International dry bulk shipping company Golden Ocean on Thursday (19 November) published its third quarter (Q3) 2020 financial where it reported a loss of USD 0.3 million from its investments in TFG Marine Pte Ltd (TFG Marine).
TFG Marine is Golden Ocean’s bunkering joint venture with Trafigura Pte Ltd (Trafigura) and Frontline Ltd (Frontline).
TFG Marine was granted approval by the Maritime and Port Authority of Singapore (MPA)in April 2020 to become a Bunker Supplier and a Bunker Craft Operator serving the vessels visiting the country’s port.
Golden Ocean has an equity investment of 10% of the shares in TFG Marine and it has also provided a shareholder loan of USD 1.0 million to TFG Marine with a five-year term and interest of LIBOR plus a margin of 7%.
In Q3 2020, USD 75,000 from the shareholder loan was converted to equity of TFG Marine. The ownership interest in TFG Marine of 10% remained unchanged.
Golden Ocean noted it also entered into a bunker supply arrangement with TFG Marine, under which in Q3 2020 it has incurred costs of USD 22.2 million in relation to bunker procurement. As of September 30, 2020 payable to TFG Marine amounted to USD 8.5 million.
As part of the joint venture to form TFG Marine, Golden Ocean issued a USD 20.0 million guarantee in respect of the performance of its subsidiaries under a bunker supply arrangement with the joint venture. As of September 30, 2020, it reports there are no exposures under this guarantee.
In addition, should TFG Marine be required to provide a parent company guarantee to its bunker suppliers or finance providers then for any guarantee that is provided by the Trafigura group and becomes payable, Golden Ocean will pay an amount equal to its equity proportion of that amount payable.
The maximum liability under this guarantee is USD 4.0 million. The company is not payable under this guarantee as of September 30, 2020.
Photo credit: Golden Ocean
Published: 23 November, 2020
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