Tallink loan delayed due to using vessels registered abroad as collateral

Tallink's MS Silja Europa.
Tallink's MS Silja Europa. Source: Siim Lõvi/ERR

According to KredEx CEO Lehar Kütt, it has taken time to get loans to Estonian shipper Tallink signed due to the volume of the loan contract and the legal complexities of using vessels registered to other countries as collateral for the loan.

"The amount is very big," Kütt told ERR. "In connection with that, this loan contract is more substantial than usual — the loan contract that we are negotiating with Tallink is a 80-90 page English-language document. This will take time; I believe it is entirely normal for it to take this long. Under normal circumstances, it would even take several times longer."

The CEO noted that one significant aspect that is also taking more time in the Tallink case is collateralization process. "This is more complicated than usual," he said. "We're making progress on this in good time, and I believe that there will be positive news regarding this matter in the next few weeks already."

He confirmed that Tallink has offered its vessels as collateral for the loan, and that the collateralization process for them is legally complex. "These vessels are in various countries' registries," he noted. "This all requires local legal assistance regarding how precisely to draw up these collateral agreements."

He was unable to say, however, whether the new vessel only just being built was among those being offered as collateral.

Last week, Tallink CEO Paavo Nõgenes said that the signing of the loan agreement should be a matter of days. Last week, the shipper also held additional talks with KredEx.

On May 8, the Estonian government decided to give Tallink a €100 million loan with a three-year term, to be repaid in a lump sum upon maturity. The loaned amount may be used in parts at a minimum of €10 million and a maximum of €40 million at a time.


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Editor: Aili Vahtla

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