WFW Advises TOWT on Financing New Ships

Watson Farley & Williams (“WFW”) has advised Crédit Industriel et Commercial on an innovative structure for the financing, through optimised leasing, of six new sailing cargo ships for TOWT (TransOceanic Wind Transport), a French company that is a pioneer in low-carbon shipping.

The six sailing cargo ships will leave the Piriou shipyards, based in French Brittany region, in 2027 and will complete the transport offer of the first two TOWT ships, which are expected to enter commercial service by mid-2024. These new ships will be intended to strengthen the link with New York and to open up new maritime routes for the shipowner to South America in particular, as well as to Asia and Africa.

With its eight vessels, TOWT will help transport around 200,000 tonnes of goods and save c. 40,000 tonnes of CO2 per year. Each new vessel will reduce CO2 emissions by more than 90% and save 20g of CO2 per tonne transported per kilometre. Primary wind propulsion will also reduce air pollution caused by heavy fuel oil typically used by commercial vessels.

The six vessels will be bareboat chartered by a dedicated vehicle majority owned by and sub-chartered to TOWT. This vehicle will finance the vessels by combining bond financing, fundraising and bank financing through leasing. The financings benefit either from a cover from Bpifrance Assurance Export or, for the first time, from a pool of private insurers as part of a “Marine Supported Finance” policy.

The WFW Paris team advising CIC was led by Partner Philippe Monfort, supported by Associates Lisa Tavlaridis and Vincent Cossavella on finance aspects. Partner Romain Girtanner and Associate Marie Dubois advised on the tax matters.

Philippe comments: “We are pleased to have supported Crédit Industriel et Commercial in the financing of these six new sailing cargo ships, allowing TOWT to expand its fleet. It is also the first ever deal in the maritime sector involving a pool of private insurers providing insurance coverage. We are proud today to contribute to the sustainability of the maritime industry by acting on key transactions such as this one and through the contribution of our teams to the Wind Ship association aimed at accelerating the development of the propulsion of ships by the wind”.

A team from Stream, led by Finance Partner Olivier Challine, advised TOWT.

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