall also prepay such amount of any Loans as is necessary to ensure that the Borrower shall be in compliance with its obligations under clause 25 (Minimum security value) on the Mortgaged Ships Disposal Repayment Date. |
(c) | For the purposes of this clause, Applicable Fraction means a fraction having a numerator equal to the Fair Market Value of the Mortgaged Ship or, for the purpose of clause 7.6(a), the Ship which was the subject of the sale or total loss and a denominator equal to the aggregate Fair Market Value of all the Mortgaged Ships or, for the purpose of clause 7.6(a), all the Ships. |
7.7 | Release of Mortgaged Ship Security |
Once the Agent has confirmed that it has received or will receive to its satisfaction all amounts payable pursuant to clause 7.6(b), the Borrower may request the consent of the Security Agent (acting on the instructions of all Lenders) to release, discharge and/or, as appropriate, reassign the Security Documents (and the Security Interests assigned or charged thereunder) executed in respect of such Mortgaged Ship. In addition, the Borrower shall also be entitled to make a request for a release of security in respect of a Mortgage Ship where it has made a cancellation of the Commitments under clause 7.3 (Voluntary cancellation) for the purpose of removing that
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Mortgage Ship from the financing arrangements contemplated by this Agreement provided that the Borrower shall be in compliance with its obligations under clause 25 (Minimum security value) following such release or discharge. When any consent to the release of security is so given, any release arrangements of the type referred to in this clause shall be at the cost and expense of the Borrower. It is agreed that the consent to release the Security Documents under this clause 7.7 shall not be unreasonably withheld or delayed in circumstances where all amounts required to be paid under clause 7.6 and/or clause 25 have been received by the Agent.
7.8 | Automatic cancellation |
Unless otherwise agreed, in relation to the first Loan to be utilised under this Agreement, the proposed Utilisation Date must be a date which is no later than 15 September 2020 and if the first Loan is not utilised by such date, the Availability Period (as contemplated by the definition of Availability Period) shall come to an end on 15 September 2020 and the Commitments for the Facility shall be cancelled and shall immediately be reduced to zero.
7.9 | Restrictions |
(a) | Any notice of cancellation or prepayment given by any Party under this clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment. |
(b) | Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty. Any cancellation of any part of the Total Commitments pursuant to clause 7.3 (Voluntary Cancellation) under this Agreement shall be without premium or penalty. |
(c) | Unless a contrary indication appears in this Agreement, any part of the Facility which is prepaid or repaid may be reborrowed in accordance with the terms of this Agreement. |
(d) | The Borrower shall not repay or prepay all or any part of a Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement. |
(e) | Subject to clause 2.2 (Increase) no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated. |
(f) | If the Agent receives a notice under this clause 7 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate. |
(g) | If the Total Commitments are partially reduced and as a result a Loan is partially prepaid under this Agreement (other than under clause 7.1 (Illegality), clause 7.5 (Right of replacement or cancellation and prepayment in relation to a single Lender) or clause 7.6 (Sale or Total Loss)): |
(i) | the Commitments of the Lenders shall be reduced rateably for the Facility; |
(ii) | in the case of a prepayment in respect of the Facility, such prepayment shall be applied pro rata in prepaying the principal outstanding amount of a Loan (and a permanent reduction by the same amount in the Total Commitments); and |
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(iii) | if following any reduction of the Commitments the amount of the Loan exceeds the relevant Commitments at the time of that reduction, the Borrower shall prepay such Loan in an amount equal to the relevant excess. |
(h) | Any cancellation of the Commitments and/or prepayment under this Agreement shall be made together with payment to any Hedging Provider of any amount falling due to the relevant Hedging Provider under a Hedging Contract as a result of the termination or close out of that Hedging Contract or any Hedging Transaction under it in accordance with clause 29.2 (Unwinding of Hedging Contracts) in relation to that prepayment. |
7.10 | Partial prepayment |
Any partial prepayment of the Loans and/or reduction of the Facility made pursuant to clause 25.12(c) (Security shortfall) shall be applied in prepaying each Loan and reducing the Total Commitments by reference to the portion borne by that Loan and, as the case may be, the Total Commitments to the aggregate of those Loans and the Total Commitments. Where at the time of any reduction of the Total Commitments the aggregate amount of the Loans exceeds the Total Commitments (as reduced), the Borrower shall be obliged to prepay the amount of the excess at the same time as the relevant reduction takes place.
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SECTION 5 - COSTS OF UTILISATION
8 | Interest |
8.1 | Calculation of interest |
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
(a) | Margin; and |
(b) | LIBOR. |
8.2 | Sustainability margin adjustment |
(a) | Subject to the other provisions of this clause, upon the written request of the Borrower at any time during the period falling between 12 and 36 months after the date of this Agreement (which shall be accompanied with a Sustainability Certificate for the calendar year immediately prior to the date of such request) and with the prior written consent of all Lenders the provisions of Schedule 9 (Sustainability Margin Adjustment), as such Schedule 9 shall be finalised by the Borrower and the Sustainability Agent (acting on the instructions of all Lenders), shall enter into force on the date agreed between the Borrower and the Agent (acting on the instructions of all Lenders) (the Sustainability Margin Date). From the Sustainability Margin Date, the Margin (as specified in paragraph (a) of its definition in clause 1.1 (Definitions)) for each subsequent calendar year during the Facility Period will be determined and adjusted in accordance with the terms set out in Schedule 9 (Sustainability Margin Adjustment) (as amended) and references to Margin in this Agreement shall be construed accordingly. |
(b) | Subject to the provisions of clause 8.2(a), the Sustainability Margin Adjustment may not apply earlier than the calendar year immediately following the Sustainability Margin Date. |
(c) | The Borrower undertakes to execute (or procure the execution of) any documentation supplemental to this Agreement and any other Finance Document as the Agent may in its sole discretion require for the purposes of adjusting Schedule 9 (Sustainability Margin Adjustment) consequent to an agreement with the Agent in accordance with clause 8.2(a) and/or reflecting an amendment to the rate of Margin. |
(d) | Unless otherwise defined in this Agreement, expressions used in this clause 8.2 shall have the meaning given to them in Schedule 9 (Sustainability Margin Adjustment). |
8.3 | Payment of interest |
The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period (and, if the Interest Period is longer than three months, on the dates falling at three monthly intervals after the first day of the Interest Period).
8.4 | Default interest |
(a) | If an Obligor fails to pay any amount payable by it under a Finance Document (other than a Hedging Contract) on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to clause 8.4(b) below, is two point zero per cent (2.0%) higher than the rate of interest most recently calculated (prior to the due date of the overdue amount) pursuant to clause 8.1 (Calculation of interest), for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing in accordance with this clause 8.4 shall be immediately payable by the Obligor on demand by the Agent. |
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(b) | If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan or the relevant part of it: |
(i) | the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to the relevant Loan; and |
(ii) | the rate of interest applying to the overdue amount during that first Interest Period shall be two point zero per cent (2.0%) per annum higher than the rate which would have applied if the overdue amount had not become due. |
(c) | Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. |
8.5 | Notification of rates of interest |
The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.
9 | Interest Periods |
9.1 | Selection of Interest Periods |
(a) | The Borrower may select an Interest Period for a Loan in the Utilisation Request for that Loan. |
(b) | If the Borrower does not issue a Utilisation Request, the relevant Interest Period for such Loan shall be three months. |
(c) | Subject to this clause 9, the Borrower may select an Interest Period of three or six months or, on no more than three occasions in any calendar year, one month, or any other period agreed between the Borrower and the Agent on the instructions of all the Lenders. |
(d) | No Interest Period shall extend beyond the Final Repayment Date. |
9.2 | Start date of Interest Periods |
The Interest Period for a Loan shall start on its Utilisation Date.
9.3 | Non-Business Days |
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
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10 | Changes to the calculation of interest |
10.1 | Unavailability of Screen Rate |
(a) | If no Screen Rate is available for LIBOR for the Interest Period of a Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan. |
(b) | If no Screen Rate is available for LIBOR for: |
(i) | dollars; or |
(ii) | the Interest Period of the Loan and it is not possible to calculate the Interpolated Screen Rate, |
the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time and for a period equal in length to the Interest Period of the relevant Loan.
10.2 | Calculation of Reference Bank Rate |
Subject to clause 10.3 (Market Disruption Event), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation the Specified Time, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
10.3 | Market Disruption Event |
(a) | If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lenders share of that Loan for the Interest Period shall be the rate per annum which is the sum of: |
(i) | the Margin; and |
(ii) | the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select. |
(b) | If a Market Disruption Event occurs, the Agent shall, as soon as practicable, notify the Borrower. |
(c) | In this Agreement Market Disruption Event means that: |
(i) | at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available, it is not possible to calculate the Interpolated Screen Rate and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for the relevant Interest Period; or |
(ii) | before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan are equal to or exceed 50% of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR. |
10.4 | Alternative basis of interest or funding |
(a) | If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest. |
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(b) | Any alternative basis agreed pursuant to clause 10.4(a) above shall, with the prior consent of all the Lenders be binding on all Parties. |
10.5 | Break Costs |
(a) | The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum or relevant part of it. |
(b) | Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue. |
11 | Fees |
11.1 | Commitment commission |
(a) | The Borrower shall pay to the Agent (for the account of each Lender) a fee in dollars computed at the rate of 35% per cent of the Margin on the undrawn and uncancelled portion of that Lenders Commitment calculated on a daily basis from the date of this Agreement (the start date). |
(b) | The Borrower shall pay the accrued commitment commission on each Quarter Date commencing on the first Quarter Date following the start date of this Agreement up to and including the Final Repayment Date on the relevant Lenders Commitment in respect of the Total Commitments and, if cancelled in full, on the cancelled amount of the relevant Lenders Commitment in respect of the Total Commitments at the time the cancellation is effective. |
(c) | No commitment fee is payable to the Agent (for the account of a Lender) on any undrawn Commitment of that Lender for any day on which that Lender is a Defaulting Lender. |
11.2 | Facility Extension |
Where the Facility Extension is granted pursuant to clause 6.2 (Extension of Facility), the Borrower shall pay to the Agent (for the account of each Lender) a fee in dollars computed at the rate of 0.1875% of the amount of the Facility as at the date on which the Facility Extension is so granted, with such fee to be payable within five (5) Business Days of the date that the Borrower is notified by the Agent that the Facility Extension has been granted.
11.3 | Additional Fees |
The Borrower shall also pay to the Agent the fees in the amount and at the times agreed in any Fee Letter.
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SECTION 6 - ADDITIONAL PAYMENT OBLIGATIONS
12 | Tax gross-up and indemnities |
12.1 | Definitions |
(a) | In this Agreement: |
Protected Party means a Finance Party or, in relation to clause 14.4 (Indemnity concerning security) and clause 14.7 (Interest) insofar as it relates to interest on any amount demanded by that Indemnified Person under clause 14.4 (Indemnity concerning security), any Indemnified Person, which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document (other than a Hedging Contract) other than a FATCA Deduction.
Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under clause 12.2 (Tax gross-up) or a payment under clause 12.3 (Tax indemnity).
(b) | Unless a contrary indication appears, in this clause 12 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination. |
12.2 | Tax gross-up |
(a) | Each Obligor shall make all payments to be made by it under any Finance Document without any Tax Deduction, unless a Tax Deduction is required by law. |
(b) | The Borrower shall, promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction), notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and that Obligor. |
(c) | If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor under the relevant Finance Document shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
(d) | If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. |
(e) | Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. |
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(f) | This clause 12.2 shall not apply in respect of any payments under any Hedging Contract, where the gross-up provisions of the relevant Hedging Master Agreement itself shall apply. |
12.3 | Tax indemnity |
(a) | The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document. |
(b) | Clause 12.3(a) above shall not apply: |
(i) | with respect to any Tax assessed on a Finance Party: |
(A) | under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or |
(B) | under the law of the jurisdiction in which that Finance Partys Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party;
(ii) | to the extent a loss, liability or cost: |
(A) | is compensated for by an increased payment under clause 12.2 (Tax gross-up); |
(B) | is compensated for by a payment under clause 12.5 (Indemnities on an after Tax basis); or |
(C) | relates to a FATCA Deduction required to be made by a Party. |
(c) | A Protected Party making, or intending to make a claim under clause 12.3(a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower. |
(d) | A Protected Party shall, on receiving a payment from an Obligor under this clause 12.3, notify the Agent. |
12.4 | Tax Credit |
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(a) | a Tax Credit is attributable (i) to an increased payment of which that Tax Payment forms part, (ii) to that Tax Payment or (iii) to a Tax Deduction in consequence of which that Tax Payment was required; and |
(b) | that Finance Party has obtained and utilised that Tax Credit, |
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
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12.5 | Indemnities on after Tax basis |
(a) | If and to the extent that any sum payable to any Protected Party by the Borrower under any Finance Document by way of indemnity or reimbursement proves to be insufficient, by reason of any Tax suffered thereon, for that Protected Party to discharge the corresponding liability to a third party, or to reimburse that Protected Party for the cost incurred by it in discharging the corresponding liability to a third party, the Borrower shall pay that Protected Party such additional sum as (after taking into account any Tax suffered by that Protected Party on such additional sum) shall be required to make up the relevant deficit. |
(b) | If and to the extent that any sum (the Indemnity Sum) constituting (directly or indirectly) an indemnity to any Protected Party but paid by the Borrower to any person other than that Protected Party, shall be treated as taxable in the hands of the Protected Party, the Borrower shall pay to that Protected Party such sum (the Compensating Sum) as (after taking into account any Tax suffered by that Protected Party on the Compensating Sum) shall reimburse that Protected Party for any Tax suffered by it in respect of the Indemnity Sum. |
(c) | For the purposes of this clause 12.5 a sum shall be deemed to be taxable in the hands of a Protected Party if it falls to be taken into account in computing the profits or gains of that Protected Party for the purposes of Tax and, if so, that Protected Party shall be deemed to have suffered Tax on the relevant sum at the rate of Tax applicable to that Protected Partys profits or gains for the period in which the payment of the relevant sum falls to be taken into account for the purposes of such Tax. |
(d) | There shall be taken into account, in determining whether any amount referred to in clause 12.5(a) is insufficient, the amount of any deduction or other relief, allowance or credit available to the Protected Party in respect of the Protected Partys corresponding liability to a third party or the cost incurred by the Protected Party in discharging the corresponding liability to a third party. |
12.6 | Stamp taxes |
(a) | The Borrower shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document. |
(b) | Paragraph (a) above shall not apply in respect of any stamp duty, registration or other similar Taxes which are payable in respect of an assignment or transfer of any kind by a Finance Party of any of its rights and/or obligations under a Finance Document other than at the request of the Borrower or Parent or following an Event of Default which is continuing. |
12.7 | Value added tax |
(a) | All amounts expressed in a Finance Document to be payable by any party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to clause 12.7(b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any party under a Finance Document, and such Finance Party is required to account to the relevant tax authority for the VAT, that party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that party). |
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(b) | If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier) to any other Finance Party (the Recipient) under a Finance Document, and any party to a Finance Document other than the Recipient (the Subject Party) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration): |
(i) | (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Subject Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (a) applies) promptly pay to the Subject Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and |
(ii) | (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Subject Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT. |
(c) | Where a Finance Document requires any party to it to reimburse or indemnify a Finance Party for any cost or expense, that party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment of in respect of such VAT from the relevant tax authority. |
(d) | Any reference in this clause 12.7 (Value Added Tax) to any party shall, at any time when such party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to any member of such group at such time. |
(e) | In relation to any supply made by a Finance Party to any party under a Finance Document, if reasonably requested by such Finance Party, that party must promptly provide such Finance Party with details of that partys VAT registration and such other information as is reasonably requested in connection with such Finance Partys VAT reporting requirements in relation to such supply. |
12.8 | FATCA Information |
(a) | Subject to clause 12.8(c) below, each Party shall, within ten Business Days of a reasonable request by another Party: |
(i) | confirm to that other Party whether it is: |
(A) | a FATCA Exempt Party; or |
(B) | not a FATCA Exempt Party; |
(ii) | supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Partys compliance with FATCA; and |
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(iii) | supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Partys compliance with any other law, regulation, or exchange of information regime. |
(b) | If a Party confirms to another Party pursuant to clause 12.8(a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
(c) | Clause 12.8(a) above shall not oblige any Finance Party to do anything, and paragraph (a)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(i) | any law or regulation; |
(ii) | any fiduciary duty; or |
(iii) | any duty of confidentiality. |
(d) | If a party to any Finance Document fails to confirm its status or to supply forms, documentation or other information requested in accordance with clause 12.8(a)(i) or clause 12.8(a)(ii) above (including, for the avoidance of doubt, where 12.8(c) applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information. |
12.9 | FATCA Deduction |
(a) | Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. |
(b) | Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Company and the Agent and the Agent shall notify the other Finance Parties. |
13 | Increased Costs |
13.1 | Increased Costs |
(a) | Subject to clause 13.3 (Exceptions), the Borrower shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates which: |
(i) | arises as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement; and/or |
(ii) | is a Basel III Increased Cost. |
(b) | In this Agreement Increased Costs means: |
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(i) | a reduction in the rate of return from the Facility or on a Finance Partys (or its Affiliates) overall capital; |
(ii) | an additional or increased cost; or |
(iii) | a reduction of any amount due and payable under any Finance Document, |
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
13.2 | Increased Cost claims |
(a) | A Finance Party intending to make a claim pursuant to clause 13.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower. |
(b) | Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. |
13.3 | Exceptions |
(a) | Clause 13.1 (Increased Costs) does not apply to the extent any Increased Cost is: |
(i) | attributable to a Tax Deduction required by law to be made by an Obligor; |
(ii) | attributable to a FATCA Deduction required to be made by a Party; |
(iii) | compensated for by clause 12.3 (Tax indemnity) (or would have been compensated for under clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in clause 12.3(b) applied); or |
(iv) | attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation. |
(b) | In this clause 13.3, a reference to a Tax Deduction has the same meaning given to the term in clause 12.1 (Definitions). |
(c) | Any claim for an Increased Cost made pursuant to clause 13.1 above that arises from or is related to a Basel III Increased Cost incurred by any Finance Party shall be recoverable only to the extent that such Basel III Increased Cost is attributable to the implementation or application of or compliance with any Basel III Regulation which has come into force after the date of this Agreement. |
14 | Other indemnities |
14.1 | Currency indemnity |
(a) | If any sum due from an Obligor under the Finance Documents (a Sum), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of: |
(i) | making or filing a claim or proof against that Obligor; and/or |
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(ii) | obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, |
that Obligor shall, as an independent obligation, within three Business Days of demand by a Finance Party, indemnify each Finance Party to whom that Sum is due against any Losses arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (ii) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b) | Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. |
14.2 | Other indemnities |
The Borrower shall (or shall procure that another Obligor will), within three Business Days of demand by a Finance Party, indemnify each Finance Party against any and all Losses incurred by that Finance Party as a result of:
(a) | the occurrence of any Event of Default; |
(b) | a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any and all Losses arising as a result of clause 36 (Sharing among the Finance Parties); |
(c) | funding, or making arrangements to fund, its participation in a Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); |
(d) | the Loans (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower; |
(e) | arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions Laws (including, without limitation, any Losses incurred by that Finance Party in investigating any possible breach of such laws but excluding any Losses incurred by that Finance Party solely by reason of that Finance Partys own breach of such laws); or |
(f) | incurred by it as a result of any claim, action, civil penalty or fine against, any settlement, and any other kind of loss or liability, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred by the Agent, the Security Agent or any Lender as a result of conduct of any Obligor or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions Laws. |
14.3 | Indemnity to the Agent |
The Borrower shall promptly indemnify the Agent and the Security Agent against:
(a) | any and all Losses incurred by the Agent or the Security Agent (acting reasonably) as a result of: |
(i) | investigating any event which it reasonably believes is a Default; |
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(ii) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; |
(iii) | instructing lawyers, accountants, tax advisers, or other professional advisers or experts as permitted under this Agreement; or |
(iv) | any action taken by the Agent or the Security Agent or any of their representatives, agents or contractors in connection with any powers conferred by any Security Document to remedy any breach of any Obligors obligations under the Finance Documents; and |
(b) | any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent or the Security Agent in the course of acting as Agent or, as the case may be, Security Agent under the Finance Documents (otherwise than by reason of the Agents or the Security Agents gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to clause 37.11 (Disruption to payment systems etc.) notwithstanding the Agents or the Security Agents negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent or the Security Agent in acting as Agent or, as the case may be, the Security Agent under the Finance Documents. |
14.4 | Indemnity concerning security |
(a) | The Borrower shall (or shall procure that another Obligor will) promptly indemnify each Indemnified Person against any and all Losses incurred by it in connection with: |
(i) | any failure by the Borrower to comply with clause 16 (Costs and expenses); |
(ii) | acting or relying on any notice, request or instruction received in respect of the Finance Documents which it reasonably believes to be genuine, correct and appropriately authorised; |
(iii) | the taking, holding, protection or enforcement of the Security Documents; |
(iv) | the exercise or purported exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and/or any other Finance Party and each Receiver by the Finance Documents or by law unless and to the extent that it was caused by its gross negligence or wilful misconduct; |
(v) | any claim (whether relating to the environment or otherwise) made or asserted against the Indemnified Person which would not have arisen but for the execution or enforcement of one or more Finance Documents (unless and to the extent it is caused by the gross negligence or wilful misconduct of that Indemnified Person); or |
(vi) | any breach by any Obligor of the Finance Documents. |
(b) | The Security Agent may, in priority to any payment to the other Finance Parties, indemnify itself out of the Trust Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this clause 14.4 and shall have a lien on the Security Documents and the proceeds of the enforcement of those Security Documents for all moneys payable to it. |
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14.5 | Continuation of indemnities |
The indemnities by the Borrower in favour of the Indemnified Persons contained in this Agreement shall continue in full force and effect notwithstanding any breach by any Finance Party or the Borrower of the terms of this Agreement, the repayment or prepayment of a Loan, the cancellation of the Total Commitments or the repudiation by the Agent or the Borrower of this Agreement.
14.6 | Third Parties Act |
Each Indemnified Person may rely on the terms of clause 14.4 (Indemnity concerning security) and clauses 12 (Tax gross-up and indemnities) and 14.7 (Interest) insofar as it relates to interest on any amount demanded by that Indemnified Person under clause 14.4 (Indemnity concerning security), subject to clause 1.3 (Third party rights) and the provisions of the Third Parties Act.
14.7 | Interest |
Moneys becoming due by the Borrower to any Indemnified Person under the indemnities contained in this clause 14 (Other indemnities) or elsewhere in this Agreement shall be paid on demand made by such Indemnified Person and shall be paid together with interest on the sum demanded from the date of demand therefor to the date of reimbursement by the Borrower to such Indemnified Person (both before and after judgment) at the rate referred to in clause 8.4 (Default interest).
14.8 | Exclusion of liability |
No Indemnified Person will be in any way liable or responsible to any Obligor (whether as mortgagee in possession or otherwise) who is a Party or is a party to a Finance Document to which this clause applies for any loss or liability arising from any act, default, omission or misconduct of that Indemnified Person, except to the extent caused by its own gross negligence or wilful misconduct. Any Indemnified Person may rely on this clause 14.8 subject to clause 1.3 (Third party rights) and the provisions of the Third Parties Act.
15 | Mitigation by the Lenders |
15.1 | Mitigation |
(a) | Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 7.1 (Illegality), clause 12 (Tax gross-up and indemnities) or clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. |
(b) | Clause 15.1(a) does not in any way limit the obligations of any Obligor under the Finance Documents. |
15.2 | Limitation of liability |
(a) | The Borrower shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under clause 15.1 (Mitigation). |
(b) | A Finance Party is not obliged to take any steps under clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
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16 | Costs and expenses |
16.1 | Transaction expenses |
The Borrower shall promptly within five Business Days of demand pay the Agent, the Security Agent, the Bookrunner and the Arrangers the amount of all documented costs and expenses (including all fees, costs and expenses of legal advisers and insurance and other consultants and advisers) reasonably incurred by any of them (and by any Receiver) in connection with the negotiation, preparation, printing, execution, syndication, registration and perfection and any release, discharge or reassignment of:
(a) | this Agreement, any Hedging Master Agreement and any other documents referred to in this Agreement and the Security Documents; |
(b) | any other Finance Documents executed or proposed to be executed after the date of this Agreement including any executed to provide additional security under clause 25 (Minimum security value);or |
(c) | any Security Interest expressed or intended to be granted by a Finance Document. |
16.2 | Amendment costs |
If an Obligor requests an amendment, waiver or consent, the Borrower shall, within five Business Days of demand by the Agent, reimburse the Agent for the amount of all documented costs and expenses (including fees, costs and expenses of legal advisers and insurance and other consultants and advisers) reasonably incurred by the Agent and the Security Agent (and by any Receiver) in responding to, evaluating, negotiating or complying with that request or requirement.
16.3 | Enforcement, preservation and other costs |
The Borrower shall on demand by a Finance Party, pay to each Finance Party the amount of all costs and expenses (including fees, costs and expenses of legal advisers and insurance and other consultants, brokers, surveyors and advisers) incurred by that Finance Party in connection with:
(a) | the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings initiated by or against any Indemnified Person and as a consequence of holding the Charged Property or enforcing those rights and any proceedings instituted by or against any Indemnified Person as a consequence of taking or holding the Security Documents or enforcing those rights; |
(b) | any valuation carried out under clause 25 (Minimum security value); or |
(c) | any inspection carried out under clause 23.8 (Inspection and notice of dry-dockings). |
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SECTION 7 - GUARANTEE
17 | Guarantee and indemnity |
17.1 | Guarantee and indemnity |
The Parent irrevocably and unconditionally:
(a) | guarantees to the Security Agent (as trustee for the Finance Parties) and the other Finance Parties punctual performance by each other Obligor of all such Obligors obligations under the Finance Documents; |
(b) | undertakes with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, it shall immediately on demand pay that amount as if it was the principal obligor; and |
(c) | agrees with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by the Borrower under any Finance Document on the date when it would have been due. The amount payable by the Parent under this indemnity will not exceed the amount it would have had to pay under this clause 17.1 if the amount claimed had been recoverable on the basis of a guarantee. |
17.2 | Continuing guarantee |
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
17.3 | Reinstatement |
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Parent under this clause 17 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
17.4 | Waiver of defences |
The obligations of the Parent under this clause 17 will not be affected by an act, omission, matter or thing (whether or not known to it or any Finance Party) which, but for this clause, would reduce, release or prejudice any of its obligations under this clause 17 including (without limitation):
(a) | any time, waiver or consent granted to, or composition with, any Obligor or other person; |
(b) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor; |
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(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
(d) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; |
(e) | any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security; |
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or |
(g) | any insolvency or similar proceedings. |
17.5 | Immediate recourse |
The Parent waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Parent under this clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
17.6 | Appropriations |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Parent shall not be entitled to the benefit of the same; and |
(b) | hold in an interest-bearing suspense account any moneys received from the Parent or on account of the Parents liability under this clause 17. |
17.7 | Deferral of Parents rights |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, the Parent will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 17:
(a) | to be indemnified by another Obligor; |
(b) | to claim any contribution from any other guarantor of any Obligors obligations under the Finance Documents; |
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(c) | to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party; |
(d) | to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which the Parent has given a guarantee, undertaking or indemnity under clause 17 (Guarantee and Indemnity); |
(e) | to exercise any right of set-off against any other Obligor; and/or |
(f) | to claim or prove as a creditor of any other Obligor in competition with any Finance Party. |
If the Parent receives any benefit, payment or distribution in relation to such rights it will promptly pay an equal amount to the Agent for application in accordance with clause 37 (Payment mechanics). This only applies until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full.
17.8 | Additional security |
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
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SECTION 8 - REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
18 | Representations |
The Borrower makes and repeats the representations and warranties set out in this clause 18 to each Finance Party at the times specified in clause 18.35 (Times when representations are made).
18.1 | Status |
(a) | The Parent is domesticated and validly existing in good standing under the laws of its Original Jurisdiction as a corporation, and the Borrower and each Owner is duly formed or, as applicable, domesticated and validly existing in good standing under the laws of its Original Jurisdiction of its incorporation or formation as a limited liability company, and each Obligor has no registered place of business outside its Original Jurisdiction. |
(b) | Each Obligor has power and authority to carry on its business as it is now being conducted and to own its property and other assets. |
18.2 | Binding obligations |
Subject to the Legal Reservations, the obligations expressed to be assumed by each Obligor in each Finance Document and any Charter Document to which it is, or is to be, a party are or, when entered into by it, will be legal, valid, binding and enforceable obligations and each Security Document to which an Obligor is, or will be, a party, creates or will create the Security Interests which that Security Document purports to create and those Security Interests are or will be valid and effective.
18.3 | Power and authority |
(a) | Each Obligor has power to enter into, perform and deliver and comply with its obligations under, and has taken all necessary action to authorise its entry into, each Finance Document and any Charter Document to which it is or is to be a party. |
(b) | No limitation on any Obligors powers to borrow, create security or give guarantees will be exceeded as a result of any transaction under, or the entry into of, any Finance Document or any Charter Document to which such Obligor is, or is to be, a party. |
18.4 | Non-conflict |
The entry into and performance by each Obligor of, and the transactions contemplated by the Finance Documents and the Charter Documents to which it is a party and the granting of the Security Interests purported to be created by the Security Documents do not and will not conflict with:
(a) | any law or regulation applicable to that Obligor; |
(b) | the Constitutional Documents of that Obligor; or |
(c) | any agreement or other instrument binding upon that Obligor or its assets, |
or constitute a default or termination event (however described) under any such agreement or instrument or result in the creation of any Security Interest (save for a Permitted Lien or under a Security Document) on that Obligors assets, rights or revenues.
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18.5 | Validity and admissibility in evidence |
(a) | All authorisations required or desirable: |
(i) | to enable each Obligor lawfully to enter into, exercise its rights and comply with its obligations under each Finance Document and any Charter Document to which it is a party; |
(ii) | to make each Finance Document and any Charter Document to which it is a party admissible in evidence in its Relevant Jurisdiction; and |
(iii) | to ensure that each of the Security Interests created under the Security Documents has the priority and ranking contemplated by them, |
have been obtained or effected and are in full force and effect except any authorisation or filing referred to in clause 18.12 (No filing or stamp taxes), which authorisation or filing will be promptly obtained or effected within any applicable period.
(b) | All authorisations necessary for the conduct of the business, trade and ordinary activities of each Obligor have been obtained or effected (subject to the Legal Reservations) and are in full force and effect if failure to obtain or effect those authorisations might have a Material Adverse Effect. |
18.6 | Governing law and enforcement |
Save as otherwise identified in any legal opinion delivered to the Agent under clause 4.1 (Initial conditions precedent) and subject to any Legal Reservations:
(a) | the choice of English law or any other applicable law as the governing law of any Finance Document and any Charter Document will be recognised and enforced in each Obligors Relevant Jurisdiction; and |
(b) | any judgment obtained in England in relation to an Obligor will be recognised and enforced in each Obligors Relevant Jurisdictions. |
18.7 | Information |
(a) | Any Information is true and accurate in all material respects at the time it was given or made. |
(b) | There are no facts or circumstances or any other information which could make the Information incomplete, untrue, inaccurate or misleading in any material respect. |
(c) | The Information does not omit anything which could make the Information incomplete, untrue, inaccurate or misleading in any material respect. |
(d) | All opinions, projections, forecasts or expressions of intention contained in the Information and the assumptions on which they are based have been arrived at after due and careful enquiry and consideration and were believed to be reasonable by the person who provided that Information as at the date it was given or made. |
(e) | For the purposes of this clause 18.7, Information means: any information provided by any Obligor to any of the Finance Parties in connection with the Finance Documents, the Charter Documents or the transactions referred to in them. |
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18.8 | Original Financial Statements |
(a) | The Original Financial Statements were prepared in accordance with GAAP or, as the case may be, IFRS consistently applied. |
(b) | The audited Original Financial Statements give a true and fair view of the consolidated financial condition and results of operations of the Group during the relevant financial year. |
(c) | There has been no material adverse change in its assets, business or financial conditions (or the assets, business or consolidated financial condition of the Group) since the date of the Original Financial Statements. |
18.9 | Pari passu ranking |
Each Obligors payment obligations under the Finance Documents to which it is, or is to be, a party rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.
18.10 | Ranking and effectiveness of security |
Subject to the Legal Reservations and any filing, registration or notice requirements which is referred to in any legal opinion delivered to the Agent under clause 4.1 (Initial conditions precedent), the security created by the Security Documents has (or will have when the Security Documents have been executed) the priority which it is expressed to have in the Security Documents, the Charged Property is not subject to any Security Interest other than Permitted Security Interests and such security will constitute perfected security on the assets described in the Security Documents.
18.11 | No insolvency |
No corporate action, legal proceeding or other procedure or step described in clause 30.10 (Insolvency proceedings) or creditors process described in clause 30.11 (Creditors process) has been taken or, to the knowledge of any Obligor, threatened in relation to a Group Member and none of the circumstances described in clause 30.9 (Insolvency) applies to any Group Member.
18.12 | No filing or stamp taxes |
Under the laws of each Obligors Relevant Jurisdictions it is not necessary that any Finance Document or any Charter Document to which it is, or is to be, party be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to any such Finance Document or any Charter Document or the transactions contemplated by the Finance Documents except any filing, recording or enrolling or any tax or fee payable in relation to any Finance Document which is referred to in any legal opinion delivered to the Agent under clause 4.1 (Initial conditions precedent) and which will be made or paid promptly after the date of the relevant Finance Document.
18.13 | Tax |
(a) | No Obligor is required to make any Tax Deduction from any payment it may make under any Finance Document to which it is, or is to be, a party and no other party is required to make any such deduction from any payment it may make under any Charter Document. |
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(b) | The execution or delivery or performance by any Party of the Finance Documents will not result in any Finance Party: |
(i) | having any liability in respect of Tax in any Flag State; |
(ii) | having or being deemed to have a place of business in any Flag State or any Relevant Jurisdiction of any Obligor. |
18.14 | No Default |
(a) | No Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Finance Document or any Charter Document. |
(b) | No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on any Obligor or to which any Obligors assets are subject which might have a Material Adverse Effect. |
18.15 | No proceedings pending or threatened |
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, might be expected to have a Material Adverse Effect, have (to the best of any Obligors knowledge and belief) been started or threatened against any Obligor or any other Group Member.
18.16 | No breach of laws |
(a) | No Obligor has breached any law or regulation which breach might have a Material Adverse Effect. |
(b) | No labour dispute is current or, to the best of any Obligors knowledge and belief (having made due and careful enquiry), threatened against any Obligor which may have a Material Adverse Effect. |
18.17 | Environmental matters |
(a) | No Environmental Law applicable to any Ship and/or any Obligor has been violated in a manner or circumstances which might have, a Material Adverse Effect. |
(b) | All consents, licences and approvals required under such Environmental Laws have been obtained and are currently in force. |
(c) | No Environmental Claim has been made or threatened or is pending against any Obligor or any Ship where that claim might have a Material Adverse Effect and there has been no Environmental Incident which has given, or might give, rise to such a claim. |
18.18 | Tax Compliance |
(a) | No Obligor is materially overdue in the filing of any Tax returns or overdue in the payment of any material amount in respect of Tax. |
(b) | No claims or investigations are being, or are reasonably likely to be, made or conducted against any Obligor with respect to Taxes such that a liability of, or claim against, any Obligor is reasonably likely to arise for an amount for which adequate reserves have not been provided in the Original Financial Statements and which might have a Material Adverse Effect. |
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18.19 | Anti- corruption law |
Each Obligor has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
18.20 | Security and Financial Indebtedness |
(a) | Prior to the first Utilisation Date and except for any Security Interests granted by the Obligors in accordance with the terms of the Existing Credit Facility and any Financial Indebtedness outstanding under the Existing Credit Facility: |
(i) | no Security Interest exists over all or any of the present or future assets of any Obligor in breach of this Agreement; and |
(ii) | no Obligor has any Financial Indebtedness outstanding in breach of this Agreement (including but not limited any Financial Indebtedness referred to in clause 28.2 (Financial Indebtedness)). |
(b) | On and following the first Utilisation Date: |
(i) | no Security Interest shall exist over all or any of the present or future assets of any Obligor in breach of this Agreement; and |
(ii) | no Obligor shall have any Financial Indebtedness outstanding in breach of this Agreement (including but not limited any Financial Indebtedness referred to in clause 28.2 (Financial Indebtedness)). |
18.21 | Legal and beneficial ownership |
Each Obligor is or, on the date the Security Documents to which it is a party are entered into, will be the sole legal and beneficial owner of the respective assets over which it purports to grant a Security Interest under the Security Documents to which it is a party.
18.22 | Membership interests |
The membership interests of each Owner are fully paid and not subject to any option to purchase or similar rights. The Constitutional Documents of each Owner do not and could not restrict or inhibit any transfer of those membership interests on creation or enforcement of the Security Documents. There are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any membership interest or loan capital of each Owner (including any option or right of pre-emption or conversion).
18.23 | Accounting Reference Date |
The financial year-end of each Obligor is the Accounting Reference Date.
18.24 | Material Adverse Effect |
There has been no Material Adverse Effect which has affected the ability of the Borrower to make all the required payments under this Agreement or the validity or enforceability of this Agreement since the date of the Original Financial Statements.
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18.25 | No adverse consequences |
Save as otherwise identified in any legal opinion delivered to the Agent under clause 4.1 (Initial conditions precedent):
(a) | it is not necessary under the laws of the Relevant Jurisdictions of any Obligor: |
(i) | in order to enable any Finance Party to enforce its rights under any Finance Document to which it is, or is to be, a party; or |
(ii) | by reason of the execution of any Finance Document or the performance by any Obligor of its obligations under any Finance Document to which it is, or is to be, a party, |
that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of such Relevant Jurisdictions; and
(b) | no Finance Party is or will be deemed to be resident, domiciled or carrying on business in any Relevant Jurisdiction by reason only of the execution, performance and/or enforcement of any Finance Document. |
18.26 | Copies of documents |
The copies of any Charter Documents and the Constitutional Documents of the Obligors delivered to the Agent under clause 4 (Conditions of Utilisation) will be true, complete and accurate copies of such documents and include all amendments and supplements to them as at the time of such delivery and no other agreements or arrangements exist between any of the parties to any Charter Document which would materially affect the transactions or arrangements contemplated by any Charter Document or modify or release the obligations of any party under that Charter Document.
18.27 | No immunity |
No Obligor or any of its assets is immune to any legal action or proceeding.
18.28 | Ship status |
Each Ship will on the first day of the relevant Mortgage Period be:
(a) | registered permanently in the name of the relevant Owner through the relevant Registry as a ship under the laws and flag of the relevant Flag State; |
(b) | operationally seaworthy and in every way fit for service; |
(c) | classed with the relevant Classification free of all requirements and recommendations of the relevant Classification Society; and |
(d) | insured in the manner required by the Finance Documents. |
18.29 | Ships employment |
Each Ship shall on the first day of the relevant Mortgage Period be free of any charter commitment (other than any Charter if any Charter has been entered into by an Owner) which, if entered into after that date, would require approval under the Finance Documents.
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18.30 | Ownership of the Obligors |
Each of the Owners and the Borrower is a wholly, legally and beneficially owned direct or indirect Subsidiary of the Parent.
18.31 | Address commission |
There are no rebates, commissions or other payments in connection with any Charter other than those referred to in it.
18.32 | No money laundering |
None of the Obligors are in contravention of any anti-money laundering law, official requirement or other regulatory measure or procedure implemented to combat money laundering.
18.33 | No corrupt practices |
None of the Obligors are engaged in any practice which would be deemed corrupt in any Relevant Jurisdiction.
18.34 | Sanctions |
(a) | Each Obligor, each Subsidiary, their joint ventures, and their respective directors, officers, employees and, to the best of their knowledge, their agents and representatives have been and are in compliance with Sanctions Laws applicable to it. |
(b) | No Obligor, nor any Subsidiary, their joint ventures, and their respective directors, officers, employees and, to the best of their knowledge (after due and careful enquiry), their agents and representatives: |
(i) | are a Restricted Party or, in relation to a member of the Group only, is involved in any transaction through which it is likely to become a Restricted Party; or |
(ii) | are subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws. |
18.35 | Times when representations are made |
(a) | All of the representations and warranties set out in this clause 18 (other than Ship Representations relating to Ships which are not Mortgaged Ships at such time) are deemed to be made on the dates of: |
(i) | this Agreement; |
(ii) | the Utilisation Request for each Loan; and |
(iii) | the issuing of any Compliance Certificate. |
(b) | The Repeating Representations are deemed to be made on the dates of each subsequent Utilisation Request and the first day of each Interest Period. |
(c) | All of the Ship Representations are deemed to be made on the first day of the Mortgage Period for the relevant Ship. |
(d) | Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances then existing at the date the representation or warranty is deemed to be made. |
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19 | Information undertakings |
The Borrower undertakes that this clause 19 will be complied with throughout the Facility Period.
In this clause 19:
Annual Financial Statements means the financial statements for a financial year of the Group delivered pursuant to clause 19.1(a).
Quarterly Financial Statements means the financial statements for a financial quarter of the Group delivered pursuant to clause 19.1(b).
19.1 | Financial statements |
(a) | The Borrower shall supply to the Agent as soon as the same become available, but in any event within 120 days after the end of each financial year, the audited consolidated financial statements of the Group for that financial year. |
(b) | The Borrower shall supply to the Agent as soon as the same become available, but in any event within 90 days after the end of each financial quarter (other than the last financial quarter) of each of its financial years the unaudited consolidated financial statements of the Group for that financial quarter. |
(c) | The Borrower shall supply to the Agent as soon as the same becomes available, but in any event within 90 days of the end of each financial year, financial projections for the Group on an annual basis in a form acceptable to the Agent. |
19.2 | Provision and contents of Compliance Certificate |
(a) | The Borrower shall supply a Compliance Certificate to the Agent, with each set of Quarterly Financial Statements and Annual Financial Statements for the Group. |
(b) | Each Compliance Certificate shall, amongst other things, including supporting schedules setting out (in reasonable detail) computations as to compliance with clause 20 (Financial covenants). |
(c) | Each Compliance Certificate shall be signed by a director or the chief financial officer of the Parent. |
19.3 | Requirements as to financial statements |
(a) | The Borrower shall procure that each set of Annual Financial Statements includes a profit and loss account, a balance sheet and a cashflow statement and each set of Quarterly Financial Statements includes an income statement, a cashflow statement and a balance sheet and that, in addition, each set of Annual Financial Statements shall be audited by the Auditors. |
(b) | Each set of financial statements delivered pursuant to clause 19.1 (Financial statements) shall: |
(i) | be prepared in accordance with GAAP, or as the case may be, IFRS; |
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(ii) | give a true and fair view of (in the case of Annual Financial Statements for any financial year), or fairly represent (in other cases), the financial condition and operations of the Group as at the date as at which those financial statements were drawn up; and |
(iii) | in the case of annual audited financial statements, not be the subject of any qualification in the Auditors opinion. |
(c) | The Borrower shall procure that each set of financial statements delivered pursuant to clause 19.1 (Financial statements) shall be prepared using GAAP or IFRS, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements, unless, in relation to any set of financial statements, the Borrower notifies the Agent that there has been a change in GAAP or, as the case may be, IFRS or the accounting practices and the Auditors deliver to the Agent: |
(i) | a description of any change necessary for those financial statements to reflect the GAAP or, as the case may be, IFRS or accounting practices and reference periods upon which corresponding Original Financial Statements were prepared; and |
(ii) | sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether clause 20 (Financial covenants) has been complied with and to make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements. |
Any reference in this Agreement to any financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
19.4 | Year-end |
The Borrower shall procure that each financial year-end of each Obligor falls on the Accounting Reference Date.
19.5 | Information: miscellaneous |
The Borrower shall supply to the Agent:
(a) | at the same time as they are dispatched, copies of all financial statements, financial forecasts, reports, proxy statements and other material communications provided to the shareholders or members of the Borrower and copies of all material documents dispatched by the Parent or any Obligors to its creditors generally (or any class of them); |
(b) | promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Obligor, and which, if adversely determined, might have a Material Adverse Effect or which would involve a liability, or a potential or alleged liability, exceeding $5,000,000 (or its equivalent in other currencies); |
(c) | promptly, such information as the Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Documents; |
(d) | promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any Group Member as any Finance Party through the Agent may reasonably request; and |
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(e) | such information which a lender, acting reasonably, may request for it to comply with its obligations under the Poseidon Principles (as such term is defined in clause 23.18 (Poseidon Principles)); |
19.6 | Notification of Default |
The Borrower shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon any Obligor becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
19.7 | Sanctions information |
The Obligors shall supply to the Agent:
(a) | promptly upon becoming aware of them, the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws against it, any of its direct or indirect owners, Subsidiaries, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives, as well as information on what steps are being taken with regards to answer or oppose such; and |
(b) | promptly upon becoming aware that it, any of its direct or indirect owners, Subsidiaries, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives has become or is likely to become a Restricted Party. |
19.8 | Sufficient copies |
The Borrower, if so requested by the Agent, shall deliver sufficient copies of each document to be supplied under the Finance Documents to the Agent to distribute to each of the Lenders and the Hedging Providers.
19.9 | Use of websites |
(a) | The Borrower may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the Website Lenders) who accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Agent (the Designated Website) if: |
(i) | the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method; |
(ii) | both the Borrower and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and |
(iii) | the information is in a format previously agreed between the Borrower and the Agent. |
If any Lender (a Paper Form Lender) does not agree to the delivery of information electronically then the Agent shall notify the Borrower accordingly and the Borrower shall supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Borrower shall supply the Agent with at least one copy in paper form of any information required to be provided by it.
(b) | The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrower and the Agent. |
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(c) | The Borrower shall promptly upon any of them becoming aware of its occurrence notify the Agent if: |
(i) | the Designated Website cannot be accessed due to technical failure; |
(ii) | the password specifications for the Designated Website change; |
(iii) | any new information which is required to be provided under this Agreement is posted onto the Designated Website; |
(iv) | any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or |
(v) | the Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software. |
If the Borrower notifies the Agent under paragraphs (i) or (v) above, all information to be provided by the Borrower under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
(d) | Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Borrower shall comply with any such request within ten Business Days. |
19.10 | Know your customer checks |
(a) | If: |
(i) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(ii) | any change in the status of an Obligor or the composition of the shareholders or members of an Obligor after the date of this Agreement; |
(iii) | a proposed assignment or transfer by a Lender or any Hedging Provider of any of its rights and/or obligations under this Agreement or any Hedging Contract to a party that is not a Lender or a Hedging Provider prior to such assignment or transfer; or |
(iv) | the introduction of any change in a Finance Partys internal policies or compliance procedures, |
obliges the Agent, the relevant Hedging Provider or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender or any Hedging Provider supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender or any Hedging Provider) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or the relevant Hedging Provider or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied with the results of all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
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(b) | Each Finance Party shall promptly upon the request of the Agent or the Security Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent or the Security Agent (for itself) in order for it to carry out and be satisfied with the results of all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
20 | Financial covenants |
The Borrower undertakes that this clause 20 will be complied with throughout the Facility Period as tested on a quarterly basis in accordance with clause 20.3 (Financial testing).
20.1 | Financial definitions |
In this clause 20:
Cash Equivalents shall mean the following (all of which shall be valued at market value and freely disposable and for the avoidance of doubt none of the following shall be deemed disqualified from being freely disposable by reason of being included in minimum liquidity calculations under this Agreement or other agreements respecting Indebtedness, or being subject to a lien):
(a) | securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof; |
(b) | certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition and overnight bank deposits of any Lender and certificates of deposit with maturities of one year or less from the date of acquisition and overnight bank deposits of any other commercial bank whose principal place of business is organized under the laws of any country that is a member of the Organization for Economic Cooperation and Development or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, and having capital and surplus in excess of $200,000,000; |
(c) | commercial paper of any issuer rated at least A-2 by Standard & Poors Ratings Group or P-2 by Moodys investors Service, Inc. with maturities of one year or less from the date of acquisition; and |
(d) | additional money market investments with maturities of one year or less from the date of acquisition rated at least A-1 or AA by Standard & Poors Ratings Group or P-1 or Aa by Moodys Investors Service, Inc. |
Indebtedness means, with respect to any Group Member, at any date of determination (without duplication) (a) all indebtedness of such Group Member for borrowed money, (b) all obligations of such Group Member evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Group Member in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto), (d) all obligations of such Group Member to pay the deferred and unpaid purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery thereof or the completion of such services, except trade payables, (e) all obligations on account of principal of such Group Member as lessee under capitalised leases, (f) all indebtedness of other persons secured by a lien on any asset of such Group Member, whether
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or not such indebtedness is assumed by such Group Member; provided that the amount of such indebtedness shall be the lesser of (i) the fair market value of such asset at such date of determination and (ii) the amount of such indebtedness, and (g) all indebtedness of other persons guaranteed by such Group Member to the extent guaranteed and the amount of Indebtedness of any Group Member at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided that the amount outstanding at any time of any indebtedness issued with an original issue discount is the face amount of such indebtedness less the remaining unamortised portion of the original issue discount of such indebtedness at such time as determined in accordance with GAAP or, as the case may require, IFRS; and provided further that Indebtedness shall not include any liability for current or deferred Taxes, or any trade payable.
Total Assets means, at any time, the total assets of the Group (as shown in the most recent Quarterly Financial Statements, and calculated in accordance with, the then most recent Annual Financial Statements).
Total Indebtedness means, at any time, the aggregate sum of all Indebtedness of the Group as reflected in the consolidated balance sheet of the Group (as shown in the most recent Quarterly Financial Statements, and calculated in accordance with the then most recent Annual Financial Statements).
Total Stockholders Equity means, at any time, the shareholders or members equity for the Group (as shown in the most recent Quarterly Financial Statements and calculated in accordance with the then most recent Annual Financial Statements).
20.2 | Financial condition |
At all times during the Facility Period, the Borrower shall procure that the Group:
(a) | maintains at all times, cash and Cash Equivalents in an amount not less than the greater of (i) $35,000,000 and (ii) five per cent (5%) of the Total Indebtedness; and |
(b) | maintains a ratio of Total Stockholders Equity to Total Assets of not less than 30%. |
20.3 | Financial testing |
The financial covenants set out in clause 20.2 (Financial condition) shall be calculated in accordance with GAAP or, as the case may require, IFRS and tested by reference to each of the financial statements and/or each Compliance Certificate delivered pursuant to clause 19.2 (Provision and contents of Compliance Certificate).
21 | General undertakings |
The Borrower undertakes that this clause 21 will be complied with throughout the Facility Period.
21.1 | Authorisations |
Each Obligor will promptly:
(a) | obtain, comply with and do all that is necessary to maintain in full force and effect; and |
(b) | supply certified copies to the Agent of, |
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any authorisation required under any law or regulation of a Relevant Jurisdiction to:
(i) | enable it to perform its obligations under the Finance Documents and any Charter Documents in each case to which it is a party; |
(ii) | ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document or Charter Document in each case to which it is a party; and |
(iii) | carry on its business where failure to do so has, or is reasonably likely to have, a Material Adverse Effect. |
21.2 | Compliance with laws |
(a) | Each Obligor will comply in all respects with all laws and regulations (including Environmental Laws) to which it may be subject if failure to comply has or reasonably likely to have a Material Adverse Effect. |
(b) | No Obligor will directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions. |
(c) | Each Obligor shall: |
(i) | conduct its businesses in compliance with applicable anti-corruption laws; and |
(ii) | maintain policies and procedures designed to promote and achieve compliance with such laws. |
21.3 | Tax compliance |
(a) | Each Obligor shall pay and discharge all Taxes imposed upon it or its assets as and when they fall due for payment and in any event within such time period as may be allowed by law without incurring penalties unless and only to the extent that: |
(i) | such payment is being contested in good faith; |
(ii) | adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under clause 19.1 (Financial statements); and |
(iii) | such payment can be lawfully withheld. |
(b) | Except as approved by the Majority Lenders, each Obligor shall ensure that it is not resident for Tax purposes in any jurisdiction other than in the jurisdiction in which it is incorporated or, as the case may be, formed. |
21.4 | Change of business |
Except as approved by the Majority Lenders, no substantial change will be made to the general nature of the business of the Parent or the other Obligors or the Group taken as a whole from that carried on at the date of this Agreement.
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21.5 | Merger |
Except as approved by the Majority Lenders, no Obligor will enter into any amalgamation, demerger, merger, consolidation, re-domiciliation, legal migration or corporate reconstruction, it being agreed for this purpose that the Parent may enter into such arrangements as long as they do not result in a breach of clause 7.2 (Change of Control) or a change to the liability and obligations of the Parent under this Agreement.
21.6 | Further assurance |
(a) | Each Obligor shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Agent may reasonably specify (and in such form as the Agent may reasonably require): |
(i) | to perfect the Security Interests created or intended to be created by that Obligor under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other security over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent provided by or pursuant to the Finance Documents or by law; |
(ii) | to confer on the Security Agent Security Interests over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security Interest intended to be conferred by or pursuant to the Security Documents; |
(iii) | to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents; and/or |
(iv) | to facilitate either the accession by a New Lender to any Security Document following an assignment in accordance with clause 32.1 (Assignments and Transfers by the Lenders) or the accession by a Hedging Provider to this Agreement in accordance with clause 31.1 (Hedging Providers) and the conferring on such Hedging Provider of the rights contemplated in clause 31.2 (Rights of Hedging Provider). |
(b) | Each Obligor shall take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Security Agent by or pursuant to the Finance Documents. |
21.7 | Negative pledge in respect of Charged Property |
Except (a) as approved by the Majority Lenders, (b) for Permitted Liens and (c) prior to the first Utilisation Date, any Security Interest granted by an Obligor in accordance with the terms of the Existing Credit Facility, no Obligor will grant or allow to exist any Security Interest over any Charged Property.
21.8 | Environmental matters |
(a) | The Agent will be notified as soon as reasonably practicable of any Environmental Claim being made against any Obligor or any Ship which, if successful to any extent, might have a Material Adverse Effect and of any Environmental Incident which may give rise to such an Environmental Claim and will be kept regularly and promptly informed in reasonable detail of the nature of, and response to, any such Environmental Incident and the defence to any such claim. |
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(b) | Environmental Laws (and any consents, licences or approvals obtained under them) applicable to any Ship will not be violated in a way which might have a Material Adverse Effect. |
(c) | The Obligors shall ensure that any Ship which is sold to an intermediary with an intention that such Ship will be scrapped, is recycled at a recycling yard in a socially and environmentally responsible manner in accordance with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (whether or not it is in force) and/or EU Ship Recycling Regulation, 2013 (as applicable). |
21.9 | Inspection of records |
Upon reasonable notice from the Agent, allow any representative of the Agent, subject to applicable laws and regulations, to visit and inspect the Borrowers properties and, on request, to examine the Borrowers books of account, records, reports, agreements and other papers and to discuss the Borrowers affairs, finances and accounts with its offices, in each case at such times and as often as the Agent reasonably requests.
21.10 | Ownership of Obligors |
At all times (unless the Lenders have provided their written consent):
(a) | the Parent shall own, directly or indirectly, 100% of the membership interests in the Borrower and each Owner; |
(b) | the managing member of an Owner shall be the Borrower; and |
(c) | the managing member of the Borrower shall be the Parent. |
21.11 | No change of name etc |
During the Facility Period, no Obligor will change:
(a) | its name; |
(b) | the type of legal entity which it exists as; or |
(c) | its Original Jurisdiction. |
21.12 | Year end |
The Borrower may not change its financial year end.
21.13 | Sanctions |
(a) | Each Obligor shall ensure that it will comply with all Sanction Laws applicable to it. |
(b) | No Obligor nor any of their respective directors, officers or employees will, directly or (to the Obligors knowledge) indirectly: |
(i) | make any part of the proceeds of the Loan available to or for the benefit of a Restricted Party, or permit or authorise any such proceeds to be applied in a manner or for a purpose prohibited by any Sanctions Laws applicable to it; or |
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(ii) | fund all or part of any repayment under the Facility out of proceeds derived from transactions which would be prohibited by any Sanctions Laws applicable to it or would otherwise cause it to be in breach of Sanctions Laws or to become a Restricted Party. |
21.14 | Listing |
The Parent shall maintain its listing on The New York Stock Exchange.
21.15 | Contractual recognition of bail-in |
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Finance Parties and the Obligors, each Finance Party and each Obligor acknowledges and accepts that any liability of any party to any other party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
(a) | any Bail-In Action in relation to any such liability, including (without limitation): |
(i) | a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability; |
(ii) | a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and |
(iii) | a cancellation of any such liability; and |
(b) | a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability. |
21.16 | Blocking Law |
Any provision of clauses 18.34 (Sanctions), 21.13 (Sanctions) or 23.6(c) (Maintenance of class; compliance with laws and codes) shall, if specified in writing by a Finance Party to the Agent, not apply to or operate in favour of any Finance Party if and to the extent that it would result in a breach, by or in respect of that Finance Party, of any applicable Blocking Law. An affected Finance Party shall be obliged to notify the Agent whether such provisions shall not be deemed to apply promptly after a potential breach by or in respect of such Finance Party comes to the attention of such Finance Party.
For the purposes of this clause 21.16, Blocking Law means:
(a) | any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996 (or any law or regulation implementing such Regulation in any member state of the European Union or the United Kingdom); or |
(b) | any similar blocking or anti-boycott law applicable to that Finance Party. |
22 | Dealings with Ship |
The Borrower undertakes that this clause 22 will be complied with in relation to each Mortgaged Ship throughout the relevant Ships Mortgage Period.
22.1 | Ships name and registration |
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(a) | The Ships name shall only be changed after prior notice to the Agent. |
(b) | The Ship shall be permanently registered in the name of the relevant Owner with the relevant Registry within 90 days of the date of the Mortgage of the Ship and registered in the name of the relevant Owner with the relevant Registry under the laws of its Flag State. Except with approval, the Ship shall not be registered under any other flag or at any other port or fly any other flag (other than that of its Flag State). If that registration is for a limited period, it shall be renewed at least 45 days before the date it is due to expire and the Agent shall be notified of that renewal at least 30 days before that date. |
(c) | Nothing will be done and no action will be omitted if that might result in such registration being forfeited or imperilled or the Ship being required to be registered under the laws of another state of registry. |
22.2 | Notification of certain events |
The Borrower shall notify the Agent immediately if the Ship becomes a Total Loss or partial loss or is materially damaged.
22.3 | Sale or other disposal of Ship |
Save where the net sale proceeds will enable the relevant Owner to comply with its mandatory prepayment obligations under clause 7.6 (Sale or Total Loss) and, if no Default is then continuing, for a sale to a buyer who is not an Affiliate of the Borrower for a cash price payable on completion of the sale which is no less than the Applicable Fraction of the Total Commitments for that Ship, the relevant Owner will not sell, or agree to, transfer, abandon or otherwise dispose of the relevant Ship or any share or interest in it.
22.4 | Manager |
Each Ship shall be technically managed by Northern Marine Management Limited, Navigator Gas Shipmanagement Limited, Thome Ship Management or another first class technical manager approved by the Agent and commercially managed by NGT Services (UK) Limited or another first class commercial manager approved by the Agent.
22.5 | Copy of Mortgage on board |
A properly certified copy of the relevant Mortgage shall be kept on board the Ship with its papers and shown to anyone having business with the Ship which might create or imply any commitment or Security Interest over or in respect of the Ship (other than a lien for crews wages and salvage) and to any representative of the Security Agent.
22.6 | Notice of Mortgage |
A framed printed notice of the Ships Mortgage shall be prominently displayed in the navigation room and in the Masters cabin of the Ship. The notice must be in plain type and read as follows:
NOTICE OF MORTGAGE
This Ship is subject to a First Preferred Mortgage to NORDEA BANK ABP, FILIAL I NORGE with offices at Essendrops gate 7, 0368 Oslo, Norway, acting in its capacity as security agent and as trustee, under authority of Title 21 of the Liberian Code of Laws of 1956 as amended. Under the terms of the said Mortgage and related documents neither the Owner nor any charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien, commitments or encumbrances whatsoever other than for crews wages and salvage.
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No-one will have any right, power or authority to create, incur or permit to be imposed upon the Ship any lien whatsoever other than for crews wages and salvage.
22.7 | Conveyance on default |
Where the Ship is (or is to be) sold in exercise of any power conferred by the Security Documents, the relevant Owner shall, upon the Agents request, immediately execute such form of transfer of title to the Ship as the Agent may require.
22.8 | Chartering |
Except with approval, the relevant Owner shall not enter into any charter commitment for the Ship, which is:
(a) | a bareboat or demise charter or passes possession and operational control of the Ship to another person; or |
(b) | a Charter, unless the relevant Owner executes a Charter Assignment in respect of such Charter prior to delivery of the relevant Ship under such Charter to the extent that such a Charter Assignment can be obtained by the Borrower using its commercially reasonable efforts to do so. |
If a Charterer requires the Lenders to enter into a letter of quiet enjoyment, such letter will be on terms acceptable to the Lenders acting reasonably.
22.9 | Lay up |
Except with approval, the Ship shall not be laid up or deactivated.
22.10 | Sharing of Earnings |
Except with approval, the relevant Owner shall not enter into any arrangement under which its Earnings from the Ship may be shared with anyone else.
22.11 | Payment of Earnings |
The relevant Owners Earnings from the Ship shall be paid in accordance with clause 27.1 (Earnings Account) unless required to be paid to the Security Agent pursuant to the General Assignment for that Ship. If any Earnings are held by brokers or other agents, they shall be paid to the Agent, if it requires this after the Earnings have become payable to it under the Ships General Assignment for that Ship.
23 | Condition and operation of Ship |
The Borrower undertakes that this clause 23 will be complied with in relation to each Mortgaged Ship throughout the relevant Ships Mortgage Period.
23.1 | Defined terms |
In this clause 23 and in Schedule 3 (Conditions precedent):
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applicable code means any code or prescribed procedures required to be observed by the Ship or the persons responsible for its operation under any applicable law (including but not limited to those currently known as the ISM Code and the ISPS Code);
applicable law means all laws and regulations applicable to vessels registered in the Ships Flag State or which for any other reason apply to the Ship or to its condition or operation at any relevant time; and
applicable operating certificate means any certificates or other document relating to the Ship or its condition or operation required to be in force under any applicable law or any applicable code.
23.2 | Repair |
The Ship shall be kept in a good, safe and efficient state of repair. The quality of workmanship and materials used to repair the Ship or replace any materially damaged, worn or lost parts or equipment shall be sufficient to ensure that the Ships value is not materially reduced.
23.3 | Modification |
Except with approval, the structure, type or performance characteristics of the Ship shall not be modified in a way which could or might materially alter the Ship or materially reduce its value.
23.4 | Removal of parts |
Except with approval, no material part of the Ship or any equipment shall be removed from the Ship if to do so would materially reduce its value (unless at the same time it is replaced with equivalent parts or equipment owned by the relevant Owner free of any Security Interest except under the Security Documents).
23.5 | Third party owned equipment |
Except with approval, equipment owned by a third party shall not be installed on the Ship if it cannot be removed without risk of causing damage to the structure or fabric of the Ship or incurring significant expense.
23.6 | Maintenance of class; compliance with laws and codes |
(a) | The Ships class shall be the relevant Classification. |
(b) | The relevant Owner shall ensure that: |
(i) | the Ship shall comply in all material aspects with all laws or regulations applicable to it; and |
(ii) | it will comply in all material aspects with all laws applicable to its business and applicable to the Ship, its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Flag State; and |
(iii) | it shall obtain, comply with and do all that is necessary to maintain in full force and effect any approvals required by any Environmental Law, |
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and without limiting paragraphs (i), (ii) and (iii) above, the Owner shall not employ Ship nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code and all Environmental Laws.
(c) | The relevant Owner shall ensure that the Owner shall not employ Ship nor allow its employment, operation or management in any manner contrary to Sanctions Laws. |
(d) | There shall be kept in force and on board the Ship or in such persons custody any applicable operating certificates which are required by applicable laws or applicable codes to be carried on board the Ship or to be in such persons custody. |
23.7 | Surveys |
The Ship shall be submitted to continuous surveys and any other surveys which are required for it to maintain the Classification as its class. Copies of reports of those surveys shall be provided promptly to the Agent if it so requests which request shall not exceed more than one in each calendar year.
23.8 | Inspection and notice of dry-dockings |
The Agent and/or surveyors or other persons appointed by it for such purpose shall be allowed to board the Ship to inspect it once per annum if no Event of Default has occurred and is continuing or as frequently as may be required by the Agent following the occurrence of an Event of Default, or a Major Casualty (whereupon the Agent and/or surveyors or other persons appointed by it for such purpose shall be entitled to board the Ship to inspect it during the period falling shortly after completion of the repair works in respect of that Major Casualty), provided advance written notice is provided to the Obligors and such inspection does not interfere with the normal commercial operation of the Ship. The Agent shall be given all proper facilities needed for the purposes of any such inspection and the reasonable costs of such inspection shall be borne by the Borrower.
23.9 | Prevention of arrest |
All debts, damages, liabilities and outgoings which have given, or may give, rise to maritime, statutory or possessory liens on, or claims enforceable against, the Ship, its Earnings or Insurances shall be promptly paid and discharged unless such payment is being contested in good faith and adequate reserves are being maintained for such payment.
23.10 | Release from arrest |
The Ship, its Earnings and Insurances shall promptly be released from any arrest, detention, attachment or levy, and any legal process against the Ship shall be promptly discharged, by whatever action is required to achieve that release or discharge.
23.11 | Information about Ship |
The Agent shall promptly be given any information which it may reasonably require about the Ship or its employment, position, use or operation, including details of towages and salvages, and copies of all its charter commitments entered into by or on behalf of any Obligor and copies of any applicable operating certificates.
23.12 | Notification of certain events |
The Agent shall promptly be notified of:
(a) | any damage to the Ship where the cost of the resulting repairs may exceed the Major Casualty Amount for such Ship; |
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(b) | any occurrence which may result in the Ship becoming a Total Loss; |
(c) | any requisition of the Ship for hire; |
(d) | any material Environmental Incident involving the Ship and Environmental Claim being made in relation to such an incident; |
(e) | any withdrawal or threat to withdraw any applicable operating certificate; |
(f) | the issue of any operating certificate required under any applicable code; |
(g) | the receipt of notification that any application for such a certificate has been refused; |
(h) | any requirement made in relation to the Ship by any insurer or the Ships Classification Society or by any competent authority which is not, or cannot be, complied with in the manner or time required; and |
(i) | any arrest or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or its Earnings or Insurances. |
23.13 | Payment of outgoings |
All tolls, dues and other outgoings whatsoever in respect of the Ship and its Earnings and Insurances shall be paid promptly. Proper accounting records shall be kept of the Ship and its Earnings.
23.14 | Evidence of payments |
The Agent shall be allowed proper and reasonable access to those accounting records when it requests it and, when it requires it, shall be given satisfactory evidence that:
(a) | the wages and allotments and the insurance and pension contributions of the Ships crew are being promptly and regularly paid; |
(b) | all deductions from its crews wages in respect of any applicable Tax liability are being properly accounted for; and |
(c) | the Ships master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress. |
23.15 | Repairers liens |
Except with approval, the Ship shall not be put into any other persons possession for work to be done on the Ship if the cost of that work will exceed or is likely to exceed $2,000,000 (or its equivalent in any other currency or currencies) unless that person gives the Security Agent a written undertaking in approved terms not to exercise any lien on the Ship or its Earnings for any of the cost of such work.
23.16 | Lawful use |
The Ship shall not be employed:
(a) | in any way or activity which would be unlawful under international law or other law applicable to an Obligor or the trading of a Ship; |
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(b) | to the extent that such activity or employment would be unlawful under international law or other law applicable to an Obligor or the trading of a Ship, in carrying illicit, contraband or prohibited goods; or |
(c) | in a way which may make it liable to be condemned by a prize court or destroyed, seized or confiscated, |
and the persons responsible for the operation of a Ship shall take all necessary and proper precautions to ensure that this does not happen, including participation in industry or other voluntary schemes available to the Ship and in which leading operators of ships operating under the same flag or engaged in similar trades generally participate at the relevant time.
23.17 | Copy of Green Passport on board |
Promptly upon becoming available and in any event no later than 31 December 2020, a copy of the inventory of hazardous materials or equivalent document acceptable to the Agent shall be maintained on board the Ship.
23.18 | Poseidon Principles |
(a) | The Borrower shall, upon the request of any Lender and at the cost of the Borrower, on or before 31 July in each calendar year, supply or procure the supply to such Lender all such information necessary in order for it to comply with its obligations under the Poseidon Principles in respect of the preceding year, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance relating to each Ship. No Lender shall publicly disclose such information with the identity of the Ship without the prior written consent of the Borrower. For the avoidance of doubt, such information shall be Confidential Information for the purposes of clause 45 (Confidentiality) but the Borrower acknowledges that, in accordance with the Poseidon Principles, such information will form part of the information published (at the cost of the relevant Lender) regarding the relevant Lenders portfolio climate alignment, provided that such information published by a Lender shall be in generic form that does not identify any Ship, any Manager or any member of the Group. |
(b) | For the purposes of this clause: |
Annex VI means Annex VI of the Protocol of 1997 (as subsequently amended from time to time) to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.
Poseidon Principles means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published on 18 June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organisation from time to time.
Statement of Compliance means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.
24 | Insurance |
The Borrower undertakes that this clause 24 shall be complied with in relation to each Mortgaged Ship and its Insurances throughout the relevant Ships Mortgage Period.
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24.1 | Insurance terms |
In this clause 24:
excess risks means the proportion (if any) of claims for general average, salvage and salvage charges not recoverable under the hull and machinery insurances of a vessel in consequence of the value at which the vessel is assessed for the purpose of such claims exceeding its insured value;
excess war risk P&I cover means cover for claims only in excess of amounts recoverable under the usual war risk cover including (but not limited to) hull and machinery, crew and protection and indemnity risks;
hull cover means insurance cover against the risks identified in clause 24.2(a)(i);
minimum hull cover means, in relation to a Mortgaged Ship, an amount equal to or greater than its market value and which, when taken together with the minimum hull values of the other Mortgaged Ships, is at the relevant time 120% of the aggregate of the Total Commitments for the Mortgaged Ships at such time; and
P&I risks means the usual risks (including liability for oil pollution, excess war risk P&I cover) covered by a protection and indemnity association which is a member of the International Group of protection and indemnity associations (or, if the International Group ceases to exist, any other leading protection and indemnity association or other leading provider of protection and indemnity insurance) (including, without limitation, the proportion (if any) of any collision liability not covered under the terms of the hull cover).
24.2 | Coverage required |
(a) | The Ship shall at all times be insured: |
(i) | against (A) fire and usual marine risks (including excess risks) and (B) war risks (including war protection and indemnity risks and terrorism, piracy and confiscation risks) on an agreed value basis, in each case for at least its minimum hull cover and in the case of sub-section (A), provided that the hull and machinery insurances for the Ship shall at all times cover 80% of its market value and the remaining minimum hull cover may be insured by way of excess risks cover; |
(ii) | against P&I risks for the highest amount then available in the insurance market for vessels of similar age, size and type as the Ship (but, in relation to liability for oil pollution, for an amount of not less than $1,000,000,000); |
(iii) | against such other risks and matters which the Agent notifies it that it considers reasonable for a prudent shipowner or operator to insure against at the time of that notice; and |
(iv) | on terms which comply with the other provisions of this clause 24. |
(b) | The Ship shall not enter or remain in any zone which has been declared a war, conditional or excluded zone by any government entity or the Ships insurers for war risks and/or allied perils (including piracy) unless: |
(i) | appropriate insurances have been taken out by the relevant Owner; and |
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(ii) | any requirements of the Agent and/or the Ships insurers necessary to ensure that the Ship remains properly insured in accordance with the Finance Documents (including any requirement for the payment of extra insurance premiums) have been complied with. |
24.3 | Placing of cover |
The insurance coverage required by clause 24.2 (Coverage required) shall be:
(a) | in the name of the Ships Owner and (in the case of the Ships hull cover) no other person (other than the Security Agent if required by it) (unless such other person, if so required by the Agent, has duly executed and delivered a first priority assignment of its interest in the Ships Insurances to the Security Agent in an approved form and provided such supporting documents and opinions in relation to that assignment as the Agent requires); |
(b) | if the Agent so requests, in the joint names of the Ships Owner and the Security Agent (and, to the extent reasonably practicable in the insurance market, without liability on the part of the Security Agent for premiums or calls); |
(c) | in dollars or another approved currency; |
(d) | arranged through approved brokers or direct with approved insurers or protection and indemnity or war risks associations; and |
(e) | on approved terms and with approved insurers or associations. |
24.4 | Deductibles |
The aggregate amount of any excess or deductible under the Ships hull cover shall not exceed an approved amount.
24.5 | Mortgagees insurance |
The Borrower shall promptly reimburse to the Agent the cost (as conclusively certified by the Agent) of taking out and keeping in force in respect of the Ship and the other Mortgaged Ships on approved terms, or in considering or making claims under:
(a) | a mortgagees interest insurance and a mortgagees additional perils (pollution risks cover) for the benefit of the Finance Parties for an aggregate amount up to 110% of the aggregate of the Total Commitments at such time in respect of mortgagees interest insurance and 110% of the aggregate of the Total Commitments at such time in respect of mortgagees interest additional perils insurance; and |
(b) | any other insurance cover which the Agent reasonably requires in respect of any Finance Partys interests and potential liabilities (whether as mortgagee of the Ship or beneficiary of the Security Documents). |
24.6 | Fleet liens, set off and cancellations |
If the Ships hull cover also insures other vessels, the Security Agent shall either be given an undertaking in approved terms by the brokers or (if such cover is not placed through brokers or the brokers do not, under any applicable laws or insurance terms, have such rights of set off and cancellation) the relevant insurers that the brokers or (if relevant) the insurers will not:
(a) | set off against any claims in respect of the Ship any premiums due in respect of any of such other vessels insured (other than other Mortgaged Ships); or |
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(b) | cancel that cover because of non-payment of premiums in respect of such other vessels, |
or the Borrower shall ensure that hull cover for the Ship and any other Mortgaged Ships is provided under a separate policy from any other vessels.
24.7 | Payment of premiums |
All premiums, calls, contributions or other sums payable in respect of the Insurances shall be paid punctually and the Agent shall be provided with all relevant receipts or other evidence of payment upon request.
24.8 | Details of proposed renewal of Insurances |
At least 14 days before any of the Ships Insurances are due to expire, the Agent shall be notified of the names of the brokers, insurers and associations proposed to be used for the renewal of such Insurances and the amounts, risks and terms in, against and on which the Insurances are proposed to be renewed.
24.9 | Instructions for renewal |
At least seven days before any of the Ships Insurances are due to expire, instructions shall be given to brokers, insurers and associations for them to be renewed or replaced on or before their expiry.
24.10 | Confirmation of renewal |
The Ships Insurances shall be renewed upon their expiry in a manner and on terms which comply with this clause 24 and confirmation of such renewal given by approved brokers or insurers to the Agent at least seven days (or such shorter period as may be approved) before such expiry.
24.11 | P&I guarantees |
Any guarantee or undertaking required by any protection and indemnity or war risks association in relation to the Ship shall be provided when required by the association.
24.12 | Insurance documents |
The Agent shall be provided with pro forma copies of all insurance policies and other documentation issued by brokers, insurers and associations in connection with the Ships Insurances as soon as they are available after they have been placed or renewed and all insurance policies and other documents relating to the Ships Insurances shall be deposited with any approved brokers or (if not deposited with approved brokers) the Agent or some other approved person.
24.13 | Letters of undertaking |
Unless otherwise approved where the Agent is satisfied that equivalent protection is afforded by the terms of the relevant Insurances and/or any applicable law and/or a letter of undertaking provided by another person, on each placing or renewal of the Insurances, the Agent shall be provided promptly with letters of undertaking in an approved form (having regard to general insurance market practice and law at the time of issue of such letter of undertaking) from the relevant brokers, insurers and associations.
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24.14 | Insurance Notices and Loss Payable Clauses |
The interest of the Security Agent as assignee of the Insurances shall be endorsed on all insurance policies and other documents by the incorporation of a Loss Payable Clause and an Insurance Notice in respect of the Ship and its Insurances signed by its Owner and, unless otherwise approved, each other person assured under the relevant cover (other than the Security Agent if it is itself an assured).
24.15 | Insurance correspondence |
If so required by the Agent, the Agent shall promptly be provided with copies of all written communications between the assureds and brokers, insurers and associations relating to any of the Ships Insurances as soon as they are available.
24.16 | Qualifications and exclusions |
All requirements applicable to the Ships Insurances shall be complied with and the Ships Insurances shall only be subject to approved exclusions or qualifications.
24.17 | Independent report |
If the Agent asks the Borrower for a detailed report from an approved independent firm of marine insurance brokers giving their opinion on the adequacy of the Ships Insurances then the Agent shall be provided promptly with such a report at no cost to the Agent or (if the Agent obtains such a report itself) the Borrower shall reimburse the Agent for the cost of obtaining that report.
24.18 | Collection of claims |
All documents and other information and all assistance required by the Agent to assist it and/or the Security Agent in trying to collect or recover any claims under the Ships Insurances shall be provided promptly.
24.19 | Employment of Ship |
The Ship shall only be employed or operated in conformity with the terms of the Ships Insurances (including any express or implied warranties) and not in any other way (unless the insurers have consented and any additional requirements of the insurers have been satisfied).
24.20 | Declarations and returns |
If any of the Ships Insurances are on terms that require a declaration, certificate or other document to be made or filed before the Ship sails to, or operates within, an area, those terms shall be complied with within the time and in the manner required by those Insurances.
24.21 | Application of recoveries |
All sums paid under the Ships Insurances to anyone other than the Security Agent shall be applied in repairing the damage and/or in discharging the liability in respect of which they have been paid except to the extent that the repairs have already been paid for and/or the liability already discharged.
24.22 | Settlement of claims |
Any claim under the Ships Insurances for a Total Loss or Major Casualty shall only be settled, compromised or abandoned with prior approval.
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24.23 | Change in insurance requirements |
If the Agent gives notice to the Borrower to change the terms and requirements of this clause 24 (which the Agent may only do, in such manner as it considers appropriate (acting reasonably having consideration to market conditions at the relevant time), as a result in changes of circumstances or practice after the date of this Agreement), this clause 24 shall be modified in the manner so notified by the Agent on the date 14 days after such notice from the Agent is received.
25 | Minimum security value |
The Borrower undertakes that this clause 25 will be complied with throughout any Mortgage Period.
25.1 | Valuation of assets |
For the purpose of the Finance Documents, the value at any time of any Mortgaged Ship or any other asset over which additional security is provided under this clause 25 will be its value as most recently determined in accordance with this clause 25.
25.2 | Valuation frequency |
Valuations of each Mortgaged Ship shall be carried out semi-annually, such valuations to be provided to the Agent at the same time that a Compliance Certificate is provided to the Agent at the end of the Groups second and fourth financial quarter of the Groups financial year pursuant to clause 19.2(a) and each valuation shall be dated no earlier than 30 days prior to delivery of that valuation to the Agent. In addition valuations of the relevant Mortgaged Ship (if, at the relevant time a valuation is required, the most recently provided valuation for the Mortgaged Ship is more than 30 days old) and each such other asset in accordance with this clause 25 as may be further required by the Agent at any other time if an Event of Default has occurred and is continuing or if a mandatory prepayment event occurs under clause 7.6 (Sale or Total Loss). In addition, no more than once a year, the Majority Lenders shall also have the right to request that the Agent nominate and appoint two Approved Brokers to provide valuations for the purposes of this clause 25.
25.3 | Expenses of valuation |
The Borrower shall bear, and reimburse to the Agent where incurred by the Agent, all reasonable costs and expenses of providing such a valuation.
25.4 | Valuations procedure |
The value of any Mortgaged Ship shall be determined in accordance with, and by Approved Valuers appointed in accordance with, this clause 25. Additional security provided under this clause 25 shall be valued in such a way, on such a basis and by such persons (including the Agent itself) as may be approved by the Majority Lenders or as may be agreed in writing by the Borrower and the Agent (on the instructions of the Majority Lenders).
25.5 | Currency of valuation |
Valuations shall be provided by Approved Valuers in dollars or, if an Approved Valuer is of the view that the relevant type of vessel is generally bought and sold in another currency, in that other currency. If a valuation is provided in another currency, for the purposes of this Agreement it shall be converted into dollars at the Agents spot rate of exchange for the purchase of dollars with that other currency as at the date to which the valuation relates.
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25.6 | Basis of valuation |
Each valuation will be addressed to the Agent in its capacity as such and made:
(a) | without physical inspection (unless required by the Agent); |
(b) | on the basis of a sale for prompt delivery for a price payable in full in cash on delivery at arms length on normal commercial terms between a willing buyer and a willing seller; and |
(c) | without taking into account the benefit (but taking into account the burden) of any charter commitment. |
25.7 | Information required for valuation |
The Borrower shall promptly provide to the Agent and any such valuer any information which they reasonably require for the purposes of providing such a valuation.
25.8 | Approval of valuers |
All valuers must be Approved Valuers. The Agent shall respond promptly to any request by the Borrower, and the Borrower shall respond promptly to any request by the Agent, for approval of a broker nominated by the Borrower or, as the case may be, the Agent to become an Approved Valuer. The Agent may, acting reasonably, at any time by notice to the Borrower withdraw any Approved Valuer or previous approval of a valuer for the purposes of future valuations. That valuer may not then be appointed to provide valuations unless it is once more approved.
25.9 | Appointment of valuers |
When valuations of a Mortgaged Ship are required for the purposes of this clause 25, the Agent and the Borrower shall promptly each nominate an Approved Valuer to provide such valuations and the Borrower shall be responsible for appointing such nominated Approved Valuers and obtaining the required valuations of the Mortgaged Ship. If the Borrower fails to do so promptly, the Agent may appoint both Approved Valuers to provide the required valuations.
25.10 | Number of valuers |
Each valuation shall be carried out by the two Approved Valuers selected pursuant to clause 25.9 (Appointment of valuers).
25.11 | Differences in valuations |
If valuations provided by individual valuers differ, the value of the relevant Ship for the purposes of the Finance Documents will be the arithmetic mean average of those valuations. If the higher of the two valuations obtained pursuant to clause 25.10 is more than 110 per cent of the lower of the two valuations then a third valuation shall be obtained from a third Approved Valuer (nominated by the Agent and appointed by the Borrower) and the value of the relevant Mortgaged Ship for the purposes of the Finance Documents will be the arithmetic mean average of those three valuations.
25.12 | Security shortfall |
If at any time the Security Value is less than the Minimum Value, the Agent may, and shall, if so directed by the Majority Lenders, by notice to the Borrower require that such deficiency be remedied. The Borrower shall then within 30 days of receipt of such notice ensure that the Security Value equals or exceeds the Minimum Value. For this purpose, the Borrower may:
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(a) | provide additional security over other assets approved by the Majority Lenders in accordance with this clause 25; and/or |
(b) | direct the Agent that it is suspending its right to utilise part of the Facility sufficient to remedy such deficiency pending the Borrower being in compliance with clause 25.1 and, if applicable, prepay under clause 7.4 (Voluntary prepayment of Loans) a corresponding amount of the outstanding Loans; and/or |
(c) | cancel the Total Commitments under clause 7.3 (Voluntary cancellation). |
Where as a result of this clause the Security Value at any time is less than the Minimum Value, then the Total Commitments during such time shall be deemed to be reduced by an amount equal to such difference save that for the purpose of clause 5 (Utilisation) the Total Commitments at any time will in no circumstances exceed the Security Value at such time. Where this provision applies and, as a result, the amount of a New Loan is reduced pursuant to clause 5.4 prior to the discharge by the Borrower of its obligation to prepay the Loans or provide additional security, the amount of that reduction shall reduce, pro tanto, the prepayment or additional security obligations of the Borrower under this clause.
25.13 | Creation of additional security |
The value of any additional security which the Borrower offers to provide to remedy all or part of a shortfall in the amount of the Security Value will only be taken into account for the purposes of determining the Security Value if and when:
(a) | that additional security, its value and the method of its valuation have been approved by the Majority Lenders, it being agreed that cash collateral provided in dollars or in the form of letters of credit denominated in dollars shall always be acceptable to the Lenders, and shall be valued at par; |
(b) | a Security Interest over that security has been constituted in favour of the Security Agent or (if appropriate) the Finance Parties in an approved form and manner; |
(c) | this Agreement has been unconditionally amended in such manner as the Agent requires in consequence of that additional security being provided; and |
(d) | the Agent, or its duly authorised representative, has received such documents and evidence it may require in relation to that amendment and additional security including documents and evidence of the type referred to in Schedule 3 in relation to that amendment and additional security and its execution and (if applicable) registration, |
26 | Chartering undertakings |
The Borrower undertakes that this clause 26 will be complied with in relation to each Mortgaged Ship and its Charter Documents and, if a Charterer is a Group Member, by the relevant Charterer at any time during the relevant Ships Mortgage Period that the Ship is subject to a Charter.
26.1 | Variations |
Except with approval (such approval not to be unreasonably withheld or delayed), the Charter Documents shall not be materially varied.
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26.2 | Releases and waivers |
Except with approval (such approval not to be unreasonably withheld or delayed), there shall be no release by the relevant Owner of any obligation of any other person under the Charter Documents (including by way of novation), no waiver of any breach of any such obligation and no consent to anything which would otherwise be such a breach.
26.3 | Charter performance |
The relevant Owner shall perform its obligations under the Charter Documents and use its reasonable endeavours to ensure that each other party to them performs their obligations under the Charter Documents.
26.4 | Notice of assignment |
In respect of any Charter, the relevant Owner shall give notice of assignment of the Charter Documents to the other parties to them in the form specified by the Charter Assignment for that Ship promptly following the execution of the Charter Assignment and shall use its reasonable endeavours to ensure that the Agent receives a copy of that notice acknowledged by each addressee in the form specified therein.
26.5 | Payment of Charter Earnings |
All Earnings which the relevant Owner is entitled to receive under the Charter Documents shall be paid in the manner required by the Security Documents (and, if the Charterer is a Group Member, without any set-off or counter-claim and free and clear of any deductions or withholdings).
26.6 | Enforcement of charter assignment |
The Charterer shall allow the Security Agent to enforce the rights of the relevant Owner under the Charter as assignee of those rights under the relevant Charter Assignment.
26.7 | Sub-chartering |
Except with approval (such approval not to be unreasonably withheld or delayed), the Owner shall use all reasonable endeavours to procure that the Charterer shall not enter into any charter commitment for the Ship which, if entered into by the relevant Owner would require approval under clause 22.8 (Chartering) and if the Security Agent is at any time entitled to enforce its rights as mortgagee of the Ship under the terms of any Mortgage, the Charterer will exercise its rights under any sub-charter of the Ship in such manner as the Agent may direct.
26.8 | Charterers manager |
A manager of the Ship shall not be appointed by the Charterer unless in accordance with clause 22.4 or that manager and the terms of its employment are approved by the Agent acting reasonably.
26.9 | Security Interests by Charterer |
Except as approved by the Majority Lenders (such approval not to be unreasonably withheld or delayed), the Owner shall use all reasonable endeavours to procure that the Charterer shall not grant or allow to exist any Security Interest over any asset of the Charterer over which a Security Interest is granted or expressed to be granted by its Charterers Assignment.
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27 | Bank accounts |
The Borrower undertakes that this clause 27 will be complied with throughout the Facility Period.
27.1 | Earnings Account |
(a) | The Borrower shall be the holder of an account with an Account Bank which is designated as the Earnings Account for the purposes of the Finance Documents. |
(b) | The Earnings of the Mortgaged Ships and all moneys payable to the relevant Owner under the Ships Insurances and any net amount payable to the Borrower under any Hedging Contract shall be paid by the persons from whom they are due or, if applicable, paid by the Owner receiving the same to the Earnings Account unless required to be paid to the Security Agent under the relevant Finance Documents. |
(c) | The Borrower shall not withdraw amounts standing to the credit of the Earnings Account except as permitted by clause 27.1(d) and 27.1(e). |
(d) | As long as no Default has occurred and is continuing and (as a result of that Default) the Agent has not given a notice to the Borrower notifying the Borrower that the amounts may not be withdrawn, then the Borrower may withdraw amounts from the Earnings Account. |
(e) | If a Default has occurred and is continuing, the Borrower may only withdraw the following amounts from the Earnings Account, in each case with the Agents prior approval: |
(i) | payments then due to Finance Parties under the Finance Documents (other than payments due in respect of a prepayment); |
(ii) | payments then due under Hedging Contracts or other Treasury Transactions entered into to protect against the fluctuation in the rate of interest payable under the Finance Documents or the price of goods or services purchased by the relevant Owner for the purpose of operating a Ship; |
(iii) | payments of the proper costs and expenses of insuring, repairing, operating and maintaining any Mortgaged Ship; and |
(iv) | payments to purchase other currencies in amounts and at times required to make payments referred to above in the currency in which they are due. |
27.2 | Other provisions |
(a) | The Earnings Account may only be designated for the purposes described in this clause 27 if: |
(i) | such designation is made in writing by the Agent and acknowledged by the Borrower and specifies the names and addresses of the Account Bank and the Borrower and the number and any designation or other reference attributed to the Earnings Account; |
(ii) | an Account Security has been duly executed and delivered by the Borrower in favour of the Security Agent; |
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(iii) | any notice required by the Account Security to be given to an Account Bank has been given to, and acknowledged by, the Account Bank in the form required by the relevant Account Security; and |
(iv) | the Agent, or its duly authorised representative, has received such documents and evidence it may require in relation to the Earnings Account and the Account Security including documents and evidence of the type referred to in Schedule 3 in relation to the Earnings Account and the Account Security. |
(b) | The rates of payment of interest and other terms regulating the Earnings Account will be a matter of separate agreement between the Borrower and Account Bank. If the Earnings Account is a fixed term deposit account, the Borrower may select the terms of deposits until the Account Security has become enforceable and the Security Agent directs otherwise. |
(c) | The Borrower shall not close the Earnings Account or alter the terms of the Earnings Account from those in force at the time it is designated for the purposes of this clause 27 or waive any of its rights in relation to the Earnings Account except with approval. |
(d) | The Borrower shall deposit with the Security Agent all certificates of deposit, receipts or other instruments or securities relating to the Earnings Account, notify the Security Agent of any claim or notice relating to the Earnings Account from any other party and provide the Agent with any other information it may request concerning the Earnings Account. |
(e) | Each of the Agent and the Security Agent agrees that if it is an Account Bank in respect of the Earnings Account then there will be no restrictions on creating a Security Interest over the Earnings Account as contemplated by this Agreement and it shall not (except with the approval of the Majority Lenders) exercise any right of combination, consolidation or set-off which it may have in respect of the Earnings Account in a manner adverse to the rights of the other Finance Parties. |
28 | Business restrictions |
Except as otherwise approved by the Majority Lenders (such approval not to be unreasonably withheld in the case of clause 28.12 (Distributions and other payments)) the Borrower undertakes that this clause 28 will be complied with by and in respect of the Borrower or, as the case may be, each Owner or the Parent, throughout the Facility Period.
28.1 | General negative pledge |
In this 28.1, Quasi-Security means an arrangement or transaction described in clause 28.1(b):
(a) | No Owner shall permit any Security Interest to exist, arise or be created or extended over all or any part of its assets. |
(b) | (Without prejudice to clauses 28.2 (Financial Indebtedness) and 28.6 (Disposals)), no Owner shall: |
(i) | sell, transfer or otherwise dispose of any of its assets on terms whereby that asset is or may be leased to, or re-acquired by, any other Group Member other than pursuant to disposals permitted under clause 28.6 (Disposals); |
(ii) | sell, transfer, factor or otherwise dispose of any of its receivables on recourse terms (except for the discounting of bills or notes in the ordinary course of business); |
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(iii) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or |
(iv) | enter into any other preferential arrangement having a similar effect, |
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
(c) | The Parent shall not permit any Security Interest to be granted or created in respect of the share capital or membership interests of the Borrower. |
(d) | Clauses 28.1(a) and 28.1(b) above do not apply to any Security Interest or (as the case may be) Quasi-Security, listed below: |
(i) | those in respect of the Existing Credit Facility that will be fully repaid on the first Utilisation Date; |
(ii) | those granted or expressed to be granted by any of the Security Documents; and |
(iii) | in relation to a Mortgaged Ship, Permitted Liens. |
28.2 | Financial Indebtedness |
No Owner shall incur or permit to exist, any Financial Indebtedness owed by it to anyone else except:
(a) | any Financial Indebtedness outstanding under the Existing Credit Facility that will be fully repaid on the first Utilisation Date; |
(b) | Financial Indebtedness incurred under the Finance Documents; |
(c) | Financial Indebtedness owed to another Group Member which is fully subordinated to all amounts payable by the Borrower under the Finance Documents on terms approved by the Agent pursuant to a Subordination Agreement entered into between the relevant Owner and the Security Agent; |
(d) | Financial Indebtedness permitted under clause 28.3 (Guarantees); and |
(e) | Financial Indebtedness permitted under clause 28.4 (Loans and credit), |
and the Borrower shall not incur or permit to exist any Financial Indebtedness or Indebtedness (as defined in clause 20.1 (Financial definitions)), that would cause the Borrower to be in default of clause 20 (Financial covenants).
28.3 | Guarantees |
No Owner shall give or permit to exist, any guarantee by it in respect of indebtedness of any person or allow any of its indebtedness to be guaranteed by anyone else except:
(a) | any Financial Indebtedness outstanding under the Existing Credit Facility that will be fully repaid on the first Utilisation Date; |
(b) | guarantees of obligations of another Owner that are not Financial Indebtedness or obligations prohibited by any Finance Document; |
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(c) | guarantees in favour of trade creditors of the Group given in the ordinary course of its business; and |
(d) | guarantees which are Financial Indebtedness permitted under clause 28.2 (Financial Indebtedness). |
28.4 | Loans and credit |
No Owner shall make, grant or permit to exist any loans or any credit by it to anyone else other than:
(a) | loans or credit to another Owner permitted under clause 28.2 (Financial Indebtedness); and |
(b) | trade credit granted by it to its customers on normal commercial terms in the ordinary course of its trading activities. |
28.5 | Bank accounts and other financial transactions |
Other than in relation to the Existing Credit Facility that will be fully repaid on the first Utilisation Date, no Owner shall:
(a) | maintain any current or deposit account with a bank or financial institution except for the deposit of money, operation of current accounts and the conduct of electronic banking operations with Lenders; |
(b) | hold cash in any account (other than with a Lender) over or in respect of which any set-off, combination of accounts, netting or Security Interest exists except as permitted by clause 28.1 (General negative pledge); or |
(c) | be party to any banking or financial transaction, whether on or off balance sheet, that is not expressly permitted under this clause 28 (Business restrictions). |
28.6 | Disposals |
No Owner shall enter into a single transaction or a series of transactions, whether related or not and whether voluntarily or involuntarily, to dispose of any asset except for any of the following disposals so long as they are not prohibited by any other provision of the Finance Documents:
(a) | disposals of assets made in (and on terms reflecting) the ordinary course of trading of the disposing entity; |
(b) | disposals of assets made by one Group Member to another Group Member; |
(c) | disposals of obsolete assets, or assets which are no longer required for the purpose of the business of the relevant Group Member, in each case for cash on normal commercial terms and on an arms length basis; |
(d) | any disposal of receivables on a non-recourse basis on arms length terms (including at fair market value) for non-deferred cash consideration in the ordinary course of its business; |
(e) | disposals permitted by clauses 28.1 (General negative pledge) or 28.2 (Financial Indebtedness); |
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(f) | dealings with trade creditors with respect to book debts in the ordinary course of trading; and |
(g) | the application of cash or cash equivalents in the acquisition of assets or services in the ordinary course of its business. |
28.7 | Contracts and arrangements with Affiliates |
No Owner shall be party to any arrangement or contract with any of its Affiliates unless such arrangement or contract is on an arms length basis.
28.8 | Subsidiaries |
No Owner shall establish or acquire a company or other entity which would be or become a Group Member or reactivate any dormant Group Member.
28.9 | Acquisitions and investments |
No Owner shall acquire any person, business, assets or liabilities or make any investment in any person or business or enter into any joint-venture arrangement except:
(a) | capital expenditures or investments related to maintenance of a Ship in the ordinary course of its business; |
(b) | acquisitions of assets in the ordinary course of business (not being new businesses or vessels); |
(c) | the incurrence of liabilities in the ordinary course of its business; |
(d) | any loan or credit not otherwise prohibited under this Agreement; |
(e) | pursuant to any Finance Documents or any Charter Documents to which it is party; or |
(f) | any acquisition pursuant to a disposal permitted under clause 28.6 (Disposals). |
28.10 | Reduction of capital |
Neither the Borrower nor any Owner shall redeem or purchase or otherwise reduce any of its equity or any other share capital or membership interests or any warrants or any uncalled or unpaid liability in respect of any of them or reduce the amount (if any) for the time being standing to the credit of its share premium account or capital redemption or other undistributable reserve in any manner.
28.11 | Increase in capital |
Neither the Borrower nor any Owner shall issue membership interests or other equity interests to anyone except for, in the case of the Owners, the Borrower and, in the case of the Borrower, the Parent.
28.12 | Distributions and other payments |
A dividend may be paid on a quarterly basis on or after 31 December 2020 provided that, at such time:
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(a) | the Group is on a consolidated basis in compliance or, where applicable, pro forma compliance with clause 20 (Financial Covenants) after giving effect to such dividend so paid or declared; and |
(b) | no Default has occurred or will occur following such dividend so paid or declared. |
29 | Hedging Contracts |
The Borrower undertakes that this clause 29 will be complied with throughout the Facility Period in respect of any Treasury Transaction it enters into with a Hedging Provider or a third party so
as to hedge all or any part of its exposure under this Agreement to interest rate fluctuations and
currency risk.
29.1 | Hedging |
(a) | If, at any time during the Facility Period, the Borrower has entered into any Treasury Transaction with a Hedging Provider or a third party so as to hedge all or any part of its exposure under this Agreement to interest rate fluctuations and currency risk, it shall notify the Agent in writing promptly following the occurrence of the same. Any Treasury Transaction must comply with the provisions of clauses 29.1(b) and 29.1(c). |
(b) | The Borrower agrees that it shall not enter into a speculative hedging transaction (which would include hedging transactions which are: (i) not entered into to hedge a real risk or exposure which the Borrower has or (ii) which are entered into by the Borrower for the main purpose of financial losses or gains, except for any forward foreign exchange, synthetic deposit or similar transaction entered into the Borrower in the ordinary course of its interest investment arrangements) under any Treasury Transaction with a Hedging Provider or a third party. |
(c) | Any Treasury Transaction which is concluded with a Hedging Provider so as to hedge all or any part of the Borrowers exposure under this Agreement to interest rate fluctuations and currency risk shall be on the terms of the Hedging Master Agreement with that Hedging Provider but, unless otherwise approved by the relevant Hedging Provider, no Hedging Transaction or Hedging Exposure shall be outstanding at the end of the Facility Period. The Borrower may also enter into Treasury Transactions with third party providers other than the Hedging Providers so long as the provisions of clauses 21.7 (Charged Property) and 28.1 (General negative pledge) are complied with. |
(d) | If and when any such Treasury Transaction has been concluded with a Hedging Provider, it shall constitute a Hedging Contract for the purposes of the Finance Documents. |
29.2 | Unwinding of Hedging Contracts |
If, at any time, and whether as a result of any cancellation (in whole or in part) of any Commitment or otherwise, the aggregate notional principal amount under all Hedging Transactions in respect of a Loan entered into by the Borrower exceeds or will exceed the amount of such Loan outstanding at that time after such cancellation, then (unless otherwise approved by the Majority Lenders) the Borrower shall immediately close out and terminate sufficient Hedging Transactions as are necessary to ensure that the aggregate notional principal amount under the remaining continuing Hedging Transactions in respect of the relevant Loan equals, and will in the future be equal to, the amount of such Loan at that time and as scheduled to be repaid from time to time thereafter pursuant to clauses 6.2 (Reduction of Facility) or 7 (Illegality, prepayment and cancellation).
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29.3 | Releases and waivers |
Except with approval, there shall be no release by the Borrower of any obligation of any other person under the Hedging Contracts (including by way of novation), no waiver of any breach of any such obligation and no consent to anything which would otherwise be such a breach.
29.4 | Assignment of Hedging Contracts by the Borrower |
Except with approval, the Borrower shall not assign or otherwise dispose of its rights under any Hedging Contract.
29.5 | Performance of Hedging Contracts by the Borrower |
The Borrower shall perform its obligations under the Hedging Contracts.
29.6 | Information concerning Hedging Contracts |
The Borrower shall provide the Agent with any information it may request concerning any Hedging Contract, including all reasonable information, accounts and records that may be necessary or of assistance to enable the Agent to verify the amounts of all payments and any other amounts payable under the Hedging Contracts.
30 | Events of Default |
Each of the events or circumstances set out in clauses 30.1 to 30.21 is an Event of Default.
30.1 | Non-payment |
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
(a) | its failure to pay is caused by administrative or technical error or by a Payment Disruption Event; and |
(b) | payment is made within two Business Days of its due date. |
30.2 | Hedging Contracts |
(a) | An Event of Default (as defined in any Hedging Master Agreement) has occurred and is continuing under any Hedging Contract. |
(b) | An Early Termination Date (as defined in any Hedging Master Agreement) has occurred or been or become capable of being effectively designated under any Hedging Contract. |
30.3 | Financial covenants |
The Borrower does not comply with clause 20 (Financial covenants).
30.4 | Value of security |
The Borrower does not comply with clause 25.12 (Security shortfall).
30.5 | Insurance |
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(a) | The Insurances of a Mortgaged Ship are not placed and kept in force in the manner required by clauses 24.2 (Coverage required) and 24.3 (Placing of cover). |
(b) | Any insurer either: |
(i) | cancels any such Insurances; or |
(ii) | disclaims liability under them by reason of any misstatement or failure or default by any person. |
30.6 | Other obligations |
(a) | An Obligor does not comply with any provision of the Finance Documents (other than those referred to in clauses 30.1 (Non-payment), 30.2 (Hedging Contracts), 30.3 (Financial Covenants) 30.4 (Value of security), 30.5 (Insurance) and 30.21 (Sanctions undertakings)). |
(b) | No Event of Default under clause 30.6(a) above will occur if the Agent considers (acting on the instructions of the Majority Lenders) that the failure to comply is capable of remedy and the failure is remedied within seven (7) days (and in the case of clause 23.10 (Release from arrest) thirty (30) days) of the Agent giving notice to the Borrower. |
30.7 | Misrepresentation |
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
30.8 | Cross default |
(a) | Any Financial Indebtedness of any Group Member exceeding $500,000 is not paid when due nor within any originally applicable grace period. |
(b) | Any Financial Indebtedness of any Group Member exceeding $500,000 is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). |
(c) | Any commitment for any Financial Indebtedness of any Group Member exceeding $500,000 is cancelled or suspended by a creditor of that Group Member exceeding $500,000 as a result of an event of default (however described). |
(d) | The counterparty to a Treasury Transaction exceeding $500,000 entered into by any Group Member becomes entitled to terminate that Treasury Transaction early by reason of an event of default (however described). |
(e) | Any creditor of any Group Member becomes entitled to declare any Financial Indebtedness of that Group Member exceeding $500,000 due and payable prior to its specified maturity as a result of an event of default (however described). |
(f) | No Event of Default will occur under this clause 30.8 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within clauses 30.8(a) to 30.8(e) above is less than $20,000,000 (or its equivalent in any other currency or currencies). |
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(g) | No Event of Default under this clause 30.8 will occur if the Agent (acting on behalf of the Majority Lenders) considers that the failure to comply is capable of remedy and the failure is remedied within five Business Days of the Agent giving notice to the Borrower. |
30.9 | Insolvency |
(a) | A Group Member is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness. |
(b) | The value of the assets of any Group Member is less than its liabilities (taking into account contingent and prospective liabilities). |
(c) | A moratorium is declared in respect of any indebtedness of any Group Member. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium. |
30.10 | Insolvency proceedings |
(a) | Any corporate action, legal proceedings or other procedure or step is taken in relation to: |
(i) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Group Member other than a solvent liquidation or reorganisation of any Group Member which is not an Obligor; |
(ii) | a composition, compromise, assignment or arrangement with any creditor of any Group Member; |
(iii) | the appointment of a liquidator (other than in respect of a solvent liquidation of a Group Member which is not an Obligor), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Group Member or any of its assets (including the directors of any Group Member requesting a person to appoint any such officer in relation to it or any of its assets); or |
(iv) | enforcement of any Security Interest over any assets of any Group Member, |
or any analogous procedure or step is taken in any jurisdiction.
(b) | Clause 30.10(a) shall not apply to any winding-up petition (or analogous procedure or step) which is frivolous or vexatious and is discharged, stayed or dismissed within 28 days of commencement or, if earlier, the date on which it is advertised. |
30.11 | Creditors process |
(a) | Any expropriation, attachment, sequestration, distress, execution or analogous process affects any asset or assets of any Group Member, which would in aggregate exceed $500,000 or, when aggregated with the value of any assets of the other Group Members affected by any process mentioned in this clause 30.11(a), would exceed $20,000,000, and is not discharged within 28 days. |
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(b) | Any judgment or order for an amount in excess of $500,000 in respect of the Borrower or $20,000,000 in respect of the Guarantors, is made against any Group Member and is not stayed or complied with within 28 days. |
30.12 | Unlawfulness and invalidity |
(a) | It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Security Interest created or expressed to be created or evidenced by the Security Documents ceases to be effective. |
(b) | Any obligation or obligations of any Obligor under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. |
(c) | Any Finance Document or any Security Interest created or expressed to be created or evidenced by the Security Documents ceases to be in full force and effect or is alleged by a party to it (other than a Finance Party) to be ineffective for any reason. |
(d) | Any Security Document does not create legal, valid, binding and enforceable security over the assets charged under that Security Document or the ranking or priority of such security is adversely affected. |
30.13 | Cessation of business |
Any Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
30.14 | Expropriation |
The authority or ability of any Obligor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Obligor or any of its assets.
30.15 | Repudiation and rescission of Finance Documents |
An Obligor (or any other relevant party) repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or purports to rescind a Finance Document.
30.16 | Litigation |
Any litigation, alternative dispute resolution, arbitration or administrative proceeding is taking place, or threatened against any Group Member or any of its assets, rights or revenues exceeding $10,000,000 which, if adversely determined, might have a Material Adverse Effect.
30.17 | Material Adverse Effect |
Any Environmental Incident or other event or circumstance or series of events (including any change of law) occurs which the Majority Lenders reasonably believe has, or is reasonably likely to have, a Material Adverse Effect.
30.18 | Security enforceable |
Any Security Interest (other than a Permitted Lien) in respect of Charged Property becomes enforceable.
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30.19 | Arrest of Ship |
Any Mortgaged Ship is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim and the relevant Owner fails to procure the release of such Ship within a period of 28 days thereafter (or such longer period as may be approved) or, in the case of any seizure or detention of such Ship as a result of piracy, within a period of 365 days thereafter.
30.20 | Ship registration |
Except with approval, the registration of any Mortgaged Ship under the laws and flag of its Flag State is cancelled or terminated or, where applicable, not renewed or, if such Ship is only provisionally registered on the date of its Mortgage, such Ship is not permanently registered under such laws within 90 days of such date.
30.21 | Sanctions undertakings |
An Obligor does not comply with any provision of clause 19.7 (Sanctions information), 21.13 (Sanctions) or 23.6(c) (Maintenance of class; compliance with laws and codes).
30.22 | Acceleration |
On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower:
(a) | cancel the Total Commitments at which time they shall immediately be cancelled; and/or |
(b) | declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; and/or |
(c) | declare that all or part of the Loans be payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or |
(d) | declare that no withdrawals be made from the Earnings Account; and/or |
(e) | exercise or direct the Security Agent and/or any other beneficiary of the Security Documents to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents. |
31 | Position of Hedging Provider |
31.1 | Hedging Providers |
At the time any Hedging Contract is entered into any Hedging Provider who is party to such Hedging Contract shall accede to, and become a party to, this Agreement by entering into a deed of adherence in a form to be agreed by the parties and upon the execution of such deed of adherence the relevant Hedging Provider shall have the rights and obligations on the part of the Hedging Providers contained in this Agreement and the other Finance Documents.
31.2 | Rights of Hedging Provider |
Each Hedging Provider is a Finance Party and as such, will be entitled to share in the security constituted by the Security Documents in respect of any liabilities of the Borrower under the Hedging Contracts with such Hedging Provider in the manner and to the extent contemplated by the Finance Documents.
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31.3 | No voting rights |
No Hedging Provider shall be entitled to vote on any matter where a decision of the Lenders alone is required under this Agreement, whether before or after the termination or close out of the Hedging Contracts with such Hedging Provider, provided that each Hedging Provider shall be entitled to vote on any matter where a decision of all the Finance Parties is expressly required.
31.4 | Acceleration and enforcement of security |
Neither the Agent nor the Security Agent or any other beneficiary of the Security Documents shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to clause 30 (Events of Default) or pursuant to the other Finance Documents, to have any regard to the requirements of the Hedging Provider except to the extent that the relevant Hedging Provider is also a Lender.
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SECTION 9 - CHANGES TO PARTIES
32 | Changes to the Lenders |
32.1 | Assignments and transfers by the Lenders |
Subject to this clause 32, a Lender (the Existing Lender) may assign any of its rights to another bank, financial institution which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (excluding a hedge fund), unless an Event of Default has occurred and is continuing, in which case the Existing Lender may assign its right to any person (in each case, the new assignee being the New Lender).
32.2 | Conditions of assignment |
(a) | The consent of the Borrower is required for an assignment by a Lender, unless the assignment is to another Lender or an Affiliate of a Lender or an Event of Default is continuing. The Agent will immediately advise the Borrower of the assignment. |
(b) | The Borrowers consent may not be unreasonably withheld or delayed and will be deemed to have been given fifteen Business Days after the Lender has requested consent unless consent is expressly refused within that time. |
(c) | An assignment will only be effective: |
(i) | on receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the Borrower and the other Finance Parties as it would have been under if it was an Original Lender; |
(ii) | on the New Lender entering into any documentation required for it to accede as a party to any Security Document to which the Original Lender is a party in its capacity as a Lender and, in relation to such Security Documents, completing any filing, registration or notice requirements; |
(iii) | if an assignment takes effect after there has been a Utilisation, the assignment of an Existing Lenders participation in the Utilisations (if any) under the Facility shall take effect in respect of the same fraction of each such Utilisation; |
(iv) | on the performance by the Agent of all know your customer or other checks relating to any person that it is required to carry out in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Lender and the New Lender; |
(v) | if that Existing Lender assigns equal fractions of its Commitment and participation in the Facility and each Utilisation (if any) under the Facility; and |
(vi) | if it is for a minimum amount of $20,000,000 (unless the assignment is of all an Existing Lenders Commitment and all of its participation in the Loans). |
(d) | Each New Lender, by executing the relevant Transfer Certificate, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with the Finance Documents on or prior to the date on which the assignment becomes effective in accordance with the Finance Documents and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender. |
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32.3 | Fee |
The New Lender shall, on the date upon which an assignment takes effect, pay to the Agent (for its own account) a fee of $5,000 per assignment.
32.4 | No increased costs |
(a) | If: |
(i) (i) | a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and |
(ii) (ii) | as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under clause 12 (Tax gross up and indemnities) or clause 13 (Increased costs), |
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.
32.5 | Limitation of responsibility of Existing Lenders |
(a) | Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for: |
(i) | the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents; |
(ii) | the financial condition of any Obligor; |
(iii) | the performance and observance by any Obligor or any other person of its obligations under the Finance Documents or any other documents; or |
(iv) | the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document, |
and any representations or warranties implied by law are excluded.
(b) | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(c) | has made (and shall continue to make) its own independent investigation and assessment of: |
(i) | the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement; and |
(ii) | the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; |
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(d) | and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document; |
(e) | will continue to make its own independent appraisal of the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; and |
(f) | will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force. |
(g) | Nothing in any Finance Document obliges an Existing Lender to: |
(i) | accept a re-assignment from a New Lender of any of the rights assigned under this clause 32 (Changes to the Lenders); or |
(ii) | support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or by reason of the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents or otherwise. |
32.6 | Procedure for transfer |
(a) | Subject to the conditions set out in clause 32.2 (Conditions of assignment) an assignment may be effected in accordance with clause 32.6(c) below when (a) the Agent executes an otherwise duly completed Transfer Certificate and (b) the Agent executes any document required under clause 32.2(c) which it may be necessary for it to execute in each case delivered to it by the Existing Lender and the New Lender duly executed by them and, in the case of any such other document, any other relevant person. The Agent shall, as soon as reasonably practicable after receipt by it of a Transfer Certificate and any such other document each duly completed, appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate and such other document. |
(b) | The Obligors and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultations with them. |
(c) | On the Transfer Date: |
(i) | to the extent that in the Transfer Certificate the Existing Lender seeks to be released from its obligations under the Finance Documents, the Existing Lender shall be released from further obligations towards the Obligors and the other Finance Parties under the Finance Documents and the rights of the Obligors and the other Finance Parties against the Existing Lender under the Finance Documents shall be cancelled (being the Discharged Rights and Obligations) (but the obligations owed by the Obligors under the Finance Documents shall not be released); |
(ii) | the New Lender shall assume obligations towards each of the Obligors who are a Party and/or the Obligors and the other Finance Parties shall acquire rights against the New Lender which differ from the Discharged Rights and Obligations only insofar as the New Lender has assumed and/or the Obligors and the other Finance Parties have acquired the same in place of the Existing Lender; |
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(iii) | the other Finance Parties and the New Lender shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Existing Lender and the other Finance Parties shall each be released from further obligations to each other under the Finance Documents; and |
(iv) | the New Lender shall become a Party to the Finance Documents as a Lender for the purposes of all the Finance Documents. |
32.7 | Copy of Transfer Certificate or Increase Confirmation to Borrower |
The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or Increase Confirmation and any other document required under clause 32.2(c), send a copy of that Transfer Certificate or Increase Confirmation and such documents to the Borrower.
32.8 | Security over Lenders Rights |
In addition to the other rights provided to Lenders under this clause 32, each Lender may without consulting with or obtaining consent from an Obligor, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank except that no such charge, assignment or Security Interest shall:
(a) | release a Lender from any obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or |
(b) | require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents. |
33 | Assignments and transfers by Obligors |
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents without the prior written consent of the Lenders.
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SECTION 10 - THE FINANCE PARTIES
34 | Roles of Agent, Security Agent and Arrangers |
34.1 | Appointment of the Agent |
(a) | Each other Finance Party (other than the Security Agent) appoints the Agent to act as its agent under and in connection with the Finance Documents. |
(b) | Each such other Finance Party authorises the Agent: |
(i) | to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and |
(ii) | to execute each of the Security Documents, and all other documents that may be approved by the Majority Lenders for execution by it. |
(c) | The Agent accepts its appointment under clause 34.1(a) as trustee of the Trust Property with effect from the date of this Agreement and declares that it holds the Trust Property on trust for itself and the other Finance Parties (for so long as they are Finance Parties) on and subject to the terms of this clause 34 and the Security Documents to which it is a party. |
34.2 | Duties of the Agent |
(a) | The Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party. |
(b) | Without prejudice to clause 32.7 (Copy of Transfer Certificate or Increase Confirmation to Borrower), clause 34.2(a) shall not apply to any Transfer Certificate or Increase Confirmation. |
(c) | Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. |
(d) | If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties. |
(e) | If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or an Arranger for their own account) under this Agreement it shall promptly notify the other Finance Parties. |
(f) | Except as specifically provided in the Finance Documents, the Agent has no obligations of any kind to any other Party under or in connection with the Finance Documents. The Agents duties under the Finance Documents are solely mechanical and administrative in nature. |
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34.3 | Role of the Arrangers, the Bookrunner and the Sustainability Agent |
Except as specifically provided in the Finance Documents, the Arrangers, the Bookrunner and the Sustainability Agent have no obligations of any kind to any other Party under or in connection with any Finance Document or the transactions contemplated by the Finance Documents.
34.4 | No fiduciary duties |
(a) | Nothing in this Agreement constitutes an Arranger as a trustee or fiduciary of any other person except to the extent that the Agent holds the benefit of the Security Documents in trust for the other Finance Parties pursuant to clause 34. |
(b) | Neither the Agent, Sustainability Agent nor any of the Arrangers shall be bound to account to any Lender or any Hedging Provider for any sum or the profit element of any sum received by it for its own account or have any obligations to the other Finance Parties beyond those expressly stated in the Finance Documents. |
34.5 | Business with the Group |
The Agent and any Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Obligor or other Group Member or their Affiliates.
34.6 | Rights and discretions of the Agent |
(a) | The Agent may rely on: |
(i) | any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and |
(ii) | any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his or her knowledge or within his or her power to verify. |
(b) | The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the other Finance Parties) that: |
(i) | no Default has occurred (unless it has actual knowledge of a Default arising under clause 30.1 (Non-payment)); |
(ii) | any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; |
(iii) | any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors; and |
(iv) | any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents (unless it has received written notice that those instructions have been revoked). |
(c) | The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts in the conduct of its obligations and responsibilities under the Finance Documents. |
(d) | The Agent may act in relation to the Finance Documents through its personnel and agents. |
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(e) | The Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. |
(f) | Without prejudice to the generality of clause 34.6(e) above, the Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Borrower and shall disclose the same upon the written request of the Borrower or the Majority Lenders. |
(g) | Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor any Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. The Agent and any Arranger may do anything which in its opinion, is necessary or desirable to comply with any law or regulation of any jurisdiction. |
(h) | Notwithstanding any other provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it. |
34.7 | Majority Lenders instructions |
(a) | Unless a contrary indication appears in a Finance Document, the Agent shall: |
(i) | exercise any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Agent); and |
(ii) | not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders. |
(b) | Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders to the Agent (in relation to any right, power, authority or discretion vested in it as Agent) shall be binding on all the Finance Parties. |
(c) | The Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions. |
(d) | In the absence of, or while awaiting, instructions from the Majority Lenders (or, if appropriate, the Lenders), the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Finance Parties. |
(e) | The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lenders consent) or any Hedging Provider in any legal or arbitration proceedings relating to any Finance Document. This clause 34.7(e) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Security Documents. |
(f) | Neither the Agent nor any Arranger shall be obliged to request any certificate, opinion or other information under clause 19 (Information undertakings) unless so required in writing by a Lender or any Hedging Provider, in which case the Agent shall promptly make the appropriate request of the Borrower if such request would be in accordance with the terms of this Agreement. |
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34.8 | Responsibility for documentation and other matters |
Neither the Agent nor the Arrangers:
(a) | is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, any Arranger, an Obligor or any other person given in or in connection with any Finance Document or the transactions contemplated in the Finance Documents or of any representations in any Finance Document or of any copy of any document delivered under any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; |
(b) | is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any Charter Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document or any Charter Document or any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise; |
(c) | is responsible for the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; |
(d) | is responsible for any loss to the Trust Property arising in consequence of the failure, depreciation or loss of any Charged Property or any investments made or retained in good faith or by reason of any other matter or thing; |
(e) | is obliged to account to any person for any sum or the profit element of any sum received by it for its own account; |
(f) | is responsible for the failure of any Obligor or any other party to perform its obligations under any Finance Document or any Charter Document or the financial condition of any such person; |
(g) | is responsible for ascertaining whether all deeds and documents which should have been deposited with it under or pursuant to any of the Security Documents have been so deposited; |
(h) | is responsible for investigating or making any enquiry into the title of any Obligor to any of the Charged Property or any of its other property or assets; |
(i) | is responsible for the failure to register any of the Security Documents with the Registrar of Companies or any other public office; |
(j) | is responsible for the failure to register any of the Security Documents in accordance with the provisions of the documents of title of any Obligor to any of the Charged Property; |
(k) | is responsible for the failure to take or require any Obligor to take any steps to render any of the Security Documents effective as regards property or assets outside England or Wales or to secure the creation of any ancillary charge under the laws of the jurisdiction concerned; or |
(l) | is responsible (save as otherwise provided in this clause 34) for taking or omitting to take any other action under or in relation to the Security Documents; |
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(m) | is responsible on account of the failure of any other beneficiary of a Security Document to perform or discharge any of its duties or obligations under the Security Documents; or |
(n) | is (unless it is the same entity as the Agent) responsible on account of the failure of the Agent and/or any other beneficiary of a Security Document to perform or discharge any of its duties or obligations under the Security Documents; or |
(o) | for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by any applicable law relating to insider dealing or otherwise. |
34.9 | Exclusion of liability |
(a) | Without limiting clause 34.9(b) the Agent will not be liable for : |
(i) | any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct; |
(ii) | exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document; or |
(iii) | without prejudice to the generality of paragraphs (i) and (ii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of: |
(A) | any act, event or circumstance not reasonably within its control; or |
(B) | the general risks of investment in, or the holding of assets in, any jurisdiction including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency, restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action. |
(b) | No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document any officer, employee or agent of the Agent may rely on this clause subject to clause 1.3 and the provisions of the Third Parties Act. |
(c) | The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose. |
(d) | Nothing in this Agreement shall oblige the Agent or any Arranger to carry out any know your customer or other checks in relation to any person on behalf of any Lender or any |
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Hedging Provider and each Lender and each Hedging Provider confirms to the Agent and the Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or any Arranger. |
(e) | Without prejudice to any provision of any Finance Document excluding or limiting the Agents liability, any liability of the Agent arising under or in connection with any Finance Document or the Transaction Security shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. |
(f) | In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages |
34.10 | Lenders indemnity to the Agent |
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against:
(a) | any Losses for negligence or any other category of liability whatsoever incurred by such Lenders Representative in the circumstances contemplated pursuant to clause 37.11 (Disruption to payment systems etc) notwithstanding the Agents negligence, gross negligence, or any other category of liability whatsoever but not including any claim based on the fraud of the Agent); and |
(b) | any other Losses (otherwise than by reason of the Agents gross negligence or wilful misconduct) including the costs of any person engaged in accordance with clause 34.6(c) (Rights and discretions of the Agent) and any Receiver in acting as its agent under the Finance Documents |
in each case incurred by the Agent in acting as such under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document or out of the Trust Property). The Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to paragraph (a) above.
34.11 | Resignation of the Agent |
(a) | The Agent may resign and appoint one of its Affiliates as successor by giving notice to the Lenders, the Hedging Providers and the Borrower. |
(b) | Alternatively the Agent may resign by giving notice to the other Finance Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Agent. |
(c) | If the Majority Lenders have not appointed a successor Agent in accordance with clause 34.11(b) above within 30 days after notice of resignation was given, the Agent (after consultation with the Borrower) may appoint a successor Agent. |
(d) | If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under paragraph (c) above, the Agent may, if it concludes (acting |
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reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent, agree with the proposed successor Agent (subject to the Borrowers approval in respect of any matters that would materially change the Borrowers liability under this Agreement) amendments to this clause 34 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees, together with any reasonable amendments to the agency fee payable under this Agreement (subject to the Borrowers approval (such approval not to be unreasonably withheld)) which are consistent with the successor Agents normal fee rates and those amendments will bind the Parties. |
(e) | The retiring Agent shall, either at the Lenders expense if it has been required to resign pursuant to clause 34.11(h) or otherwise at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. |
(f) | The Agents resignation notice shall only take effect upon the appointment of a successor. |
(g) | Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of clause 14.3 (Indemnity to the Agent) and this clause 34 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
(h) | After consultation with the Borrower, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with clause 34.11(a). In this event, the Agent shall resign in accordance with clause 34.11(a). |
(i) | At any time after the appointment of a successor, the retiring Agent shall execute all acts, deeds and documents reasonably required by its successor to transfer to it (or its nominee, as it may direct) any property, assets and rights previously vested in the retiring Agent pursuant to the Security Documents and which shall not have vested in its successor by operation of law. All such acts, deeds and documents shall be done or, as the case may be, executed at the cost of the retiring Agent (except where the Agent is retiring pursuant to clause 34.11(h) in which case such costs shall be borne by the Lenders (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero). |
(j) | The Agent shall resign in accordance with clause 34.11(b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph 34.11(c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either: |
(i) | the Agent fails to respond to a request under clause 12.8 (FATCA Information) and the Borrower or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
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(ii) | the information supplied by the Agent pursuant to clause 12.8 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or |
(iii) | the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
and (in each case) the Borrower or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and the Borrower or that Lender, by notice to the Agent, requires it to resign.
34.12 | Confidentiality |
(a) | In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its department, division or team directly responsible for the management of the Finance Documents which shall be treated as a separate entity from any other of its divisions, departments or teams. |
(b) | If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it. |
(c) | Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent, nor any Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any law or a breach of a fiduciary duty. |
34.13 | Relationship with the Lenders and Hedging Provider |
(a) | The Agent may treat the person shown in its records as Lender or each Hedging Provider at the opening of business (in the place of its principal office as notified to the Finance Parties from time to time) as the Lender or (as the case may be) a Hedging Provider acting through its Facility Office: |
(i) | entitled to or liable for any payment due under any Finance Document on that day; and |
(ii) | entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day, |
unless it has received not less than five Business Days prior notice from that Lender (or as the case may be a Hedging Provider) to the contrary in accordance with the terms of this Agreement.
(b) | Each Lender and each Hedging Provider shall supply the Agent with any information that the Agent may reasonably specify as being necessary or desirable to enable the Agent to perform its functions as Agent, including, but not limited to, any information which the Agent may require to comply with know your customer checks or similar identification procedures. |
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34.14 | Credit appraisal by the Lenders and Hedging Providers |
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender and each Hedging Provider confirms to each other Finance Party that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
(a) | the financial condition, status and nature of each Obligor and other Group Member; |
(b) | the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any Charter Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or any Charter Document; |
(c) | the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; |
(d) | whether any Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; |
(e) | the adequacy, accuracy and/or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document or, any Charter Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or any Charter Document; and |
(f) | the right of title of any person to, or the value or sufficiency of, any part of the Charged Property, the priority of the Security Documents or the existence of any Security Interest affecting the Charged Property. |
34.15 | Reference Banks |
If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Borrower) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.
34.16 | Deduction from amounts payable by the Agent |
If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
34.17 | Security Agent |
(a) | Each other Finance Party appoints the Security Agent to act as its agent and (to the extent permitted under any applicable law) trustee under and in connection with the Security Documents and confirms that the Security Agent shall have a lien on the Security Documents and the proceeds of the enforcement of those Security Documents for all moneys payable to the beneficiaries of those Security Documents. |
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(b) | Each other Finance Party authorises the Security Agent: |
(i) | to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and |
(ii) | to execute each of the Security Documents and all other documents that may be approved by the Agent and/or the Majority Lenders for execution by it. |
(c) | The Security Agent accepts its appointment under this clause 34.17 (Security Agent) as trustee of the Trust Property with effect from the date of this Agreement and declares that it holds the Trust Property on trust for itself, the other Finance Parties (for so long as they are Finance Parties) on and subject to the terms set out in clauses 34.1734.25 (inclusive) and the Security Documents to which it is a party. |
34.18 | Application of certain clauses to Security Agent |
(a) | Clauses 34.6 (Rights and discretions of the Agent), 34.8 (Responsibility for documentation and other matters), 34.9 (Exclusion of liability), 34.10 (Lenders indemnity to the Agent), 34.11 (Resignation of the Agent), 45 (Confidentiality), 34.13 (Relationship with the Lenders and Hedging Providers), 34.14 (Credit appraisal by the Lenders and Hedging Providers) and 34.16 (Deduction from amounts payable by the Agent) shall each extend so as to apply to the Security Agent in its capacity as such and for that purpose each reference to the Agent in these clauses shall extend to include in addition a reference to the Security Agent in its capacity as such and, in clause 34.6 (Rights and discretions of the Agent), references to the Lenders and a group of Lenders shall refer to the Agent. |
(b) | In addition, clause 34.11 (Resignation of the Agent) shall, for the purposes of its application to the Security Agent pursuant to clause 34.18(a), have the following additional sub-clause: |
At any time after the appointment of a successor, the retiring Security Agent shall do and execute all acts, deeds and documents reasonably required by its successor to transfer to it (or its nominee, as it may direct) any property, assets and rights previously vested in the retiring Security Agent pursuant to the Security Documents and which shall not have vested in its successor by operation of law. All such acts, deeds and documents shall be done or, as the case may be, executed at the cost of the retiring Security Agent (except where the Security Agent is retiring under clause 34.11 (Resignation of the Agent) as extended to it by clause 34.18(a), in which case such costs shall be borne by the Lenders (in proportion (if no part of the Loan is then outstanding) to their shares of the Total Commitments or (at any other time) to their participations in the Loan).
34.19 | Instructions to Security Agent |
(a) | The Security Agent shall: |
(i) | unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Agent; and |
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(ii) | not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above. |
(b) | The Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Agent as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives those instructions or that clarification. |
(c) | Unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Agent shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties. |
(d) | The Security Agent may refrain from acting in accordance with any instructions of the Agent until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions. |
(e) | In the absence of instructions, the Security Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders. |
(f) | The Security Agent is not authorised to act on behalf of a Lender or any Hedging Provider (without first obtaining that Lenders or the relevant Hedging Providers consent) in any legal or arbitration proceedings relating to any Finance Document. This clause 34.19(f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Security Documents. |
34.20 | Order of application |
(a) | The Security Agent agrees to apply the Trust Property and each other beneficiary of the Security Documents agrees to apply all moneys received by it in the exercise of its rights under the Security Documents in accordance with the following respective claims: |
(i) | first, as to a sum equivalent to the amounts payable to the Security Agent under the Finance Documents (excluding any amounts received by the Security Agent pursuant to clause 34.10 (Lenders indemnity to the Agent) as extended to the Security Agent pursuant to clause 34.18 (Application of certain clauses to Security Agent), for the Security Agent absolutely; |
(ii) | secondly, as to a sum equivalent to the aggregate amount then due and owing to the other Finance Parties (except the Hedging Providers) under the Finance Documents (except any Hedging Contracts), for those Finance Parties (except the Hedging Providers) absolutely, and pro-rata to the amounts owing to them under the Finance Documents (except any Hedging Contracts); |
(iii) | thirdly, until such time as the Security Agent is satisfied that all obligations owed to the Finance Parties (except the Hedging Providers) have been irrevocably and unconditionally discharged in full, held by the Security Agent on a suspense account for payment of any further amounts owing to the Finance Parties (except the Hedging Providers) under the Finance Documents (except any Hedging Contracts) and further application in accordance with this clause 34.20(a) as and when any such amounts later fall due; |
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(iv) | fourthly, as to a sum equivalent to the aggregate net amount then due to the Hedging Providers but unpaid under any Hedging Contracts, for the Hedging Providers absolutely, and pro rata to the net amounts owing to them under those Hedging Contracts; |
(v) | fifthly, to such other persons (if any) as are legally entitled thereto in priority to the Obligors; and |
(vi) | sixthly, as to the balance (if any), for the Obligors by or from whom or from whose assets the relevant amounts were paid, received or recovered or other person entitled to them. |
(b) | The Security Agent and each other beneficiary of the Security Documents shall make each application as soon as is practicable after the relevant moneys are received by, or otherwise become available to, it save that (without prejudice to any other provision contained in any of the Security Documents) the Security Agent (acting on the instructions of the Agent), any other beneficiary of the Security Documents or any receiver or administrator may credit any moneys received by it to a suspense account for so long and in such manner as the Security Agent, such other beneficiary of the Security Documents or such receiver or administrator may from time to time determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of their respective claims against the Borrower or any other person liable. |
(c) | The Security Agent and/or any other beneficiary of the Security Documents shall obtain a good discharge in respect of the amounts expressed to be due to the other Finance Parties as referred to in this clause 34.17 by distributing the same in accordance with clause 37 (Payment mechanics). |
34.21 | Powers and duties of the Security Agent as trustee of the security |
In its capacity as trustee in relation to the Trust Property, the Agent:
(a) | shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law (and to the extent not inconsistent with the provisions of this Agreement or any of the Security Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Agent by this Agreement and/or any Security Document but so that the Security Agent may only exercise such powers and discretions to the extent that it is authorised to do so by the provisions of this Agreement; |
(b) | shall (subject to clause 34.17 (Order of application)) be entitled (in its own name or in the names of nominees) to invest moneys from time to time forming part of the Trust Property or otherwise held by it as a consequence of any enforcement of the security constituted by any Finance Document which, in the reasonable opinion of the Security Agent, it would not be practicable to distribute immediately, by placing the same on deposit in the name or under the control of the Security Agent as the Security Agent may think fit without being under any duty to diversify the same and the Security Agent shall not be responsible for any loss due to interest rate or exchange rate fluctuations except for any loss arising from the Security Agents gross negligence or wilful misconduct; |
(c) | may, in the conduct of its obligations under and in respect of the Security Documents (otherwise than in relation to its right to make any declaration, determination or decision), instead of acting personally, employ and pay any agent (whether being a lawyer or any other person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Security Agent (including the receipt and payment of money) and on the basis that (i) any such agent engaged in any profession or |
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business shall be entitled to be paid all usual professional and other charges for business transacted and acts done by him or any partner or employee of his or her in connection with such employment and (ii) the Security Agent shall not be bound to supervise, or be responsible for any loss incurred by reason of any act or omission of, any such agent if the Security Agent shall have exercised reasonable care in the selection of such agent; and |
(d) | may place all deeds and other documents relating to the Trust Property which are from time to time deposited with it pursuant to the Security Documents in any safe deposit, safe or receptacle selected by the Security Agent exercising reasonable care or with any firm of solicitors or company whose business includes undertaking the safe custody of documents selected by the Security Agent exercising reasonable care and may make any such arrangements as it thinks fit for allowing Obligors access to, or its solicitors or auditors possession of, such documents when necessary or convenient and the Security Agent shall not be responsible for any loss incurred in connection with any such deposit, access or possession if it has exercised reasonable care in the selection of a safe deposit, safe, receptacle or firm of solicitors or company (save that it shall take reasonable steps to pursue any person who may be liable to it in connection with such loss). |
34.22 | All enforcement action through the Security Agent |
(a) | None of the other Finance Parties shall have any independent power to enforce any of those Security Documents which are executed in favour of the Security Agent only or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents except through the Security Agent. |
(b) | None of the other Finance Parties shall have any independent power to enforce any of those Security Documents which are executed in their favour or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents except through the Security Agent. If any Finance Party (other than the Security Agent) is a party to any Security Document it shall promptly upon being requested by the Agent to do so grant a power of attorney or other sufficient authority to the Security Agent to enable the Security Agent to exercise any rights, discretions or powers or to grant any consents or releases under such Security Document. |
34.23 | Co-operation to achieve agreed priorities of application |
The other Finance Parties shall co-operate with each other and with the Security Agent and any receiver or administrator under the Security Documents in realising the property and assets subject to the Security Documents and in ensuring that the net proceeds realised under the Security Documents after deduction of the expenses of realisation are applied in accordance with clause 34.20 (Order of application).
34.24 | Indemnity from Trust Property |
(a) | In respect of all liabilities, costs or expenses for which the Obligors are liable under this Agreement, the Security Agent and each Affiliate of the Security Agent and each officer or employee of the Agent or its Affiliate (each a Relevant Person) shall be entitled to be indemnified out of the Trust Property in respect of all liabilities, damages, costs, claims, charges or expenses whatsoever properly incurred or suffered by such Relevant Person: |
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(i) | in the execution or exercise or bona fide purported execution or exercise of the trusts, rights, powers, authorities, discretions and duties created or conferred by or pursuant to the Finance Documents; |
(ii) | as a result of any breach by an Obligor of any of its obligations under any Finance Document; |
(iii) | in respect of any Environmental Claim made or asserted against a Relevant Person which would not have arisen if the Finance Documents had not been executed; and |
(iv) | in respect of any matter or thing done or omitted in any way in accordance with the terms of the Finance Documents relating to the Trust Property or the provisions of any of the Finance Documents. |
(b) | The rights conferred by this clause 34.24 are without prejudice to any right to indemnity by law given to trustees generally and to any provision of the Finance Documents entitling the Security Agent or any other person to an indemnity in respect of, and/or reimbursement of, any liabilities, costs or expenses incurred or suffered by it in connection with any of the Finance Documents or the performance of any duties under any of the Finance Documents. Nothing contained in this clause 34.24 shall entitle the Security Agent or any other person to be indemnified in respect of any liabilities, damages, costs, claims, charges or expenses to the extent that the same arise from such persons own gross negligence or wilful misconduct. |
34.25 | Finance Parties to provide information |
The other Finance Parties shall provide the Security Agent with such written information as it may reasonably require for the purposes of carrying out its duties and obligations under the Security Documents and, in particular, with such necessary directions in writing so as to enable the Security Agent to make the calculations and applications contemplated by clause 34.17 (Order of application) above and to apply amounts received under, and the proceeds of realisation of, the Security Documents as contemplated by the Security Documents, clause 37.5 (Partial payments) and clause 34.17 (Order of application).
34.26 | Release to facilitate enforcement and realisation |
Each Finance Party acknowledges that pursuant to any enforcement action by the Security Agent (or a Receiver) carried out on the instructions of the Agent it may be desirable for the purpose of such enforcement and/or maximising the realisation of the Charged Property being enforced against, that any rights or claims of or by the Security Agent (for the benefit of the Finance Parties) and/or any Finance Parties against any Obligor and/or any Security Interest over any assets of any Obligor (in each case) as contained in or created by any Finance Document, other than such rights or claims or security being enforced, be released in order to facilitate such enforcement action and/or realisation and, notwithstanding any other provision of the Finance Documents, each Finance Party hereby irrevocably authorises the Security Agent (acting on the instructions of the Agent) to grant any such releases to the extent necessary to fully effect such enforcement action and realisation including, without limitation, to the extent necessary for such purposes to execute release documents in the name of and on behalf of the Finance Parties. Where the relevant enforcement is by way of disposal of membership interests in an Owner, the requisite release shall include releases of all claims (including under guarantees) of the Finance Parties and/or the Security Agent against such Owner and of all Security Interests over the assets of such Owner.
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34.27 | Undertaking to pay |
Each Obligor which is a Party undertakes with the Security Agent on behalf of the Finance Parties that it will, on demand by the Security Agent, pay to the Security Agent all money from time to time owing, and discharge all other obligations from time to time incurred, by it under or in connection with the Finance Documents.
34.28 | Additional trustees |
The Security Agent shall have power by notice in writing to the other Finance Parties and the Borrower to appoint any person approved by the Borrower (such approval not to be unreasonably withheld or delayed) either to act as separate trustee or as co-trustee jointly with the Security Agent:
(a) | if the Security Agent reasonably considers such appointment to be in the best interests of the Finance Parties; |
(b) | for the purpose of conforming with any legal requirement, restriction or condition in any jurisdiction in which any particular act is to be performed; or |
(c) | for the purpose of obtaining a judgment in any jurisdiction or the enforcement in any jurisdiction against any person of a judgment already obtained, |
and any person so appointed shall (subject to the provisions of this Agreement) have such rights (including as to reasonable remuneration), powers, duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Agent shall have power to remove any person so appointed. At the request of the Security Agent, the other parties to this Agreement shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such party irrevocably authorises the Security Agent in its name and on its behalf to do the same. Such a person shall accede to this Agreement as a Security Agent to the extent necessary to carry out their role on terms satisfactory to the Security Agent and (subject always to the provisions of this Agreement) have such trusts, powers, authorities, liabilities and discretions (not exceeding those conferred on the Security Agent by this Agreement and the other Finance Documents) and such duties and obligations as shall be conferred or imposed by the instrument of appointment (being no less onerous than would have applied to the Security Agent but for the appointment). The Security Agent shall not be bound to supervise, or be responsible for any loss incurred by reason of any act or omission of, any such person if the Security Agent shall have exercised reasonable care in the selection of such person.
34.29 | Non-recognition of trust |
It is agreed by all the parties to this Agreement that:
(a) | in relation to any jurisdiction the courts of which would not recognise or give effect to the trusts expressed to be constituted by this clause 34, the relationship of the Security Agent and the other Finance Parties shall be construed as one of principal and agent, but to the extent permissible under the laws of such jurisdiction, all the other provisions of this Agreement shall have full force and effect between the parties to this Agreement; and |
(b) | the provisions of this clause 34 insofar as they relate to the Security Agent in its capacity as trustee for the Finance Parties and the relationship between themselves and the Security Agent as their trustee may be amended by agreement between the other Finance Parties and the Security Agent. The Security Agent may amend all documents necessary to effect the alteration of the relationship between the Security Agent and the other Finance Parties and each such other party irrevocably authorises the Security Agent in its name and on its behalf to execute all documents necessary to effect such amendments. |
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35 | Conduct of business by the Finance Parties |
35.1 | Finance Parties tax affairs |
No provision of this Agreement will:
(a) | interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; |
(b) | oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or |
(c) | oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. |
35.2 | Finance Parties acting together |
Notwithstanding clause 2.3 (Finance Parties rights and obligations), if the Agent makes a declaration under clause 30.22 (Acceleration) the Agent shall, in the names of all the Finance Parties, take such action on behalf of the Finance Parties and conduct such negotiations with the Borrower and any Group Members and generally administer the Facility in accordance with the wishes of the Majority Lenders. All the Finance Parties shall be bound by the provisions of this clause and no Finance Party shall be entitled to take action independently against any Obligor or any of its assets without the prior consent of the Majority Lenders.
This clause shall not override clause 34 (Roles of Agent, Security Agent and Arrangers) as it applies to the Security Agent.
35.3 | Majority Lenders |
(a) | Where any Finance Document provides for any matter to be determined by reference to the opinion of, or to be subject to the consent, approval or request of, the Majority Lenders or for any action to be taken on the instructions of the Majority Lenders (a majority decision), such majority decision shall (as between the Lenders) only be regarded as having been validly given or issued by the Majority Lenders if all the Lenders shall have received prior notice of the matter on which such majority decision is required and the relevant majority of Lenders shall have given or issued such majority decision. However (as between any Obligor and the Finance Parties) the relevant Obligor shall be entitled (and bound) to assume that such notice shall have been duly received by each Lender and that the relevant majority shall have been obtained to constitute Majority Lenders when notified to this effect by the Agent whether or not this is the case. |
(b) | If, within ten Business Days of the Agent despatching to each Lender a notice requesting instructions (or confirmation of instructions) from the Lenders or the agreement of the Lenders to any amendment, modification, waiver, variation or excuse of performance for the purposes of, or in relation to, any of the Finance Documents, the Agent has not received a reply specifically giving or confirming or refusing to give or confirm the relevant instructions or, as the case may be, approving or refusing to approve the proposed amendment, modification, waiver, variation or excuse of performance, then (irrespective of whether such Lender responds at a later date) the Agent shall treat any Lender which has not so responded as having indicated a desire to be bound by the wishes of 60 per cent. of those Lenders (measured in terms of the total Commitments of those Lenders) which have so responded. |
(c) | For the purposes of clause 35.3(b), any Lender which notifies the Agent of a wish or intention to abstain on any particular issue shall be treated as if it had not responded. |
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(d) | Clauses 35.3(b) and 35.3(c) shall not apply in relation to those matters referred to in, or the subject of, clause 43.2 (Exceptions). |
35.4 | Conflicts |
(a) | The Borrower acknowledges that any Arranger and its parent undertaking, subsidiary undertakings and fellow subsidiary undertakings (together an Arranger Group) may be providing debt finance, equity capital or other services (including financial advisory services) to other persons with which the Borrower may have conflicting interests in respect of the Facility or otherwise. |
(b) | No member of an Arranger Group shall use confidential information gained from any Obligor by virtue of the Facility or its relationships with any Obligor in connection with their performance of services for other persons. This shall not, however, affect any obligations that any member of an Arranger Group has as Agent in respect of the Finance Documents. The Borrower also acknowledges that no member of an Arranger Group has any obligation to use or furnish to any Obligor information obtained from other persons for their benefit. |
(c) | The terms parent undertaking, subsidiary undertaking and fellow subsidiary undertaking when used in this clause have the meaning given to them in sections 1161 and 1162 of the Companies Act 2006. |
36 | Sharing among the Finance Parties |
36.1 | Payments to Finance Parties |
If a Finance Party (a Recovering Finance Party) receives or recovers any amount from an Obligor other than in accordance with clause 37 (Payment mechanics) (a Recovered Amount) and applies that amount to a payment due under the Finance Documents then:
(a) | the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent; |
(b) | the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with clause 37 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and |
(c) | the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the Sharing Payment) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with clause 37.5 (Partial payments). |
36.2 | Redistribution of payments |
The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the Sharing Finance Parties) in accordance with clause 37.5 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.
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36.3 | Recovering Finance Partys rights |
On a distribution by the Agent under clause 36.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
36.4 | Reversal of redistribution |
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(a) | each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the Redistributed Amount); and |
(b) | as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor. |
36.5 | Exceptions |
(a) | This clause 36 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a valid and enforceable claim against the relevant Obligor. |
(b) | A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings in accordance with the terms of this Agreement, if: |
(i) | it notified that other Finance Party of the legal or arbitration proceedings; and |
(ii) | that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings. |
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SECTION 11 - ADMINISTRATION
37 | Payment mechanics |
37.1 | Payments to the Agent |
(a) | On each date on which an Obligor or a Lender is required to make a payment under a Finance Document (other than a Hedging Contract), that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment. |
(b) | Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Agent specifies. |
37.2 | Distributions by the Agent |
Each payment received by the Agent under the Finance Documents for another Party shall, subject to clause 37.3 (Distributions to an Obligor) and clause 37.4 (Clawback) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days notice with a bank specified by that Party in the principal financial centre of the country of that currency.
37.3 | Distributions to an Obligor |
The Agent may (with the consent of the Obligor or in accordance with clause 38 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
37.4 | Clawback |
(a) | Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum. |
(b) | If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds. |
37.5 | Partial payments |
(a) | If the Agent receives a payment for application against amounts due under the Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under those Finance Documents in the following order: |
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(i) | first, in or towards payment pro rata of any unpaid fees, costs and expenses (ignoring any fees payable under clause 11 (Fees)) of the Agent, the Security Agent or the Arrangers under those Finance Documents; |
(ii) | secondly, pro rata in or towards payment to the Lenders pro rata of any amount owing to the Lenders under clause 34.10 (Lenders indemnity to the Agent) (including but not limited to any amount resulting from the indemnity to the Security Agent under clause 34.18 (Application of certain clauses to the Security Agent); |
(iii) | thirdly, pro-rata in or towards payment to the Lenders pro rata of any accrued interest, fee or commission or other amounts due to them but unpaid under the Finance Documents; |
(iv) | fourthly, in or towards payment to the Lenders pro rata of any principal which is due but unpaid under the Finance Documents; |
(v) | fifthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents (except any Hedging Contracts); and |
(vi) | sixthly, pro-rata in or towards payment to the Hedging Providers of any net amounts due to them but unpaid under any Hedging Contracts; |
(b) | The Agent shall, if so directed by all the Lenders and the Hedging Providers, vary the order set out in paragraphs (ii) to (v) of clause 37.5(a). |
(c) | Clauses 37.5(a) and 37.5(b) above will override any appropriation made by an Obligor. |
37.6 | No set-off by Obligors |
All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
37.7 | Business Days |
(a) | Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not). |
(b) | During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date. |
37.8 | Payments on demand |
For the purposes of clause 30.1 and subject to the Agents right to demand interest under clause 8.4, payments on demand shall be treated as paid when due if paid within three Business Days of demand.
37.9 | Currency of account |
(a) | Subject to clauses 37.9(b) to 37.9(c), dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document. |
(b) | A repayment of all or part of a Loan or an Unpaid Sum and each payment of interest shall be made in dollars on its due date. |
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(c) | Each payment in respect of the amount of any costs, expenses or Taxes or other losses shall be made in dollars and, if they were incurred in a currency other than dollars, the amount payable under the Finance Documents shall be the equivalent in dollars of the relevant amount in such other currency on the date on which it was incurred. |
(d) | All moneys received or held by the Security Agent or by a Receiver under a Security Document in a currency other than dollars may be sold for dollars and the Obligor which executed that Security Document shall indemnify the Security Agent against the full cost in relation to the sale. Neither the Security Agent nor such Receiver will have any liability to that Obligor in respect of any loss resulting from any fluctuation in exchange rates after the sale. |
37.10 | Change of currency |
(a) | Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then: |
(i) | any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrower); and |
(ii) | any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably). |
(b) | If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the London interbank market and otherwise to reflect the change in currency. |
37.11 | Disruption to Payment Systems etc. |
If either the Agent determines (in its discretion) that a Payment Disruption Event has occurred or the Agent is notified by the Borrower that a Payment Disruption Event has occurred:
(a) | the Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances; |
(b) | the Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes; |
(c) | the Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances; |
(d) | any such changes agreed upon by the Agent and the Borrower shall (whether or not it is finally determined that a Payment Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of clause 43 (Amendments and grant of waivers); |
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(e) | the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this clause 37.11; and |
(f) | the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above. |
38 | Set-off |
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
39 | Notices |
39.1 | Communications in writing |
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
39.2 | Addresses |
The address, and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Obligor or Finance Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
(a) | in the case of any Obligor which is a Party, that identified with its name in Part 1 of Schedule 1 (The original parties); |
(b) | in the case of any Obligor which is not a Party, that identified in any Finance Document to which it is a party; |
(c) | in the case of the Agent, the Security Agent and any other original Finance Party that identified with its name in Part 1 of Schedule 1 (The original parties); and |
(d) | in the case of each Lender or other Finance Party, that notified in writing to the Agent on or prior to the date on which it becomes a Party in the relevant capacity, |
or, in each case, any substitute address, fax number, or department or officer as an Obligor or Finance Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days notice.
39.3 | Delivery |
(a) | Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective: |
(i) | if by way of fax, when received in legible form; or |
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(ii) | if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; |
and, if a particular department or officer is specified as part of its address details provided under clause 39.2 (Addresses), if addressed to that department or officer.
(b) | Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified in Part 1 of Schedule 1 (The original parties) (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose). |
(c) | All notices from or to an Obligor shall be sent through the Agent. |
(d) | Any communication or document made or delivered to the Borrower in accordance with this clause will be deemed to have been made or delivered to each of the Obligors. |
39.4 | Notification of address and fax number |
Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to clause 39.2 (Addresses) or changing its own address or fax number, the Agent shall notify the other Parties.
39.5 | Electronic communication |
(a) | Any communication or document to be made or delivered by one Party to another under or in connection with the Finance Documents may be made or delivered by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties: |
(i) | notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and |
(ii) | notify each other of any change to their address or any other such information supplied by them by not less than five Business Days notice. |
(b) | Any such electronic communication or document as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication or delivery. |
(c) | Any such electronic communication or document as specified in paragraph (a) above made or delivered by one Party to another will be effective only when actually received (or made available) in readable form and, in the case of any electronic communication or document made or delivered by a Party to the Agent or the Security Agent, only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose. |
(d) | Any electronic communication or document which becomes effective, in accordance with paragraph (c) above, after 5:00 p. m. in the place in which the Party to whom the relevant communication or document is sent or made available has its address for the purpose of this Agreement or any other Finance Document shall be deemed only to become effective on the following day. |
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(e) | Any reference in a Finance Document to a communication being sent or received or a document being delivered shall be construed to include that communication or document being made available in accordance with this clause 39.5. |
39.6 | English language |
(a) | Any notice given under or in connection with any Finance Document shall be in English. |
(b) | All other documents provided under or in connection with any Finance Document shall be: |
(i) | in English; or |
(ii) | if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document. |
40 | Calculations and certificates |
40.1 | Accounts |
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
40.2 | Certificates and determinations |
Any certification or determination by the Agent of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
40.3 | Day count convention |
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Interbank Market differs, in accordance with that market practice.
41 | Partial invalidity |
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
42 | Remedies and waivers |
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any of the Finance Documents on the part of any Finance Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in the Finance Documents are cumulative and not exclusive of any rights or remedies provided by law.
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43 | Amendments and grant of waivers |
43.1 | Required consents |
(a) | Subject to clause 43.2 (Exceptions) and clause 43.4 (Replacement of Screen Rate), any term of the Finance Documents may be amended or waived with the written consent of the Agent (acting on the instructions of the Majority Lenders and, if it affects the rights and obligations of the Agent or the Security Agent, the consent of the Agent or the Security Agent) and any such amendment or waiver agreed or given by the Agent will be binding on the other Finance Parties. |
(b) | The Agent may (or in the case of the Security Documents, instruct the Security Agent to) effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause. |
43.2 | Exceptions |
(a) | An amendment, waiver or discharge or release that has the effect of changing or which relates to: |
(i) | the definition of Majority Lenders in clause 1.1 (Definitions); |
(ii) | the definition of Availability Period in clause 1.1 (Definitions); |
(iii) | the definition of Flag State in clause 1.1 (Definitions); |
(iv) | the definition of Restricted Party, Sanctions Authority, Sanctions Laws, or Sanctions List in clause 1.1 (Definitions); |
(v) | an extension to the date of payment of any amount under the Finance Documents; |
(vi) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable or the rate at which they are calculated; |
(vii) | an increase in, or an extension of, any Commitment; |
(viii) | a change to the Borrower or any other Obligor; |
(ix) | any provision which expressly requires the consent or approval of all the Lenders; |
(x) | clause 2.3 (Finance Parties rights and obligations), clause 18.34 (Sanctions), clause 19.7 (Sanctions information), clause 21.13 (Sanctions), clause 23.6(c) (Maintenance of class; compliance with laws and codes), clause 32 (Changes to the Lenders), clause 36.1 (Payments to Finance Parties) or this clause 43; |
(xi) | the approval of the Facility Extension pursuant to clause 6.2 (Extension of Facility); |
(xii) | the order of distribution under clause 37.5 (Partial payments); |
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(xiii) | the order of distribution under clause 34.17 (Order of application); |
(xiv) | this clause 43.2(a); |
(xv) | the currency in which any amount is payable under any Finance Document; |
(xvi) | the nature or scope of the Charged Property or the manner in which the proceeds of enforcement of the Security Documents are distributed; |
(xvii) | the nature or scope of the guarantee and indemnity granted under clause 17 (Guarantee and Indemnity); or |
(xviii) | the circumstances in which the security constituted by the Security Documents are permitted or required to be released under any of the Finance Documents, |
shall not be made without the prior consent of all the Lenders.
(b) | Amendments to or waivers in respect of the Hedging Contracts may only be agreed by the relevant Hedging Provider. |
(c) | An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arrangers in their respective capacities as such (and not just as a Lender) may not be effected without the consent of the Agent, the Security Agent or the Arrangers (as the case may be). |
(d) | Notwithstanding clauses 43.1 and 43.2(a) to 43.2(c) (inclusive), the Agent may make technical amendments to the Finance Documents arising out of manifest errors on the face of the Finance Documents, where such amendments would not prejudice or otherwise be adverse to the interests of any Finance Party without any reference or consent of the Finance Parties. |
43.3 | Releases |
Except with the approval of all of the Lenders or as is expressly permitted or required by the Finance Documents, the Agent shall not have authority to authorise the Security Agent to release:
(a) | any Charged Property from the security constituted by any Security Document; or |
(b) | any Obligor from any of its guarantee or other obligations under any Finance Document. |
43.4 | Replacement of Screen Rate |
(a) | Subject to clauses 43.2(b) and 43.2 (c) (Exceptions), if a Screen Rate Replacement Event has occurred in relation to any Screen Rate, any amendment or waiver which relates to: |
(i) | providing for the use of a Replacement Benchmark in relation to that currency in place of that Screen Rate; and |
(ii) |
(A) | aligning any provision of any Finance Document to the use of that Replacement Benchmark; |
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(B) | enabling that Replacement Benchmark to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Benchmark to be used for the purposes of this Agreement); |
(C) | implementing market conventions applicable to that Replacement Benchmark; |
(D) | providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; or |
(E) | adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Benchmark (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation), |
may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Borrower.
(b) | If, as at 31 August 2021, this Agreement provides that the rate of interest for a Loan is to be determined by reference to the Screen Rate for LIBOR: |
(i) | a Screen Rate Replacement Event shall be deemed to have occurred on that date in relation to the Screen Rate; and |
(ii) | the Agent, (acting on the instructions of the Majority Lenders) and the Borrower shall enter into negotiations in good faith with a view to agreeing the use of a Replacement Benchmark in place of that Screen Rate from and including a date no later than 31 October 2021. |
(c) | If any Lender fails to respond to a request for an amendment or waiver described in, or for any other vote of Lenders in relation to, paragraphs (a) or (b) above within ten Business Days (or such longer time period in relation to any request which the Borrower and the Agent may agree) of that request being made: |
(i) | its Commitment or its participation in the Loan (as the case may be) shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan (as applicable) when ascertaining whether any relevant percentage of Total Commitments or the aggregate of participations in the Loan (as applicable) has been obtained to approve that request; and |
(ii) | its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request. |
43.5 | Except with the approval of all of the Lenders or as is expressly permitted or required by the Finance Documents, the Agent shall not have authority to authorise the Security Agent to release: |
(a) | any Charged Property from the security constituted by any Security Document; or |
(b) | any Obligor from any of its guarantee or other obligations under any Finance Document. |
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43.6 | Disenfranchisement of Defaulting Lenders |
(a) | For so long as a Defaulting Lender has any undrawn Commitments, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lenders Commitments will be reduced by the amount of its undrawn Commitments. |
(b) | For the purposes of this clause 43.6, the Agent may assume that the following Lenders are Defaulting Lenders: |
(c) | any Lender which has notified the Agent that it has become a Defaulting Lender; and |
(d) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of Defaulting Lender has occurred, |
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
43.7 | Replacement of a Defaulting Lender |
(a) | The Borrower may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 20 Business Days prior written notice to the Agent and such Lender replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) assign pursuant to clause 32 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a Replacement Lender) selected by the Borrower, and which is acceptable to the Agent (acting reasonably) and which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lenders participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lenders participation in the outstanding Loans and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents. |
(b) | Any assignment by a Defaulting Lender pursuant to this clause shall be subject to the following conditions: |
(i) | the Borrower shall have no right to replace the Agent; |
(ii) | neither the Agent nor the Defaulting Lender shall have any obligation to the Borrower to find a Replacement Lender; |
(iii) | the transfer must take place no later than 14 days after the notice referred to in clause 43.7(a) above; and |
(iv) | in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents. |
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44 | Counterparts |
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
45 | Confidentiality |
45.1 | Confidential Information |
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by clause 45.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
45.2 | Disclosure of Confidential Information |
Any Finance Party may disclose:
(a) | to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, insurance and reinsurance advisors, insurance and reinsurance brokers, insurers and reinsurers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this clause 45.2(a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
(b) | to any person: |
(i) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Agent, and, in each case, to any of that persons Affiliates, Representatives and professional advisers; |
(ii) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation or risk mitigation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that persons Affiliates, Representatives and professional advisers; |
(iii) | appointed by any Finance Party or by a person to whom clause 45.2(b)(i) or 45.2(b)(ii) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under clause 34.13 (Relationship with the Lenders and Hedging Providers)); |
(iv) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in clause 45.2(b)(i) or 45.2(b)(ii); |
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(v) | to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
(vi) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(vii) | to whom or for whose benefit that Finance Party charges, assigns or otherwise creates security (or may do so) pursuant to clause 32.8 (Security over Lenders rights); |
(viii) | who is a Party; or |
(ix) | with the consent of the Borrower, |
in each case, such Confidential Information as that Finance Party shall consider appropriate; and
(c) | to any person appointed by that Finance Party or by a person to whom clauses 45.2(b)(i) or 45.2(b)(ii) applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this clause 45.2(c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrower and the relevant Finance Party; |
45.3 | Entire agreement |
This clause 45 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
45.4 | Inside information |
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
45.5 | Notification of disclosure |
Each of the Finance Parties agrees (to the extent permitted by applicable law) to inform the Borrower:
(a) | of the circumstances of any disclosure of Confidential Information made pursuant to clause 45.2(v) (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that clause during the ordinary course of its supervisory or regulatory function; and |
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(b) | upon becoming aware that Confidential Information has been disclosed in breach of this clause 45 (Confidentiality). |
45.6 | Continuing obligations |
The obligations in this clause 45 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve months from the earlier of:
(a) | the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and |
(b) | the date on which such Finance Party otherwise ceases to be a Finance Party. |
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SECTION 12 - GOVERNING LAW AND ENFORCEMENT
46 | Governing law |
This Agreement and any non-contractual obligations connected with it are governed by English law.
47 | Enforcement |
47.1 | Jurisdiction of English courts |
(a) | The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Agreement) (a Dispute). |
(b) | The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. |
(c) | This clause 47.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. |
47.2 | Service of process |
Without prejudice to any other mode of service allowed under any relevant law, each Obligor which is a Party:
(a) | irrevocably appoints the person named in Part 1 of Schedule 1 (The original parties) as that Obligors English process agent as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; |
(b) | agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned; and |
(c) | if any person appointed as process agent for an Obligor is unable for any reason to act as agent for service of process, that Obligor must immediately (and in any event within ten days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose. |
This Agreement has been entered into on the date stated at the beginning of this Agreement.
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Schedule 1
The parties
Part 1 The original parties
Borrower
Name: | Navigator Gas L.L.C. | |
Jurisdiction of formation | Republic of the Marshall Islands | |
Registration number (or equivalent, if any) | 961263 | |
English process agent | NGT Services (UK) Limited | |
Registered office | Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands | |
Address for service of notices | NGT Services (UK) Limited 10 Bressenden Place London SW1E 5DH England Attention: Niall Nolan Fax Number: 020 7340 4858 |
The Parent
Name of Parent | Navigator Holdings Ltd | |
Jurisdiction of incorporation | Republic of the Marshall Islands | |
Registration number (or equivalent, if any) | 29140 | |
English process agent | NGT Services (UK) Limited | |
Registered office | Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands | |
Address for service of notices | NGT Services (UK) Limited 10 Bressenden Place London SW1E 5DH England Attention: Niall Nolan Fax Number: 020 7340 4858 |
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The Original Lenders and their Commitments
Name | Address and fax number / email | Total | ||||
Commitments ($) | ||||||
Nordea Bank Abp, filial i | Address: | 60,000,000 | ||||
Norge | Essendrops gate 7 | |||||
0368 Oslo | ||||||
Norway | ||||||
Credit Matters: | ||||||
Magnus Løvstad (magnus.lovstad@nordea.com) | ||||||
Helge Leikvang (helge.leikvang@nordea.com) | ||||||
Agency Matters | ||||||
agency.soosid@nordea.com | ||||||
Administration / Operation Matters: | ||||||
Email: sls.shipping.norway@nordea.com | ||||||
Attn: Structured Loan & Collateral Services | ||||||
ABN AMRO Bank N.V. | Address: | Coolsingel 93, 3012 AE Rotterdam | 46,250,000 | |||
Attention: | Dien Quan | |||||
E-mail: loket.leningenadministratie.ccs@nl.abnamro.com | ||||||
BNP Paribas S.A. | Address: | 35 rue de la Gare 75019, Paris, France | 26,250,000 | |||
Attention: | BOCI CFI 2 TEAM; CTM Shipping; Melissa | |||||
Doucoure; Michael Neel | ||||||
E-mail: | paris.cib.boci.cfi.2@bnpparibas.com; | |||||
melissa.doucoure@bnpparibas.com; |
||||||
michael.neel@bnpparibas.com |
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Name | Address and fax number / email | Total | ||||
Commitments ($) | ||||||
ING Bank N.V., London Branch | Address: | 8-10 Moorgate, London, EC2R 6DA | 26,250,000 | |||
Attention: | Deal Execution Team | |||||
E-mail: | execution@ing.com | |||||
National Australia Bank | Address: | Level 21, 500 Bourke Street, Melbourne VIC 3000 | 26,250,000 | |||
Attention: | Specialised Transaction Management | |||||
E-mail: | ||||||
Wholesale.Banking.Transaction.Management. | ||||||
Group@nab.com.au | ||||||
Credit Agricole Corporate and Investment Bank | Address: | 12, place des Etats-Unis, 92547 Montrouge | 25,000,000 | |||
Cedex, France | ||||||
Attention: | Clémentine COSTIL / Cyprien FOULFOIN | |||||
E-mail: | clementine.costil@ca-cib.com; | |||||
cyprien.foulfoin@cacib.com | ||||||
Total | 210,000,000 |
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The Agent
Name |
Nordea Bank Abp, filial i Norge | |||
Facility Office, address, fax number and attention details for notices and account details for payments | Address: Essendrops gate 7, 0368 Oslo, Norway | |||
Attention: | Loan Agency Team Norway | |||
Email: | agency.soosid@nordea.com | |||
Account details for payments: | ||||
Pay to: | Nordea Bank Abp, filial i Norge | |||
Swift No: | NDEANOKK | |||
For Account of: | Nordea Bank Abp, filial i Norge, Structured Loan & Collateral Services | |||
Swift No: | BOFAUS3N | |||
Account: | 6550168948 |
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The Security Agent
Name |
Nordea Bank Abp, filial i Norge | |||
Facility Office, address, fax number and attention details for notices and account details for payments | Address: Essendrops gate 7, 0368 Oslo, Norway | |||
Attention: | Loan Agency Team Norway | |||
Email: | agency.soosid@nordea.com | |||
Account details for payments: | ||||
Pay to: | Nordea Bank Abp, filial i Norge | |||
Swift No: | NDEANOKK | |||
For Account of: | Nordea Bank Abp, filial i Norge, Structured Loan & Collateral Services | |||
Swift No: | BOFAUS3N | |||
Account: | 6550168948 |
The Sustainability Agent
Name |
ABN AMRO Bank N.V. | |||
Facility Office, address, fax number and attention details for notices | Address: Attention: |
Coolsingel 93, 3012 AE Rotterdam Dien Quan | ||
Tel: | +31 (0)10 40156 39 | |||
E-mail: | loket.leningenadministratie.ccs@nl.abnamro.com |
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Part 2 The Owners and, together with the Parent, the Guarantors
Name of Owner | Navigator Eclipse L.L.C. | |
Jurisdiction of formation | Republic of the Marshall Islands | |
Registration number (or equivalent, if any) | 963494 | |
Ship | Navigator Eclipse | |
English process agent | NGT Services (UK) Limited | |
Registered office | Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands | |
Address for service of notices | NGT Services (UK) Limited 10 Bressenden Place London SW1E 5DH England Attention: Niall Nolan Fax Number: 020 7340 4858 |
Name of Owner | Navigator Nova L.L.C. | |
Jurisdiction of formation | Republic of the Marshall Islands | |
Registration number (or equivalent, if any) | 963491 | |
Ship | Navigator Nova | |
English process agent | NGT Services (UK) Limited | |
Registered office | Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands | |
Address for service of notices | C/O NGT Services (UK) Limited 10 Bressenden Place London SW1E 5DH England Attention: Niall Nolan Fax Number: 020 7340 4858 |
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Name of Owner | Navigator Prominence L.L.C. | |
Jurisdiction of formation | Republic of the Marshall Islands | |
Registration number (or equivalent, if any) | 963490 | |
Ship | Navigator Prominence | |
English process agent | NGT Services (UK) Limited | |
Registered office | Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands | |
Address for service of notices | NGT Services (UK) Limited 10 Bressenden Place London SW1E 5DH England Attention: Niall Nolan Fax Number: 020 7340 4858 |
Name of Owner | Navigator Yauza L.L.C. | |
Jurisdiction of formation | Republic of the Marshall Islands | |
Registration number (or equivalent, if any) | 963493 | |
Ship | Navigator Yauza | |
English process agent | NGT Services (UK) Limited | |
Registered office | Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands | |
Address for service of notices | C/O NGT Services (UK) Limited 10 Bressenden Place London SW1E 5DH England Attention: Niall Nolan Fax Number: 020 7340 4858 |
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Name of Owner | Navigator Luga L.L.C. | |
Jurisdiction of formation | Republic of the Marshall Islands | |
Registration number (or equivalent, if any) | 963495 | |
Ship | Navigator Luga | |
English process agent | NGT Services (UK) Limited | |
Registered office | Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands | |
Address for service of notices | NGT Services (UK) Limited 10 Bressenden Place London SW1E 5DH England Attention: Niall Nolan Fax Number: 020 7340 4858 |
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Schedule 2
Ship information
Owner: | Navigator Eclipse L.L.C. | |
Ship Name: | Navigator Eclipse | |
Official Number | 17410 | |
Flag State: | Liberia | |
Port of Registry | Monrovia | |
Classification: | +A1, Liquefied Gas Carrier, (E),+AMS, +ACCU, SH, SHCM, RELIQ, TCM, RRDA, UWILD, BWE | |
Classification Society: | American Bureau of Shipping | |
Major Casualty Amount | $2,000,000 |
Owner: | Navigator Nova L.L.C. | |
Ship Name: | Navigator Nova | |
Official Number | 17411 | |
Flag State: | Liberia | |
Port of Registry | Monrovia | |
Classification: | +A1, Liquefied Gas Carrier, (E),+AMS, +ACCU, SH, SHCM, RELIQ, TCM, RRDA, UWILD, BWE | |
Classification Society: | American Bureau of Shipping | |
Major Casualty Amount | $2,000,000 |
Owner: | Navigator Prominence L.L.C. | |
Ship Name: | Navigator Prominence | |
Official Number | 17412 | |
Flag State: | Liberia | |
Port of Registry | Monrovia | |
Classification: | +A1, Liquefied Gas Carrier, (E),+AMS, +ACCU, SH, SHCM, RELIQ, TCM, RRDA, UWILD, BWE | |
Classification Society: | American Bureau of Shipping | |
Major Casualty Amount | $2,000,000 |
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Owner: | Navigator Yauza L.L.C. | |
Ship Name: | Navigator Yauza | |
Official Number | 17416 | |
Flag State: | Liberia | |
Port of Registry | Monrovia | |
Classification: | +100A1, Liquefied Gas Carrier, Ship Type 2G, +LMC, UMS, +Lloyds RMC (LG), *IWS, Ice-Class 1B FS, LI, Shipright(CM,SDA,ACS(B)) Shipright(SCM, IHM) | |
Classification Society: | Lloyds Register of Shipping | |
Major Casualty Amount | $2,000,000 |
Owner: | Navigator Luga L.L.C. | |
Ship Name: | Navigator Luga | |
Official Number | 17417 | |
Flag State: | Liberia | |
Port of Registry | Monrovia | |
Classification: | +100A1, Liquefied Gas Carrier, Ship Type 2G, +LMC, UMS, +Lloyds RMC (LG), *IWS, Ice-Class 1B FS, LI, Shipright(CM,SDA,ACS(B)) Shipright(SCM, IHM) | |
Classification Society: | Lloyds Register of Shipping | |
Major Casualty Amount | $2,000,000 |
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Schedule 3
Conditions precedent
Part 1
Conditions precedent to the first Utilisation Request
1 | Obligors corporate documents |
(a) | A copy of the Constitutional Documents of each Obligor. |
(b) | A copy of a resolution of the board of directors of each Obligor (or any committee of such board empowered to approve and authorise the following matters) and, if applicable, a copy of a resolution of the shareholders and/or members of each Obligor: |
(i) | approving the terms of, and the transactions contemplated by, the Finance Documents or any Charter (Relevant Documents) to which it is a party and resolving that it execute the Relevant Documents; |
(ii) | authorising a specified person or persons to execute the Relevant Documents on its behalf; and |
(iii) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Relevant Documents to which it is a party. |
(c) | If applicable, a copy of a resolution of the board of directors of the relevant company, establishing any committee referred to in paragraph (b) above and conferring authority on that committee. |
(d) | A copy of the passport of each person authorised by the resolution referred to in paragraph (b) above. |
(e) | A certificate of the Parent (signed by a director) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on any Obligor to be exceeded. |
(f) | A copy of any power of attorney under which any person is to execute any of the Relevant Documents on behalf of any Obligor. |
(g) | A certificate of an authorised signatory of the Parent certifying that each copy document relating to it specified in this Part of this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement and that any such resolutions or power of attorney have not been revoked. |
(h) | For each Obligor, a certificate of goodstanding from the registrar of corporations in the jurisdiction of its incorporation or organisation. |
2 | Legal opinions |
(a) | A legal opinion of Norton Rose Fulbright LLP, London addressed to the Arrangers and the Agent on matters of English law, substantially in the form approved by the Agent (acting on the instructions of the Lenders) prior to signing this Agreement. |
(b) | A legal opinion of the legal advisers to the Arrangers and the Agent in each jurisdiction in which an Obligor is incorporated or, as the case may be, formed and/or which is or is to be the Flag State of a Mortgaged Ship, each substantially in the form approved by the Agent (acting on the instructions of the Lenders) prior to the first Loan to be made for the Facility under this Agreement. |
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3 | Other documents and evidence |
(a) | Evidence that any process agent referred to in clause 47.2 (Service of process) or any equivalent provision of any other Finance Document entered into on or before the first Utilisation Date has accepted its appointment. |
(b) | A copy of any other authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document. |
(c) | The Original Financial Statements. |
(d) | Evidence that the fees, commissions, costs and expenses then due from the Borrower pursuant to clause 11 (Fees) and clause 16 (Costs and expenses) have been paid or will be paid by the first Utilisation Date. |
4 | Earnings Account |
Evidence that the Earnings Account has been opened and established, that the Account Security in respect of the Earnings Account has been executed and delivered by the Borrower in favour of the Security Agent and that any notice required to be given to an Account Bank under that Account Security has been given to it and acknowledged by it in the manner required by that Account Security and that an amount has been credited to it.
5 | Know your customer information |
Such documentation and information as any Finance Party may reasonably request through the Agent to comply with know your customer or similar identification procedures under all laws and regulations applicable to that Finance Party.
6 | Subordination Agreement |
If applicable, a Subordination Agreement, duly executed by the relevant Group Members.
7 | Structure of the Borrower and Owners |
Evidence in form and substance satisfactory to the Agent of the Borrowers and the Owners ownership and financial structure.
8 | Material Adverse Effect |
Confirmation in a form and substance satisfactory to the Agent that:
(a) | since 31 December 2019 nothing has occurred in relation to any Obligor which had, or could reasonably be expected to have, a Material Adverse Effect; and |
(b) | there is no litigation pending or threatened against any Obligor which has, or could reasonably be expected to have, a Material Adverse Effect. |
147
9 | No Conflict |
Confirmation, in a form and substance satisfactory to the Agent that this Agreement and the transactions contemplated in connection with it do not and will not cause any conflict with, or any default under, any material agreement to which the Obligors are party to.
10 | Consents and Approvals |
(a) | A certificate from an officer of the Borrower that no consents, authorisations, licences or approvals are necessary for the Borrower to authorise or are required by the Borrower in connection with the borrowing by the Borrower of the Loans pursuant to this Agreement or the execution, delivery and performance of the Borrowers Security Documents; and |
(b) | a certificate from an officer of each Obligor (other than the Borrower) that no consents, authorisations, licences or approvals are necessary for such Obligor to guarantee and/or grant security for the borrowing by the Borrower of the Commitment pursuant to this Agreement and execute, deliver and perform the Security Documents insofar as such Obligor is a party thereto. |
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Part 2
Ship and security conditions precedent
1 | Corporate documents |
(a) | A certificate of an authorised signatory of the Borrower and the relevant Owner certifying that each copy document relating to it specified in Part 1 of this Schedule remains correct, complete and in full force and effect as at a date no earlier than a date approved for this purpose and that any resolutions or power of attorney referred to in Part 1 of this Schedule in relation to it have not been revoked or amended. |
(b) | A certificate of an authorised signatory of each other Obligor which is party to any of the Security Documents required to be executed at or before Delivery of the relevant Ship certifying that each copy document relating to it specified in Part 1 of this Schedule remains correct, complete and in full force and effect as at a date no earlier than a date approved for this purpose and that any resolutions or power of attorney referred to in Part 1 of this Schedule in relation to it have not been revoked or amended. |
(c) | For the Borrower, a certificate of goodstanding from: |
(i) | the registrar of corporations in the jurisdiction of its incorporation or organisation; and |
(ii) | the Ministry of Foreign Affairs in the Republic of Liberia certifying the Borrower as a Liberian Foreign Maritime Entity or such equivalent certification (to extent available) from the appropriate government entity of the Flag State of the relevant Ship. |
2 | Existing Credit Facility |
Evidence that at the time of the first Utilisation the proceeds of the Loan will be used to prepay the Existing Credit Facility in full and that the security granted in respect of the Ships will be discharged, release and/or reassigned (as applicable).
3 | Guarantees |
The Shipowner Guarantees duly executed by each Owner.
4 | Security |
(a) | The Mortgage and the General Assignment in respect of each Ship. |
(b) | Any Charter Assignment then required in respect of the relevant Ship pursuant to the Finance Documents duly executed by the relevant Owner. |
(c) | Managers Undertakings in respect of each Ship duly executed by the relevant manager. |
(d) | Duly executed notices of assignment and acknowledgements of those notices as required by any of the above Security Documents. |
(e) | The LLC Interests Security in respect of each of the Owners duly executed by the Borrower together with all letters, transfers, certificates and other documents required to be delivered under the LLC Interests Security. |
149
5 | Delivery and registration of Ship |
(a) | Evidence that each Ship: |
(i) | is legally and beneficially owned by the relevant Owner and permanently registered in the name of the relevant Owner through the relevant Registry as a ship under the laws and flag of the relevant Flag State; |
(ii) | is operationally seaworthy and in every way fit for service; |
(iii) | is classed with the relevant Classification free of all requirements and recommendations of the relevant Classification Society; |
(iv) | is insured in the manner required by the Finance Documents; |
(v) | has been delivered, and accepted for service, under its Charter (if any); |
(vi) | is free of any other charter commitment which would require approval under the Finance Documents; and |
(vii) | is free from registered liens and encumbrances other than the relevant Mortgage. |
6 | Mortgage registration |
Evidence that the Mortgage in respect of the relevant Ship has been provisionally registered with first preferred status against the relevant Ship through the relevant Registry under the laws and flag of the relevant Flag State.
7 | Insurance |
In relation to the relevant Ships Insurances:
(a) | an opinion from insurance consultants appointed by the Agent on such Insurances; |
(b) | evidence that such Insurances have been placed in accordance with clause 24 (Insurance); and |
(c) | evidence that approved brokers, insurers and/or associations have issued or will issue letters of undertaking in favour of the Security Agent in an approved form in relation to the Insurances. |
8 | ISM and ISPS Code |
Copies of:
(a) | the document of compliance issued in accordance with the ISM Code to the person who is the operator of the relevant Ship for the purposes of that code; |
(b) | the safety management certificate in respect of such Ship issued in accordance with the ISM Code; |
(c) | the international ship security certificate in respect of such Ship issued under the ISPS Code; and |
150
(d) | if so requested by the Agent, any other certificates issued under any applicable code required to be observed by such Ship or in relation to its operation under any applicable law. |
9 | Charter |
(a) | A copy, certified by an approved person to be a true and complete copy, of any Charter in relation to the relevant Ship. |
(b) | If a Charter Assignment is then required in relation to the relevant Ship pursuant to the Finance Documents the Borrower shall procure (using reasonable commercial efforts) such evidence as the Agent may require as to the due incorporation of the relevant Charterer and any other party to the Charter Documents (other than an Obligor). |
10 | Fees and expenses |
Evidence that the fees, commissions, costs and expenses that are due from the Borrower pursuant to clause 11 (Fees) and clause 16 (Costs and expenses) have been paid or will be paid by the relevant Utilisation Date.
11 | Environmental matters |
If and when the Ship is to trade to the United States after its Delivery, evidence that the relevant Ship has the required certificate to trade in the United States as required under United States law in respect of the relevant Ship from an approved person.
12 | Management Agreement |
Where any Managers (other than any internal Manager) have been approved in accordance with clause 22.4 (Manager), a copy, certified by an approved person to be a true and complete copy, of the agreement between the relevant Owner and the relevant Manager relating to the appointment of the Manager.
13 | Value of Security |
Valuations (dated not more than 30 days before the relevant Utilisation Date (or such earlier date approved by the Agent)) of all the Ships, prepared by two (2) Approved Brokers, made on the basis of, and in accordance with clause 25 (Minimum security value), in each case made at the cost and expense of the Borrower showing the Borrower is in compliance with 25.12 (Security shortfall).
14 | Legal Opinions |
(a) | To the extent not previously provided pursuant to Schedule 3, Part 1, a legal opinion of Norton Rose Fulbright LLP, London addressed to the Arrangers and the Agent on matters of English law, substantially in the form approved by the Agent (acting on the instructions of the Lenders) prior to signing this Agreement. |
(b) | To the extent not previously provided pursuant to Schedule 3, Part 1, a legal opinion of the legal advisers to the Arrangers and the Agent in each jurisdiction in which an Obligor is incorporated or formed and/or which is or is to be the Flag State of a Mortgaged Ship, each substantially in the form approved by the Agent (acting on the instructions of the Lenders) prior to first Loan to be made for the Facility under this Agreement. |
151
Schedule 4
Utilisation Request
From: | Navigator Gas L.L.C. | |
To: | [name of Agent] as Agent (for and on behalf of the Finance Parties) | |
Dated: | [●] |
Dear Sirs
$210,000,000
Facility Agreement dated [●] (the Agreement)
2 | We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request. |
3 | We wish to borrow a Loan on the following terms: |
Proposed Utilisation Date: | [●] (or, if that is not a Business Day, the next Business Day) | |
Amount: | $ [●] | |
Interest Period: | [one][three][six] months |
4 | We confirm that each condition specified in clause 4.4 (Further conditions precedent) is satisfied on the date of this Utilisation Request. |
5 | The purpose of this Loan is [specify purpose complying with clause 3 of the Agreement] and its proceeds] [The proceeds of the Loan] should be credited to [●] [specify account]. |
6 | This Utilisation Request is irrevocable. |
7 | [First Utilisation of facility: All of the representations and warranties set out in clause 18 (Representations) are correct at the date of this Utilisation Request] / [Subsequent Utilisation of facility: The Repeating Representations, (being each of the representations and warranties set out in the Agreement at clauses 18.1 (Status) to 18.10 (Ranking and effectiveness of Security Documents) (except for clauses 18.7 (Information) and 18.8 (Original Financial Statements)) are correct at the date of this Utilisation Request.] |
Yours faithfully
authorised signatory for
Navigator Gas L.L.C.
152
Schedule 5
Form of Transfer Certificate
To: | [●] as Agent (for and on behalf of the Finance Parties) |
From: | [single Existing Lender: [The Existing Lender] (the Existing Lender)] [multiple Existing Lenders: [Existing Lender] [and/,] [Existing Lender] [and [Existing Lender]] (together, the Existing Lenders)] and [The New Lender] (the New Lender) |
Dated:
$210,000,000 Facility Agreement dated [●] (the Agreement)
8 | We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate. |
9 | We refer to clause 32.6 (Procedure for transfer): |
(a) | [multiple Existing Lenders: Each of the] [single Existing Lender: The] Existing Lender[multiple Existing Lenders: s] and the New Lender agree to the Existing Lender[multiple Existing Lenders: s] assigning to the New Lender all or part of the Existing [single Existing Lender: Lenders] [multiple Existing Lenders: Lenders respective] Commitment rights and assuming the Existing [single Existing Lender: Lenders] [multiple Existing Lenders: Lenders respective] obligations referred to in the Schedule in accordance with clause 32.6 (Procedure for transfer) and [multiple Existing Lenders: each of the] [single Existing Lender: the] Existing Lender[multiple Existing Lenders: s] assigns and agrees to assign such rights to the New Lender with effect from the Transfer Date. |
(b) | The proposed Transfer Date is []. |
(c) | The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of clause 39.2 (Addresses) are set out in the Schedule. |
10 | The New Lender expressly acknowledges the limitations on [multiple Existing Lenders: each of] the Existing [single Existing Lender: Lenders] [multiple Existing Lenders: Lenders respective] obligations set out in clause 32.5(c). |
11 | This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate. |
12 | This Transfer Certificate and any non-contractual obligations connected with it are governed by English law. |
153
The Schedule
Commitment/rights to be assigned and obligations to be assumed
[insert relevant details for each Existing Lender, in particular (having regard to clause 32.2(c))]
Facility Office address, fax number
and attention details for notices and account details for payments
[insert relevant details]
[Existing Lender] | [[Existing Lender] | [[Existing Lender] | [New Lender] | |||
By: | By:] | By:] | By: |
This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed to be as stated above.
[Agent]
By:
154
Schedule 6
Form of Compliance Certificate
To: | [●] as Agent (for and on behalf of the Finance Parties) | |
From: | Navigator Holdings Ltd | |
Dated: | [●] |
Dear Sirs
$210,000,000
Facility Agreement dated [●] (the Agreement)
13 | [I/We] refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate. |
14 | [I/We] confirm that with respect to the latest financial quarter of the Group ending on []: |
(a) | Cash and cash equivalents was at all times, including the ending balance of $[], not less than the minimum required amount of the greater of (i) $35,000,000 and (ii) 5% of the Total Indebtedness, calculated as shown in Appendix B; and |
(b) | the ratio of Total Stockholders Equity to Total Assets was []%, calculated as shown in Appendix B, versus the minimum required level of not less than 30%. |
15 | [I/We] confirm that Security Value is $[], calculated pursuant to the attached valuations dated [ and such date not older than 30 days from the date of this Compliance Certificate], versus the required Minimum Value of $[], as shown in Appendix C. |
16 | [I/We confirm that no Default is continuing.] [If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.] |
17 | All the representations and warranties set out in clause 18 (Representations) are correct at the date of this Certificate. |
Signed by:
[Chief Financial Officer] of Navigator Holdings Ltd
155
Schedule 7
Form of Increase Confirmation
To: [name of Agent] as Agent (for and on behalf of the Finance Parties)
and
Navigator Gas L.L.C.
From: [the Increase Lender] (the Increase Lender)
Dated: []
$210,000,000
Facility Agreement dated [●] (the Agreement)
18 | We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation. |
19 | We refer to clause 2.2 (Increase). |
20 | The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the Relevant Commitment) as if it was an Original Lender under the Agreement. |
21 | The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the Increase Date) is []. |
22 | On the Increase Date, the Increase Lender becomes party to the Finance Documents as a Lender. |
23 | The Facility Office and address, fax number and attention details for notices to the Increase Lender for the purposes of clause 39.2 (Addresses) are set out in the Schedule. |
24 | The Increase Lender expressly acknowledges the limitations on the Lenders obligations referred to in clause 2.2(g). |
25 | This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation. |
26 | This Increase Confirmation and any non-contractual obligations arising out of or in connection with it are governed by English law. |
This Agreement has been entered into on the date stated at the beginning of this Agreement.
156
The Schedule
Relevant Commitment/rights and obligations to be assumed by the Increase Lender
[insert relevant details]
[Facility office address, fax number and attention details for notices and account details for payments]
[Increase Lender]
By:
This Increase Confirmation is accepted as an Increase Confirmation for the purposes of the Agreement by the Agent and the Increase Date is confirmed as [].
Agent (on behalf of itself and the other Finance Parties)
By:
Navigator Gas L.L.C.
By:
Navigator Holdings Ltd
By:
157
Schedule 8
Scheduled Reduction Amounts
Repayment Date |
Reduction Amount | Reduced Facility Amount | ||||||
$ | 210,000 000.00 | |||||||
31 December 2020 |
$ | 7,397,506.18 | $ | 202,602,493.82 | ||||
30 June 2021 |
$ | 7,397,506.18 | $ | 195,204,987.65 | ||||
31 December 2021 |
$ | 7,397,506.18 | $ | 187,807,481.47 | ||||
30 June 2022 |
$ | 7,397,506.18 | $ | 180,409,975.29 | ||||
31 December 2022 |
$ | 7,397,506.18 | $ | 173,012,469.12 | ||||
30 June 2023 |
$ | 7,397,506.18 | $ | 165,614,962.94 | ||||
31 December 2023 |
$ | 7,397,506.18 | $ | 158,217,456.76 | ||||
30 June 2024 |
$ | 7,397,506.18 | $ | 150,819,950.59 | ||||
$150,819,950.59 |
158
Schedule 9
Sustainability Margin Adjustment
1 | In this Schedule 9: |
AER: | Shall mean the average efficiency ratio as calculated per the Poseidon Principles as follows:
Where Ci is the carbon emissions for voyage i computed using the fuel consumption and carbon factor of each type of fuel, DWT is the design deadweight of a vessel, and Di is the distance travelled on voyage i. The AER is computed for all voyages performed over a calendar year. | |
Annex VI: | Shall mean Annex VI of the Protocol of 1997 (as subsequently amended from time to time) to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto. | |
Fleet: | Shall mean all vessels owned, whether directly or indirectly, by the Parent. | |
Fleet Carbon Intensity Certificate(s): | Shall mean the certificate(s) from a Recognised Organisation (or such other person approved by the Sustainability Agent) relating to each vessel in the Fleet and a calendar year setting out the AER of a Vessel for all voyages performed by it over that calendar year using ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI in respect of that calendar year. | |
Fleet Sustainability Score: | Shall mean the weighted average of all Vessel Sustainability Scores based on Vessel Weighting. | |
Owned Days: | Shall mean, for a given Vessel in the Fleet, the number of days in a calendar year that such Vessel is owned, whether directly or indirectly, by the Parent. | |
Poseidon Principles: | Shall mean the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published on 18 June 2019, as the same may be amended or replaced from time to time. | |
Sustainability Certificate | Shall mean a certificate signed by the Chief Financial Officer of the Borrower substantially in the form set out in Schedule 10 (Form of Sustainability Certificate) or any other form satisfactory to the Sustainability Agent, that shows to the satisfaction of the Sustainability Agent the calculation of the Fleet Sustainability Score and sets forth the Sustainability Margin Adjustment. | |
Trajectory Value: | The median climate alignment score of a vessel type and size in a given year per Schedule I, as set out in the Poseidon Principles. | |
Vessel: | Shall mean any vessel in the Fleet. | |
Vessel Sustainability Score: | Shall mean, for a given Vessel in the Fleet, calculated as:
As evidenced by the relevant Fleet Carbon Intensity Certificate(s). | |
Vessel Weighting: | Shall mean, for a given Vessel in the Fleet, the product of Owned Days and the respective Vessel DWT. |
159
2 | The Borrower shall furnish to the Agent, within [90] days after the end of each calendar year, a Sustainability Certificate for the prior calendar year. |
3 | Each calendar year, the Margin shall increase or decrease subject to achievement against the Fleet Sustainability Score targets (defined in the table below) (rounded to two decimal places) and provided in the Sustainability Certificate for the prior calendar year (the Sustainability Margin Adjustment). The Sustainability Margin Adjustment will take place on the date falling 10 Business Days following the delivery on the applicable Sustainability Certificate. The Sustainability Margin Adjustment will apply as follows: |
Fleet |
Fleet |
Fleet |
Sustainability Margin following calendar | |||
Fleet Sust. Score ³ [TBD]1 | Fleet Sust. Score ³ [TBD] | Fleet Sust. Score ³ [TBD] | Margin + 0.05% | |||
[TBD] £ Fleet Sust. Score < [TBD] | [TBD] £ Fleet Sust. Score < [TBD] | [TBD] £ Fleet Sust. Score < [TBD] | Margin +/- nil | |||
[TBD] £ Fleet Sust. Score < [TBD] | [TBD] £ Fleet Sust. Score < [TBD] | [TBD] £ Fleet Sust. Score < [TBD] | Margin 0.05% |
4 | The Sustainability Margin Adjustment shall at no time exceed 0.05% as a decrease or an increase from the Margin. |
5 | If the Borrower fails to furnish a Sustainability Certificate, the Sustainability Margin Adjustment shall increase by 0.05%. For the avoidance of doubt, the Borrower may elect not to furnish a Sustainability Certificate and such election will not constitute a Default or an Event of Default. |
1 | Specific targets and figures to be finalised between the Sustainability Agent and the Borrower. |
160
Schedule 10
Form of Sustainability Certificate
To: | [●] as Agent (for and on behalf of the Finance Parties) |
From: | Navigator Gas L.L.C. |
Dated: | [●] |
Dear Sirs
$210,000,000
Facility Agreement dated [●] (the Agreement)
1 | We refer to the Agreement. This is a Sustainability Certificate. Terms defined in the Agreement have the same meaning when used in this Sustainability Certificate unless given a different meaning in this Sustainability Certificate. |
2 | We confirm that, as at the date hereof: |
(a) | the calculation of the Fleet Sustainability Score for the present calendar year ending [31 December 202][] as evidenced by the Fleet Carbon Intensity Certificates, is as follows: |
[]
(b) | the calculation of the Fleet Sustainability Score for the prior calendar year ending [31 December 202[], as evidenced by the Fleet Carbon Intensity Certificates, was as follows: |
[]
(c) | accordingly the Sustainability Margin Adjustment is as follows: [] |
3 | We confirm that no Default is continuing. |
Signed by:
|
Chief Financial Officer of Navigator Gas L.L.C. |
161
SIGNATURES
THE BORROWER | ||||
SIGNED by ELLA VRIES | ) | |||
for and on behalf of | ) | |||
NAVIGATOR GAS L.L.C. | ) | |||
pursuant to a power of attorney | ) | |||
dated 10 September 2020 | ) | |||
/s/ Ella Vries Attorney-in-Fact | ||||
THE PARENT | ||||
SIGNED by ELLA VRIES | ) | |||
for and on behalf of | ) | |||
NAVIGATOR HOLDINGS LTD | ) | |||
pursuant to a power of attorney | ) | |||
dated 10 September 2020 | ) | |||
/s/ Ella Vries Attorney-in-Fact |
162
THE MANDATED LEAD ARRANGERS | ||||
SIGNED by | ) | |||
for and on behalf of | ) | |||
NORDEA BANK ABP, FILIAL I NORGE | ) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
SIGNED by | ) | |||
for and on behalf of | ) | |||
ABN AMRO BANK N.V. | ) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
SIGNED by | ) | |||
for and on behalf of | ) | |||
NATIONAL AUSTRALIA BANK | ) | |||
/s/ Quincy Chan Quincy Chan Asset Finance and Leasing Authorised signatory | ||||
SIGNED by | ) | |||
for and on behalf of | ) | |||
BNP PARIBAS S.A. | ) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
SIGNED by | ) | |||
for and on behalf of | ) | |||
ING BANK N.V., LONDON BRANCH | ) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
SIGNED by | ) | |||
for and on behalf of | ) | |||
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK | ) | |||
/s/ Oliver Webber | ||||
Oliver Webber Attorney-in-Fact |
163
THE BOOKRUNNER |
||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
NORDEA BANK ABP, FILIAL I NORGE |
) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
THE LENDERS |
||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
NORDEA BANK ABP, FILIAL I NORGE |
) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
ABN AMRO BANK N.V. |
) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
NATIONAL AUSTRALIA BANK |
) | |||
/s/ Quincy Chan Quincy Chan Asset Finance and Leasing | ||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
BNP PARIBAS S.A. |
) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
ING BANK N.V., LONDON BRANCH |
) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact |
164
SIGNED by |
) | |||
for and on behalf of |
) | |||
CREDIT AGRICOLE CORPORATE AND INVESTMENT |
) | |||
BANK |
||||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
THE AGENT |
||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
NORDEA BANK ABP, FILIAL I NORGE |
) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
THE SECURITY AGENT |
||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
NORDEA BANK ABP, FILIAL I NORGE |
) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact | ||||
THE SUSTAINABILITY AGENT |
||||
SIGNED by |
) | |||
for and on behalf of |
) | |||
ABN AMRO BANK N.V. |
) | |||
/s/ Oliver Webber Oliver Webber Attorney-in-Fact |
165
Exhibit 8.1
Subsidiaries of Navigator Holdings Ltd
Corporation Name |
Percentage Ownership as of December 31, |
Country of Incorporation |
Subsidiary of Limited Liability Company | |||||||||
2019 | 2020 | |||||||||||
- Navigator Gas US L.L.C. |
100 | % | 100 | % | Delaware (USA) | Service company | ||||||
- Navigator Gas L.L.C. |
100 | % | 100 | % | Marshall Islands | Holding company | ||||||
~ Navigator Aries L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Atlas L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Aurora L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Centauri L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Ceres L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Ceto L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Copernico L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Capricorn L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Eclipse L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Europa L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Galaxy L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Gemini L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Genesis L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Glory L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Grace L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Gusto L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Jorf L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Leo L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Libra L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Luga L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Magellan L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Mars L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Neptune L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Nova L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Oberon L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Pegasus L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Phoenix L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Prominence L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Saturn L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Scorpio L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Taurus L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Triton L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Umbrio L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Venus L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Virgo L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ Navigator Yauza L.L.C. |
100 | % | 100 | % | Marshall Islands | Vessel-owning company | ||||||
~ NGT Services (UK) Ltd |
100 | % | 100 | % | England | Service company | ||||||
~ NGT Services (Poland) Sp. z.o.o. |
100 | % | 100 | % | Poland | Service company | ||||||
~ Navigator Gas Ship Management Ltd. |
100 | % | 100 | % | England | Service company | ||||||
~ Falcon Funding PTE Ltd |
100 | % | 100 | % | Singapore | Service company | ||||||
~ Navigator Gas Invest Ltd |
100 | % | 100 | % | England | Investment company | ||||||
- PT Navigator Khatulistiwa |
49 | % | 49 | % | Indonesia | Vessel-owning company | ||||||
~ Navigator Terminals L.L.C. |
100 | % | 100 | % | Marshall Islands | Investment company | ||||||
~ Navigator Terminal Invest Ltd |
100 | % | 100 | % | England | Investment company | ||||||
- Navigator Ethylene Terminals L.L.C. |
100 | % | 100 | % | Delaware (USA) | Investment company |
Exhibit 12.1
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Dr Henry Deans, Principal Executive Officer, certify that:
I have reviewed this annual report on Form 20-F of Navigator Holdings Ltd. (the company);
1. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
2. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
3. | The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
4. | The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: May 17, 2021
By: | /s/ Harry Deans | |
Name: | Dr. Harry Deans | |
Title: | Chief Executive Officer (Principal Executive Officer) |
Exhibit 12.2
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Niall Nolan, Principal Financial Officer, certify that:
I have reviewed this annual report on Form 20-F of Navigator Holdings Ltd. (the company);
1. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
2. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
3. | The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
4. | The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: May 17, 2021
By: | /s/ Niall Nolan | |
Name: | Niall Nolan | |
Title: | Chief Financial Officer (Principal Financial Officer) |
Exhibit 13.1
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Navigator Holdings Ltd., a Marshall Islands company (the Company), hereby certifies that:
The Annual Report on Form 20-F for the year ended December 31, 2019 (the Report) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 17, 2021
By: | /s/ Harry Deans | |
Name: | Dr. Harry Deans | |
Title: | Chief Executive Officer (Principal Executive Officer) |
Exhibit 13.2
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Navigator Holdings Ltd., a Marshall Islands company (the Company), hereby certifies that:
The Annual Report on Form 20-F for the year ended December 31, 2019 (the Report) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 17, 2021
By: | /s/ Niall Nolan | |
Name: | Niall Nolan | |
Title: | Chief Financial Officer (Principal Financial Officer) |
Exhibit 15.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-197321) pertaining to the 2013 Long-Term Incentive Plan of Navigator Holdings Ltd. of our reports dated May 17, 2021, with respect to the consolidated financial statements of Navigator Holdings Ltd. and the effectiveness of internal control over financial reporting of Navigator Holdings Ltd., included in this Annual Report (Form 20-F) for the year ended December 31, 2020.
/s/ Ernst & Young LLP
London, United Kingdom
May 17, 2021
Exhibit 15.2
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Navigator Holdings Ltd.:
We consent to the incorporation by reference in the registration statement (No. 333-197321) on Form S-8 of Navigator Holdings Ltd. of our report dated April 1, 2019, with respect to the consolidated statements of operations, comprehensive income, stockholders equity and cash flows of Navigator Holdings Ltd. for the year ended December 31, 2018, and the related notes, which report appears in the December 31, 2020 annual report on Form 20-F of Navigator Holdings Ltd.
/s/ KPMG LLP
London, United Kingdom
May 17, 2021
Exhibit 15.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333- 197321 on Form S-8 of our report dated February 12, 2021, relating to the financial statements of Enterprise Navigator Ethylene Terminal LLC appearing in this Annual Report on Form 20-F for the year ended December 31, 2020.
/s/ Deloitte & Touche LLP
Houston, Texas
May 17, 2021
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowanace for doubt debts on accounts receivable current | $ 161 | $ 0 |
Intangible assets, Accumulated amortization | $ 279 | $ 184 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 55,893,618 | 55,826,644 |
Common stock, shares outstanding | 55,893,618 | 55,826,644 |
Consolidated Statements of Operations (Parenthetical) |
Dec. 31, 2020 |
---|---|
Interest rate on bond | 7.75% |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | |||
Net (loss)/income | $ 1,313 | $ (16,607) | $ (5,739) |
Other comprehensive income / (loss): | |||
Foreign currency translation (loss)/gain | 86 | 32 | (86) |
Total comprehensive (loss)/income | 1,399 | (16,575) | (5,825) |
Other comprehensive (loss)/income attributable to: | |||
Stockholders of Navigator Holdings Ltd: | (357) | (16,674) | (5,825) |
Non-controlling interests: | 1,756 | 99 | |
Total comprehensive (loss)/income | $ 1,399 | $ (16,575) | $ (5,825) |
Consolidated Statements of Cash Flows (Parenthetical) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Interest rate on bond | 7.75% | |
2017 Senior Unsecured Bonds [Member] | ||
Interest rate on bond | 8.00% | 8.00% |
2012 Senior Unsecured Bonds [Member] | ||
Interest rate on bond | 7.75% | 7.75% |
Description of Business |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | 1. Description of Business Navigator Holdings Ltd. (the “Company”), the ultimate parent company of the Navigator Group of companies, is registered in the Republic of the Marshall Islands. The Company has a core business of owning and operating a fleet of gas carriers. As of December 31, 2020, the Company owned and operated 38 gas carriers (the “Vessels”) each having a cargo capacity of between 20,600 cbm and 38,000 cbm, of which 31 were semi-refrigerated, and seven were fully-refrigerated vessels. The Company has an investment in a joint venture that operates a Marine Export Terminal at Morgan’s Point in Texas to export approximately one million tons of ethylene per year. Unless the context otherwise requires, all references in the consolidated financial statements to “our”,” we” and “us” refer to the Company. Going Concern A discussion of the Company’s going concern as of the date of issuance of the consolidated financial statements for the year ended December 31, 2019 concluded that there was substantial doubt about the Company’s ability to continue as a going concern as a result of the negative impacts of COVID-19; the potential inability of the Company to maintain its minimum liquidity covenants, in part due to the uncertainty related to potential cash collateral obligations; or to remain in compliance with its interest coverage covenants; as well as the uncertainty of the ability to refinance or to repay its $100 million 2017 bonds when they were to mature in . We believe all of these uncertainties have either been resolved or mitigated during the year ended December 31, 2020, as described below. During the year ended December 31, 2020, the Company increased its liquidity by drawing down a total of $51.0 million from the Terminal Facility, of which $34.0 million was used for general corporate purposes, due to previous capital contributions for the Marine Export Terminal being paid from the Company’s own resources. In addition, the Company entered into the new September 2020 Secured Revolving Credit Facility, enabling an additional $25.0 million from that $210.0 million facility to be available for general corporate purposes. As a result, the Company had a cash balance of $59.3 million as of December 31, 2020 with a further $37.6 million available from undrawn credit facilities. In September 2020, the Company issued new $100 million senior unsecured 2020 Bonds for the purpose of refinancing its 2017 Bonds, which were scheduled to mature in . The 2020 Bonds will mature in and have a fixed coupon of 8.00% per annum. The 2017 Bonds were redeemed in full on September 15, 2020. While the above new borrowings will incur additional interest costs, U.S. LIBOR reduced significantly during the year ended December 31, 2020, which has reduced our borrowing costs over the same period and U.S. LIBOR is expected to remain low for the foreseeable future. The negative impact of the global pandemic has not reduced, to the extent initially anticipated, the demand for the LPG markets we serve, or petrochemicals and ammonia and we do not expect, based on market data reviewed by us, that such demand will reduce to levels that would result in a decline in our earnings to levels that would result in a breach by us of our interest coverage covenants. We believe, therefore, that the risk of non-compliance with our interest coverage ratio covenants has been alleviated. In addition, when considered with the additional liquidity headroom generated during 2020 and the refinancing of the 2017 bonds, we believe that there is no longer substantial doubt about the Company’s ability to continue as a going concern and that the Company will be able to pay its obligations as they come due. |
Summary of Significant Accounting Policies |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (a) Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries (See Note 8—Group Subsidiaries to our consolidated financial statements) and Variable Interest Entities (“VIE”) for which the Company is a primary beneficiary are also consolidated (See Note 9—Variable Interest Entities to our consolidated financial statements). All intercompany accounts and transactions have been eliminated in consolidation. As of December 31, 2019, the Company has consolidated 100% of PT Navigator Khatulistiwa, a VIE for which the Company is deemed to be the primary beneficiary, i.e. it has a controlling financial interest in this entity. The Company owns 49% of the VIE’s common stock, all of its secured debt and has voting control. All economic interests in the residual net assets reside with the Company. A VIE is an entity that in general does not have equity investors with voting rights or that has equity investors that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the right to residual gains or the obligation to absorb losses that could potentially be significant to the VIE. On October 21, 2019, the Company entered into a sale and leaseback to refinance one of its vessels, Navigator Aurora Navigator Aurora While we do not hold any equity investments in this lessor VIE, we have concluded that we are the primary beneficiary of the lessor VIE under U.S. GAAP and accordingly we are required to consolidate this lessor VIE into our financial results. Although consolidated into our results, we have no control over the funding arrangements negotiated by this lessor VIE entity including the interest rates to be applied. In consolidating the lessor VIE into our financial results, we must make assumptions regarding the debt amortization profile and the interest rate to be applied against the lessor VIE’s debt principal. Furthermore, our estimation process is dependent upon the timeliness of receipt and accuracy of financial information provided by the lessor VIE entity. By virtue of the accounting principle of consolidation, transactions between consolidated entities are eliminated and accordingly the sale and leaseback refinancing transaction with OCY Aurora is not shown as a liability in the Company’s consolidated balance sheets, being superseded by the Navigator Aurora Facility between OCY Aurora and Ocean Yield Malta Limited. Please read Note 21—Related Party Transactions to our consolidated financial statements. Under the sale and leaseback transaction we are committed to monthly principal payments until the year five purchase option which include interest payable at a rate of U.S. LIBOR plus 430 basis points per annum. For additional detail refer to Note 9—Variable Interest Entities to our consolidated financial statements. On January 31, 2018, the Company announced the execution of definitive agreements creating a 50/50 joint venture with Enterprise Products Partners L.P. (the “Export Terminal Joint Venture”) to construct and operate an ethylene export marine terminal at Morgan’s Point, Texas on the Houston Ship Channel (the “Marine Export Terminal”). Enterprise Products Partners, L.P. is the sole managing member of the Export Terminal Joint Venture and it is also the operator of the Marine Export Terminal. Interests in joint ventures are accounted for using the equity method. They are recognized initially at cost, which includes capitalized interest. The capitalized interest will be amortized over the useful life of the terminal. Subsequent to initial recognition, the consolidated financial statements will include the Company’s share of the profit or loss and other comprehensive income (“OCI”) of equity-accounted investees, until the date on which joint control ceases. The Export Terminal Joint Venture is organized as a limited liability company and maintains separate ownership accounts, consequently we account for our investment using the equity method as our ownership interest is 50% and we exercise joint control over the investee’s operating and financial policies. We disclose our proportionate share of profits and losses from equity method unconsolidated affiliates in the statement of operations and adjust the carrying amount of our equity method investments on the balance sheet accordingly. In March 2020, the Company collaborated with Pacific Gas Pte. Ltd. and Greater Bay Gas Co. Ltd. to form and manage the Luna Pool. We refer to the Company and Greater Bay Gas Co. Ltd. collectively as the “Pool Participants”. As part of the formation of the Luna Pool, a new entity, Luna Pool Agency Limited, (“Pool Agency”) was established in May 2020. The investment in the Pool Agency created a 50/50 joint venture with Greater Bay Gas Co. Ltd. as outlined by Accounting Standards Codification (“ASC”) 323 – Investments -Equity Method and Joint Ventures (“ASC 323”). The Company’s investment in the Pool Agency is accounted for as an equity investment in accordance with the guidance within ASC 810 – Consolidation and ASC 323. Therefore, we account for our investment using the equity method as our ownership interest is 50% and we exercise joint control over the entity’s operating and financial policies. The year ended December 31, 2020 includes an out of period adjustment in the consolidated statements of operations of an additional $0.5 million in general and administrative costs and a decrease of $0.8 million in interest expense, resulting in an overall decrease in the net loss for the year ended December 31, 2020 of $0.3 million, and in the consolidated balance sheets at December 31, 2020, an increase to the investment in the equity accounted joint ventures of $0.3 million. Management believes this out of period adjustment is not material to the annual consolidated financial statements for the year ending December 31, 2020 or any previously issued financial statements. Collaborative arrangements The Pool Participants manage and participate in the activities of the Luna Pool through an executive committee comprising equal membership from both Pool Participants. Certain decisions made by the executive committee as to the operations of the Luna Pool require the unanimous agreement of both participants with others requiring a majority of votes. At this time we control 66% of the votes. The Company’s wholly owned subsidiary, NGT Services (UK) Limited acts as commercial manager (“Commercial Manager”) to the Luna Pool. Under the pool agreement, the Commercial Manager is responsible, as agent, for the marketing and chartering of the participating vessels, collection of revenues and paying voyage costs such as port call expenses, bunkers and brokers’ commissions in relation to charter contracts, but the vessel owners continue to be fully responsible for the financing, insurance, crewing and technical management of their respective vessels. The Commercial Manager receives a fee based on the net revenues of the Luna Pool, which is levied on the Pool Participants, which was a net amount of $0.2 million, after the elimination of inter group income, for the year ended December 31, 2020, and is presented as other income within our consolidated statements of operations. Pool revenues and expenses within the Luna Pool are accounted for in accordance with ASC 808 – Collaborative Arrangements, when two (or more) parties are active participants in the arrangement and exposed to significant risk and rewards dependent on the commercial success of the activity. Pool earnings (gross earnings of the pool less costs and overheads of the Luna Pool and fees to the Commercial Manager) are aggregated and then allocated to the Pool Participants in accordance with an apportionment for each participant’s vessels multiplied by the number of days each of their vessels are on hire in the pool during the relevant period and therefore the Company is exposed to risk and rewards dependent on the commercial success of the Luna Pool. We have concluded that the Company is an active participant due to its representation on the executive committee and the participation of the Commercial Manager, as is the other Pool Participant. We have presented our share of net income earned under the Luna Pool collaborative arrangement across a number of lines in our consolidated statements of operations. For revenues and expenses earned/incurred specifically by the Company’s vessels and for which we are deemed to be the principal, these are presented gross on the face of our consolidated statements of operations within operating revenues, voyage expenses and brokerage commissions. Our share of pool net revenues generated by the other Pool Participant’s vessels in the Luna Pool collaborative arrangement is presented on the face of our consolidated statements of operations within operating revenues – Luna Pool collaborative arrangements. The other Pool Participant’s share of pool net revenues generated by our vessels in the pool is presented on the face of our consolidated statements of operations within voyage expenses – Luna Pool collaborative arrangements. The portion of the Commercial Manager’s fee which is due from the other Pool Participant is presented on the face of our consolidated statements of operations as other income. The Luna Pool became operational during the quarter ended June 30, 2020. The impact on our consolidated statements of operations for the year ended December 31, 2020, was a recognition of operating revenues from Luna Pool collaborative arrangements of $12.8 million, and voyage expenses from Luna Pool collaborative arrangements of $12.4 million. Adoption of new accounting standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses, which changes the recognition model for the impairment of financial instruments, including accounts receivable, loans and held-to-maturity Using the modified retrospective method, reporting periods beginning after January 1, 2020, are presented under Topic 326 while comparative periods continue to be reported in accordance with previously applicable GAAP and have not been restated. The adoption of Topic 326 did not have a material impact on our consolidated financial statements. The total provision on transition was $0.1 million and has been presented as an adjustment to equity in the consolidated statements of shareholders’ equity. For the amounts calculated for the Current Expected Credit Loss (“CECL”) model for the year ended December 31, 2020, since transition, the Company has recognized an expense in our consolidated statements of operations. As the amount is immaterial, it is presented within general and administration costs rather than as a separate line. For financial assets measured at amortized cost within the scope of Topic 326, we have separately presented on the statements of financial position the allowance for credit losses as a contra-asset that is deducted from the asset’s amortized cost basis. Management has assessed the financial assets that fall under the scope of the new standard and have determined how to apply the model to each one. Cash, cash equivalents and restricted cash as well as insurance debtor amounts are considered to have negligible risk of loss, which management has based on consideration of whether the balances have short-term maturities and whether the counterparty has an investment grade credit rating, limiting any credit exposure, and as such no impairment allowance has been recognized. Trade receivables are presented net of allowances for doubtful debt based on observable events and expected credit losses. At each balance sheet date, all potentially uncollectible accounts are assessed individually for the purpose of determining the appropriate provision for doubtful accounts. The expected credit loss allowance is calculated using loss rates which reflect similar risk characteristics. Management has considered that trade receivables should be split into two pools with similar risk characteristics. Pool 1 consists of freight and recharge receivables for which management has made estimates of losses based on an aging matrix. Pool 2 consists of demurrage receivables where the percentage historical recovery/loss data over the last five years is utilized to model an estimate of expected credit losses. Our trade receivables have short maturities so we have considered that forecasted changes to economic conditions will have an insignificant effect on the estimate of the allowance, except in extraordinary circumstances. Contract assets have been deemed as being at remote risk as there have been no historical contract assets recognized which were not subsequently invoiced to customers and paid. The risk of expected losses for these assets is deemed to be remote and an appropriate percentage of expected losses has been applied to the whole balance. The activity in the allowance for credit losses for financial assets within the scope of ASU 2016-13 for the year ended December 31, 2020 was as follows:
In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses which, amongst other things, clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the new leasing standard, ASC 842 – Leases, which was adopted by the Company on January 1, 2019. The amendments relating to ASU 2016-13, Topic 326, were adopted on January 1, 2020 and did not have a material impact on our consolidated financial statements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments which, amongst other things, clarifies certain aspects of accounting for credit losses, hedging activities and financial instruments respectively. The amendments within ASU 2019-04 have various effective dates of adoption. The amendments relating to Topic 326 and Topic 825 were adopted on January 1, 2020 and did not have a material impact on our consolidated financial statements. The amendments within ASU 2019-04 relating to Topic 815, Derivatives and Hedging were effective from the first annual reporting period beginning after April 25, 2019. The Company adopted the amendments on January 1, 2020. The Company has no derivatives for which hedge accounting has been applied and as such, the amendments contained in this section of ASU 2019-04 are not applicable and there was no impact on our consolidated financial statements on adoption. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief which provides transition relief for entities adopting the credit losses standard, ASU 2016-13. Specifically, ASU 2019-05 amends ASU 2016-13 to allow companies to irrevocably elect, on adoption of ASU 2016-13, the fair value option for financial instruments that were previously recorded at amortized cost, are within the scope of the guidance in ASC 326-20, are eligible for the fair value option under ASC 825-20 and are not held-to-maturity 2019-05 is required to be adopted at the same time as ASU 2016-13. We adopted both ASU 2016-13 and ASU 2019-05 on January 1, 2020. The adoption of this amendment did not have a material impact on our consolidated financial statements or related disclosures. In May 2019, the FASB issued ASU 2019-11, Financial Instruments—Credit Losses (Topic 326): Codification Improvements, which revises certain aspects of the new guidance on Topic 326 for credit losses. Matters addressed in this amendment include purchased credit-deteriorated assets, transition relief for troubled debt restructurings, disclosure relief for accrued interest receivable, and financial assets secured by collateral maintenance provisions. ASU 2019-11 is required to be adopted at the same time as ASU 2016-13. We adopted both ASU 2016-13 and ASU 2019-11 on January 1, 2020 and the adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. (b) Vessels Vessels are stated at cost, which includes the cost of construction, capitalized interest and other direct costs attributable to the construction. The cost of the vessels (excluding the estimated initial drydocking cost) less their estimated residual value is depreciated on a straight-line basis over the vessel’s estimated useful life. Management estimates the useful life of each of the Company’s vessels to be 30 years from the date of its original construction. (c) Vessels Under Construction Vessels under construction are stated at cost, which includes the cost of construction, capitalized interest and other direct costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use. (d) Impairment of Vessels Our vessels are reviewed for impairment when events or circumstances indicate the carrying amount of the vessel may not be recoverable. When such indicators are present, a vessel is tested for recoverability and we recognize an impairment loss if the sum of the future cash flows (undiscounted and excluding interest charges that will be recognized as an expense when incurred) expected to be generated by the vessel over its estimated remaining useful life are less than its carrying value. If we determine that a vessel’s undiscounted cash flows are less than its carrying value, we record an impairment loss equal to the amount by which its carrying amount exceeds its fair value. The new lower cost basis would result in a lower annual depreciation than before the impairment. Considerations in making such an impairment evaluation include comparison of current carrying values to anticipated future operating cash flows, expectations with respect to future operations and other relevant factors. The estimates and assumptions regarding expected cash flows require considerable judgment and are based upon historical experience, financial forecasts and industry trends and conditions. These assumptions are based on historical trends as well as future expectations. Specifically, in estimating future charter rates, management considers estimated daily TCE rates for each vessel over the estimated remaining lives of each of the vessels. We consider rates currently in effect for existing time charters and the estimated daily TCE rates used for unfixed vessels, which were based on the trailing 10-year historical average one-year time charter rates. Recognizing that rates tend to be cyclical, and subject to some volatility based on factors beyond our control, we believe the use of estimates based on the 10-year historical average rates to be appropriate. In addition, our vessels operate in a sector that is relatively young and data beyond 10 years is limited, while rates for one and five year periods would not necessarily include the peaks and troughs of a typical shipping cycle. (e) Drydocking Costs Each vessel is required to be dry-docked every 30 to 60 months for classification society surveys and inspections of, among other things, the underwater parts of the vessel. These works include, but are not limited to hull coatings, seawater valves, steelworks and piping works, propeller servicing and anchor chain winch calibrations, all of which cannot be performed while the vessels are operating. The Company capitalizes costs associated with the dry-dockings in accordance with ASC 360 – Property, Plant and Equipment, and amortizes these costs on a straight-line basis over the period to the next expected dry-docking. Amortization of dry-docking costs is included in depreciation and amortization in the Consolidated Statements of Operations. Costs incurred during the dry-docking period which relate to routine repairs and maintenance are expensed. Where a vessel is newly acquired, or constructed, a proportion of the cost of the vessel is allocated to the components expected to be replaced at the next drydocking based on the expected costs relating to the next drydocking, which is based on experience and past history of similar vessels. Drydocking costs are included within operating activities on the cashflow statement. (f) Intangible assets Intangible assets consist of software acquisition and associated costs of software modification to meet the Company’s internal needs. Intangible assets are amortized on a straight-line basis over the expected life of the software license, product or the expected duration that the software is estimated to contribute to the cash flows of the Company, estimated to be five years. Amortization of intangible assets is included in depreciation and amortization in the Consolidated Statements of Operations. Intangible assets are assessed for impairment when and if impairment indicators exist. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value. No impairment has been recognized as of December 31, 2020. Amortization of intangible assets for the year ended December 31, 2020 was $0.09 million (December 31, 2019: $0.07 million) and for succeeding fiscal years is estimated to be $0.08 million (2021), $0.08 million (2022), $0.05 million (2023), $0.03 million (2024) and $0.01 million (2025) . The weighted average amortization period on December 31, 2020 was 2.6 years (December 31, 2019: 2.7 years). (g) Cash, Cash Equivalents and Restricted Cash The Company considers highly liquid investments, such as time deposits and certificates of deposit, with an original maturity of three months or less when purchased, to be cash equivalents. As of December 31, 2019, and 2020 and for the years then ended, the Company had balances in this financial institution in excess of the insured amount. The Company also maintains cash balances in foreign financial institutions outside of the U.S. which are not covered by the Federal Deposit Insurance Corporation. Included within cash, cash equivalents and restricted cash as of December 31, 2020 is an amount of $0.2 million relating to the cash belonging to the lessor VIE that we are required to consolidate under U.S. GAAP (December 31, 2019: $0.8 million). Please read Note 9—Variable Interest Entities to our consolidated financial statements. Amounts included in restricted cash represent those required to be set aside as collateral by a contractual agreement with a banking institution for the forecast future liability on the cross-currency interest rate swap agreement at the reporting date, payable on maturity of our 2018 issued senior secured bonds (“2018 Bonds”). If the Norwegian Kroner depreciates relative to the U.S. Dollar beyond a certain threshold, we are required to place cash collateral with our swap providers. As of December 31, 2020, there was no collateral amount held with the swap provider (December 31, 2019: $1.3 million). The amounts held as collateral within restricted cash are assessed against daily currency movements and are presented as current assets on the Company’s consolidated balance sheets. (h) Financial Instruments—Debt Securities The senior unsecured bonds issued in (“2020 Bonds”), 2017 Bonds before their redemption in October 2020 and 2018 Bonds are recognized at the net amount of the proceeds received. Subsequent measurement is at amortized cost, net of deferred finance costs. Interest accrued on the 2020 Bonds and the 2018 Bonds is calculated on a 360-day year basis and is included within accrued interest as a current liability. Deferred finance costs are amortized using the effective interest method over the lifetime of the 2020 Bonds and the 2018 Bonds. (i) Accounts Receivable, net The Company carries its accounts receivable at cost less an allowance for expected credit losses. As of January 1 and December 31, 2020, the Company evaluated its accounts receivable and established an allowance for expected credit losses, based on a history of past write-offs, collections and current credit conditions. As of December 31, 2020, the Company also considers future and reasonable and supportable forecasts of future economic conditions in its allowance for expected credit losses. The Company does not generally charge interest on past-due accounts (unless the accounts are subject to legal action), and accounts are written off as uncollectible when all reasonable collection efforts have failed. Accounts are deemed past-due based on contractual terms. (j) Bunkers and lubricant oils Bunkers and lubricant oils include bunkers (fuel), for those vessels under voyage charter, and lubricants. Under a time charter, the cost of bunkers is borne by and remains the property of the charterer. Bunkers and lubricant oils are accounted for on a first in, first out basis and are valued at cost. (k) Deferred Finance Costs Costs incurred in connection with obtaining secured term loan facilities, revolving credit facilities and bonds are recorded as deferred financing costs and are amortized to interest expense over the estimated duration of the related debt. Such costs include fees paid to the lenders or on the lenders’ behalf and associated legal and other professional fees. Under the Accounting Standards Update (ASU) 2015- 03, Interest—Imputation of Interest the Company has adopted the accounting standard (Subtopic 835-30)—simplifying the presentation of debt issuance cost to present the unamortized debt issuance costs, excluding up front commitment fees, as a direct reduction of the carrying value of the debt. Deferred financing costs related to undrawn debt are presented as assets on our consolidated balance sheets and amortized using the straight-line method. Following a loan refinancing assessed as a modification, any unamortized issuance costs related to the refinanced facility will continue to be amortized over the new term of the loan using the effective interest rate method. (l) Deferred Income Deferred income is the balance of cash received in excess of revenue earned under a time charter or voyage charter arrangement as of the balance sheet date. (m) Revenue Recognition The Company receives its revenue streams from three different sources; voyage or ‘spot’ charters; contracts of affreightment (“COA”), and time charters. Voyage charter and COA arrangements In the case of vessels contracted under voyage charters, the vessel is contracted for a voyage, or a series of voyages, between two or more ports and the Company is paid for the cargo transported. Revenue from COAs is recognized on the same basis as revenue from voyage charters, as they are essentially a series of consecutive voyage charters. Payment from voyage charters and COAs is due upon discharge of the cargo at the discharge port. Since January 1, 2018, following adoption of ASU No. 2014-09, Revenue from Contracts with Customers, (“Topic 606”), our basis for revenue recognition for voyage charters and COAs has changed to recognize revenue on a load port to discharge port basis and determined percentage of completion for all voyage charters and COAs on a time elapsed basis. The Company believes that the performance obligation towards the customer starts to become satisfied once the cargo is loaded and the obligation becomes completely satisfied once the cargo has been discharged at the discharge port. Under this revenue recognition standard, the Company has identified certain costs incurred to fulfill a contract with a charterer, which are costs incurred following the commencement of a contract or charter party but before the loading of the cargo commences. These directly related costs are generally fuel or any canal or port costs incurred to get the vessel from its position at inception of the contract to the load port to commence loading of the cargo. These costs are deferred and amortized over the duration of the performance obligation on a time basis. Voyage charters and COAs have an expected duration of one year or less. The Company has applied optional exemptions on adoption of the new revenue standard, as set out in Topic 606-10-50-14 that are unsatisfied (or partially unsatisfied) as at the balance sheet date and the expectation of when the Company expects to recognize these amounts. Prior to the adoption of Topic 606, under a voyage charter or a COA the revenue was recognized on a discharge-to-discharge Time charter arrangements For vessels contracted under time charters, the arrangements are for a specified period of time. The Company receives a fixed charter rate per on-hire day which is payable monthly in advance and revenue is recognized ratably over the term of the charter. Within our time charter arrangements key decisions concerning the use of the vessel during the duration of the time charter period reside with the charterer. We are responsible for the crewing, maintenance and insurance of the vessel, and the charterer is generally responsible for voyage specific costs, which typically include bunkers and port/canal costs. As the charterer holds rights to determine how and when the vessel is used and is also responsible for voyage specific costs incurred during the voyage, the charterer derives the economic benefits from the use of the vessel, as control over the use of the vessel is transferred to the charterer during the specified time charter period. Time charters are therefore considered operating leases and since January 1, 2019 we apply the lease income recognition guidance in ASC 842 – Leases following the adoption of that standard. In addition, the Company has performed a qualitative analysis of each of its time charter contracts and concluded that the lease component is the predominant component as the charterer would attribute most value to the ability to direct the use of the vessel rather than to the technical and crewing services to operate the vessel which are add-on services. Accordingly, revenue from vessels under time charter arrangements is presented as a single lease component. For each year presented prior to January 1, 2019, we recognized revenue for time charters as operating leases under the previous leasing standard, ASC 840, and recorded time charter revenue ratably over the term of the charter. (n) Other Comprehensive Income / (Loss) The Company follows the provisions of ASC 220 – Comprehensive Income, which requires separate presentation of certain transactions, which are recorded directly as components of stockholders’ equity. Comprehensive income is comprised of net income/(loss) and foreign currency translation gains and losses. (o) Voyage Expenses and Vessel Operating Expenses When the Company employs its vessels on time charter, it is responsible for all the operating expenses of the vessels, such as crew costs, stores, insurance, repairs and maintenance. In the case of voyage charters, the vessel is contracted only for a voyage between two or more ports, and the Company pays for all voyage expenses in addition to the vessel operating expenses. Voyage expenses consist mainly of in-port expenses, canal fees and bunker (fuel) consumption and are recognized as incurred during the performance obligation (the period of time from load to discharge) of the vessel. The Company has identified certain voyage costs incurred to fulfill a contract with a charterer, which are costs incurred following the commencement of a contract or charter party but before the loading of the cargo commences. These directly related costs are generally fuel or any canal or port costs to get the vessel from its position at inception of the contract to the load port to commence loading of the cargo. These costs are deferred and amortized over the duration of the performance obligation on a time basis. (p) Repairs and Maintenance All expenditures relating to routine maintenance and repairs are expensed when incurred. (q) Insurance The Company maintains hull and machinery insurance, war risk insurance, protection and indemnity insurance coverage, increased value insurance, demurrage and defense insurance coverage in amounts considered prudent to cover normal risks in the ordinary course of its operations. Premiums paid in advance to insurance companies are recognized as prepaid expenses and recorded as a vessel operating expense over the period covered by the insurance contract. In addition, the Company maintains Directors and Officers insurance. When the Company has enforceable insurance in place, a receivable is recognized for an insured event if realization is probable. We apply judgement that an insurance recovery is probable when the insurer has confirmed that a claim is covered by insurance, the claim has been successful, and an amount will be paid to the Company. If the insurance receivable realization is probable, the receivable is measured as the lesser of (a) the recognized loss from the insurance event or (b) the probable recovery from the insurer. Subsequent receipt of the receivable is typically within a twelve month period, and insurance receivables are classified as current on our consolidated balance sheets. If the recoverability of the insurance claim is subject to dispute there is a rebuttable presumption that realization is not probable. (r) Share-Based Compensation The Company records as an expense in its financial statements the fair value of all equity-settled stock-based compensation awards. The terms and vesting schedules for share-based awards vary by type of grant. Generally, the awards vest subject to time-based (immediate to three years) service conditions. Compensation expense is recognized ratably over the service period. (s) Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For a description of our material accounting policies, please read Note 2—Summary of Significant Accounting Policies to our consolidated financial statements. (t) Foreign Currency Transactions Substantially all of the Company’s cash receipts are in U.S. Dollars. The Company’s disbursements, however, are in the currency invoiced by the supplier. The Company remits funds in the various currencies invoiced. The non U.S. Dollar invoices received, and their subsequent payments, are converted into U.S. Dollars when the transactions occur. The movement in exchange rates between these two dates is transferred to an exchange difference account and is expensed each month. The exchange risk resulting from these transactions is not material. The primary source of our foreign exchange gains and losses are the movements on our Norwegian Kroner denominated 2018 Bonds. The 2018 Bonds are translated into U.S. Dollars at each reporting date at the prevailing exchange rate at the end of the period. The movement in the foreign exchange rates between each reporting date will result in a foreign exchange gain or loss on the 2018 Bonds, which is shown as a single line on the face of the statement of operations. The foreign currency exchange loss on the 2018 Bonds for the year ended December 31, 2020, was $1.9 million, compared to December 31, 2018 and 2019 when the foreign currency exchange gain on the 2018 Bonds was $2.4 million and $1.0 million, respectively. The aggregate amount of all foreign exchange movements recorded in net income for the year ended December 31, 2020, was a $1.7 million loss compared to a $0.8 million gain for the year ended December 31, 2019 and a $2.2 million gain for the year ended December 31, 2018. The movement was primarily as a result of the foreign currency translation, at the prevailing exchange rate, of the 2018 Bonds mentioned in the previous paragraph. (u) Derivative instruments Derivative instruments are initially recorded at fair value as either assets or liabilities in the accompanying balance sheet and subsequently remeasured to fair value at each reporting d ate, regardless of the purpose or intent for holding the derivative. The resulting derivative assets or liabilities are shown as a single line and are not net off against one another on the face of the balance sheet. The method of recognizing the resulting gain or loss is dependent on whether the derivative contract qualifies for hedge accounting and has been designated as a hedging instrument. For derivative instruments that are not designated or that do not qualify as hedging instruments under ASC 815 – Derivatives and Hedging, the liability has been recognized as ‘Derivative liabilities’ on the balance sheet and changes in the fair value of the derivative financial instruments are recognized in earnings. Gains and losses from the Company’s non-designated cross-currency interest rate swap agreement and interest rate swap agreements are recorded in unrealized (losses)/gains on non-designated derivative instruments in the Company’s consolidated statements of operations but do not impact our cash flows. (v) Income Taxes Navigator Holdings Ltd. and its Marshall Islands subsidiaries are currently not required to pay income taxes in the Marshall Islands on ordinary income or capital gains as they qualify as exempt companies. The Company has four wholly owned subsidiaries incorporated in the United Kingdom where the base tax rate is 19%. These subsidiaries provide services to affiliated entities within the group. The Company has a subsidiary in Poland where the base tax rate is 19%. The subsidiary earns management fees from fellow subsidiary companies. The Company has a subsidiary incorporated in Singapore where the base tax rate is 17%. The subsidiary earns management and other fees and receives interest from a VIE, PT Navigator Khatulistiwa. The VIE is subject to Indonesian freight tax on all of its gross shipping transportation revenue at a rate of 1.2%. The Company has consolidated a VIE incorporated in Malta where the base tax rate is 35%. This VIE is the lessor entity for the sale and leaseback of Navigator Aurora The Company considered the income tax disclosure requirements of ASC 740 – Income Taxes, with regard to disclosing material unrecognized tax benefits; none were identified. The Company’s policy is to recognize accrued interest and penalties for unrecognized tax benefits as a component of tax expense. As of December 31, 2019, and 2020, there were no accrued interest and penalties for unrecognized tax benefits. Deferred taxation Deferred income tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statements and tax basis of existing assets and liabilities using enacted rates applicable to the periods in which the differences are expected to affect taxable income . Deferred income tax balances included on the consolidated balance sheets reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. The recoverability of these future tax deductions is evaluated by assessing the adequacy of future taxable income, including the reversal of temporary differences and forecasted operating earnings. If it is deemed more likely than not that the deferred tax assets will not be realized, the Company provides for a valuation allowance. (w) Earnings Per Share Basic earnings per common share (“Basic EPS”) is computed by dividing the net income/(loss) available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per common share (“Diluted EPS”) are computed by dividing the net income available to common stockholders by the weighted average number of common shares and dilutive common share equivalents then outstanding. Shares granted pursuant to the 2013 Restricted Stock Plan are the only dilutive shares, and these shares have been considered as outstanding since their respective grant dates for purposes of computing diluted earnings per share. These shares were antidilutive in the years ended December 31, 2018, 2019 and 2020 and thus not included in the calculation of diluted EPS in the last three years. (x) Related parties Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or significant influence. (y) Segment Reporting Although separate vessel financial information is available, management internally evaluates the performance of the enterprise as a whole and not on the basis of separate business units or different types of charters. As a result, the Company has determined that it operates as one reportable segment. Since the Company’s vessels regularly move between countries in international waters over many trade routes, it is impractical to assign revenues or earnings from the transportation of international LPG and petrochemical products by geographic area. Other than three vessels involved in cabotage within Indonesia for the years ended December 31, 2020 and 2019, our vessels operate on a worldwide basis and are not restricted to specific locations. As disclosed in Note 5—Revenue to our consolidated financial statements, there are two different revenue streams due to the nature of the contracts that we operate. The Company considers the equity accounted joint ventures do not meet the criteria in ASC 280 to be separate reportable segments. (z) Recent Accounting Pronouncements The following accounting standards issued as of May 14, 2021, may affect the future financial reporting by Navigator Holdings Ltd: On December 18, 2019, the FASB issued ASU 2019-12, which modifies ASC 740 – Income Taxes (“Topic 740”) to simplify the accounting for income taxes, by removing certain exceptions to the general principles in Topic 740 and improve consistent application by clarifying and amending existing guidance. The amendments to this standard are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued, with the amendments to be applied on a retrospective, modified retrospective or prospective basis, depending on the specific amendment. We adopted the new standard with effect from January 1, 2021, and the adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815. The amendments in ASU 2020-01 make improvements related to the accounting for (1) an equity security under the measurement alternative before application or after discontinuation of the equity method of accounting and (2) forward contracts and purchased options to acquire an equity instrument that will be accounted for under Topic 323. The guidance is effective for annual and interim periods beginning after December 15, 2020 for public business entities and an entity may early adopt the guidance in any annual or interim period after issuance. We adopted the new standard with effect from January 1, 2021, and the adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848)—Reference Rate Reform on Financial Reporting. The amendments provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies to contracts that reference LIBOR or another reference rate expected to be terminated because of reference rate reform. This optional guidance may be applied prospectively from any date beginning March 12, 2020 but cannot be applied to modifications that occur after December 31, 2022. We do not currently have any contracts that have been changed to a new reference rate, but we will continue to evaluate our contracts and the effects of this standard on our consolidated financial position, results of operations, and cash flows prior to adoption. In August 2020, the FASB issued ASU
2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)”, which provides guidance to simplify the issuer’s accounting for convertible debt instruments and, among other changes, eliminates some of the conditions for equity classification in for contracts in an entity’s own equity and requires enhanced disclosures surrounding the terms and features of convertible instruments. The guidance is effective for annual periods beginning after December 15, 2021 and interim periods within that annual period for public business entities and an entity may early adopt the guidance for annual periods beginning after December 15, 2020. We plan to adopt these amendments on January 1, 2022 and we do not expect this ASU to have a significant impact on our consolidated financial statements and disclosures, as we currently have no convertible debt instruments. |
Derivative Instruments Accounted for at Fair Value |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments Accounted for at Fair Value | 3. Derivative Instruments Accounted for at Fair Value The Company uses derivative instruments in accordance with its overall risk management policy to mitigate our risk to the effects of unfavorable fluctuations in foreign exchange and interest rate movements. The Company held no derivatives designated as hedges as of December 31, 2019 and 2020. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. The fair value accounting standard establishes a three tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. On July 2, 2020, the Company entered into floating-to-fixed rate swap agreements is 3-month LIBOR, calculated on a 360-day year basis, which resets every three months in line with the dates of interest payments on the Terminal Facility. The interest rate payable by the Company under these interest rate swap agreements is 0.369% and 0.3615% per annum to ING and SocGen respectively, calculated on a 360-day year basis. The interest rate swaps are remeasured to fair value at each reporting date and have been categorized as level two on the fair value measurement hierarchy. The fair value of these non-designated derivative instruments is presented as a non-current liability in the Company’s consolidated balance sheets and the change in fair value is presented in the consolidated statements of operations. As of December 31, 2020, the interest rate swaps had a fair value liability of $0.1 million and unrealized losses of $0.06 million and $0.05 million on the fair value of the swaps with ING and SocGen, respectively for the year ended December 31, 2020. The remeasurement to fair value has no impact on the cash flows at the reporting date. There is no requirement for cash collateral to be placed with the swap providers under these swap agreements and there is no effect on restricted cash as of December 31, 2020. The Company entered into a cross-currency interest rate swap agreement concurrently with the issuance of its NOK denominated senior secured bonds (please read Note 11—Senior Secured Bond to our consolidated financial statements) and pursuant to this swap, the Company receives the principal amount of NOK 600 million in exchange for a payment of a fixed amount of $71.7 million on the maturity date of the swap. In addition, at each quarterly interest payment date, the cross-currency interest rate swap exchanges a receipt of floating interest of6.0% plus 3-month NIBORon NOK 600 million for a U.S. Dollar payment of floating interest of 6.608% plus 3-month U.S. LIBORon the $71.7 million principal amount. The purpose of the cross-currency interest rate swap is to economically hedge the foreign currency exposure on the payments of interest and principal of the Company’s NOK denominated 2018 Bonds due to mature in 2023. The cross-currency interest rate swap is remeasured to fair value at each reporting date and has been categorized as level two on the fair value measurement hierarchy. The fair value of this non-designated derivative instrument is presented in the Company’s consolidated balance sheets and the change in fair value is presented in the consolidated statements of operations. As of December 31, 2020, the cross-currency interest rate swap had a fair value liability of $2.9 million and an unrealized gain of $2.9 million (December 31, 2019, a fair value liability of $5.8 million and an unrealized loss of $0.6 million; December 31, 2018: unrealized losses of $5.2 million). The remeasurement to fair value has no impact on the cash flows at the reporting date except for the effect on restricted cash. Amounts included in restricted cash represent those required to be set aside as collateral by a contractual agreement with a banking institution for the forecast future liability on the cross-currency interest rate swap agreement at the reporting date. The Company has not offset the fair value of the derivative with the cash collateral account notwithstanding there is a master netting agreement in place. Please read Note 19 —Derivative Instruments and Note 20— Cash, Cash Equivalents and Restricted Cash to our consolidated financial statements. The fair values of our interest rate swap agreements and the cross-currency interest rate swap is the estimated amount that we would pay to sell or transfer the swap at the reporting date, taking into account current interest rates and the current credit worthiness of the swap counterparties, in addition to foreign exchange rates for the cross currency swap agreement. The estimated amount is the present value of future cash flows, adjusted for credit risk. The Company transacts all of these derivative instruments through investment-grade rated financial institutions at the time of the transaction. It is possible that the amount recorded as a derivative asset or liability could vary by a material amount in the near term if there is volatility in the credit markets or if credit risk were to change significantly. The fair value of our interest rate swap agreements and cross-currency interest rate swap agreement at the end of each period is most significantly affected by the interest rate implied by the benchmark interest yield curve, including its relative steepness and the forward foreign exchange rates respectively. Interest rates and foreign exchange rates have experienced significant volatility in recent years in both the short and long term. While the fair value of our swap agreements is typically more sensitive to changes in short-term rates, significant changes in the long-term benchmark interest, foreign exchange rates and the credit risk of the counterparties or the Company also materially impact the fair values of our swap agreements. The following table includes the estimated fair value of those assets and liabilities that are measured at fair value on a recurring basis as at December 31, 2019 and 2020.
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Fair Value of Financial Instruments Not Accounted For at Fair Value |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments Not Accounted For at Fair Value | 4. Fair Value of Financial Instruments Not Accounted For at Fair Value The principal financial assets of the Company at December 31, 2019, and 2020 consist of cash, cash equivalents and restricted cash and accounts receivable. The principal financial liabilities of the Company at December 31, 2019 and 2020 consist of accounts payable, accrued expenses and other liabilities, secured term loan facilities, revolving credit facilities and the 2018 Bonds. The 2017 Bonds were outstanding as at December 31, 2019, but were subsequently redeemed and were refinanced by the 2020 Bonds that were an outstanding liability at December 31, 2020. The carrying values of cash, cash equivalents and restricted cash, accounts receivable, accounts payable, accrued expenses and other liabilities are reasonable estimates of their fair value due to the short-term nature or liquidity of these financial instruments. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. The fair value accounting standard establishes a three tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. The 2020 Bonds and the 2018 Bonds are classified, and, prior to their redemption, the 2017 Bonds were classified, as a level two liability and the fair values have been calculated based on the most recent trades of the bond on the Oslo Børs prior to December 31, 2020. Theses trades are infrequent and therefore not considered to be an active market. The 2018 Bonds are denominated in Norwegian Kroner (“NOK”) and the fair value has been translated to the functional currency of the Company using the prevailing exchange rate as at December 31, 2020. The fair value of secured term loan facilities and revolving credit facilities is estimated to approximate the carrying value in the balance sheet since it bears a variable interest rate, which is reset on a quarterly basis. This has been categorized at level two on the fair value measurement hierarchy as at December 31, 2020. The following table includes the estimated fair value and carrying value of those assets and liabilities where the fair value does not approximate to carrying value. The table excludes cash, cash equivalents and restricted cash, accounts receivable, accounts payable, accrued expenses and other liabilities because the fair value approximates carrying value and, for accounts receivable and payable, are due in one year or less.
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Operating Revenues |
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Operating Revenues | 5. Operating Revenues The following table compares our operating revenues by the source of revenue stream for the years ended December 31, 2018, 2019 and 2020:
Time charter revenues As of December 31, 2020, 19 of the Company’s 38 operated vessels, were subject to time charters, eleven of which will expire within one year, six which will expire within three years, and two which will expire after more than five years from the balance sheet date. (December 31, 2019: 25 ofthe Company’s 38 operated vessels, were subject to time charters, 18 of which will expire within one year, three which will expire within three years, and four which will expire after more than five years from the balance sheet date). The estimated undiscounted cash flows for committed time charter revenue expected to be received on an annual basis for ongoing time charters, as of each December 31, is as follows:
For time charter revenues accounted for under Topic 842, the amount of accrued income on the Company’s consolidated balance sheets was $8.4 million (December 31, 2019: $1.8 million). The amount of hire payments received in advance under time charter contracts, recognized as a liability and reflected within deferred income on the Company’s consolidated balance sheets was $10.0 million (December 31, 2019: $11.2 million). Deferred income allocated to time charters will be recognized ratably over time, which is expected to be within one month from December 31, 2020. Voyage Charter revenues Voyage charter revenues, which include revenues from contracts of affreightment, are shown net of address commissions. As of December 31, 2020, for voyage charters and contracts of affreightment, services accounted for under Topic 606, the amount of contract assets reflected within accrued income on the Company’s consolidated balance sheets was $11.4 million (December 31, 2019: $4.4 million). Changes in the contract asset balance at the balance sheet dates reflect income accrued after loading of the cargo commences but before an invoice has been raised to the charterer, as well as changes in the number of the Company’s vessels contracted under voyage charters or contracts of affreightment. The amount of contract liabilities reflected within deferred income on the Company’s consolidated balance sheets was $1.6 million (December 31, 2019: $3.0 million). The opening and closing balance of receivables from voyage charters and contracts of affreightment was $4.2 million and $3.3 million respectively as of December 31, 2020 (December 31, 2019: $7.7 million and $4.2 million respectively) and are reflected within net accounts receivable on our consolidated balance sheets. The amount allocated to costs incurred to fulfill a contract with a charterer, which are costs incurred following the commencement of a contract or charter party but before the loading of the cargo commences was $1.5 million (December 31, 2019: $1.3 million) and is reflected within prepaid expenses and other current assets on the Company’s consolidated balance sheets. Voyage and Time charter revenues from Luna Pool collaborative arrangements: Revenues from the Luna Pool collaborative arrangements for year ended December 31, 2020, which are accounted for under ASC 808 – Collaborative Arrangements, represent our share of pool net revenues generated by the other Pool Participant’s vessels in the Luna Pool. These include revenues from voyage charters and contracts of affreightment, which are accounted for under Topic 606 in addition to time charter revenues, which are accounted for under Topic 842. |
Vessels, net |
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Vessels, net | 6. Vessels, net
The cost and net book value of the 19 vessels that were contracted under time charter agreements (please read Note 16—Operating Lease Liabilities to our consolidated financial statements) was $1,084 million and $839 million respectively as of December 31, 2020 (December 31, 2019: $1,374 million and $1,053 million respectively for 25 vessels contracted under time charters). The net book value of vessels that serve as collateral for the Company’s secured bond, secured term loan and revolving credit facilities (Note 10 and Note 11 to the consolidated financial statements) was $1,359 million as of December 31, 2020 (December 31, 2019: $1,413 million). The cost and net book value of vessels that are included in the table above and are subject to financing arrangements (please read Note 9—Variable Interest Entities to the consolidated financial statements) was $82.9 million and $71.0 million respectively as of December 31, 2020. (December 31, 2019: $82.9 million and $73.7 million). |
Investment in Equity Accounted Joint Venture |
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Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Equity Accounted Joint Venture | 7. Investment in Equity Accounted Joint Ventures Interests in joint ventures are accounted for using the equity method and are recognized initially at cost and subsequently include the Company’s share of the profit or loss and other comprehensive income of equity-accounted investees, until the date on which joint control ceases. As at December 31, 2019 and 2020, we had the following participation in investments that are accounted for using the equity method:
Export Terminal Joint Venture In January 2018, the Company entered into definitive agreements creating the Export Terminal Joint Venture. As of December 31, 2020, we had contributed to the Export Terminal Joint Venture $142.5 million of our expected share of the approximate $146.5 million capital cost for the construction of the Marine Export Terminal. On January 21, 2021, we made a capital contribution of $4.0 million, by drawing down on the Terminal Facility, being the final contribution for our expected full share of the capital cost for the construction of the Marine Export Terminal. The table below represents the Company’s investment into the Export Terminal Joint Venture, pursuant to which the Company has a 50% economic interest in building and operating the Marine Export Terminal, as of December 31, 2019 and 2020:
Cumulative interest and associated costs capitalized on the investment in the Export Terminal Joint Venture are being amortized over the estimated useful life of the Marine Export Terminal, which began commercial operations with the export of commissioning cargoes in December 2019. As of December 31, 2020, the unamortized difference between the carrying amount of the investment in the Export Terminal Joint Venture and the amount of the Company’s underlying equity in net assets of the Export Terminal Joint Venture was $6.5 million (December 31, 2019: $6.7 million). The costs amortized in the year ended December 31, 2020 were $0.3 million and are presented in the share of result of the equity accounted joint ventures within our consolidated statements of operations. There were no capitalized costs on the investment in the Export Terminal Joint Venture amortized for the years ended December 31, 2018 and 2019. Equity method gains, excluding amortized costs, recognized in the share of result of equity accounted joint ventures for the year ended December 31, 2020 were $0.9 million (December 31, 2019 and 2018: equity method losses of $1.1 million and $0.04 million respectively). Impairment of Joint Venture The equity method investment is reviewed for indicators of impairment when events or circumstances indicate the carrying amount of the investment may not be recoverable. When such indicators are present, we determine if the indicators are ‘other than temporary’ to determine if an impairment exists. If we determine that an impairment exists, a discounted cash flow analysis is carried out based on the future cash flows expected to be generated over the investment’s estimated remaining useful life. The resulting net present value is compared to the carrying value and we would recognize an impairment loss equal to the amount by which the carrying amount exceeds its fair value. Considerations in identifying if indicators of impairment are present for the equity method investment include significant incidents that have resulted in the forecast future operating cash flows to be amended, such as significant market events that impact the terminal operations and cashflow, physical damage to assets, recurring financial losses for consecutive periods or changes to the Company’s equity holding in the investment. As of December 31, 2020, the aggregate carrying value of our investment in the Export Terminal Joint Venture was $148.7 million. We believe that there are no events or circumstances that indicate that the value of the investment in the Export Terminal Joint Venture should be impaired as of December 31, 2020. Accordingly, no impairment charge has been recorded as of December 31, 2020 following the requirements of our U.S. GAAP impairment accounting policy. Luna Pool Agency Limited In March 2020, the Company collaborated with Pacific Gas Pte. Ltd. and Greater Bay Gas Co. Ltd. to form and manage the Luna Pool. As part of the formation of the Luna Pool, a new entity, Luna Pool Agency Limited, (the “Pool Agency”), was incorporated in May 2020. The pool participants jointly own the Pool Agency on an equal basis, and both have equal board representation. As of December 31, 2020, we have recognized the Company’s initial investment of one British pound in the Pool Agency within investments in equity accounted joint ventures on our consolidated balance sheets. The Pool Agency has no activities other than that as a legal custodian of the Luna Pool bank account and there will be no variability in its financial results, as it has no income and its minimal operating expenses are reimbursed by the Pool Participants. |
Group Subsidiaries |
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Schedule of Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Group Subsidiaries | 8. Group Subsidiaries As of December 31, 2019, and 2020, the company had the following significant subsidiaries:
The above table excludes OCY Aurora Ltd, the lessor variable interest entity (‘‘lessor VIE’’) that we have leased a vessel from under a finance lease arrangement. The lessor VIE is a wholly-owned special purpose vehicle (“SPV”) of a financial institution. While we do not hold any equity investments in this SPV, we have concluded that we are the primary beneficiary of the lessor VIE and accordingly have consolidated this entity into our financial results. Please read Note 9—Variable Interest Entities to our consolidated financial statements for further details. |
Variable Interest Entities |
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Variable Interest Entities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | 9. Variable Interest Entities As of December 31, 2019 and 2020, the Company has consolidated 100% of PT Navigator Khatulistiwa, a VIE for which the Company is deemed to be the primary beneficiary, i.e. it has a controlling financial interest in this entity. The Company owns 49% of the VIE’s common stock, all of its secured debt and has voting control. All economic interests in the residual net assets reside with the Company. A VIE is an entity that in general does not have equity investors with voting rights or that has equity investors that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the right to residual gains or the obligation to absorb losses that could potentially be significant to the VIE. By virtue of the accounting principle of consolidation, transactions between PT Navigator Khatulistiwa and the Company are eliminated on consolidation. The VIE, PT Navigator Khatulistiwa, had total assets and liabilities, as of December 31, 2020, of $125.9 million and $9.5 million respectively (December 31, 2019: $123.1 million and $20.4 million respectively). These amounts have been included in the Company’s consolidated balance sheets as of December 31, 2019 and 2020. On October 21, 2019, the Company entered into a sale and leaseback to refinance one of its vessels, Navigator Aurora 2014-09, Revenue from Contracts with Customers (Topic 606), and therefore has been accounted for as a financing transaction. Following the sale and leaseback refinancing transaction, Navigator Aurora As of December 31, 2019 and 2020, the Company has consolidated 100% of OCY Aurora Ltd., the lessor variable interest entity (‘‘lessor VIE’’) that we have leased Navigator Aurora 810-10-15-12 810-10-15-17 Navigator Aurora Navigator Aurora The Company must evaluate whether we are the primary beneficiary of a VIE after concluding that the SPV is in the scope of the variable interest model, we have a variable interest in the entity and the SPV is a VIE. As outlined in ASC 810-10-25-38 day-to-day While we do not hold any equity investments in this lessor VIE, we have concluded that we are the primary beneficiary of the lessor VIE under U.S. GAAP and accordingly we are required to consolidate this lessor VIE into our financial results. Accordingly, although consolidated into our results, we have no control over the funding arrangements negotiated by this lessor VIE entity such as interest rates, maturity and repayment profiles. In consolidating the lessor VIE into our financial results, we must make assumptions regarding the debt amortization profile and the interest rate to be applied against the lessor VIE’s debt principal. Furthermore, our estimation process is dependent upon the timeliness of receipt and accuracy of financial information provided by the lessor VIE entity. By virtue of the accounting principle of consolidation, transactions between consolidated entities are eliminated and accordingly the sale and leaseback refinancing transaction with OCY Aurora is not shown as a liability in the Company’s consolidated balance sheets, being superseded by the Navigator Aurora Facility between OCY Aurora and Ocean Yield Malta Limited. Please read Note 21—Related Party Transactions to our consolidated financial statements. Under the sale and leaseback transaction we are committed to monthly principal payments until the year five purchase option which include interest payable at a rate of U.S. LIBOR plus 430 basis points per annum. The lessor VIE, OCY Aurora Ltd., had total assets and liabilities, as of December 31, 2020, of $63.5 million and $61.7 million, respectively (December 31, 2019: $69.1 million and $69.0 million respectively). These amounts have been included in the Company’s consolidated balance sheets as of December 31, 2019 and 2020. The liabilities mainly consist of a seven year unsecured loan facility provided by OCY Malta Limited, the parent of OCY Aurora Ltd., The loan facility is subordinated to a further bank loan where OCY Aurora Ltd. is the guarantor and Navigator Aurora The assets and liabilities of the lessor VIE that most significantly impact the Company’s consolidated balance sheets and the financial statement line items in which they are presented, as of December 31, 2019 and 2020, are as follows:
The most significant impact of the lessor VIE’s operations on the Company’s consolidated statements of operations is interest expense of $1.8 million for the year ended December 31, 2020 (December 31, 2019: $0.5 million). The most significant impact of the lessor VIE’s cash flows on the Company’s consolidated statements of cash flows is net cash used in financing activities of $6.8 million for the year ended December 31, 2020 (December 31, 2019: net cash provided by financing activities of $69.1 million). The lessor VIE was incorporated in 2019 and so there was no impact on our consolidated statements of operations or cash flows for the year ended December 31, 2018. |
Secured Term Loan Facilities and Revolving Credit Facilities |
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Secured Term Loan Facilities and Revolving Credit Facilities | 10. Secured Term Loan Facilities and Revolving Credit Facilities The table below represents the annual principal payments to be made under our term loans and revolving credit facilities after December 31, 2019 and 2020:
Terminal Facility. Interest on amounts drawn is payable at a rate of U.S. LIBOR plus 250 to 300 basis points per annum over the term of the facility, for interest periods of three or six months. The Marine Terminal Borrower may voluntarily prepay indebtedness at any time, without premium or penalty, in whole or in part upon prior written notice to the facility agent. The Terminal Facility is subject to quarterly repayments of principal and interest after the completion of the Marine Export Terminal, with quarterly principal repayments of between $3.4 million and $3.8 million commencing from March 31, 2021. The Marine Terminal Borrower must make mandatory prepayments of indebtedness upon specified amounts of excess cash flow, the receipt of performance liquidated damages pursuant to certain material contracts related to the Marine Export Terminal, the receipt of proceeds in connection with an event of loss (as defined in the Terminal Facility), the receipt of proceeds in connection with termination payments (as defined in the Terminal Facility), the receipt of proceeds in connection with certain dispositions by the Export Terminal Joint Venture, the incurrence of certain specified indebtedness, the inability to meet the conditions for paying a dividend for four or more consecutive quarters, dispositions of the Marine Terminal Borrower’s equity interests in the Export Terminal Joint Venture, the receipt of indemnity payments in excess of $500,000 and certain amounts of any loans outstanding upon the conversion date. The loans under the Terminal Facility are secured by first priority liens on the rights to the Marine Terminal Borrower’s distributions from the Export Terminal Joint Venture, the Marine Terminal Borrower’s assets and properties and the company’s equity interests in the Marine Terminal Borrower. Under the Terminal Facility, the Marine Terminal Borrower must maintain a minimum debt service coverage ratio (as defined in the Terminal Facility) for the prior four calendar fiscal quarters (or shorter period of time if data for the prior four fiscal quarters is not available) of no less than 1.10 to 1.00 from the beginning of the second full fiscal quarter of the term loan, being June 1, 2021. Following completion of the Marine Export Terminal, On August 4, 2020, the Terminal Facility was amended to allow the Company an early true-up of $34.0 million, enabling those funds to be immediately drawn for general corporate purposes due to previous capital contributions for the Marine Export Terminal being paid from the Company’s own resources. On December 23, 2020, the Terminal Facility was amended to allow the Company to, among other things, make a Restricted Payment on the Conversion Date in an amount equal to the lesser of $20,000,000 and the remaining amount of the aggregate Commitment Availability as of such date, and to enable those funds not yet drawn as at December 31, 2020 to be made available until January 31, 2021. ASC 470-50—Debt Modifications states that if an amendment to the terms of a loan results in the present value of future cash flows being modified by more than 10%, it is considered to have ‘substantially different terms’ from the original loan and is accounted for as a debt extinguishment and the new loan treated as the issuance of new debt. The 10% cash flow test was performed by management after both amendments, and it was concluded that the present value of future cash flows was not modified by more than 10% as a result of the amendments. As of December 31, 2020, the Company had drawn down $51.0 million on this facility. Based on the existing committed throughput for the Marine Export Terminal approved by the lenders and subject to the satisfaction of certain conditions to the ability to borrow under the Terminal Facility, an additional $18.0 million was available to be drawn down under the Terminal Facility as of December 31, 2020. In addition, we had a $7.5 million unused letter of credit available to be drawn to be used solely to make capita l repayments on the Terminal Facility. On May 6, 2021, the Company obtained a waiver from the lenders under the Terminal Facility, which is retrospective with effect from the date of its inception, to correct a technical inconsistency in the Terminal Facility, involving a restrictive covenant relating to taking affirmative action regarding the treatment of tax status of the borrower as a corporation for U.S. federal, state or local income tax purposes. The waiver requires among other things, within 90 days after the date of the waiver, the parties to the Terminal Facility to amend the credit agreement and other loan documentation to remediate the inconsistency and to set aside and fund a tax reserve, based on an agreed periodic basis, of future tax liabilities. Management has concluded that it is probable that these requirements will be complied with within the required 90 days and therefore classification of the long term portion of the loan as non-current is appropriate. January 2015 Secured Term Loan Facility. This loan facility is secured by first priority mortgages on each of; Navigator Umbrio, Navigator Centauri, Navigator Ceres, Navigator Ceto Navigator Copernico December 2015 Secured Revolving Credit Facility. . On October 21, 2019 the Company entered into a sale and leaseback to refinance one of its vessels, Navigator Aurora This loan facility was secured by first priority mortgages on each of; Navigator Eclipse, Navigator Nova, Navigator Prominence, Navigator Luga Navigator Yauza October 2016 Secured Term Loan and Revolving Credit Facility. of the facility and as of December 31, 2020, the outstanding balance drawn on the secured term loan, newbuilding loan and revolving credit facility was $94.7 million which is repayable in 11 quarterly amounts of approximately $4.1 million, followed by a final repayment of $50.0 million on November 28, 2023. Interest on amounts drawn is payable at a rate of U.S. LIBOR plus 260 basis points per annum. The aggregate fair market value of the collateral vessels must be no less than 125% of the aggregate outstanding borrowing under the facility. This facility is secured by first priority mortgages on each of: Navigator Gemini Navigator Leo, Navigator Libra, Navigator Pegasus Navigator Phoenix Navigator Taurus Navigator Jorf June 2017 Secured Term Loan and Revolving Credit Facility. ) Interest on amounts drawn is payable at a rate of U.S. LIBOR plus 230 basis points per annum. The aggregate fair market value of the collateral vessels must be no less than 125% of the aggregate outstanding borrowing under the facility. The facility is secured by first priority mortgages on each of Navigator Galaxy, Navigator Genesis, Navigator Grace, Navigator Gusto, Navigator Glory, Navigator Capricorn, Navigator Scorpio Navigator Virgo March 2019 Secured Term Loan Facility re-finance our January 2015 secured term loan facility that was due to mature in June 2020. The full amount of $107.0 million was drawn on March 28, 2019. The repayment of the loan, secured by four of our vessels was $75.6 million, leaving net proceeds of $31.4 million for fees and general corporate purposes. The facility has a term of six years from the date of the agreement and expires in March 2025, is fully drawn down and as of December 31, 2020, the amount still outstanding was $91.0 million which is repayable in 16 equal quarterly instalments of approximately $2.3 million followed by a final payment of $54.4 million on the final quarterly repayment date on March 25, 2025. Interest on amounts drawn is payable at a rate of U.S. LIBOR plus 240 basis points per annum. ASC 470-50—Debt Modifications states that if re-financing of a loan results in the present value of future cash flows being modified by more than 10%, it is considered to have ‘substantially different terms’ from the original loan and is accounted for as a debt extinguishment and the new loan treated as the issuance of new debt. The 10% cash flow test was performed, and it was concluded that the present value of future cash flows on a lender-by-lender This loan facility is secured by first priority mortgages on each of; Navigator Atlas, Navigator Europa, Navigator Oberon, Navigator Triton September 2020 Secured Revolving Credit Facility. The facility is due to mature in September 2024, but contains an option, subject to the consent of the Lenders, exercisable 12 to 36 months after the date of the agreement, to extend the maturity date of the facility by 12 months to September 2025.As of December 31, 2020, an initial amount of $185.0 million of the $210.0 million was drawn and outstanding, which was used to repay the December 2015 secured revolving credit facility and associated fees. Interest on the September 2020 secured revolving credit facility is payable quarterly at U.S. LIBOR plus 250 basis points. The facility has an undrawn amount of $17.6 million as of December 31, 2020. The amount of the total facility shall be reduced semi-annually on June 30 and December 31 by an amount of $7.4 million followed by a final balloon payment on September 17, 2024, of $150.9 million. ASC 470-50—Debt Modifications states that if re-financing of a revolving line of credit facility results in the borrowing capacity of the new arrangement being greater or equal to the borrowing capacity of the old arrangement, then any unamortized deferred costs, any fees paid to the lender, and any third-party costs incurred shall be associated with the new arrangement. The comparison of borrowing capacity was performed, and it was concluded that the borrowing capacity of the September 2020 Secured Revolving Credit Facility on a lender-by-lender One lender exited the revolving line of credit facility syndicate and unamortized deferred finance costs of $0.2 million associated with the re-financed December 2015 secured revolving credit facility and apportioned to that lender were written off. One lender entered the revolving line of credit facility syndicate and is considered a new arrangement and not a modification of the December 2015 secured revolving credit facility. Therefore, both the portion of lender fees and the apportioned third-party costs associated with the new lender in the syndicate, being $0.2 million, will be deferred as debt issuance costs and amortized by the interest method over the life of the term of the new facility arrangement. In total, unamortized deferred costs of $0.8 million and issuance costs for the September 2020 Secured Revolving Credit Facility of $1.9 million have been deferred and are being amortized over the facility term using the effective rate method. This loan facility is secured by first priority mortgages on each of Navigator Eclipse, Navigator Luga, Navigator Nova, Navigator Prominence Navigator Yauza times of cash and cash equivalents in an amount equal to or greater than (i) $35.0 million, or (ii) 5% of total indebtedness (as defined by the September 2020 Secured Revolving Credit Facility agreement), as applicable; b) the maintenance of the ratio of total stockholders’ equity to total assets (both as defined by the September 2020 Secured Revolving Credit Facility agreement) of not less than 30% and the aggregate outstanding borrowing under the facility must be no more than 65% of the aggregate fair market value of the collateral vessels. Interest on amounts drawn is payable at a rate of U.S. LIBOR plus 250 basis points per annum. As of December 31, 2020, the Company was in compliance with all covenants contained in this revolving credit facility. Navigator Aurora Facility. Navigator Aurora million in $ 68.1million). The Navigator Aurora Facility is subordinated to a further bank loan where OCY Aurora Ltd. is the guarantor and Navigator Aurora Navigator Aurora $ 14.0million as of December 31, 2020. The fair value of the vessel is significantly greater than the amount of the senior bank loan it is pledged against, and therefore the guarantee made by the SPV to the lenders of the subordinated loan where OCY Malta Ltd is the borrower has negligible fair value. The following table shows the breakdown of secured term loan facilities and total deferred financing costs split between current and non-current liabilities as of December 31, 2019 and 2020:
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Senior Secured/Unsecured Bond |
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Senior Secured/Unsecured Bond | 12. Senior Unsecured Bonds On September 10, 2020 the Company issued senior unsecured bonds in an aggregate principal amount of $100.0 million with Nordic Trustee AS as the bond trustee (the “2020 Bonds”). The net proceeds of the issuance of the 2020 Bonds were used to redeem in full all of our outstanding 2017 Bonds which were due to mature in full on February 10, 2021 and become repayable on that date. The 2020 Bonds are governed by Norwegian law and listed on the Nordic ABM which is operated and organized by Oslo Børs ASA. ASC 470-50—Debt Modifications states that a liability is considered to have been extinguished if either a) the debtor pays the creditor and is relieved of the obligation for the liability or b) the debtor is legally released from being the primary obligator under the liability either judicially or by the creditor. The net proceeds of the issuance of the 2020 Bonds were used to redeem in full all of our outstanding 2017 Bonds, and the Company has been relieved of the obligation for the liability. The redemption of the 2017 Bonds is accounted for as a debt extinguishment and the issuance of the 2020 Bonds is treated as the issuance of new debt. On redemption of the 2017 Bonds, the Company recognized a loss on extinguishment of $0.5 million, being the difference between the reacquisition price of the debt and the net carrying amount of the extinguished debt. Issuance costs for the 2020 Bonds of $2.0 million have been deferred and are being amortized over the term of the 2020 Bonds using the effective rate method. The 2020 Bonds bear interest at a rate of 8.0% per annum and mature on September 10, 2025. Interest is payable semi-annually in arrears on March 10 and September 10. The 2020 Bonds are redeemable by the Company, in whole or in part, at any time. Any 2020 Bonds redeemed; up until September 9, 2023 will be priced at the aggregate of the net present value of 103.2% of par and interest payable up to September 9, 2023; from September 10, 2023 up until September 9, 2024, are redeemable at 103.2% of par; from September 10, 2024 up until March 9, 2025, are redeemable at 101.6% of par, and from March 10 to the maturity date are redeemable at 100% of par, in each case, in cash plus accrued interest. Additional financial covenants (each as defined within the bond agreement governing the 2020 Bonds (the “2020 Bond Agreement”)) are: (a) The issuer shall ensure that the Group (meaning “the Company and its subsidiaries”) maintains a minimum liquidity of no less than $35.0 million; and (b) maintain a Group equity ratio (as defined in the 2020 Bond Agreement) of at least 30%. As of December 31, 2020, the Company was in compliance with all covenants for the 2020 Bonds. The 2020 Bond Agreement provides that we may declare or pay dividends to shareholders provided that the Company maintains a minimum liquidity of $60.0 million unless an event of default has occurred and is continuing. The 2020 Bond Agreement also limits us and our subsidiaries from, among other things, entering into mergers and divestitures, engaging in transactions with affiliates or incurring any additional liens which would have a material adverse effect. In addition, the 2020 Bond Agreement includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, false representation and warranty, a cross-default to other indebtedness, the occurrence of a material adverse effect, or our insolvency or dissolution. The following table shows the breakdown of our senior unsecured bonds and total deferred financing costs as of December 31, 2019 and 2020:
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2018 Senior Secured Bonds [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Secured/Unsecured Bond | 11. Senior Secured Bond On November 2, 2018, the Company issued senior secured bonds in an aggregate principal amount of NOK 600 million with Nordic Trustee AS as the bond trustee (the “2018 Bonds”). The net proceeds were used to partially finance our portion of the capital cost for the construction of the Marine Export Terminal. The 2018 Bonds are governed by Norwegian law and are listed on the Nordic ABM which is operated and organized by Oslo Børs ASA. The 2018 Bonds bear interest at a rate of 3-month NIBOR plus 6.0% per annum, calculated on a 360-day year basis and mature on November 2, 2023. Interest is payable quarterly in arrears on February 2, May 2, August 2 and November 2. The 2018 Bonds are secured by four of the Company’s ethylene capable semi-refrigerated liquefied gas carriers. On the same date, the Company entered into a cross-currency interest rate swap agreement with Nordea Bank Abp (“Nordea”), with a termination date of November 2, 2023, to run concurrently with the 2018 Bonds. The interest rate payable by the Company under this cross-currency interest rate swap agreement is 6.608% plus 3-month U.S. LIBOR and the transfer of the principal amount fixed at $71.7 million upon maturity in exchange for NOK 600 million. Please read Note 19—Derivative Instruments to our consolidated financial statements. For a description of our accounting policy in relation to the cross-currency interest rate swap, please read Note 2 —Summary of Significant Accounting Policies to our consolidated financial statements. The Company may redeem the 2018 Bonds, in whole or in part, at any time beginning on or after November 2, 2021. Any 2018 Bonds redeemed from November 2, 2021 until November 1, 2022, are redeemable at 102.4% of par, from November 2, 2022 until May 1, 2023, are redeemable at 101.5% of par, and from May 2, 2023 to the maturity date are redeemable at 100% of par, in each case, in cash plus accrued interest. Additionally, upon the occurrence of a “Change of Control Event” (as defined in the agreement governing the 2018 Bonds (the “2018 Bond Agreement”), the holders of 2018 Bonds have an option to require us to repay such holders’ outstanding principal amount of 2018 Bonds at 101% of par, plus accrued interest. The financial covenants each as defined within the bond agreement are: (a) The issuer shall ensure that the Group (meaning “the Company and its subsidiaries”) maintains a minimum liquidity of no less than $25.0 million and (b) maintain a Group equity ratio of at least 30% (as defined in the 2018 Bond Agreement). As of December 31, 2020, the Company was in compliance with all covenants for the 2018 Bonds. The 2018 Bond Agreement provides that we may declare dividends from January 1, 2020, payable at the earliest from January 1, 2021 so long as such dividends do not exceed 50% of our cumulative consolidated net profits after taxes from January 1, 2020. The 2018 Bond Agreement also limits us and our subsidiaries from, among other things, entering into mergers and divestitures, engaging in transactions with affiliates or incurring any additional liens which would have a material adverse effect. In addition, the 2018 Bond Agreement includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, false representation and warranty, a cross-default to other indebtedness, the occurrence of a material adverse effect, or our insolvency or dissolution. The following table shows the breakdown of our senior secured bond and total deferred financing costs as of December 31, 2019 and 2020:
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Earnings per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | 13. Earnings per Share Basic earnings per share is calculated by dividing the net income/(loss) available to common shareholders by the average number of common shares outstanding during the periods. Diluted earnings per share is calculated by adjusting the weighted average number of common shares used for calculating basic earnings per share for the effects of all potentially dilutive shares. The following table shows calculation of both basic and diluted number of weighted average outstanding shares for the years ended December 31, 2018, 2019 and 2020:
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Share-Based Compensation |
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Share-Based Compensation | 14. Share-Based Compensation During 2013, the Company’s Board adopted the 2013 Restricted Stock Plan (the “2013 Plan”), which entitled officers, employees, consultants and directors of the Company to receive grants of restricted stock of the Company’s common stock or share options in the Company’s common stock. This 2013 Plan is administered by the Board or a committee of the Board. The 2013 Plan is administered by the Compensation Committee with certain decisions subject to approval of our Board. The maximum aggregate number of common shares that may be delivered pursuant to options or restricted stock awards granted under the 2013 Plan is 3,000,000 shares of common stock. A holder of restricted stock, awarded under the 2013 Plan, shall have the same voting and dividend rights as the Company’s other common stockholders in relation to those shares. Share awards On March 19, 2020, the Company granted 37,975 restricted shares under the Navigator Holdings Ltd. 2013 Long-Term Incentive Plan (the “2013 Plan”) to non-employee directors with a weighted average value of $7.90 per share. These restricted shares vest on the first anniversary of the grant date. On the same date the Company granted 17,240 restricted shares to the Executive Chairman of the Board and 23,957 restricted shares to the officers and employees of the Company with a weighted average value of $7.90 per share. These restricted shares vest on December 31,2021 and the third anniversary of the grant date, respectively. During the year ended December 31, 2020, 27,125 shares that were granted to non-employee directors on March 20, 2019 under the 2013 Plan vested with a weighted average grant value of $11.06 per share, which had a fair value of $114,739. In addition, 62,763 shares that were granted in 2017 to the then Chief Executive Officer and officers and employees of the Company, all of which had a weighted average grant value of $12.77, vested at a fair value of $265,487. In addition, in April and October 2020, 2,144 shares and 10,054 shares, respectively, previously granted to employees of the Company with a weighted average cost of grant of $11.54 per share were forfeited. On March 20, 2019, the Company granted 32,550 restricted shares under 2013 Plan to non-employee directors with a weighted average value of $11.06 per share. These restricted shares vested on the first anniversary of the grant date. On the same date the Company granted 141,888 restricted shares to the officers and employees of the Company, including the then Chief Executive Officer, with a weighted average value of $11.06 per share. All these restricted shares vest on the third anniversary of the grant date. During the year ended December 31, 2019, there were 29,898 shares that were previously granted to non-employee directors under the 2013 Plan with a weighted average grant value of $12.04 per share, which vested at a fair value of $336,054. In addition, 48,147 shares that were granted in 2016 to the then Chief Executive Officer and officers and employees of the Company, all of which had a weighted average grant value of $15.80, vested at a fair value of $548,218. In addition, 5,000 shares granted to a non-employee director in 2018 who subsequently became the Chief Executive of the Company vested at a fair value of $60,300. On August 14, 2019, 5,425 shares granted to a non-employee director with a value of $11.06 per share were forfeited. On March 20, 2018, the Company granted 29,898 restricted shares under the 2013 Plan to non-employee directors with a weighted average value of $12.04 per share. On November 28, 2018, the Company granted a further 5,000 shares to a newly appointed non-employee director with a weighted average value of $12.30. These restricted shares vest on the first anniversary of the grant date. On March 20, 2018, the Company granted 96,644 restricted shares to the Chief Executive Officer and officers and employees of the Company with a weighted average value of $12.04 per share. All these restricted shares vest on the third anniversary of the grant date. During the year ended December 31, 2018, 28,194 shares that were previously granted under the 2013 Plan to non-employee directors with a weighted average grant value of $12.77 per share vested at a fair value of $325,641. Restricted share grant activity for the year ended December 31, 2019 and 2020 was as follows:
Using the straight-line method of expensing the restricted stock grants, the weighted average estimated value of the shares calculated at the date of grant is recognized as compensation cost in the statements of operations over the period to the vesting date. During the year ended December 31, 2020, the Company recognized $1,321,205 in share-based compensation costs relating to share grants (year ended December 31, 2019: $1,495,412 and year ended December 31, 2018: $1,173,580). As of December 31, 2020, there was a total of $1,002,608 unrecognized compensation costs relating to the expected future vesting of share-based awards (December 31, 2019: $1,774,202) which are expected to be recognized over a weighted average period of 0.93 years (December 31, 2019: 1.38 years). Share options Share options issued under the 2013 Plan are not exercisable until the third anniversary of the grant date and can be exercised up to the tenth anniversary of the date of grant. The fair value of each option is calculated on the date of grant based on the Black-Scholes valuation model. Expected volatilities are based on the historic volatility of the Company’s stock price and other factors. The Company does not currently pay dividends and it is assumed this will not change. The expected term of the options granted is anticipated to occur in the range between 4 and 6.5 years. The risk-free rate is the rate adopted from the U.S. Government Zero Coupon Bond. The movements in the existing share options during the years ended December 31, 2019 and 2020 were as follows:
There were 339,936 options exercisable as of December 31, 2020. The weighted average exercise price of the share options exercisable as of December 31, 2020 was $21.40. The weighted-average remaining contractual term of options outstanding and exercisable as of December 31, 2020 was 3.67 years. During the year ended December 31, 2020, the Company recognized a credit of $77,364 to share-based compensation costs (Year ended December 31, 2019: a charge of $8,474 and year ended December 31, 2018: credit of $99,902) relating to options forfeited under the 2013 Plan. As of December 31, 2020, and December 31, 2019, there were no unrecognized compensation costs relating to options under the 2013 Plan. As of December 31, 2020, there were 339,936 share options which had vested but had not been exercised. On January 5, 2019, 6,000 share options were granted to an employee of the Company at an exercise price of $18.95 under the 2013 Plan. These options can be exercised up to the sixth anniversary of the grant date. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | 15. Commitments and Contingencies The contractual obligations schedule set forth below summarizes our contractual obligations as of December 31, 2020:
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Operating Lease Liabilities |
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Operating Lease Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Liabilities | 16. Operating Lease Liabilities On January 1, 2019, the Company adopted ASU 2016-02, Leases, (‘Topic 842’), as further amended, which supersedes Topic 840, Leases and requires lessees to recognize most leases on-balance sheet and disclose key information about leasing arrangements. The Company has elected all of the standard’s practical expedients in ASC 842-10-65-1(f) use-of-hindsight On January 1, 2019, the Company adopted ASU 2018-11, Leases—Targeted Improvements, which created a new, optional, transition method, the “Comparatives Under ASC 840” option, for implementing ASU 2016-02, which can only be adopted by entities either at (1) the beginning of the company’s first reporting period after issuance or (2) the entity’s mandatory ASU 2016-02 effective date. This choice of method affects only the timing of when an entity applies the transition provisions. The Company applied this optional transition method on January 1, 2019. Under this transition method, a cumulative-effect adjustment to the consolidated statements of stockholder’s equity of $0.1 million was recorded, which represents the amounts of expense that would not have been recognized in retained earnings for the year ended December 31, 2018. The presentation of the consolidated financial statements for comparative periods has remained unchanged. On January 1, 2019, the Company adopted ASU 2019-01, Leases (Topic 842); Codification Improvements, which, amongst other things, aligns the guidance in Topic 842 for determining fair value and its application to lease classification and measurement for lessors that are not manufacturers or dealers with that of existing guidance; and clarifies that lessees and lessors are exempt from a certain interim disclosure requirement associated with adopting the new leases standard within the fiscal year of adoption. This standard is effective on adoption of ASU 2016-02, the new leasing standard. The Company adopted ASU 2016-02 and ASU 2019-01 on January 1, 2019. Accordingly, interim disclosures about the effect on income of adoption of ASC 842 are excluded from the required disclosures in these financial statements, in a manner similar to the annual disclosures in ASC 250-10-50-1(b)(2). We used the effective date as our date of initial application. Consequently, for dates and periods prior to January 1, 2019, financial information was not updated, and the disclosures required under the new standard were not provided. The Company applied Topic 842 by recognizing the cumulative effect of initially applying Topic 842 as an adjustment to the opening balance of equity as of January 1, 2019. Therefore, the comparative information has not been adjusted and continues to be reported under Topic 840 or Topic 606 as applicable. Under Topic 840, our three office leases were classified as operating leases, with rental costs for the year ended December 31, 2018 of $1.3 million recognized within General and Administrative costs in the consolidated income statements. Lessee accounting The new standard established a right-of use (“ROU”) model that requires a lessee to recognize a ROU asset, representing the right to use the asset for a specified period of time and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Existing leases with a contracted term of less than 12 months on January 1, 2019 are classified as short-term leases on adoption of the new standard and qualify for an exemption from recognizing ROU assets or lease liabilities for periods presented after January 1, 2019. Leases for lessees under ASU 2016-02 are classified as financing or operating, with classification affecting the pattern and classification of expense recognition in the income statement. Under ASU 2016-02 we have recognized new ROU assets and liabilities on our balance sheet for our operating leases, relating to long-term commitments for our offices in London, New York and Gdynia. At the adoption date of January 1, 2019, we had no short-term lease commitments. Lease liabilities and ROU assets for operating leases are initially measured at the present value of the lease payments not yet paid, discounted using the discount rate for the lease determined at the later of the date of initial application or the lease commencement date. As a lessee, the Company has elected not to separate lease and non-lease components pertaining to operating lease payments. The discount rate used is the Company’s incremental borrowing rate, defined as the rate of interest that the Company as lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Consequently, operating lease liabilities of $6.5 million, based on the present value of the remaining minimum rental payments; and ROU assets of $5.7 million have been recognized on the Company’s consolidated balance sheets as of December 31, 2020 (December 31, 2019: operating lease liabilities of $7.5 million and ROU assets of $6.8 million) with accretion of the liabilities and amortization of the ROU assets over the remaining length of the lease terms. The lease for our office in Poland is subject to annual indexation each January according to the Eurozone All Items Monetary Union Index of Consumer Prices (“MUICP”) index as quoted for the previous year. ASU 2016-02 requires lessees to include such variable lease payments in the value of the remaining lease payments and, therefore, in the measurement of a lessee’s lease liabilities at the adoption date of January 1, 2019. The lease payments relating to the Poland office lease are not remeasured at the beginning of each year, the effect of future increases in MUICP are recognized as part of lease-related costs in each year and classified as variable lease costs. For the years ended December 31, 2020, 2019, total operating lease costs were $1.4 million, which include immaterial variable lease costs and are presented in General and Administrative costs within the consolidated statements of operations and in cash flows from operating activities within the consolidated statements of cash flows. The Company’s consolidated balance sheets include a ROU asset and a corresponding liability for operating lease contracts where the Company is a lessee. The discount rate used to measure the lease liability presented on the Company’s consolidated balance sheets is the incremental cost of borrowing since the rate implicit in the lease cannot be determined. The liabilities described below are for the Company’s offices in London, Gdynia and New York which are denominated in various currencies. At December 31, 2019 and 2020, the weighted average discount rate across the three leases was 5.56% At December 31, 2020, based on the remaining lease liabilities, the weighted average remaining operating lease term was 5.6 years (December 31, 2019: 6.5 years). The difference from the weighted average remaining contractual lease term arises from the mutual break option on the London office lease. Please read Note 15—Commitments and Contingencies to our consolidated financial statements. Under ASC 842, which the Company adopted on January 1, 2019, the ROU asset is a nonmonetary asset and is remeasured into the Company’s reporting currency of the U.S. Dollar using the exchange rate for the applicable currency as at the adoption date of ASC 842. The operating lease liability is a monetary liability and is remeasured quarterly using the current exchange rates, with changes recognized in a manner consistent with other foreign-currency-denominated liabilities in general and administrative expenses in the consolidated statements of comprehensive income. A maturity analysis of the undiscounted cash flows of the Company’s operating lease liabilities as at December 31, 2019 and 2020 is presented in the following table:
Lessor accounting The new standard also requires lessors to classify leases as a sales-type, direct financing, or operating lease. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease in effect, transfers control of the underlying assets to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating that the lessor has transferred substantially all of the risks and benefits of the underlying asset to the lessee and a third-party, the lease is a direct financing lease. All lessor leases that are not sales-type or direct financing leases are operating leases. For the Company as a lessor, in applying ASU 2016-02, we believe that our vessels contracted under voyage charters or contracts of affreightment do not qualify as leases, as the charterer does not have the right to operate the asset and we maintain the right to direct the use of the asset during the period of charter hire. Vessels on time charters will continue to qualify as operating leases, when the charterer has the right to obtain substantially all of the benefits and can direct how and for what purposes the vessel will be used, and the Company has no substantive substitution rights. Time charters do not qualify as direct finance leases under ASU 2016-02 as the present value of the sum of the lease payments does not exceed the fair value of the underlying vessel. The Company has elected, as a package, the practical expedients available in ASC 842-10-65-1(f) re-assess whether any existing or expired contracts are, or contain leases, for voyages in progress at the adoption date of January 1, 2019. We have assessed new charter contracts signed after the adoption date for whether they are, or contain, leases and should be recognized under ASU 2016-02. Charter contracts that do not contain a lease will be accounted for under Topic 606. The adoption of ASU 2016-02 has not resulted in a change to the classification of time charters, voyage charters or contracts of affreightment, the period over which we recognize revenue and, as a lessor, there has been no significant impact on our consolidated financial statements or cash flows as a result. ASU 2018-11, Leases—Targeted Improvements, which the Company adopted on January 1, 2019, contains an amendment to ASU 2016-02 that would allow lessors to elect, as a practical expedient, by class of underlying asset, not to separate lease and non-lease components of a contract. The amendment allows these components to be accounted for as a single component if the non-lease components otherwise would be accounted for under the new revenue guidance (Topic 606) and both of the following are met: (i) the timing and pattern of transfer for the lease component and non-lease components associated with that lease component are the same and (ii) the lease component, if accounted for separately, would be classified as an operating lease. Also, the ASU states that if the non-lease component or components associated with the lease component are the predominant component of the combined component, an entity should account for the combined component in accordance with Topic 606. Otherwise, the entity should account for the combined component as an operating lease in accordance with Topic 842. The Company has elected the package of practical expedients, as mentioned above. In addition, the Company has performed a qualitative analysis of each of its time charter contracts to determine whether the lease or non-lease component is the predominant component of the contract. The Company concluded that the lease component is the predominant component as the lessee would attribute more value to the ability to direct the use of the vessel rather than to the technical and crewing services to operate the vessel which are add-on services to the lessee. Accordingly, revenue from vessels under time charters, which are accounted as lease revenue for under ASC 842, are presented as a single lease component. On January 1, 2019, the Company adopted ASU
2019-01, Leases (Topic 842); Codification Improvements, which, amongst other things, aligns the guidance in Topic 842 for determining fair value and its application to lease classification and measurement for lessors that are not manufacturers or dealers with that of existing guidance; and clarifies t hat lessees and lessors are exempt from a certain interim disclosure requirement associated with adopting the new leases standard within the fiscal year of adoption. This standard is effective on adoption of ASU 2016-02, the new leasing standard. The Company adopted ASU 2016-02 and ASU 2019-01 on January 1, 2019. Accordingly, interim disclosures about the effect on income of adoption of ASC 842 are excluded from the required disclosures in these financial statements, in a manner similar to the annual disclosures in ASC 250-10-50-1(b)(2). |
Concentration of Credit Risks |
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Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risks | 17. Concentration of Credit Risks The Company’s vessels ar e chartered under either a time charter arrangement or voyage charter arrangement. Under a time charter arrangement, no security is provided for the payment of charter hire. However, payment is usually required monthly in advance. Under a voyage charter arrangement, a lien may sometimes be placed on the cargo to secure the payment of the accounts receivable, as permitted by the prevailing charter party agreement. During 2020, two charterers contributed 10% or more of the operating revenues, comprising approximately 12.8% or $41.0 million and 12.3% or $39.6 million, respectively. (2019: four charterers contributed 10% or more of the operating revenues, comprising approximately 16.8% or $51.0 million, 13.9% or $41.9 million, 13.2% or $30.8 million, and 10.2% or $7.2 million, respectively). Other than 9.3% of operating revenues arising from vessels trading exclusively in Indonesia for the year ended December 31, 2020 (year ended December 31 2019: 10.2%), our vessels operate on a worldwide basis and are not restricted to specific locations. The Company considers the equity accounted joint ventures do not meet the criteria in ASC 280 to be separate reportable segments. As of December 31, 2019, and 2020, all of the Company’s cash, cash equivalents, restricted cash, and short-term investments were held by large financial institutions, highly rated by a recognized rating agency. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | 18. Income Taxes Navigator Holdings Ltd and its vessel owning subsidiaries are incorporated in the Marshall Islands and under the laws of the Marshall Islands are not subject to tax on income or capital gains and no Marshall Islands withholding tax will be imposed on dividends paid by the Company to its stockholders.
The total of all deferred tax assets included in our balance sheet as of December 31, 2020, was $421,000 and the total of all deferred tax liabilities is $32,000 (December 31, 2019: $458,000 and $26,000 respectively). We have income tax carry forwards relating to our operations in Poland of approximately $1.3 million. We have recorded a deferred tax asset on the balance sheet of $0.3 million reflecting the benefit of $1.3 million in loss carry forwards.The deferred tax asset, after valuation allowance of $15.9 million includes $15.4 million related to carry forwards associated with our Export Terminal Joint Venture which can be utilized against 80% of our future profits from the terminal operations. The two years of tax returns remain eligible for examination. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2019 and 2020 are in the following table.
The net deferred tax asset relates to deferred tax assets and liabilities in different jurisdictions. |
Derivative Instruments |
12 Months Ended |
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Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 19. Derivative Instruments The Company uses derivative instruments in accordance with its overall risk management policy to mitigate the risk of the effects of unfavorable fluctuations in interest rates and foreign exchange movements. The Company held no derivatives designated as hedges as of December 31, 2019 and 2020. Interest Rate risk On July 2, 2020, we entered into floating-to-fixed 3-month LIBOR, calculated on a 360-day year basis, which resets every three months in line with the dates of interest payments on the Terminal Facility. The interest rate payable by the Company under these interest rate swap agreements is 0.369% and 0.3615% per annum to ING and SocGen respectively, calculated on a 360-day year basis. The interest rate swaps are remeasured to fair value at each reporting date. There is no requirement for cash collateral to be placed with the swap providers under these swap agreements and there is no effect on restricted cash as at December 31, 2020. Please read Note 3—Derivative Instruments accounted for at Fair Value to our consolidated financial statements. Foreign Currency Exchange Rate risk Under U.S. GAAP, all foreign currency-denominated monetary assets and liabilities are revalued and are reported in the Company’s functional currency based on the prevailing exchange rate at the end of the period. These foreign currency transactions fluctuate based on the strength of the U.S. Dollar relative to the NOK and are included in our results of operations. The primary source of our foreign exchange gains and losses are the movements on our NOK-denominated 2018 Bonds, which we have mitigated through the cross-currency interest rate swap. The remeasurement of all foreign currency-denominated monetary assets and liabilities at each reporting date results in unrealized foreign currency exchange differences but do not impact our cash flows. The Company has entered into a cross-currency interest rate swap agreement concurrently with the issuance of its NOK-denominated Senior secured bonds (see Note 11—Senior Secured Bond to our consolidated financial statements) and pursuant to this swap, the Company receives the principal amount of NOK 600 million in exchange for a payment of a fixed amount of $71.7 million on the maturity date of the swap. If the Norwegian Kroner weakens relative to the U.S. Dollar beyond a certain threshold, we are required to place cash collateral with our swap providers for the liability on the cross-currency interest rate swap at the reporting date. As at December 31, 2020 we had no cash collateral placed with our cross-currency interest rate swap provider (December 31, 2019: $1.3 million). In the event that the weakening of the Norwegian Kroner relative to the U.S. Dollar is significant, the cash collateral requirements could adversely affect our liquidity and financial position. In addition, at each quarterly interest payment date, the cross-currency interest rate swap exchanges a receipt of floating interest of 6.0% plus 3-month NIBOR on NOK 600 million for a U.S. Dollar payment of floating interest of 6.608% plus 3-month U.S. LIBOR on the $71.7 million principal amount. The purpose of the cross-currency interest rate swap is to economically hedge the foreign currency exposure on the payments of interest and principal of the Company’s NOK-denominated 2018 Bonds due in 2023. The cross-currency interest rate swap is remeasured to fair value at each reporting date. Please read Note 3—Derivative Instruments accounted for at Fair Value to our consolidated financial statements. Credit risk The Company is exposed to credit loss in the event of
non-performance by the counterparty to the cross-currency interest rate swap agreement. In order to minimize counterparty risk, the Company only enters into derivative transactions with counterparties that are reputable financial institutions, highly rated by a recognized rating agency. As of December 31, 2020, there was immaterial credit risk as the cross-currency interest rate swap and the interest rate swaps were in a liability position from the perspective of the Company. |
Cash, Cash Equivalents and Restricted Cash |
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Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash | 20. Cash, Cash Equivalents and Restricted Cash The following table shows the breakdown of cash, cash equivalents and restricted cash as of December 31, 2019 and 2020:
Amounts included in restricted cash represent those required to be set aside as collateral by a contractual agreement with a banking institution for the forecast future liability on the cross-currency interest rate swap agreement at the reporting date. Please read Note 19 —Derivative Instruments to our consolidated financial statements. As of December 31, 2020, there was no collateral amount held with the swap provider (December 31, 2019: $1.3 million). The amounts held as collateral within restricted cash are assessed against daily currency movements and are presented as current assets on the Company’s consolidated balance sheets. Included within total cash, cash equivalents and restricted cash as of December 31, 2020 is an amount of $0.2 million relating to the cash belonging to the lessor VIE that we are required to consolidate under U.S. GAAP (December 31, 2019: $0.8 million). Please read Note 9—Variable Interest Entities to our consolidated financial statements. |
Related Party Transactions |
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Related Party Transactions | 21. Related Party Transactions The following table summarizes our transactions with related parties for the years ended December 31, 2019 and 2020:
There were no transactions with related parties for the year ended December 31, 2018. The following table sets out the balances with related parties as at December 31, 2019 and 2020:
In March 2020, the Company collaborated with Pacific Gas Pte. Ltd. and Greater Bay Gas Co. Ltd. to form and manage the Luna Pool. As part of the formation of the Luna Pool, a new entity, Luna Pool Agency Limited, (“Pool Agency”) was established in May 2020. The investment in the Pool Agency created a 50/50 joint venture with Greater Bay Gas Co. Ltd. The Company’s investment in the Pool Agency is accounted for as an equity investment. Please read Note 7— Investment in Equity Accounted Joint Ventures to our consolidated financial statements. Pool revenues and expenses within the Luna Pool are accounted for in accordance with ASC 808 – Collaborative Arrangements, when two (or more) parties are active participants in the arrangement and exposed to significant risk and rewards dependent on the commercial success of the activity. Please read Note 2(a)— Basis of Presentation to our consolidated financial statements. Transactions with the Luna Pool collaborative arrangement We have presented our share of net income earned under the Luna Pool collaborative arrangement across a number of lines in our consolidated statements of operations. For revenues and expenses incurred specifically to the Company’s vessels and for which we are deemed to be the principal, these are presented gross on the face of our consolidated statements of operations within operating revenues, voyage expenses and brokerage commissions. Our share of pool net revenues generated by the other Pool Participant’s vessels in the Luna Pool collaborative arrangement is presented on the face of our consolidated statements of operations within operating revenues – Luna Pool collaborative arrangements. The other Pool Participant’s share of pool net revenues generated by our vessels in the pool is presented on the face of our consolidated statements of operations within voyage expenses – Luna Pool collaborative arrangements. The portion of the Commercial Manager’s fee which is due from the other Pool Participant is presented on the face of our consolidated statements of operations as other income. The Luna Pool became operational during the quarter ended June 30, 2020. The impact on our consolidated statements of operations for the year ended December 31, 2020 was a recognition of operating revenues from Luna Pool collaborative arrangements of $12.8 million, voyage expenses from Luna Pool collaborative arrangements of $12.4 million and net income recognized from our participation in the Luna Pool of $34.5 million. The following table summarizes our net income generated from our participation in the Luna Pool for the year ended December 31, 2020:
Transactions with the Luna Pool Agency Limited The Company’s related party balances with the Pool Agency consisted of the following at December 31, 2020:
The net balance as of December 31, 2020 is presented as amounts due from related parties on our consolidated balance sheets and arises from amounts owed by the Pool Agency to the Company relating to working capital, pool distributions and voyage expenses for the Company’s vessels within the Luna Pool, offset by amounts received by the Company relating to hire and freight of the Company’s vessels within the Luna Pool. There were no related party balances with the Pool Agency as at December 31, 2019 as the Luna Pool was only established during 2020. Transactions with Ocean Yield Malta Limited In October 2019, we sold Navigator Aurora In October 2019, the lessor VIE which owns Navigator Aurora Navigator Aurora non-current liabilities on the Company’s consolidated balance sheets. The lessor VIE, is consolidated into our results and consequently, under U.S. GAAP, transactions with OCY Malta Limited are deemed to be related party transactions. Payments of $6.84 million were made against the Navigator Aurora Facility for the year ended December 31, 2020 (December 31, 2019: $0.85 million) as non-contractual prepayments of the loan. This has been reflected as cash flows from financing in our consolidated statements of cash flows. The Company’s related party transactions with Ocean Yield Malta Limited consisted of the following for the years ended December 31, 2019 and 2020:
The Company’s related party balances with Ocean Yield Malta Ltd. consisted of the following as at December 31, 2019 and 2020:
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Subsequent Events |
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Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 22. Subsequent Events The remaining $18.0 million on the Terminal Facility was drawn down in full in January 2021, of which $4.0 million was a final capital contribution to the Export Terminal Joint Venture and the remaining $14.0 million for general corporate purposes. On April 12, 2021, the Company announced the signing of a non-binding Letter of Intent with Naviera Ultranav Limitada (“Ultranav”) to merge Ultragas ApS’ (“Ultragas”) fleet and business activities with Navigator. The combined fleet would total 56 vessels. In connection with the proposed acquisition of Ultragas’ fleet, it is expected that Navigator would issue approximately 21.2 million new shares of its common stock to Ultranav, and assume Ultragas’ net debt of approximately $197 million, as well as its net working capital. After giving effect to the proposed issuance of its new shares of common stock to Ultranav, Navigator is expected to have a total of approximately 77.1 million shares of common stock outstanding, of which Ultranav would own approximately 27.5% and BW Group would own approximately 28.4%. The transaction is subject to the execution of a definitive share purchase agreement, approval by the boards of directors of both Navigator and Ultragas, regulatory approvals and other customary closing conditions. The parties anticipate closing the transaction by the end of the second quarter of 2021. There can be no assurance that a definitive share purchase agreement relating to the transaction will be executed or that the transaction will be completed on the terms anticipated or at all. |
Summary of Significant Accounting Policies (Policies) |
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Basis of Presentation | (a) Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries (See Note 8—Group Subsidiaries to our consolidated financial statements) and Variable Interest Entities (“VIE”) for which the Company is a primary beneficiary are also consolidated (See Note 9—Variable Interest Entities to our consolidated financial statements). All intercompany accounts and transactions have been eliminated in consolidation. As of December 31, 2019, the Company has consolidated 100% of PT Navigator Khatulistiwa, a VIE for which the Company is deemed to be the primary beneficiary, i.e. it has a controlling financial interest in this entity. The Company owns 49% of the VIE’s common stock, all of its secured debt and has voting control. All economic interests in the residual net assets reside with the Company. A VIE is an entity that in general does not have equity investors with voting rights or that has equity investors that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the right to residual gains or the obligation to absorb losses that could potentially be significant to the VIE. On October 21, 2019, the Company entered into a sale and leaseback to refinance one of its vessels, Navigator Aurora Navigator Aurora While we do not hold any equity investments in this lessor VIE, we have concluded that we are the primary beneficiary of the lessor VIE under U.S. GAAP and accordingly we are required to consolidate this lessor VIE into our financial results. Although consolidated into our results, we have no control over the funding arrangements negotiated by this lessor VIE entity including the interest rates to be applied. In consolidating the lessor VIE into our financial results, we must make assumptions regarding the debt amortization profile and the interest rate to be applied against the lessor VIE’s debt principal. Furthermore, our estimation process is dependent upon the timeliness of receipt and accuracy of financial information provided by the lessor VIE entity. By virtue of the accounting principle of consolidation, transactions between consolidated entities are eliminated and accordingly the sale and leaseback refinancing transaction with OCY Aurora is not shown as a liability in the Company’s consolidated balance sheets, being superseded by the Navigator Aurora Facility between OCY Aurora and Ocean Yield Malta Limited. Please read Note 21—Related Party Transactions to our consolidated financial statements. Under the sale and leaseback transaction we are committed to monthly principal payments until the year five purchase option which include interest payable at a rate of U.S. LIBOR plus 430 basis points per annum. For additional detail refer to Note 9—Variable Interest Entities to our consolidated financial statements. On January 31, 2018, the Company announced the execution of definitive agreements creating a 50/50 joint venture with Enterprise Products Partners L.P. (the “Export Terminal Joint Venture”) to construct and operate an ethylene export marine terminal at Morgan’s Point, Texas on the Houston Ship Channel (the “Marine Export Terminal”). Enterprise Products Partners, L.P. is the sole managing member of the Export Terminal Joint Venture and it is also the operator of the Marine Export Terminal. Interests in joint ventures are accounted for using the equity method. They are recognized initially at cost, which includes capitalized interest. The capitalized interest will be amortized over the useful life of the terminal. Subsequent to initial recognition, the consolidated financial statements will include the Company’s share of the profit or loss and other comprehensive income (“OCI”) of equity-accounted investees, until the date on which joint control ceases. The Export Terminal Joint Venture is organized as a limited liability company and maintains separate ownership accounts, consequently we account for our investment using the equity method as our ownership interest is 50% and we exercise joint control over the investee’s operating and financial policies. We disclose our proportionate share of profits and losses from equity method unconsolidated affiliates in the statement of operations and adjust the carrying amount of our equity method investments on the balance sheet accordingly. In March 2020, the Company collaborated with Pacific Gas Pte. Ltd. and Greater Bay Gas Co. Ltd. to form and manage the Luna Pool. We refer to the Company and Greater Bay Gas Co. Ltd. collectively as the “Pool Participants”. As part of the formation of the Luna Pool, a new entity, Luna Pool Agency Limited, (“Pool Agency”) was established in May 2020. The investment in the Pool Agency created a 50/50 joint venture with Greater Bay Gas Co. Ltd. as outlined by Accounting Standards Codification (“ASC”) 323 – Investments -Equity Method and Joint Ventures (“ASC 323”). The Company’s investment in the Pool Agency is accounted for as an equity investment in accordance with the guidance within ASC 810 – Consolidation and ASC 323. Therefore, we account for our investment using the equity method as our ownership interest is 50% and we exercise joint control over the entity’s operating and financial policies. The year ended December 31, 2020 includes an out of period adjustment in the consolidated statements of operations of an additional $0.5 million in general and administrative costs and a decrease of $0.8 million in interest expense, resulting in an overall decrease in the net loss for the year ended December 31, 2020 of $0.3 million, and in the consolidated balance sheets at December 31, 2020, an increase to the investment in the equity accounted joint ventures of $0.3 million. Management believes this out of period adjustment is not material to the annual consolidated financial statements for the year ending December 31, 2020 or any previously issued financial statements. Collaborative arrangements The Pool Participants manage and participate in the activities of the Luna Pool through an executive committee comprising equal membership from both Pool Participants. Certain decisions made by the executive committee as to the operations of the Luna Pool require the unanimous agreement of both participants with others requiring a majority of votes. At this time we control 66% of the votes. The Company’s wholly owned subsidiary, NGT Services (UK) Limited acts as commercial manager (“Commercial Manager”) to the Luna Pool. Under the pool agreement, the Commercial Manager is responsible, as agent, for the marketing and chartering of the participating vessels, collection of revenues and paying voyage costs such as port call expenses, bunkers and brokers’ commissions in relation to charter contracts, but the vessel owners continue to be fully responsible for the financing, insurance, crewing and technical management of their respective vessels. The Commercial Manager receives a fee based on the net revenues of the Luna Pool, which is levied on the Pool Participants, which was a net amount of $0.2 million, after the elimination of inter group income, for the year ended December 31, 2020, and is presented as other income within our consolidated statements of operations. Pool revenues and expenses within the Luna Pool are accounted for in accordance with ASC 808 – Collaborative Arrangements, when two (or more) parties are active participants in the arrangement and exposed to significant risk and rewards dependent on the commercial success of the activity. Pool earnings (gross earnings of the pool less costs and overheads of the Luna Pool and fees to the Commercial Manager) are aggregated and then allocated to the Pool Participants in accordance with an apportionment for each participant’s vessels multiplied by the number of days each of their vessels are on hire in the pool during the relevant period and therefore the Company is exposed to risk and rewards dependent on the commercial success of the Luna Pool. We have concluded that the Company is an active participant due to its representation on the executive committee and the participation of the Commercial Manager, as is the other Pool Participant. We have presented our share of net income earned under the Luna Pool collaborative arrangement across a number of lines in our consolidated statements of operations. For revenues and expenses earned/incurred specifically by the Company’s vessels and for which we are deemed to be the principal, these are presented gross on the face of our consolidated statements of operations within operating revenues, voyage expenses and brokerage commissions. Our share of pool net revenues generated by the other Pool Participant’s vessels in the Luna Pool collaborative arrangement is presented on the face of our consolidated statements of operations within operating revenues – Luna Pool collaborative arrangements. The other Pool Participant’s share of pool net revenues generated by our vessels in the pool is presented on the face of our consolidated statements of operations within voyage expenses – Luna Pool collaborative arrangements. The portion of the Commercial Manager’s fee which is due from the other Pool Participant is presented on the face of our consolidated statements of operations as other income. The Luna Pool became operational during the quarter ended June 30, 2020. The impact on our consolidated statements of operations for the year ended December 31, 2020, was a recognition of operating revenues from Luna Pool collaborative arrangements of $12.8 million, and voyage expenses from Luna Pool collaborative arrangements of $12.4 million. Adoption of new accounting standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses, which changes the recognition model for the impairment of financial instruments, including accounts receivable, loans and held-to-maturity Using the modified retrospective method, reporting periods beginning after January 1, 2020, are presented under Topic 326 while comparative periods continue to be reported in accordance with previously applicable GAAP and have not been restated. The adoption of Topic 326 did not have a material impact on our consolidated financial statements. The total provision on transition was $0.1 million and has been presented as an adjustment to equity in the consolidated statements of shareholders’ equity. For the amounts calculated for the Current Expected Credit Loss (“CECL”) model for the year ended December 31, 2020, since transition, the Company has recognized an expense in our consolidated statements of operations. As the amount is immaterial, it is presented within general and administration costs rather than as a separate line. For financial assets measured at amortized cost within the scope of Topic 326, we have separately presented on the statements of financial position the allowance for credit losses as a contra-asset that is deducted from the asset’s amortized cost basis. Management has assessed the financial assets that fall under the scope of the new standard and have determined how to apply the model to each one. Cash, cash equivalents and restricted cash as well as insurance debtor amounts are considered to have negligible risk of loss, which management has based on consideration of whether the balances have short-term maturities and whether the counterparty has an investment grade credit rating, limiting any credit exposure, and as such no impairment allowance has been recognized. Trade receivables are presented net of allowances for doubtful debt based on observable events and expected credit losses. At each balance sheet date, all potentially uncollectible accounts are assessed individually for the purpose of determining the appropriate provision for doubtful accounts. The expected credit loss allowance is calculated using loss rates which reflect similar risk characteristics. Management has considered that trade receivables should be split into two pools with similar risk characteristics. Pool 1 consists of freight and recharge receivables for which management has made estimates of losses based on an aging matrix. Pool 2 consists of demurrage receivables where the percentage historical recovery/loss data over the last five years is utilized to model an estimate of expected credit losses. Our trade receivables have short maturities so we have considered that forecasted changes to economic conditions will have an insignificant effect on the estimate of the allowance, except in extraordinary circumstances. Contract assets have been deemed as being at remote risk as there have been no historical contract assets recognized which were not subsequently invoiced to customers and paid. The risk of expected losses for these assets is deemed to be remote and an appropriate percentage of expected losses has been applied to the whole balance. The activity in the allowance for credit losses for financial assets within the scope of ASU 2016-13 for the year ended December 31, 2020 was as follows:
In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses which, amongst other things, clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the new leasing standard, ASC 842 – Leases, which was adopted by the Company on January 1, 2019. The amendments relating to ASU 2016-13, Topic 326, were adopted on January 1, 2020 and did not have a material impact on our consolidated financial statements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments which, amongst other things, clarifies certain aspects of accounting for credit losses, hedging activities and financial instruments respectively. The amendments within ASU 2019-04 have various effective dates of adoption. The amendments relating to Topic 326 and Topic 825 were adopted on January 1, 2020 and did not have a material impact on our consolidated financial statements. The amendments within ASU 2019-04 relating to Topic 815, Derivatives and Hedging were effective from the first annual reporting period beginning after April 25, 2019. The Company adopted the amendments on January 1, 2020. The Company has no derivatives for which hedge accounting has been applied and as such, the amendments contained in this section of ASU 2019-04 are not applicable and there was no impact on our consolidated financial statements on adoption. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief which provides transition relief for entities adopting the credit losses standard, ASU 2016-13. Specifically, ASU 2019-05 amends ASU 2016-13 to allow companies to irrevocably elect, on adoption of ASU 2016-13, the fair value option for financial instruments that were previously recorded at amortized cost, are within the scope of the guidance in ASC 326-20, are eligible for the fair value option under ASC 825-20 and are not held-to-maturity 2019-05 is required to be adopted at the same time as ASU 2016-13. We adopted both ASU 2016-13 and ASU 2019-05 on January 1, 2020. The adoption of this amendment did not have a material impact on our consolidated financial statements or related disclosures. In May 2019, the FASB issued ASU
2019-11, Financial Instruments—Credit Losses (Topic 326): Codification Improvements, which revises certain aspects of the new guidance on Topic 326 for credit losses. Matters addressed in this amendment include purchased credit-deteriorated assets, transition relief for troubled debt restructurings, disclosure relief for accrued interest receivable, and financial assets secured by collateral maintenance provisions. ASU 2019-11 is required to be adopted at the same time as ASU 2016-13. We adopted both ASU 2016-13 and ASU 2019-11 on January 1, 2020 and the adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. |
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Impairment of Vessels | (d) Impairment of Vessels Our vessels are reviewed for impairment when events or circumstances indicate the carrying amount of the vessel may not be recoverable. When such indicators are present, a vessel is tested for recoverability and we recognize an impairment loss if the sum of the future cash flows (undiscounted and excluding interest charges that will be recognized as an expense when incurred) expected to be generated by the vessel over its estimated remaining useful life are less than its carrying value. If we determine that a vessel’s undiscounted cash flows are less than its carrying value, we record an impairment loss equal to the amount by which its carrying amount exceeds its fair value. The new lower cost basis would result in a lower annual depreciation than before the impairment. Considerations in making such an impairment evaluation include comparison of current carrying values to anticipated future operating cash flows, expectations with respect to future operations and other relevant factors. The estimates and assumptions regarding expected cash flows require considerable judgment and are based upon historical experience, financial forecasts and industry trends and conditions. These assumptions are based on historical trends as well as future expectations. Specifically, in estimating future charter rates, management considers estimated daily TCE rates for each vessel over the estimated remaining lives of each of the vessels. We consider rates currently in effect for existing time charters and the estimated daily TCE rates used for unfixed vessels, which were based on the trailing
10-year historical average one-year time charter rates. Recognizing that rates tend to be cyclical, and subject to some volatility based on factors beyond our control, we believe the use of estimates based on the 10-year historical average rates to be appropriate. In addition, our vessels operate in a sector that is relatively young and data beyond 10 years is limited, while rates for one and five year periods would not necessarily include the peaks and troughs of a typical shipping cycle. |
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Drydocking Costs | (e) Drydocking Costs Each vessel is required to be
dry-docked every 30 to 60 months for classification society surveys and inspections of, among other things, the underwater parts of the vessel. These works include, but are not limited to hull coatings, seawater valves, steelworks and piping works, propeller servicing and anchor chain winch calibrations, all of which cannot be performed while the vessels are operating. The Company capitalizes costs associated with the dry-dockings in accordance with ASC 360 – Property, Plant and Equipment, and amortizes these costs on a straight-line basis over the period to the next expected dry-docking. Amortization of dry-docking costs is included in depreciation and amortization in the Consolidated Statements of Operations. Costs incurred during the dry-docking period which relate to routine repairs and maintenance are expensed. Where a vessel is newly acquired, or constructed, a proportion of the cost of the vessel is allocated to the components expected to be replaced at the next drydocking based on the expected costs relating to the next drydocking, which is based on experience and past history of similar vessels. Drydocking costs are included within operating activities on the cashflow statement. |
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Intangible assets | (f) Intangible assets Intangible assets consist of software acquisition and associated costs of software modification to meet the Company’s internal needs. Intangible assets are amortized on a straight-line basis over the expected life of the software license, product or the expected duration that the software is estimated to contribute to the cash flows of the Company, estimated to be five years. Amortization of intangible assets is included in depreciation and amortization in the Consolidated Statements of Operations. Intangible assets are assessed for impairment when and if impairment indicators exist. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value. No impairment has been recognized as of December 31, 2020. Amortization of intangible assets for the year ended December 31, 2020 was $0.09 million (December 31, 2019: $0.07 million) and for succeeding fiscal years is estimated to be $0.08 million (2021), $0.08 million (2022), $0.05 million (2023), $0.03 million (2024) and $0.01 million (2025) . The weighted average amortization period on December 31, 2020 was 2.6 years (December 31, 2019: 2.7 years). |
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Cash, Cash Equivalents and Restricted Cash | (g) Cash, Cash Equivalents and Restricted Cash The Company considers highly liquid investments, such as time deposits and certificates of deposit, with an original maturity of three months or less when purchased, to be cash equivalents. As of December 31, 2019, and 2020 and for the years then ended, the Company had balances in this financial institution in excess of the insured amount. The Company also maintains cash balances in foreign financial institutions outside of the U.S. which are not covered by the Federal Deposit Insurance Corporation. Included within cash, cash equivalents and restricted cash as of December 31, 2020 is an amount of $0.2 million relating to the cash belonging to the lessor VIE that we are required to consolidate under U.S. GAAP (December 31, 2019: $0.8 million). Please read Note 9—Variable Interest Entities to our consolidated financial statements. Amounts included in restricted cash represent those required to be set aside as collateral by a contractual agreement with a banking institution for the forecast future liability on the cross-currency interest rate swap agreement at the reporting date, payable on maturity of our 2018 issued senior secured bonds (“2018 Bonds”). If the Norwegian Kroner depreciates relative to the U.S. Dollar beyond a certain threshold, we are required to place cash collateral with our swap providers. As of December 31, 2020, there was no collateral amount held with the swap provider (December 31, 2019: $1.3 million). The amounts held as collateral within restricted cash are assessed against daily currency movements and are presented as current assets on the Company’s consolidated balance sheets. |
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Financial Instruments—Debt Securities | (h) Financial Instruments—Debt Securities The senior unsecured bonds issued in
(“2020 Bonds”), 2017 Bonds before their redemption in October 2020 and 2018 Bonds are recognized at the net amount of the proceeds received. Subsequent measurement is at amortized cost, net of deferred finance costs. Interest accrued on the 2020 Bonds and the 2018 Bonds is calculated on a 360-day year basis and is included within accrued interest as a current liability. Deferred finance costs are amortized using the effective interest method over the lifetime of the 2020 Bonds and the 2018 Bonds. |
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Accounts Receivable, net | (i) Accounts Receivable, net The Company carries its accounts receivable at cost less an allowance for expected credit losses. As of January 1 and December 31, 2020, the Company evaluated its accounts receivable and established an allowance for expected credit losses, based on a history of past write-offs, collections and current credit conditions. As of December 31, 2020, the Company also considers future and reasonable and supportable forecasts of future economic conditions in its allowance for expected credit losses. The Company does not generally charge interest on
past-due accounts (unless the accounts are subject to legal action), and accounts are written off as uncollectible when all reasonable collection efforts have failed. Accounts are deemed past-due based on contractual terms. |
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Bunkers and lubricant oils | (j) Bunkers and lubricant oils Bunkers and lubricant oils include bunkers (fuel), for those vessels under voyage charter, and lubricants. Under a time charter, the cost of bunkers is borne by and remains the property of the charterer. Bunkers and lubricant oils are accounted for on a first in, first out basis and are valued at cost. |
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Deferred Finance Costs | (k) Deferred Finance Costs Costs incurred in connection with obtaining secured term loan facilities, revolving credit facilities and bonds are recorded as deferred financing costs and are amortized to interest expense over the estimated duration of the related debt. Such costs include fees paid to the lenders or on the lenders’ behalf and associated legal and other professional fees. Under the Accounting Standards Update (ASU) 2015- 03, Interest—Imputation of Interest the Company has adopted the accounting standard (Subtopic
835-30)—simplifying the presentation of debt issuance cost to present the unamortized debt issuance costs, excluding up front commitment fees, as a direct reduction of the carrying value of the debt. Deferred financing costs related to undrawn debt are presented as assets on our consolidated balance sheets and amortized using the straight-line method. Following a loan refinancing assessed as a modification, any unamortized issuance costs related to the refinanced facility will continue to be amortized over the new term of the loan using the effective interest rate method. |
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Deferred Income | (l) Deferred Income Deferred income is the balance of cash received in excess of revenue earned under a time charter or voyage charter arrangement as of the balance sheet date. |
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Revenue Recognition | (m) Revenue Recognition The Company receives its revenue streams from three different sources; voyage or ‘spot’ charters; contracts of affreightment (“COA”), and time charters. Voyage charter and COA arrangements In the case of vessels contracted under voyage charters, the vessel is contracted for a voyage, or a series of voyages, between two or more ports and the Company is paid for the cargo transported. Revenue from COAs is recognized on the same basis as revenue from voyage charters, as they are essentially a series of consecutive voyage charters. Payment from voyage charters and COAs is due upon discharge of the cargo at the discharge port. Since January 1, 2018, following adoption of ASU No. 2014-09, Revenue from Contracts with Customers, (“Topic 606”), our basis for revenue recognition for voyage charters and COAs has changed to recognize revenue on a load port to discharge port basis and determined percentage of completion for all voyage charters and COAs on a time elapsed basis. The Company believes that the performance obligation towards the customer starts to become satisfied once the cargo is loaded and the obligation becomes completely satisfied once the cargo has been discharged at the discharge port. Under this revenue recognition standard, the Company has identified certain costs incurred to fulfill a contract with a charterer, which are costs incurred following the commencement of a contract or charter party but before the loading of the cargo commences. These directly related costs are generally fuel or any canal or port costs incurred to get the vessel from its position at inception of the contract to the load port to commence loading of the cargo. These costs are deferred and amortized over the duration of the performance obligation on a time basis. Voyage charters and COAs have an expected duration of one year or less. The Company has applied optional exemptions on adoption of the new revenue standard, as set out in Topic 606-10-50-14 that are unsatisfied (or partially unsatisfied) as at the balance sheet date and the expectation of when the Company expects to recognize these amounts. Prior to the adoption of Topic 606, under a voyage charter or a COA the revenue was recognized on a discharge-to-discharge Time charter arrangements For vessels contracted under time charters, the arrangements are for a specified period of time. The Company receives a fixed charter rate per on-hire day which is payable monthly in advance and revenue is recognized ratably over the term of the charter. Within our time charter arrangements key decisions concerning the use of the vessel during the duration of the time charter period reside with the charterer. We are responsible for the crewing, maintenance and insurance of the vessel, and the charterer is generally responsible for voyage specific costs, which typically include bunkers and port/canal costs. As the charterer holds rights to determine how and when the vessel is used and is also responsible for voyage specific costs incurred during the voyage, the charterer derives the economic benefits from the use of the vessel, as control over the use of the vessel is transferred to the charterer during the specified time charter period. Time charters are therefore considered operating leases and since January 1, 2019 we apply the lease income recognition guidance in ASC 842 – Leases following the adoption of that standard. In addition, the Company has performed a qualitative analysis of each of its time charter contracts and concluded that the lease component is the predominant component as the charterer would attribute most value to the ability to direct the use of the vessel rather than to the technical and crewing services to operate the vessel which are add-on services. Accordingly, revenue from vessels under time charter arrangements is presented as a single lease component. For each year presented prior to January 1, 2019, we recognized revenue for time charters as operating leases under the previous leasing standard, ASC 840, and recorded time charter revenue ratably over the term of the charter. |
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Other Comprehensive Income / (Loss) | (n) Other Comprehensive Income / (Loss) The Company follows the provisions of ASC 220 – Comprehensive Income, which requires separate presentation of certain transactions, which are recorded directly as components of stockholders’ equity. Comprehensive income is comprised of net income/(loss) and foreign currency translation gains and losses. |
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Voyage Expenses and Vessel Operating Expenses | (o) Voyage Expenses and Vessel Operating Expenses When the Company employs its vessels on time charter, it is responsible for all the operating expenses of the vessels, such as crew costs, stores, insurance, repairs and maintenance. In the case of voyage charters, the vessel is contracted only for a voyage between two or more ports, and the Company pays for all voyage expenses in addition to the vessel operating expenses. Voyage expenses consist mainly of
in-port expenses, canal fees and bunker (fuel) consumption and are recognized as incurred during the performance obligation (the period of time from load to discharge) of the vessel. The Company has identified certain voyage costs incurred to fulfill a contract with a charterer, which are costs incurred following the commencement of a contract or charter party but before the loading of the cargo commences. These directly related costs are generally fuel or any canal or port costs to get the vessel from its position at inception of the contract to the load port to commence loading of the cargo. These costs are deferred and amortized over the duration of the performance obligation on a time basis. |
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Repairs and Maintenance | (p) Repairs and Maintenance All expenditures relating to routine maintenance and repairs are expensed when incurred. |
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Insurance | (q) Insurance The Company maintains hull and machinery insurance, war risk insurance, protection and indemnity insurance coverage, increased value insurance, demurrage and defense insurance coverage in amounts considered prudent to cover normal risks in the ordinary course of its operations. Premiums paid in advance to insurance companies are recognized as prepaid expenses and recorded as a vessel operating expense over the period covered by the insurance contract. In addition, the Company maintains Directors and Officers insurance. When the Company has enforceable insurance in place, a receivable is recognized for an insured event if realization is probable. We apply judgement that an insurance recovery is probable when the insurer has confirmed that a claim is covered by insurance, the claim has been successful, and an amount will be paid to the Company. If the insurance receivable realization is probable, the receivable is measured as the lesser of (a) the recognized loss from the insurance event or (b) the probable recovery from the insurer. Subsequent receipt of the receivable is typically within a twelve month period, and insurance receivables are classified as current on our consolidated balance sheets. If the recoverability of the insurance claim is subject to dispute there is a rebuttable presumption that realization is not probable. |
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Share-Based Compensation | (r) Share-Based Compensation The Company records as an expense in its financial statements the fair value of all equity-settled stock-based compensation awards. The terms and vesting schedules for share-based awards vary by type of grant. Generally, the awards vest subject to time-based (immediate to three years) service conditions. Compensation expense is recognized ratably over the service period. |
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Critical Accounting Estimates | (s) Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For a description of our material accounting policies, please read Note 2—Summary of Significant Accounting Policies to our consolidated financial statements. |
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Foreign Currency Transactions | (t) Foreign Currency Transactions Substantially all of the Company’s cash receipts are in U.S. Dollars. The Company’s disbursements, however, are in the currency invoiced by the supplier. The Company remits funds in the various currencies invoiced. The non U.S. Dollar invoices received, and their subsequent payments, are converted into U.S. Dollars when the transactions occur. The movement in exchange rates between these two dates is transferred to an exchange difference account and is expensed each month. The exchange risk resulting from these transactions is not material. The primary source of our foreign exchange gains and losses are the movements on our Norwegian Kroner denominated 2018 Bonds. The 2018 Bonds are translated into U.S. Dollars at each reporting date at the prevailing exchange rate at the end of the period. The movement in the foreign exchange rates between each reporting date will result in a foreign exchange gain or loss on the 2018 Bonds, which is shown as a single line on the face of the statement of operations. The foreign currency exchange loss on the 2018 Bonds for the year ended December 31, 2020, was $1.9 million, compared to December 31, 2018 and 2019 when the foreign currency exchange gain on the 2018 Bonds was $2.4 million and $1.0 million, respectively. The aggregate amount of all foreign exchange movements recorded in net income for the year ended December 31, 2020, was a $1.7 million loss compared to a $0.8 million gain for the year ended December 31, 2019 and a $2.2 million gain for the year ended December 31, 2018. The movement was primarily as a result of the foreign currency translation, at the prevailing exchange rate, of the 2018 Bonds mentioned in the previous paragraph. |
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Derivative instruments | (u) Derivative instruments Derivative instruments are initially recorded at fair value as either assets or liabilities in the accompanying balance sheet and subsequently remeasured to fair value at each reporting
d ate, regardless of the purpose or intent for holding the derivative. The resulting derivative assets or liabilities are shown as a single line and are not net off against one another on the face of the balance sheet. The method of recognizing the resulting gain or loss is dependent on whether the derivative contract qualifies for hedge accounting and has been designated as a hedging instrument. For derivative instruments that are not designated or that do not qualify as hedging instruments under ASC 815 – Derivatives and Hedging, the liability has been recognized as ‘Derivative liabilities’ on the balance sheet and changes in the fair value of the derivative financial instruments are recognized in earnings. Gains and losses from the Company’s non-designated cross-currency interest rate swap agreement and interest rate swap agreements are recorded in unrealized (losses)/gains on non-designated derivative instruments in the Company’s consolidated statements of operations but do not impact our cash flows. |
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Income Taxes | (v) Income Taxes Navigator Holdings Ltd. and its Marshall Islands subsidiaries are currently not required to pay income taxes in the Marshall Islands on ordinary income or capital gains as they qualify as exempt companies. The Company has four wholly owned subsidiaries incorporated in the United Kingdom where the base tax rate is 19%. These subsidiaries provide services to affiliated entities within the group. The Company has a subsidiary in Poland where the base tax rate is 19%. The subsidiary earns management fees from fellow subsidiary companies. The Company has a subsidiary incorporated in Singapore where the base tax rate is 17%. The subsidiary earns management and other fees and receives interest from a VIE, PT Navigator Khatulistiwa. The VIE is subject to Indonesian freight tax on all of its gross shipping transportation revenue at a rate of 1.2%. The Company has consolidated a VIE incorporated in Malta where the base tax rate is 35%. This VIE is the lessor entity for the sale and leaseback of Navigator Aurora The Company considered the income tax disclosure requirements of ASC 740 – Income Taxes, with regard to disclosing material unrecognized tax benefits; none were identified. The Company’s policy is to recognize accrued interest and penalties for unrecognized tax benefits as a component of tax expense. As of December 31, 2019, and 2020, there were no accrued interest and penalties for unrecognized tax benefits. Deferred taxation Deferred income tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statements and tax basis of existing assets and liabilities using enacted rates applicable to the periods in which the differences are expected to affect taxable income . Deferred income tax balances included on the consolidated balance sheets reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. The recoverability of these future tax deductions is evaluated by assessing the adequacy of future taxable income, including the reversal of temporary differences and forecasted operating earnings. If it is deemed more likely than not that the deferred tax assets will not be realized, the Company provides for a valuation allowance. |
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Earnings Per Share | (w) Earnings Per Share Basic earnings per common share (“Basic EPS”) is computed by dividing the net income/(loss) available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per common share (“Diluted EPS”) are computed by dividing the net income available to common stockholders by the weighted average number of common shares and dilutive common share equivalents then outstanding. Shares granted pursuant to the 2013 Restricted Stock Plan are the only dilutive shares, and these shares have been considered as outstanding since their respective grant dates for purposes of computing diluted earnings per share. These shares were antidilutive in the years ended December 31, 2018, 2019 and 2020 and thus not included in the calculation of diluted EPS in the last three years. |
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Related parties | (x) Related parties Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or significant influence. |
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Segment Reporting | (y) Segment Reporting Although separate vessel financial information is available, management internally evaluates the performance of the enterprise as a whole and not on the basis of separate business units or different types of charters. As a result, the Company has determined that it operates as one reportable segment. Since the Company’s vessels regularly move between countries in international waters over many trade routes, it is impractical to assign revenues or earnings from the transportation of international LPG and petrochemical products by geographic area. Other than three vessels involved in cabotage within Indonesia for the years ended December 31, 2020 and 2019, our vessels operate on a worldwide basis and are not restricted to specific locations. As disclosed in Note 5—Revenue to our consolidated financial statements, there are two different revenue streams due to the nature of the contracts that we operate. The Company considers the equity accounted joint ventures do not meet the criteria in ASC 280 to be separate reportable segments. |
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Recent Accounting Pronouncements | (z) Recent Accounting Pronouncements The following accounting standards issued as of May 14, 2021, may affect the future financial reporting by Navigator Holdings Ltd: On December 18, 2019, the FASB issued ASU 2019-12, which modifies ASC 740 – Income Taxes (“Topic 740”) to simplify the accounting for income taxes, by removing certain exceptions to the general principles in Topic 740 and improve consistent application by clarifying and amending existing guidance. The amendments to this standard are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued, with the amendments to be applied on a retrospective, modified retrospective or prospective basis, depending on the specific amendment. We adopted the new standard with effect from January 1, 2021, and the adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815. The amendments in ASU 2020-01 make improvements related to the accounting for (1) an equity security under the measurement alternative before application or after discontinuation of the equity method of accounting and (2) forward contracts and purchased options to acquire an equity instrument that will be accounted for under Topic 323. The guidance is effective for annual and interim periods beginning after December 15, 2020 for public business entities and an entity may early adopt the guidance in any annual or interim period after issuance. We adopted the new standard with effect from January 1, 2021, and the adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848)—Reference Rate Reform on Financial Reporting. The amendments provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies to contracts that reference LIBOR or another reference rate expected to be terminated because of reference rate reform. This optional guidance may be applied prospectively from any date beginning March 12, 2020 but cannot be applied to modifications that occur after December 31, 2022. We do not currently have any contracts that have been changed to a new reference rate, but we will continue to evaluate our contracts and the effects of this standard on our consolidated financial position, results of operations, and cash flows prior to adoption. In August 2020, the FASB issued ASU
2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)”, which provides guidance to simplify the issuer’s accounting for convertible debt instruments and, among other changes, eliminates some of the conditions for equity classification in for contracts in an entity’s own equity and requires enhanced disclosures surrounding the terms and features of convertible instruments. The guidance is effective for annual periods beginning after December 15, 2021 and interim periods within that annual period for public business entities and an entity may early adopt the guidance for annual periods beginning after December 15, 2020. We plan to adopt these amendments on January 1, 2022 and we do not expect this ASU to have a significant impact on our consolidated financial statements and disclosures, as we currently have no convertible debt instruments. |
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Vessels [Member] | |||||||||||||||||||||||||||||||||||||||||
Vessels | (b) Vessels Vessels are stated at cost, which includes the cost of construction, capitalized interest and other direct costs attributable to the construction. The cost of the vessels (excluding the estimated initial drydocking cost) less their estimated residual value is depreciated on a straight-line basis over the vessel’s estimated useful life. Management estimates the useful life of each of the Company’s vessels to be 30 years from the date of its original construction. |
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Vessels Under Construction [Member] | |||||||||||||||||||||||||||||||||||||||||
Vessels | (c) Vessels Under Construction Vessels under construction are stated at cost, which includes the cost of construction, capitalized interest and other direct costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use. |
Summary of Significant Accounting Policies (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Summary of allowance for credit losses for financial assets | The activity in the allowance for credit losses for financial assets within the scope of ASU 2016-13 for the year ended December 31, 2020 was as follows:
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Derivative Instruments Accounted for at Fair Value (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Fair Value and Carrying Value of Assets and Liabilities Measured at Fair Value on Recurring Basis, Non-recurring Basis | The following table includes the estimated fair value of those assets and liabilities that are measured at fair value on a recurring basis as at December 31, 2019 and 2020.
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Fair Value of Financial Instruments Not Accounted For at Fair Value (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Fair Value and Carrying Value of Assets and Liabilities Measured at Fair Value on Recurring Basis, Non-recurring Basis | The following table includes the estimated fair value and carrying value of those assets and liabilities where the fair value does not approximate to carrying value. The table excludes cash, cash equivalents and restricted cash, accounts receivable, accounts payable, accrued expenses and other liabilities because the fair value approximates carrying value and, for accounts receivable and payable, are due in one year or less.
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Operating Revenues (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Operating Revenue by Source of Revenue Stream | The following table compares our operating revenues by the source of revenue stream for the years ended December 31, 2018, 2019 and 2020:
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Committed Time Charter Income | The estimated undiscounted cash flows for committed time charter revenue expected to be received on an annual basis for ongoing time charters, as of each December 31, is as follows:
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Vessels, net (Tables) |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels |
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Investment in Equity Accounted Joint Venture (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Participation in Investments That Are Accounted For Using The Equity Method | As at December 31, 2019 and 2020, we had the following participation in investments that are accounted for using the equity method:
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Schedule of Investments in Equity Accounted Joint Venture | The table below represents the Company’s investment into the Export Terminal Joint Venture, pursuant to which the Company has a 50% economic interest in building and operating the Marine Export Terminal, as of December 31, 2019 and 2020:
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Group Subsidiaries (Tables) |
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Schedule of Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Group Subsidiaries | As of December 31, 2019, and 2020, the company had the following significant subsidiaries:
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Variable Interest Entities (Tables) |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities of the Lessor VIE | The assets and liabilities of the lessor VIE that most significantly impact the Company’s consolidated balance sheets and the financial statement line items in which they are presented, as of December 31, 2019 and 2020, are as follows:
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Secured Term Loan Facilities and Revolving Credit Facilities (Tables) |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Annual Principal Payments to Term Loans and Revolving Credit Facilities | The table below represents the annual principal payments to be made under our term loans and revolving credit facilities after December 31, 2019 and 2020:
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Schedule of Breakdown of Secured Term Loan Facilities and Total Deferred Financing Costs Split Between Current and Non-Current Liabilities | The following table shows the breakdown of secured term loan facilities and total deferred financing costs split between current and non-current liabilities as of December 31, 2019 and 2020:
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Senior Secured Bonds [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Breakdown of Secured Term Loan Facilities and Total Deferred Financing Costs Split Between Current and Non-Current Liabilities | The following table shows the breakdown of our senior secured bond and total deferred financing costs as of December 31, 2019 and 2020:
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2020 Senior Unsecured Bonds [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Breakdown of Secured Term Loan Facilities and Total Deferred Financing Costs Split Between Current and Non-Current Liabilities | The following table shows the breakdown of our senior unsecured bonds and total deferred financing costs as of December 31, 2019 and 2020:
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Earnings per Share (Tables) |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Number of Weighted Average Outstanding Shares | The following table shows calculation of both basic and diluted number of weighted average outstanding shares for the years ended December 31, 2018, 2019 and 2020:
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Share-Based Compensation (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Grant Activity | Restricted share grant activity for the year ended December 31, 2019 and 2020 was as follows:
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Summary of Stock Option Activity | The movements in the existing share options during the years ended December 31, 2019 and 2020 were as follows:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Contractual Obligations | The contractual obligations schedule set forth below summarizes our contractual obligations as of December 31, 2020:
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Operating Lease Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity Analysis of The Undiscounted Cash Flows of The Company's Operating Lease Liabilities | A maturity analysis of the undiscounted cash flows of the Company’s operating lease liabilities as at December 31, 2019 and 2020 is presented in the following table:
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Income Tax Reconciliation | However, the Company’s UK, Polish and Singaporean subsidiaries and Maltese VIE (please read Note 9—Variable Interest Entities to our consolidated financial statements) are subject to local taxes.
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Summary of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2019 and 2020 are in the following table.
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Cash, Cash Equivalents and Restricted Cash (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of breakdown of cash, cash equivalents and restricted cash | The following table shows the breakdown of cash, cash equivalents and restricted cash as of December 31, 2019 and 2020:
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Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Related Party Transactions Income Expenses | The following table summarizes our transactions with related parties for the years ended December 31, 2019 and 2020:
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Schedule Of Balances Due To And From Related Parties | The following table sets out the balances with related parties as at December 31, 2019 and 2020:
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Luna Pool Agency Limited [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Of Operating Results On Account Of Related Party Transactions | The following table summarizes our net income generated from our participation in the Luna Pool for the year ended December 31, 2020:
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Disclosure Details Of Balance Due From To Related Parties | The Company’s related party balances with the Pool Agency consisted of the following at December 31, 2020:
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Ocean Yield Malta Limited [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Of Operating Results On Account Of Related Party Transactions | The Company’s related party transactions with Ocean Yield Malta Limited consisted of the following for the years ended December 31, 2019 and 2020:
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Disclosure Details Of Balance Due From To Related Parties | The Company’s related party balances with Ocean Yield Malta Ltd. consisted of the following as at December 31, 2019 and 2020:
|
Summary of Significant Accounting Policies - Summary of allowance for credit losses for financial assets (Detail) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Allowance recognized on transition | $ 151 |
Current period provision for expected credit losses | 10 |
Ending balance as of December 31, 2020 | $ 161 |
Derivative Instruments Accounted for at Fair Value - Schedule of Estimated Fair Value and Carrying Value of Assets and Liabilities Measured at Fair Value on Recurring Basis, Non-recurring Basis (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Cross Currency Interest Rate Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Asset (Liability) | $ (2,896) | $ (5,769) |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Asset (Liability) | $ (111) |
Operating Revenues - Summary of Operating Revenue by Source of Revenue Stream (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Operating revenue | |||
Operating revenue | $ 332,495 | $ 301,385 | $ 310,046 |
Time Charters [Member] | |||
Operating revenue | |||
Operating revenue | 177,762 | 168,641 | 168,500 |
Time Charters [Member] | Luna Pool Agency Limited [Member] | |||
Operating revenue | |||
Operating revenue | 606 | ||
Voyage Charters [Member] | |||
Operating revenue | |||
Operating revenue | 141,903 | $ 132,744 | $ 141,546 |
Voyage Charters [Member] | Luna Pool Agency Limited [Member] | |||
Operating revenue | |||
Operating revenue | $ 12,224 |
Operating Revenues - Summary of Time Charter Revenues (Detail) - Time Charter [Member] $ in Thousands |
Dec. 31, 2020
USD ($)
|
|||
---|---|---|---|---|
Concentration Risk [Line Items] | ||||
2021: | $ 125,714 | [1] | ||
2022: | 60,065 | |||
2023: | 48,452 | |||
2024: | 21,516 | |||
2025: | 21,480 | |||
2026 onwards: | $ 25,578 | |||
|
Operating Revenues - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Deferred income | $ 11,604 | $ 14,154 |
Revenue, performance obligation, description of timing | the Company’s 38 operated vessels, were subject to time charters, eleven of which will expire within one year, six which will expire within three years, and two which will expire after more than five years from the balance sheet date. | the Company’s 38 operated vessels, were subject to time charters, 18 of which will expire within one year, three which will expire within three years, and four which will expire after more than five years from the balance sheet date). |
Accounts Receivable Net | $ 14,451 | $ 23,462 |
Accounting Standards Update 2014-09 [Member] | ||
Contract Assets | 8,400 | 1,800 |
Contracts Of Affreightment [Member] | ||
Deferred income | 11,400 | 4,400 |
Accounts Receivable Net | 7,700 | 4,200 |
Voyage Charters [Member] | ||
Deferred income | 1,600 | 3,000 |
Accounts Receivable Net | 4,200 | 3,300 |
Cargo Commences [Member] | ||
Contract Costs Incurred In Advance | 1,500 | 1,300 |
Cargo Commences [Member] | Accounting Standards Update 2014-09 [Member] | ||
Deferred income | $ 10,000 | $ 11,200 |
Vessels, net - Additional Information (Detail) $ in Thousands |
Dec. 31, 2020
USD ($)
Vessels
|
Dec. 31, 2019
USD ($)
Vessels
|
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 502 | $ 793 |
Variable Interest Entities [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, cost | 82,900 | 82,900 |
Property, plant and equipment, net | 71,000 | 73,700 |
Time Charter Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, cost | 1,084,000 | 1,374,000 |
Property, plant and equipment, net | $ 839,000 | $ 1,053,000 |
Number of vessels contracted | Vessels | 19 | 25 |
Collateralized Loan Obligations [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 1,359,000 | $ 1,413,000 |
Investment in Equity Accounted Joint Ventures - Schedule of Participation in Investments That Are Accounted For Using The Equity Method (Detail) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Enterprise Navigator Ethylene Terminals L.L.C. [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, ownership percentage | 50.00% | 50.00% |
Luna Pool Agency Limited [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, ownership percentage | 50.00% |
Investment in Equity Accounted Joint Venture - Summary of Investment in Equity Accounted Joint Venture (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Schedule of Equity Method Investments Joint Ventures [Line Items] | |||
Investment in equity accounted joint venture, beginning balance | $ 130,660 | $ 42,462 | |
Equity contributions to joint venture entity | 17,000 | 84,500 | |
Share of results | 651 | (1,126) | $ (38) |
Capitalized interest and deferred financing costs | 354 | 4,824 | |
Investment in equity accounted joint venture, ending balance | $ 148,665 | $ 130,660 | $ 42,462 |
Variable Interest Entities - Schedule of Assets and Liabilities of the Lessor VIE (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets [Abstract] | ||
Cash, cash equivilents and restricted cash | $ 59,271 | $ 66,130 |
Liabilities [Abstract] | ||
Amounts due to related parties, current | (229) | (451) |
Amounts due to related parties, non current | (61,219) | (68,055) |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Assets [Abstract] | ||
Cash, cash equivilents and restricted cash | 215 | 796 |
Liabilities [Abstract] | ||
Amounts due to related parties, current | (229) | (451) |
Amounts due to related parties, non current | (61,361) | (68,206) |
Due to Related Parties | $ (61,590) | $ (68,657) |
Variable Interest Entities - Additional Information (Detail) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Oct. 21, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Line of Credit Facility [Line Items] | ||||
Sale value of property | $ 77,500 | |||
Proceeds from sale of property in percent to sale value | 90.00% | |||
Proceeds from sale of property in value to sale value | $ 69,750 | |||
Credit from sale of property in percent to sale value | 10.00% | |||
Repayment of secured debt | $ 44,500 | $ 1,939 | $ 1,448 | $ 38 |
Bareboat charter agreement period | 13 years | |||
Bareboat charter agreement description | the Company entered into a bareboat charter for the vessel for a period of up to 13 years, with purchase options at years 5, 7 and 10. | the Company entered into a bareboat charter for the vessel for a period of up to 13 years, with purchase options at years 5, 7 and 10. | ||
Variable interest entity, consolidated, carrying amount, assets | $ 1,839,408 | 1,874,253 | ||
Variable interest entity, consolidated, carrying amount, liabilities | 897,013 | 934,351 | ||
Interest Expense | 41,080 | 48,611 | $ 44,908 | |
Proceeds from Related Party Debt | $ 69,052 | |||
Variable Interest Entity, consolidated | 100.00% | |||
Payments to Acquire Businesses, Gross | 44,800 | |||
Common Stock [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable Interest Entity, consolidated | 49.00% | |||
Ocean Yield Arora Ltd [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest entity, consolidated, carrying amount, assets | 63,500 | $ 69,100 | ||
Variable interest entity, consolidated, carrying amount, liabilities | 61,700 | 69,000 | ||
Variable Interest Entity, Primary Beneficiary [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest entity, consolidated, carrying amount, assets | 125,900 | 123,100 | ||
Variable interest entity, consolidated, carrying amount, liabilities | 9,500 | 20,400 | ||
Interest Expense | 1,800 | 500 | ||
Proceeds from Related Party Debt | $ 6,800 | $ 69,100 | ||
Variable Interest Entity, Primary Beneficiary [Member] | PT Navigator Khatulistiwa [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable Interest Entity, consolidated | 100.00% | 100.00% |
Secured Term Loan Facilities and Revolving Credit Facilities - Schedule of Annual Principal Payments to Term Loans and Revolving Credit Facilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Maturities of Long-term Debt [Abstract] | ||||
Due within one year | $ 67,936 | $ 66,534 | ||
Due in two years | 124,479 | 66,534 | ||
Due in three years | 202,353 | 259,053 | ||
Due in four years | 175,413 | 193,078 | ||
Due in five years | 54,388 | 9,150 | ||
Due in more than five years | [1] | 61,361 | 122,593 | |
Total | 685,930 | 716,942 | ||
Less: current portion | 67,936 | 66,534 | ||
Secured term loan facilities and revolving credit facility, non-current portion | [1] | $ 617,994 | $ 650,408 | |
|
Secured Term Loan Facilities and Revolving Credit Facilities - Additional Information (Detail) |
1 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 17, 2020
USD ($)
|
Aug. 04, 2020
USD ($)
|
Mar. 28, 2019
USD ($)
|
Mar. 25, 2019
USD ($)
|
Oct. 28, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Jan. 27, 2015
USD ($)
|
Oct. 31, 2019
USD ($)
|
Oct. 21, 2019
USD ($)
|
Dec. 31, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
Repayments
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Dec. 23, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2017
USD ($)
|
|
Debt Instrument [Line Items] | |||||||||||||||||
Cash balance required | $ 59,056,000 | $ 59,056,000 | $ 64,024,000 | ||||||||||||||
Aggregate fair value of collateral vehicles required for borrowings under facility | 125.00% | ||||||||||||||||
Debt instrument covenant description | financial covenants (each as defined within the bond agreement governing the 2020 Bonds (the “2020 Bond Agreement”)) are: (a) The issuer shall ensure that the Group (meaning “the Company and its subsidiaries”) maintains a minimum liquidity of no less than $35.0 million; and (b) maintain a Group equity ratio (as defined in the 2020 Bond Agreement) of at least 30%. As of December 31, 2020, the Company was in compliance with all covenants for the 2020 Bonds | The 2020 Bond Agreement provides that we may declare or pay dividends to shareholders provided that the Company maintains a minimum liquidity of $60.0 million unless an event of default has occurred and is continuing. The 2020 Bond Agreement also limits us and our subsidiaries from, among other things, entering into mergers and divestitures, engaging in transactions with affiliates or incurring any additional liens which would have a material adverse effect. In addition, the 2020 Bond Agreement includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, false representation and warranty, a cross-default to other indebtedness, the occurrence of a material adverse effect, or our insolvency or dissolution. | |||||||||||||||
Cash required as percent of indebtedness | 5.00% | ||||||||||||||||
Commitment fee on credit facility | 0.91% | ||||||||||||||||
Credit facility, remaining borrowing capacity | $ 37,600,000 | $ 37,600,000 | |||||||||||||||
Sale value of property | $ 77,500,000 | ||||||||||||||||
Proceeds from sale of property in value to sale value | $ 69,750,000 | ||||||||||||||||
Credit from sale of property in percent to sale value | 10.00% | ||||||||||||||||
Proceeds from sale of property in percent to sale value | 90.00% | ||||||||||||||||
Repayment of secured debt | $ 44,500,000 | 1,939,000 | 1,448,000 | $ 38,000 | |||||||||||||
Restricted Payment | 0 | 0 | $ 20,000,000 | ||||||||||||||
Ethylene Marine Export Terminal [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, amount outstanding | $ 500,000 | 500,000 | |||||||||||||||
ASC 47050 [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Description Of Debt Modification Conditions | ASC 470-50—Debt Modifications states that a liability is considered to have been extinguished if either a) the debtor pays the creditor and is relieved of the obligation for the liability or b) the debtor is legally released from being the primary obligator under the liability either judicially or by the creditor | ||||||||||||||||
Revolving Credit Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, amount outstanding | $ 34,000,000.0 | 34,000,000.0 | |||||||||||||||
Drawdowns under the credit facility | $ 51,000,000.0 | ||||||||||||||||
Terminal Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Description Of Debt Modification Conditions | Under the Terminal Facility, the Marine Terminal Borrower must maintain a minimum debt service coverage ratio (as defined in the Terminal Facility) for the prior four calendar fiscal quarters (or shorter period of time if data for the prior four fiscal quarters is not available) of no less than 1.10 to 1.00 from the beginning of the second full fiscal quarter of the term loan, being June 1, 2021. | ||||||||||||||||
Proceeds from Issuance of Long-term Debt | $ 51,000,000.0 | ||||||||||||||||
Debt instrument variable rate description | U.S. LIBOR plus 250 to 300 basis points | ||||||||||||||||
Line Of Credit Repayment Commencing Period | Mar. 31, 2021 | ||||||||||||||||
Debt Instrument Covenant Description For Dividends Payments | the Marine Terminal Borrower can only pay dividends if the Marine Terminal Borrower satisfies certain customary conditions to paying a dividend, including maintaining a debt service coverage ratio for the immediately preceding four consecutive fiscal quarters and the projected immediately succeeding four consecutive fiscal quarters of not less than 1.20 to 1.00 and no default or event of default has occurred or is continuing. | ||||||||||||||||
Early True Up Of Line Of Credit | $ 34,000,000.0 | ||||||||||||||||
Line Of Credit Additional Borrowing Capacity | 18,000,000.0 | $ 18,000,000.0 | |||||||||||||||
Terminal Facility [Member] | ING Capital LLC And SG America Securities [Member] | Ethylene Marine Export Terminal [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility term | 5 years | ||||||||||||||||
Credit facility, maximum borrowing capacity | 75,000,000.0 | $ 75,000,000.0 | |||||||||||||||
Date of commencement of the terminal credit facility | Mar. 29, 2019 | ||||||||||||||||
Terminal Facility [Member] | ING Capital LLC And SG America Securities [Member] | Ethylene Marine Export Terminal [Member] | Maturity Of Debt Time Two [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Expiration date of line of credit facility | Dec. 31, 2025 | ||||||||||||||||
Terminal Facility [Member] | ASC 47050 [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Description Of Debt Modification Conditions | ASC 470-50—Debt Modifications states that if an amendment to the terms of a loan results in the present value of future cash flows being modified by more than 10%, it is considered to have ‘substantially different terms’ from the original loan and is accounted for as a debt extinguishment and the new loan treated as the issuance of new debt. The 10% cash flow test was performed by management after both amendments, and it was concluded that the present value of future cash flows was not modified by more than 10% as a result of the amendments. | ||||||||||||||||
Minimum [Member] | Terminal Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Basis spread on credit facility interest rate | 250.00% | ||||||||||||||||
Credit facility, final payment | $ 3,400,000 | ||||||||||||||||
Maximum [Member] | Terminal Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Basis spread on credit facility interest rate | 300.00% | ||||||||||||||||
Credit facility, final payment | $ 3,800,000 | ||||||||||||||||
April 2013 Loan Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, refinancing | $ 120,000,000.0 | ||||||||||||||||
January 2015 Secured Term Loan Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility term | 7 years | 7 years | |||||||||||||||
Credit facility, maximum borrowing capacity | $ 278,100,000 | ||||||||||||||||
Credit facility, amount outstanding | 99,800,000 | $ 99,800,000 | |||||||||||||||
January 2015 Secured Term Loan Facility [Member] | Minimum [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, periodic payment | 0.5 | ||||||||||||||||
Credit facility, final payment | 15,600,000 | ||||||||||||||||
Aggregate fair value of collateral vehicles required for borrowings under facility | 135.00% | ||||||||||||||||
January 2015 Secured Term Loan Facility [Member] | Maximum [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, periodic payment | 0.6 | ||||||||||||||||
Credit facility, final payment | 18,300,000 | ||||||||||||||||
December 2015 Secured Revolving Credit Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, maximum borrowing capacity | $ 290,000,000.0 | ||||||||||||||||
Cash balance required | 25,000,000.0 | $ 25,000,000.0 | |||||||||||||||
Debt instrument covenant description | The financial covenants each as defined within the credit facility are: a) the maintenance at all times of cash and cash equivalents in an amount equal to or greater than (i) $25.0 million and (ii) 5 per cent of the total indebtedness; b) a ratio of EBITDA to interest expense of not less than 2:1 up to and including September 30, 2020, after which it will revert to 3:1; and c) maintain a ratio of total stockholders’ equity to total assets of not less than 30%. | ||||||||||||||||
Commitment fee on credit facility | 0.74% | ||||||||||||||||
Proceeds from sale of property in percent to sale value | 90.00% | ||||||||||||||||
December 2015 Secured Revolving Credit Facility [Member] | Minimum [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
EBITDA to interest expense Ratio | 30.00% | ||||||||||||||||
October 2016 Secured Revolving Credit Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, maximum borrowing capacity | $ 220,000,000.0 | ||||||||||||||||
Credit facility, number of repayments | Repayments | 11 | ||||||||||||||||
Credit facility, expiring period | 2023-12 | ||||||||||||||||
Drawdowns under the credit facility | $ 94,700,000 | ||||||||||||||||
October 2016 Secured Revolving Credit Facility [Member] | Quarterly Installment One [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, periodic payment | 4,100,000 | ||||||||||||||||
October 2016 Secured Revolving Credit Facility [Member] | Quarterly Installment Three [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, periodic payment | 50,000,000.0 | ||||||||||||||||
October 2016 Secured Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, amount outstanding | 20,000,000.0 | 20,000,000.0 | |||||||||||||||
October 2016 Secured Revolving Credit Facility [Member] | Minimum [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Aggregate fair value of collateral vehicles required for borrowings under facility | 125.00% | ||||||||||||||||
June 2017 Secured Term Loan Facility [Member] | Navigator Gas L.L.C. [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, maximum borrowing capacity | 100,000,000.0 | 100,000,000.0 | |||||||||||||||
Credit facility, periodic payment | 4,100,000 | ||||||||||||||||
Cash balance required | $ 65,900,000 | ||||||||||||||||
Drawdowns under the credit facility | 103,100,000 | ||||||||||||||||
June 2017 Secured Term Loan and Revolving Credit Facility [Member] | Navigator Gas L.L.C. [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, maximum borrowing capacity | 160,800,000 | 160,800,000 | $ 160,800,000 | ||||||||||||||
June 2017 Secured Term Loan and Revolving Credit Facility [Member] | Minimum [Member] | Navigator Gas L.L.C. [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Cash balance required | $ 25,000,000.0 | $ 25,000,000.0 | |||||||||||||||
Aggregate fair value of collateral vehicles required for borrowings under facility | 125.00% | ||||||||||||||||
Cash required as percent of indebtedness | 5.00% | ||||||||||||||||
Total equity to total assets | 30.00% | 30.00% | |||||||||||||||
EBITDA to interest expense Ratio | 0.91% | ||||||||||||||||
June 2017 Revolving Credit Facility [Member] | Navigator Gas L.L.C. [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, maximum borrowing capacity | $ 60,800,000 | $ 60,800,000 | |||||||||||||||
March 2019 Terminal Credit Agreement [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, amount outstanding | 91,000,000.0 | 91,000,000.0 | |||||||||||||||
Credit facility, periodic payment | $ 2,300,000 | ||||||||||||||||
Credit facility, expiring period | 2025-03 | ||||||||||||||||
Frequency Of Instalment Payments | repayable in 16 equal quarterly instalments | ||||||||||||||||
March 2019 Secured Term Loan [Member | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, maximum borrowing capacity | $ 107,000,000.0 | ||||||||||||||||
Credit facility, periodic payment | 31,400,000 | ||||||||||||||||
Credit facility, final payment | 75,600,000 | ||||||||||||||||
Debt instrument covenant description | an amount equal to or greater than (i) $35.0 million, or (ii) 5% of Net Debt or total debt, as applicable, whichever is greater; and the aggregate fair market value of the collateral vessels must be no less than 130% of the aggregate outstanding borrowing under the facility. As of December 31, 2020, the Company was in compliance with all covenants contained in this credit facility. | ||||||||||||||||
Final Payment Payable | 54,400,000 | $ 54,400,000 | |||||||||||||||
Debt Issuance Costs, Net | $ 1,400,000 | ||||||||||||||||
Proceeds from Issuance of Long-term Debt | $ 107,000,000.0 | ||||||||||||||||
March 2019 Secured Term Loan [Member | ASC 47050 [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Description Of Debt Modification Conditions | ASC 470-50—Debt Modifications states that if re-financing of a loan results in the present value of future cash flows being modified by more than 10%, it is considered to have ‘substantially different terms’ from the original loan and is accounted for as a debt extinguishment and the new loan treated as the issuance of new debt. The 10% cash flow test was performed, and it was concluded that the present value of future cash flows on a lender-by-lender basis have not been modified by more than 10%. Issuance costs for the March 2019 | ||||||||||||||||
Navigator Aurora Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility term | 7 years | ||||||||||||||||
Credit facility, maximum borrowing capacity | $ 69,100,000 | ||||||||||||||||
Basis spread on credit facility interest rate | 185.00% | ||||||||||||||||
Unsecured Debt | 61,300,000 | $ 61,300,000 | $ 68,100,000 | ||||||||||||||
Appraisal value of borrowings outstanding | 14,000,000.0 | ||||||||||||||||
September 2020 Secured Revolving Credit Facility [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, maximum borrowing capacity | $ 210,000,000.0 | 185,000,000.0 | $ 185,000,000.0 | ||||||||||||||
Credit facility, final payment | $ 7,400,000 | ||||||||||||||||
Debt instrument covenant description | The financial covenants each as defined within the credit facility are: a) the maintenance at alltimes of cash and cash equivalents in an amount equal to or greater than (i) $35.0 million, or (ii) 5% of total indebtedness (as defined by the September 2020 Secured Revolving Credit Facility agreement), as applicable; b) the maintenance of the ratio of total stockholders’ equity to total assets (both as defined by the September 2020 Secured Revolving Credit Facility agreement) of not less than 30% and the aggregate outstanding borrowing under the facility must be no more than 65% of the aggregate fair market value of the collateral vessels. Interest on amounts drawn is payable at a rate of U.S. LIBOR plus 250 basis points per annum. As of December 31, 2020, the Company was in compliance with all covenants contained in this revolving credit facility. | ||||||||||||||||
Credit facility, expiring period | 2024-09 | ||||||||||||||||
Drawdowns under the credit facility | $ 210,000,000.0 | ||||||||||||||||
Description Of Line Of Credit Maturity And Extended Maturity | The facility is due to mature in September 2024, but contains an option, subject to the consent of the Lenders, exercisable 12 to 36 months after the date of the agreement, to extend the maturity date of the facility by 12 months to September 2025. | ||||||||||||||||
Final Ballon Payment Of Line Of Credit | $ 150,900,000 | ||||||||||||||||
Line Of Credit Facility Extended Expiration Date | 2025-09 | ||||||||||||||||
September 2020 Secured Revolving Credit Facility [Member] | New Revolving Credit Facility Syndicate [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt Issuance Costs, Net | 1,900,000 | 1,900,000 | |||||||||||||||
Line of credit commitment fee and thirdy party costs | 200,000 | ||||||||||||||||
Unamortized Deferred costs | 800,000 | 800,000 | |||||||||||||||
September 2020 Secured Revolving Credit Facility [Member] | Revolving Credit Facility Syndicate [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, refinancing | 200,000 | ||||||||||||||||
Letter of Credit [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Credit facility, remaining borrowing capacity | $ 7,500,000 | $ 7,500,000 |
Secured Term Loan Facilities and Revolving Credit Facilities - Schedule of Breakdown of Secured Term Loan Facilities and Total Deferred Financing Costs Split Between Current and Non-Current Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Current Liability | ||||
Current portion of secured term loan facilities | $ 67,936 | $ 66,534 | ||
Less: current portion of deferred financing costs | (2,274) | (1,831) | ||
Current portion of secured term loan facilities, net of deferred financing costs | 65,662 | 64,703 | ||
Non-Current Liability | ||||
Secured term loan facilities and revolving credit facilities net of current portion | [1] | 617,994 | 650,408 | |
Less: non-current portion of deferred financing costs | (4,183) | (3,680) | ||
Non-current secured term loan facilities and revolving credit facilities, net of current portion and non-current deferred financing costs | $ 613,811 | $ 646,728 | ||
|
Senior Secured Bond - Additional Information (Detail) |
4 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Nov. 02, 2018
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
NOK (kr)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2019
NOK (kr)
|
Dec. 31, 2018
NOK (kr)
|
Nov. 02, 2018
NOK (kr)
|
|
Debt Instrument [Line Items] | ||||||||
Minimum liquidity to be maintained, amount | $ 59,056,000 | $ 59,056,000 | $ 64,024,000 | |||||
Debt instrument covenant description | financial covenants (each as defined within the bond agreement governing the 2020 Bonds (the “2020 Bond Agreement”)) are: (a) The issuer shall ensure that the Group (meaning “the Company and its subsidiaries”) maintains a minimum liquidity of no less than $35.0 million; and (b) maintain a Group equity ratio (as defined in the 2020 Bond Agreement) of at least 30%. As of December 31, 2020, the Company was in compliance with all covenants for the 2020 Bonds | The 2020 Bond Agreement provides that we may declare or pay dividends to shareholders provided that the Company maintains a minimum liquidity of $60.0 million unless an event of default has occurred and is continuing. The 2020 Bond Agreement also limits us and our subsidiaries from, among other things, entering into mergers and divestitures, engaging in transactions with affiliates or incurring any additional liens which would have a material adverse effect. In addition, the 2020 Bond Agreement includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, false representation and warranty, a cross-default to other indebtedness, the occurrence of a material adverse effect, or our insolvency or dissolution. | ||||||
2018 Senior Secured Bonds [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | kr | kr 600,000,000 | kr 600,000,000 | kr 600,000,000 | |||||
Variable interest rate on bond | 6.00% | |||||||
Debt instrument maturity date | Nov. 02, 2023 | |||||||
Debt instrument variable rate description | The 2018 Bonds bear interest at a rate of 3-month NIBOR plus 6.0% per annum, calculated on a 360-day year basis and mature on November 2, 2023. | |||||||
Interest payment description on bond | Interest is payable quarterly in arrears on February 2, May 2, August 2 and November 2. | |||||||
Debt instrument redemption description | The Company may redeem the 2018 Bonds, in whole or in part, at any time beginning on or after November 2, 2021. Any 2018 Bonds redeemed from November 2, 2021 until November 1, 2022, are redeemable at 102.4% of par, from November 2, 2022 until May 1, 2023, are redeemable at 101.5% of par, and from May 2, 2023 to the maturity date are redeemable at 100% of par, in each case, in cash plus accrued interest. | |||||||
Debt instrument covenant description | The financial covenants each as defined within the bond agreement are: (a) The issuer shall ensure that the Group (meaning “the Company and its subsidiaries”) maintains a minimum liquidity of no less than $25.0 million and (b) maintain a Group equity ratio of at least 30% (as defined in the 2018 Bond Agreement). As of December 31, 2020, the Company was in compliance with all covenants for the 2018 Bonds. | |||||||
2018 Senior Secured Bonds [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Minimum liquidity to be maintained, amount | $ 25,000,000.0 | $ 25,000,000.0 | ||||||
Gross Equity ratio | 30.00% | |||||||
2018 Senior Secured Bonds [Member] | November 2, 2021 through November 1, 2022 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument redeemable percentage | 102.40% | |||||||
2018 Senior Secured Bonds [Member] | November 2, 2022 through May 1, 2023 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument redeemable percentage | 101.50% | |||||||
2018 Senior Secured Bonds [Member] | May 2, 2023 through Maturity Date [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument redeemable percentage | 100.00% | |||||||
2018 Senior Secured Bonds [Member] | Redemption of Bonds [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument redeemable percentage | 101.00% | |||||||
Senior Secured Bonds [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Dividend payable percentage | 50.00% | |||||||
Nordea Bank Abp [Member] | 2018 Senior Secured Bonds [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 71,700,000 | kr 600,000,000 | ||||||
Debt instrument variable rate description | 6.608% plus 3-month U.S. LIBOR |
Senior Secured Bond - Schedule of Breakdown of Senior Secured Bond and Total Deferred Financing Costs (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Total | $ 685,930 | $ 716,942 |
Senior Secured Bonds [Member] | ||
Debt Instrument [Line Items] | ||
Total Bond | 70,299 | 68,368 |
Less deferred financing costs | (719) | (865) |
Total | $ 69,580 | $ 67,503 |
Senior Unsecured Bond - Additional Information (Detail) - USD ($) $ in Thousands |
1 Months Ended | 4 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Sep. 10, 2020 |
|
Debt Instrument [Line Items] | |||||
Interest rate on bond | 7.75% | 7.75% | |||
Debt instrument covenant description | financial covenants (each as defined within the bond agreement governing the 2020 Bonds (the “2020 Bond Agreement”)) are: (a) The issuer shall ensure that the Group (meaning “the Company and its subsidiaries”) maintains a minimum liquidity of no less than $35.0 million; and (b) maintain a Group equity ratio (as defined in the 2020 Bond Agreement) of at least 30%. As of December 31, 2020, the Company was in compliance with all covenants for the 2020 Bonds | The 2020 Bond Agreement provides that we may declare or pay dividends to shareholders provided that the Company maintains a minimum liquidity of $60.0 million unless an event of default has occurred and is continuing. The 2020 Bond Agreement also limits us and our subsidiaries from, among other things, entering into mergers and divestitures, engaging in transactions with affiliates or incurring any additional liens which would have a material adverse effect. In addition, the 2020 Bond Agreement includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, false representation and warranty, a cross-default to other indebtedness, the occurrence of a material adverse effect, or our insolvency or dissolution. | |||
Minimum liquidity to be maintained, amount | $ 59,056 | $ 59,056 | $ 64,024 | ||
ASC 470-50 [Member] | |||||
Debt Instrument [Line Items] | |||||
Description Of Debt Modification Conditions | ASC 470-50—Debt Modifications states that a liability is considered to have been extinguished if either a) the debtor pays the creditor and is relieved of the obligation for the liability or b) the debtor is legally released from being the primary obligator under the liability either judicially or by the creditor | ||||
2017 Senior Unsecured Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 100,000 | ||||
Interest rate on bond | 8.00% | 8.00% | 8.00% | ||
Debt instrument maturity date | Feb. 01, 2021 | Feb. 28, 2021 | |||
loss on extinguishment of debt | $ 500 | ||||
2020 Senior Unsecured Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 100,000 | ||||
Interest rate on bond | 8.00% | ||||
Debt instrument maturity date | Sep. 10, 2025 | ||||
Interest payment description on bond | Interest is payable semi-annually in arrears on March 10 and September 10. | ||||
Debt instrument covenant description | The 2020 Bonds are redeemable by the Company, in whole or in part, at any time. Any 2020 Bonds redeemed; up until September 9, 2023 will be priced at the aggregate of the net present value of 103.2% of par and interest payable up to September 9, 2023; from September 10, 2023 up until September 9, 2024, are redeemable at 103.2% of par; from September 10, 2024 up until March 9, 2025, are redeemable at 101.6% of par, and from March 10 to the maturity date are redeemable at 100% of par, in each case, in cash plus accrued interest. | ||||
Deferred issuance costs | $ 2,000 | $ 1,842 | 1,842 | $ 1,487 | |
2020 Senior Unsecured Bonds [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Minimum liquidity to be maintained, amount | $ 35,000 | $ 35,000 | |||
2020 Senior Unsecured Bonds [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Gross Equity ratio | 30.00% | ||||
2020 Senior Unsecured Bonds [Member] | Until September 9, 2023 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument redeemable percentage | 103.20% | ||||
2020 Senior Unsecured Bonds [Member] | September 10 ,2023 Up Until September 9 ,2024 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument redeemable percentage | 103.20% | ||||
2020 Senior Unsecured Bonds [Member] | September 10 ,2024 Up Until September 9 ,2025 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument redeemable percentage | 101.60% |
Senior Unsecured Bond - Schedule of Breakdown of Senior Unsecured Bond and Total Deferred Financing Costs (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Total | $ 685,930 | $ 716,942 | |
2017 Senior Unsecured Bonds [Member] | |||
Debt Instrument [Line Items] | |||
Total Bond | 100,000 | ||
2020 Senior Unsecured Bonds [Member] | |||
Debt Instrument [Line Items] | |||
Total Bond | 100,000 | ||
Less deferred financing costs | (1,842) | $ (2,000) | (1,487) |
Total | $ 98,158 | $ 98,513 |
Earnings per Share - Calculation of Basic and Diluted Number of Weighted Average Outstanding Shares (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Earnings Per Share [Abstract] | |||
Basic and diluted loss available to common stockholders (in thousands) | $ (443) | $ (16,706) | $ (5,739) |
Basic weighted average number of shares | 55,885,376 | 55,792,711 | 55,629,023 |
Effect of dilutive potential share options: | 0 | 0 | 0 |
Diluted weighted average number of shares | 55,885,376 | 55,792,711 | 55,629,023 |
Earnings per Share - Calculation of Basic and Diluted Number of Weighted Average Outstanding Shares (Parenthetical) (Detail) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Earnings Per Share [Abstract] | |||
Effect of dilutive potential shares | 0 | 0 | 0 |
Potential dilutive shares excluded computation of earnings per share | 344,472 | 349,870 | 349,237 |
Share-Based Compensation - Additional Information (Detail) - USD ($) |
1 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 19, 2020 |
Aug. 14, 2019 |
Jan. 05, 2019 |
Nov. 28, 2018 |
Mar. 20, 2018 |
Mar. 17, 2015 |
Apr. 30, 2020 |
Mar. 20, 2019 |
Oct. 31, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Maximum number of shares authorized for grant | 3,000,000 | |||||||||||
Granted, Number of shares | 23,957 | 2,144 | 37,975 | 29,898 | ||||||||
Vesting term | shares under the 2013 Plan to non-employee directors with a weighted average value of $12.04 per share. On November 28, 2018, the Company granted a further 5,000 shares to a newly appointed non-employee director with a weighted average value of $12.30. These restricted shares vest on the first anniversary of the grant date. | |||||||||||
Restricted stock unit, vesting in period | 5,000 | 89,888 | 83,045 | |||||||||
Weighted average grant value per share, vested | $ 12.30 | $ 12.25 | $ 14.24 | |||||||||
Share-based compensation costs | $ 1,321,205 | $ 1,495,412 | $ 1,173,580 | |||||||||
Share-based compensation costs | $ 77,364 | |||||||||||
Share based compensation options exercisable | 339,936 | |||||||||||
weighted average exercise price of share options exercisable | $ 21.40 | |||||||||||
weighted-average remaining contractual term of options outstanding | 3 years 8 months 1 day | |||||||||||
Shares granted forfieted | 5,425 | 10,054 | 12,198 | 5,425 | ||||||||
Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Expected term (in years) | 4 years | |||||||||||
Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Expected term (in years) | 6 years 6 months | |||||||||||
Restricted Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Total compensation cost not yet recognized | $ 1,002,608 | $ 1,774,202 | ||||||||||
Total compensation cost not yet recognized period for recognition | 11 months 4 days | 1 year 4 months 17 days | ||||||||||
2013 Long Term Incentive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Total compensation cost not yet recognized | $ 0 | $ 0 | ||||||||||
Share-based compensation costs | $ 8,474 | $ 99,902 | ||||||||||
Non Employee Director [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Granted, Number of shares | 27,125 | |||||||||||
Non Employee Director [Member] | 2013 Long Term Incentive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Granted, Number of shares | 5,000 | 32,550 | ||||||||||
Weighted average value, per share | $ 12.04 | $ 7.90 | $ 11.06 | $ 11.06 | ||||||||
Restricted stock unit, vesting in period | 29,898 | 28,194 | ||||||||||
Weighted average grant value per share, vested | $ 12.77 | |||||||||||
Share vested, total fair value | $ 114,739 | $ 336,054 | $ 325,641 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Intrinsic Value, Amount Per Share | $ 11.06 | |||||||||||
Non Employee Director [Member] | 2013 Long Term Incentive Plan [Member] | Restricted Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Weighted average value, per share | $ 12.04 | |||||||||||
Chief Executive Officer [Member] | 2013 Long Term Incentive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Granted, Number of shares | 48,147 | |||||||||||
Weighted average value, per share | $ 11.06 | $ 15.80 | ||||||||||
Share vested, total fair value | $ 265,487 | $ 60,300 | ||||||||||
Chief Executive Officer [Member] | 2013 Long Term Incentive Plan [Member] | Restricted Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Weighted average value, per share | $ 12.04 | |||||||||||
Officers and Employees [Member] | 2013 Long Term Incentive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Granted, Number of shares | 96,644 | 141,888 | 62,763 | |||||||||
Weighted average value, per share | $ 12.77 | |||||||||||
Share vested, total fair value | $ 548,218 | |||||||||||
Officers and Employees [Member] | 2013 Long Term Incentive Plan [Member] | Restricted Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Granted, Number of shares | 17,240 | |||||||||||
Weighted average value, per share | $ 7.90 | |||||||||||
Employee [Member] | 2013 Long Term Incentive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options, vesting in period | 6,000 | |||||||||||
Strike Price Per Share | $ 18.95 |
Share-Based Compensation - Restricted Share Grant Activity (Detail) - $ / shares |
10 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 14, 2019 |
Nov. 28, 2018 |
Oct. 31, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Number of RSUs | ||||||
Unvested, beginning balance | 329,156 | 329,156 | 243,188 | |||
Granted | 79,172 | 174,438 | ||||
Forfeited | (5,425) | (10,054) | (12,198) | (5,425) | ||
Vested | (5,000) | (89,888) | (83,045) | |||
Unvested, ending balance | 306,242 | 329,156 | 243,188 | |||
Weighted-average grant date fair value | ||||||
Unvested, beginning balance | $ 11.68 | $ 11.68 | $ 12.98 | |||
Granted | 7.90 | 11.06 | ||||
Vested | $ 12.30 | 12.25 | 14.24 | |||
Forfeited | 11.54 | 11.06 | ||||
Unvested, ending balance | $ 10.54 | $ 11.68 | $ 12.98 | |||
Weighted-average remaining contractual terms (Years) | ||||||
Weighted-average remaining contractual terms (Years) | 11 months 4 days | 1 year 4 months 17 days | 1 year 3 months 18 days |
Share-Based Compensation - Summary of Stock Option Activity (Detail) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Options | ||
Beginning Balance | 349,936 | 343,936 |
Granted during the period | $ 6,000 | |
Forfeited during the period | (10,000) | |
Ending Balance | 339,936 | 349,936 |
Weighted-Average Exercise Price | ||
Beginning Balance | $ 21.39 | $ 21.43 |
Granted during the period | 18.95 | |
Forfeited during the period | 20.82 | |
Ending Balance | $ 21.40 | $ 21.39 |
Commitments and Contingencies - Summary of Contractual Obligations (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
||||||
---|---|---|---|---|---|---|---|---|
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||||||
2021 | $ 67,936 | $ 66,534 | ||||||
2022 | 124,479 | 66,534 | ||||||
2023 | 202,353 | 259,053 | ||||||
2024 | 175,413 | 193,078 | ||||||
2025 | 54,388 | 9,150 | ||||||
Total | 685,930 | $ 716,942 | ||||||
2021 | 73,508 | |||||||
2022 | 124,731 | |||||||
2023 | 274,050 | |||||||
2024 | 175,413 | |||||||
2025 | 154,388 | |||||||
Thereafter | 61,361 | |||||||
Total | 863,451 | |||||||
Navigator Aurora Facility [Member] | ||||||||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||||||
Thereafter | [1] | 61,361 | ||||||
Total | [1] | 61,361 | ||||||
Office operating leases [Member] | ||||||||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||||||
2021 | [2] | 1,572 | ||||||
2022 | [2] | 252 | ||||||
Total | [2] | 1,824 | ||||||
Marine Export Terminal capital contributions [Member] | ||||||||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||||||
2021 | [3] | 4,000 | ||||||
Total | [3] | 4,000 | ||||||
Secured term loan facilities and revolving credit facilities [Member] | ||||||||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||||||
2021 | 67,936 | |||||||
2022 | 124,479 | |||||||
2023 | 202,353 | |||||||
2024 | 175,413 | |||||||
2025 | 54,388 | |||||||
Total | 624,569 | |||||||
2018 Bonds [Member] | ||||||||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||||||
2023 | 71,697 | |||||||
Total | 71,697 | |||||||
2020 Bonds [Member] | ||||||||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||||||
2025 | 100,000 | |||||||
Total | $ 100,000 | |||||||
|
Commitments and Contingencies - Summary of Contractual Obligations (Parenthetical) (Detail) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jan. 21, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||
Investment in equity accounted joint venture | $ 17,354 | $ 89,324 | $ 42,500 | |
Marine Export Terminal capital contributions [Member] | Subsequent Event [Member] | ||||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||||
Investment in equity accounted joint venture | $ 4,000 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Schedule Of Commitments And Contingencies [Line Items] | ||
Weighted Average Remaining Lease Tenure | 5 years 7 months 6 days | 6 years 6 months |
Office Space [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Weighted Average Remaining Lease Tenure | 1 year 2 months 12 days | 2 years 2 months 12 days |
POLAND [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Lease term | 5 years | |
Operating lease future minimum payment per year | $ 60,000 | |
London [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Lease term | 10 years | |
Lease term, mutual break clause | 5 years | |
Operating lease future minimum payment per year | $ 1,100,000 | |
NEW YORK [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Operating lease future minimum payment per year | $ 400,000 | |
Lease expiration date | May 31, 2022 |
Operating Lease Liabilities - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Operating Lease Weighted Average Discount Rate | 5.56% | ||
Remaing Lease Period | 5 years 7 months 6 days | 6 years 6 months | |
Operating lease rental costs | $ 1,300 | ||
Operating lease liabilities | $ 6,508 | $ 7,507 | |
Operating lease right of use asset | $ 5,701 | $ 6,781 | |
Cumulative-Effect Adjustment, Consolidation of Variable Interest Entity [Member] | |||
Cumulative effect adjustment to the consolidated statements | $ 100 |
Operating Lease Liabilities - Maturity Analysis of The Undiscounted Cash Flows of The Company's Operating Lease Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating Lease Liabilities [Abstract] | ||
One year | $ 1,572 | $ 1,534 |
Two years | 1,300 | 1,534 |
Three years | 1,144 | 1,267 |
Four years | 1,144 | 1,111 |
Five years | 1,144 | 1,111 |
Six years and thereafter | 1,222 | 2,297 |
Total undiscounted operating lease commitments | 7,526 | 8,854 |
Less: Discount adjustment | (1,018) | (1,347) |
Total operating lease liabilities | 6,508 | 7,507 |
Less: current portion | (1,276) | (1,178) |
Operating lease liabilities, non-current portion | $ 5,232 | $ 6,329 |
Concentration of Credit Risks - Additional Information (Detail) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Product Concentration Risk [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Number of charterers | 2 | 4 |
Product Concentration Risk [Member] | Sales Revenue, Net [Member] | Minimum [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of operating revenue | 10.00% | 10.00% |
Product Concentration Risk [Member] | One Time Charter [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of operating revenue | 12.80% | 16.80% |
Concentration risk, amount | $ 41.0 | $ 51.0 |
Product Concentration Risk [Member] | Two Time Charter [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of operating revenue | 12.30% | 13.90% |
Concentration risk, amount | $ 39.6 | $ 41.9 |
Product Concentration Risk [Member] | Three Time Charter [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of operating revenue | 13.20% | |
Concentration risk, amount | $ 30.8 | |
Product Concentration Risk [Member] | Four Time Charter [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of operating revenue | 10.20% | |
Concentration risk, amount | $ 7.2 | |
Revenue from Rights Concentration Risk [Member] | Indonesia | ||
Concentration Risk [Line Items] | ||
Percentage of operating revenue | 9.30% | 10.20% |
Income Taxes - Summary of Income Tax Reconciliation (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Contingency [Line Items] | |||
(Loss)/income before income taxes and share of result of equity accounted joint ventures | $ 1,279 | $ (15,129) | $ (5,368) |
Tax expense at statutory rate | 0 | 0 | 0 |
Total statutory tax charge | 0 | 0 | 0 |
Total Tax charge | 617 | 352 | 333 |
UNITED KINGDOM [Member] | |||
Income Tax Contingency [Line Items] | |||
Total Tax charge | 416 | 199 | 254 |
POLAND [Member] | |||
Income Tax Contingency [Line Items] | |||
Total Tax charge | 31 | (65) | (147) |
SINGAPORE [Member] | |||
Income Tax Contingency [Line Items] | |||
Total Tax charge | 77 | 213 | 226 |
MALTA [Member] | |||
Income Tax Contingency [Line Items] | |||
Total Tax charge | $ 93 | $ 5 | $ 0 |
Income Tax - Summary of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred tax asset | ||
Net operating losses carry forwards | $ 19,601 | $ 19,638 |
Total deferred tax assets | 19,601 | 19,638 |
Less valuation allowance | (3,735) | (1,731) |
Deferred tax asset, net of valuation allowance | 15,866 | 17,907 |
Deferred tax liabilities | ||
Investment in joint venture | 15,445 | 17,449 |
Other temporary differences | 32 | 26 |
Total deferred tax liabilities | 15,477 | 17,475 |
Net deferred tax asset | $ 389 | $ 432 |
Income Taxes - Additional Information (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Defered Tax Assets | $ 421,000 | $ 458,000 |
Defered Tax Liabilities | 32,000 | $ 26,000 |
Income Tax, Carry Forwards | 1,300,000 | |
Defered Tax Assets | 300,000 | |
Losses Carry Forward | 1,300,000 | |
Export Terminal Joint Venture [Member] | ||
Defered Tax Assets | 15,900,000 | |
Income Tax, Carry Forwards | $ 15,400,000 | |
Percentage of carry forwards utilized against future profits | 80.00% | |
Tax returns remain eligible for examination period | 2 years |
Derivative Instruments - Additional Information (Detail) kr in Millions, $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Jul. 02, 2020 |
Nov. 02, 2018
NOK (kr)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
NOK (kr)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2019
NOK (kr)
|
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Collateral amount held with swap provider | $ 0.0 | $ 1.3 | ||||
Interest Rate Swap [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Notional swaps percentage | 80.00% | |||||
Interest Rate Swap [Member] | ING Capital Markets LLC [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Interest rate payable | 0.369% | |||||
Interest Rate Swap [Member] | Societe Generale [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Interest rate payable | 0.3615% | |||||
Designated as Hedging Instrument [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivatives | 0.0 | $ 0.0 | ||||
2018 Senior Secured Bonds [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Outstanding secured borrowings, principal | kr | kr 600 | kr 600 | kr 600 | |||
Outstanding secured borrowings, interest rate terms | The 2018 Bonds bear interest at a rate of 3-month NIBOR plus 6.0% per annum, calculated on a 360-day year basis and mature on November 2, 2023. | |||||
NORWAY [Member] | 2018 Senior Secured Bonds [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Outstanding secured borrowings, principal | 71.7 | |||||
Outstanding secured borrowings | $ 71.7 | kr 600 | ||||
Spread on variable rate | 6.608% | 6.608% | 6.608% | 6.608% | ||
Outstanding secured borrowings, interest rate terms | 6.608% plus 3-month U.S. LIBOR | |||||
Outstanding secured borrowings, maturity year | 2023 | |||||
Collateral amount held with swap provider | $ 0.0 | $ 1.3 | ||||
NORWAY [Member] | 2018 Senior Secured Bonds [Member] | NIBOR [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Spread on variable rate | 6.00% | 6.00% | 6.00% | 6.00% | ||
Outstanding secured borrowings, interest rate terms | 6.0% plus 3-month NIBOR |
Cash,Cash Equivalents and Restricted Cash - Schedule of breakdown of cash, cash equivalents and restricted cash (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Cash, Cash Equivalents and Restricted Cash | ||
Cash and cash equivalents | $ 59,056 | $ 64,024 |
Cash and cash equivalents held by the lessor VIE (note 9) | 59,271 | 66,130 |
Restricted cash | 0 | 1,310 |
Total cash, cash equivalents and restricted cash | 59,271 | 66,130 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Cash, Cash Equivalents and Restricted Cash | ||
Cash and cash equivalents held by the lessor VIE (note 9) | 215 | 796 |
Total cash, cash equivalents and restricted cash | $ 215 | $ 796 |
Cash,Cash Equivalents and Restricted Cash - Additional Information (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Collateral amount held with swap provider | $ 0 | $ 1,300 |
Cash, cash equivalents and restricted cash | 59,271 | 66,130 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Cash, cash equivalents and restricted cash | $ 215 | $ 796 |
Related Party Transactions - Schedule of Related Party Transactions Income Expenses (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Schedule of Related Party Transactions Income Expenses [Line Items] | ||
Net income / (expenses) | $ (1,827) | $ (672) |
Ocean Yield Malta Limited [Member] | ||
Schedule of Related Party Transactions Income Expenses [Line Items] | ||
Net income / (expenses) | $ (1,827) | $ (672) |
Related Party Transactions - Schedule Of Balances Due To And From Related Parties (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Luna Pool Agency Limited [Member] | |||
Schedule Of Balances Due To And From Related Parties [Line Items] | |||
Related Party Transaction, Due from (to) Related Party, Current | $ 11,853 | $ 0 | |
Ocean Yield Malta Limited [Member] | |||
Schedule Of Balances Due To And From Related Parties [Line Items] | |||
Related Party Transaction, Due from (to) Related Party, Current | $ (61,448) | (68,506) | |
Due to Affiliate, Noncurrent | $ (61,448) | $ (68,506) |
Related Party Transactions - Disclosure Of Operating Results On Account Of Related Party Transactions (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Disclosure Of Operating Results On Account Of Related Party Transactions [Line Items] | |||
Voyage expenses | $ 63,372 | $ 55,310 | $ 61,634 |
Total net operating income from the Luna Pool | 41,754 | 32,611 | $ 41,480 |
Total net income from the Luna Pool | (1,827) | (672) | |
Luna Pool Agency Limited [Member] | |||
Disclosure Of Operating Results On Account Of Related Party Transactions [Line Items] | |||
Time and Voyage Charter Revenues | 49,613 | ||
Time and Voyage charter revenues from Luna Pool collaborative arrangements | 12,830 | ||
Brokerage Commissions | (804) | ||
Voyage expenses | (14,966) | ||
Voyage Expenses—Luna Pool collaborative arrangements | (12,418) | ||
Total net operating income from the Luna Pool | 34,255 | ||
Other Income | 199 | ||
Total net income from the Luna Pool | 34,454 | ||
Ocean Yield Malta Limited [Member] | |||
Disclosure Of Operating Results On Account Of Related Party Transactions [Line Items] | |||
Total net income from the Luna Pool | (1,827) | (672) | |
Related Party Transaction, Amounts of Transaction | (1,827) | (672) | |
Ocean Yield Malta Limited [Member] | General and Administrative Costs [Member] | |||
Disclosure Of Operating Results On Account Of Related Party Transactions [Line Items] | |||
Related Party Transaction, Amounts of Transaction | (14) | (221) | |
Ocean Yield Malta Limited [Member] | Interest Expense [Member] | |||
Disclosure Of Operating Results On Account Of Related Party Transactions [Line Items] | |||
Related Party Transaction, Amounts of Transaction | $ (1,813) | $ (451) |
Related Party Transactions - Disclosure Details Of Balance Due From To Related Parties (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Luna Pool Agency Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Other assets | $ 11,853 | ||
Total assets (liabilities) | $ 11,853 | $ 0 | |
Ocean Yield Malta Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Accrued interest and trade payables | $ (229) | (451) | |
Navigator Aurora Facility, net of deferred financing costs | (61,216) | (68,052) | |
Other non-current payables | (3) | (3) | |
Total assets (liabilities) | $ (61,448) | $ (68,506) |
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Due to Related Parties, Current | $ 229 | $ 451 | ||
Prepayment of Loan | 17,354 | 89,324 | $ 42,500 | |
Related party transactions net income expense | (1,827) | (672) | ||
Operating revenue | 332,495 | 301,385 | $ 310,046 | |
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Prepayment of Loan | 6,840 | 850 | ||
Luna Pool Agency Limited [Member] | ||||
Related party transactions net income expense | 34,500 | |||
Luna Pool Agency Limited [Member] | Collaborative Arrangements [Member] | ||||
Operating revenue | 12,800 | |||
Luna Pool Agency Limited [Member] | Voyage Expenses [Member] | ||||
Operating revenue | 12,400 | |||
Navigator Aurora Facility [Member] | ||||
Line of credit maximum borrowing capacity | $ 69,100 | |||
Basis spread on credit facility interest rate | 185.00% | |||
Navigator Aurora Facility [Member] | OCY Aurora Limited [Member] | ||||
Line of credit maximum borrowing capacity | 69,100 | |||
Basis spread on credit facility interest rate | 185.00% | |||
Due to Related Parties, Current | $ 61,400 | $ 68,200 |
Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 12, 2021 |
Jan. 21, 2021 |
Dec. 31, 2020 |
|
Subsequent Event [Line Items] | |||
Draw down from terminal facility | $ 185,000 | ||
Ultranav [Member] | |||
Subsequent Event [Line Items] | |||
Common share issued | 21.2 | ||
Common share outstanding | 77.1 | ||
Holding percentage of share | 27.50% | ||
Ultragas [Member] | |||
Subsequent Event [Line Items] | |||
Net working capital | $ 197,000 | ||
BW Group [Member] | |||
Subsequent Event [Line Items] | |||
Holding percentage of share | 28.40% | ||
Subsequent Event [Member] | Terminal Facility [Member] | |||
Subsequent Event [Line Items] | |||
Draw down from terminal facility | $ 18,000 | ||
Subsequent Event [Member] | Terminal Facility [Member] | Export terminal Joint Venture [Member] | |||
Subsequent Event [Line Items] | |||
Draw down from terminal facility | 4,000 | ||
Subsequent Event [Member] | Terminal Facility [Member] | General Corporate [Member] | |||
Subsequent Event [Line Items] | |||
Draw down from terminal facility | $ 14,000 |
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