TRADE FINANCE

Trade Finance



Trade Finance

POSCO

Posco is a South-Korean based steel manufacturing company engaged in providing products such as wire rods, silicon steel sheets, hot and cold rolled products. The company has an annual production capacity of 31.7 million tons of crude steel. The company primarily operates in Korea, where it is headquartered in Seoul and employs around 29800 people. The company recorded revenues of $29,115.5 million in the fiscal year ended December 2009, but it is less than 2008. The company's operating profit was $3055.8 million in fiscal 2009; it is 46.8 % less than the last year. Its net profit was $2542.6 million in fiscal 2009.

STX Pan Ocean

STX Pan Ocean is a shipping company engaged in providing various types of marine transportation services. The company operates a fleet composed of around 389 vessels, out of which, 84 are owned vessels and 305 are chartered-in vehicles. It has operations in South Korea, Singapore, China, Hong Kong, the UK, the UAE, Brazil, Japan and the US.

The company operates through the following segments: bulk carrier service (BLKR), container service (CNTR), pure car and truck carrier service (PCTC), tankers service (TNKR) and others. In break bulk liner services segment, STX Pan Ocean carries steel products, wood products, equipment and facilities and other break-bulk cargoes through main ports of the Far East/South East Asia, the US, the Middle East and Europe with its diverse shipping range.

The company also provides break bulk liner service throughout Asian areas, including coverage of all major ports within Inter-Asian ports from Pakistan to Japan. It offers break bulk liner service throughout Far East areas, covering all major ports within Russian Pacific and Asian ports. It transports around 11.1 million tons of cargoes with a total of 60 plus vessels and recorded about 410 voyages in the break bulk liner business.

Top Competitors are

Korea Line Corporation

Hyundai Merchant Marine Co. Ltd

Heung-A shipping Co Ltd

Identification of counterparties

Buyer

Borrower

Name

STX Shipping

POSCO

City and State

Seoul, South Korea

Seoul, South Korea

Country + rating

South Korea (-A)

(A)

Legal Status

Listed Company , KSE, SSE

Listed Company , NSE , LSE

Established

1966

1968

Client since

1971

1974

Business

Sea transportation services

Steel Manufacturer

Key figures (US$)

12/31/2010

12/31/2009

Revenues

5592.6 Million

29,115.5 million

Operating Profit

91.5 million

3055.8 million

Loan Plan

No. of Lines

O/S

Granted

Request

Nature

Interest Rate

Committed

Description

Maturity

1

5

0

60

New

4% + LIBOR

C

Prepayment Under L/C based on Construction Material

90 days from Issuance

1st disbursement

2nd disbursement

50 % of principal Amount on 1 Jan 2010

50 % of remaining principal Amount on 1 Jan 2011

Structure

EIB POLICY

Description, Security and Support

1. Initially contract is made between the parties and terms are clearly stated and agreed by both parties

2. Special account set up by Posco to handle proceeds from sale of construction material with rights and ownership assigned to EIB. An irrevocable payment instruction controlling the routing of proceeds should also be issued.

3. Ministry of finance in Korea has been requested to undertake a waiver of sovereign immunity and non-contravention of IMF regulation.

4. The Central Bank of Korea agreed to provided currency support if Korean Wol were to decline due to unforeseen circumstances

5. As this is a syndicated deal led by EIB, a credit agreement has been set up for the banks ...