According to Tallink manager Paavo Nõgene, the early repayment of the loan to the state and the elimination of restrictions on state aid will make it easier for Tallink to pay dividends.
Tallink announced on Friday the conclusion of a syndicated loan agreement of 298 million euros, with which it repays, among others, the loan received from the state during the corona restrictions and the loan from the Nordic Investment Bank (NIB).
Tallink does not reveal the conditions under which the banks union granted the loan to the shipping company, but company director Paavo Nõgene said that if the company is doing well, as Tallink is doing after four years of crisis, then it is possible refinance loans under the conditions of commercial banks.
Nõgene added that the banks that granted the loan were already partners of Tallink.
“Rather, if we want to repay the loan from the Republic of Estonia and the Nordic Investment Bank ahead of schedule, the conditions are better today,” Nõgene said.
While Tallink originally had to repay the 100 million loan granted by the State in three years under the contract signed in June 2020, last summer the loan deadline was extended to June 2026. The State granted Tallink a loan with a interest equal to the 12-month Euribor plus 2%.
According to Nõgene, a year ago the company did not have the possibility to refinance loans in this volume, now the situation for the company has stabilized. “If the company does well, you can refinance those loans,” he said.
One reason for the early repayment of the loan is that state aid conditions set limits on large investments the company can make and, for example, to pay dividends, the company would have to obtain separate permits from borrowers.
“Since we want to pay dividends if financial results are enabled, we wanted to eliminate restrictions associated with state aid,” added Nõgene.
The last time Tallink paid a dividend to shareholders was before the coronavirus crisis.
Environmental conditions influence loan conditions more than the geopolitical situation
According to Nõgene, Tallink has not felt any changes in the offer of loans due to the various crises, according to him the financing is similar to that before the crisis, and for banks it is above all important that the company is able to provide the loans .
According to the director of the company, the terms of the loans are more influenced, for example, by additional conditions related to environmental protection. The conditions of the new loan also include sustainability criteria.
“Tallink has been good and has invested for years to become more environmentally friendly and the climate goals set for 2030 have been achieved,” he said.
Tallink is more concerned with reaching the zero-mission goals set for 2050. “Unfortunately, in maritime affairs, the technology with which to achieve zero emissions actually doesn’t exist today,” Nõgene said. According to him, this is also illustrated by the country’s latest ferry procurement, which is seeking a multifunctional vessel that would run on hydrogen fuel cells, electric batteries and diesel generators.
Nõgene noted that all parties must work hard to achieve zero emissions in maritime transport. “Marine shipping cannot go extinct, the question is when technology will catch up,” Nõgene said. Electric and hydrogen technologies are being tested on small river vessels.
However, this does not mean that financing opportunities for companies like Tallink will become less available in the coming years. Nõgene said financiers cannot expect companies to use technologies that don’t actually exist.
2023-12-15 12:57:00
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