EFIC supports Austal Limited with a major contract in the Republic of Trinidad and Tobago
Export Finance and Insurance Corporation (EFIC), Australia’s export credit agency, has helped Austal Limited to win an A$74.7 million contract to provide four high-speed passenger catamaran ferries to the Republic of Trinidad and Tobago.
The buyer of the ferries in the Caribbean is Trinidad and Tobago’s National Infrastructure Development Company Limited (NIDCO), a government entity. Australia and New Zealand Banking Group Limited (ANZ), Austal’s Australian bank for the transaction, has provided a loan facility to NIDCO to fund the purchase of the ferries. EFIC has provided ANZ with an export finance guarantee (EFG) for $A61.3 million to guarantee repayment of the loan.
EFIC’s EFG facility is a form of buyer finance: it is a guarantee to a bank to encourage the bank to lend to overseas buyers of Australian exports. An Australian exporter’s ability to enhance a contract bid with buyer finance from EFIC can make them more competitive in global markets.
Austal won the contract in an international tender and EFIC’s ability to work with the company and ANZ to structure a buyer finance package was key to Austal’s success.
Austal’s Managing Director, Bob Browning, said ‘Given the size of the order, being able to offer NIDCO a finance package which included EFIC’s guarantee was a crucial part of our bid.’
The high-speed ferries will be used to establish a water taxi service between San Fernando, in south-western Trinidad, and the capital, Port of Spain, and are intended to reduce travel time between north and south Trinidad by almost two-thirds. Each 41 metre aluminium vessel is designed to carry 405 passengers.
EFIC has supported several other Austal contracts and most recently provided an EFG in relation to an A$74 million contract for the design and construction of six fast patrol boats for the Republic of Trinidad and Tobago Coast Guard, a transaction in which it also worked with ANZ.
Angus Armour, EFIC’s Managing Director and CEO, said “We’re delighted to continue our association with Austal and to contribute to the international expansion of this successful Australian company.’
Paul Richards, ANZ’s Global Head of Structured Export Finance, said “Austal is a highly valued customer of ANZ. We are pleased to support Austal’s export business and to work with EFIC again.”
The four vessels will be constructed at Austal’s Tasmanian and Western Australian shipyards, with delivery scheduled for late 2010.