In the first ever deal in the maritime sector involving a pool of private insurers providing insurance cover, Watson Farley & Williams (WFW) has advised Crédit Industriel et Commercial on the financing of six new sailing cargo ships for the French wind ship pioneer TransOceanic Wind Transport (TOWT).
The six sailing cargo ships will leave the Piriou shipyards, based in Brittany in France, in 2027 and will complete the transport offer of the first two TOWT ships, which are expected to enter commercial service by mid-2024.
As previously reported, the contract for the first TOWT vessel was signed back in January 2022, and the new sailing cargo fleet will be deployed on a route between France and New York as well as opening up new routes for the shipowner to South America in particular, as well as to Asia and Africa.
With its eight vessels, TOWT will help transport around 200,000 tonnes of goods, thereby saving around 40,000 tonnes of CO2 per year.
Each new vessel will reduce CO2 emissions by more than 90% and save 20g of CO2 per tonne transported per kilometre.
The six vessels will be bareboat chartered by a dedicated vehicle majority owned by and sub-chartered to TOWT. This vehicle will finance the vessels by combining bond financing, fundraising and bank financing through leasing. The financings will benefit either from a cover from Bpifrance Assurance Export or, for the first time, from a pool of private insurers as part of a ‘Marine Supported Finance’ policy.
The WFW Paris team advising CIC was led by Partner Philippe Monfort, supported by Associates Lisa Tavlaridis and Vincent Cossavella on finance aspects. Partner Romain Girtanner and Associate Marie Dubois advised on the tax matters.
Monfort commented: ‘We are pleased to have supported Crédit Industriel et Commercial in the financing of these six new sailing cargo ships, allowing TOWT to expand its fleet. It is also the first ever deal in the maritime sector involving a pool of private insurers providing insurance coverage.
‘We are proud today to contribute to the sustainability of the maritime industry by acting on key transactions such as this one and through the contribution of our teams to the Wind Ship association aimed at accelerating the development of the propulsion of ships by the wind.’
A team from Stream, led by Finance Partner Olivier Challine, advised TOWT.
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