MARINE MONEY, BUSAN 2017 TOPICAL LEGAL ISSUES GOH MEI LIN PARTNER WATSON FARLEY & WILLIAMS, SINGAPORE 1 NOVEMBER 2017

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1 MARINE MONEY, BUSAN 2017 TOPICAL LEGAL ISSUES GOH MEI LIN PARTNER WATSON FARLEY & WILLIAMS, SINGAPORE 1 NOVEMBER 2017

2 Global Shipping Topical Legal Issues (1) Change of Control Who does it apply to and do Lenders understand what the current structure is? How many layers are there between e.g. the Borrower and the Guarantor or the party on whom the Lenders are focusing their credit risk on? Do the Borrower and Lenders have a mutual understanding as to what type of change / extent of change is meant to trigger a change of control provision? The difference between having this as a prepayment event and as an Event of Default. What if the relevant party is a joint venture entity? What if the relevant party is a listed entity? What flexibility does the relevant party need for changes contemplated for the future? Slide 2

3 Global Shipping Topical Legal Issues (2) Joint Ventures Sponsor support in a JV Does one party have majority shareholding / control? How would a change of control provision work? What are the issues which require unanimous consent? What are the continuing funding obligations of the joint venture partners? Which party are the Lenders primarily taking credit risk on? How do the acts / omissions of the joint venture partners impact on performance of the JV co? Is there a restriction in the shareholders agreement on pledging of shares in the JV co or a regulatory / local law restriction applicable to one of the shareholders? Slide 3

4 Global Shipping Topical Legal Issues (3) Back-to-back Contracts There are various scenarios where a party might find itself in a series of contractual arrangements whereby either: it is the party in the middle which needs to manage its liability to the parties on either side e.g. where the company is an owner with a charterer on one side and a shipyard on the other, with some key risk areas being: Delivery window Force Majeure Liquidated damages Termination Risk it needs to manage the risk which it is taking on its indirect counterparty e.g. where the end-buyer is acquiring a ship from an interim seller which in turn is acquiring the ship from a shipyard, with some key risk areas being : Risk on interim seller s bank Risk of interim seller s performance under SBC / solvency of interim seller Is shipyard aware of the back-to-back arrangement? Slide 4

5 Global Shipping Topical Legal Issues (4) Loan Transfers Lenders will want as much flexibility as possible to transfer, but.. Borrowers may be concerned about: a competitor or specific types of institutions becoming a lender any withholding tax or increased cost which may arise there being no transfer until the facility has been fully drawn the agent / security agent being a party it has an existing relationship with Is it just a loan transfer or are the agency and security trustee functions also being transferred? What is the impact on: Existing terms and existing security? Swap and junior creditors? Third parties such as shipyards, shipmanagers, insurers, charterers? Bank accounts? Will security parties cooperate? Slide 5

6 Contacts Summary Mei is the head of the Singapore office of Watson Farley & Williams and is a partner in the firm s Finance Group. GOH MEI LIN Partner International Finance Singapore mlgoh@wfw.com Mei specialises in cross-border asset, project and structured finance transactions in the maritime and logistics and offshore oil and gas sectors and advises financial institutions, export credit agencies, lessors, lessees, owners and operators. Quotes from Chambers Global and Chambers Asia Pacific, 2017: "Unparalleled expertise in English law as a ship financing lawyer" and "expertise in rehabilitation matters." Among all the English lawyers based in Hong Kong or Singapore, she is probably the most knowledgeable about the Korean market." is a popular choice for owners and operators, export credit agencies, banks, lessors and lessees alike. Sources praise "her unparalleled expertise in English law as a ship financing lawyer." One of the top shipping lawyers in the region" She maintains an excellent reputation for her expertise in shipping finance and is a trustedadviserto financialinstitutions, shipownersandlessors. Slide 6 Watson Farley & Williams 2015

7 Introduction Our global network 140+ partners, 500+ lawyers, 14 global offices, 11 jurisdictions Offices in major financial centres in Europe, Asia, the USA and the Middle East Worked in over 75 countries in 2016 Slide 7

8 WFW Offices ATHENS FRANKFURT MADRID PARIS 6th Floor, Building B 348 Syngrou Avenue Kallithea , Athens T: Ulmenstraße Frankfurt am Main T: C/ María de Molina, Madrid T: avenue des Champs-Elysées Paris T: BANGKOK HAMBURG MILAN ROME Unit 902, 9th Floor GPF Witthayu Tower B 93/1 Wireless Road Patumwan, Bangkok T: Neuer Wall Hamburg T: Piazza del Carmine Milan T: Piazza Navona Rome T: DUBAI HONG KONG MUNICH SINGAPORE Office 1503, Level 15, Tower 2 Al Fattan Currency House PO Box Dubai T: Units , One Pacific Place 88 Queensway, Hong Kong T: Gewürzmühlstraße 11 Courtyard Munich T: Battery Road #28-00 Singapore T: LONDON NEW YORK 15 Appold Street London EC2A 2HB T: West 55th Street New York, New York T: Slide 8 Publication Watson Farley code number: & Williams v1 2017

9 ATHENS BANGKOK DUBAI FRANKFURT HAMBURG HONG KONG LONDON MADRID MILAN MUNICH NEW YORK PARIS ROME SINGAPORE All references to Watson Farley & Williams and the firm in this presentation mean Watson Farley & Williams LLP and/or its Affiliated Undertakings. Any reference to a partner means a member of Watson Farley & Williams LLP, or a member or partner in a WFW Affiliated Entity, or an employee or consultant with equivalent standing and qualification. This presentation constitutes attorney advertising. wfw.com