Receivables and liabilities
|Total long-term receivables||
Receivables due later than 12 months
|Loans to employees 1)||
|Other long-term receivables||
1) The average interest rate used for loans to employees was 2.28% (2.72%) in 2016. The repayment period is five years.
In 2014 Belships entered into a long-term financing agreement for M/S Belstar, M/S Belnor and M/S Belocean. The loan facility of USD 50 million is secured for a period of 6 years. The following principal conditions applies to the loan: agreed interest rate is LIBOR pluss margin of 2.75%, minimum market value of the ships is 110% of the outstanding loan balance, minimum value adjusted equity on a consolidated basis is 25% and the Group shall at all times have available liquidity of at least USD 5 million or 6% of total interest bearing debt.
The ship values have dropped significantly during the last two years. In order to avoid breach of loan covenants, Belships received a revised waiver from ship mortgage lender in November 2016. Main terms in the waiver period until 1 January 2018 are as follows: Minimum cash USD 5.0 million including restricted cash of USD 3.0 mill, minimum value 100% incl. restricted cash, minimum value adjusted equity of 20% and on‐demand guarantee from main shareholder of USD 5 million. All the covenants were fulfilled as at 31 December 2016. The market value of the ships were 101% of the outstanding loan balance at year-end.
Belships ASA entered in 2015 into a lease agreement for M/S Belforest. The bareboat period is 12 years with purchase options from year 3 onwards.
M/S Belisland was delivered 15 March 2016. Remaining newbuilding commitment amounting to USD 19.8 million was paid upon delivery. At time of delivery the ship was sold to a Japanese counterpart and leased back for a period of 15 years with purchase options from year 5 onwards.
Both leases are considered as financial leases.
|Total||6 836||6 994||7 163||7 350||52 554||80 897|
|Mortgage debt||5 000||5 000||5 000||5 000||16 250||36 250|
|Obligation under finance leases||1 836||1 994||2 163||2 350||36 304||44 647|
INTEREST SWAP AGREEMENTS
Belships has an interest swap agreement with a fixed interest rate at 2.2% with a remaining duration of 1.5 years covering USD 10 million, reducing by USD 5 million per year. Another interest swap agreement started in September 2015 at a rate of 1.9% and with a duration of 5 years covering USD 19 million, reducing by USD 2 million per year.
Hedging the Group’s interest exposure is considered on an ongoing basis. Hedge accounting is not used.
CURRENT RECEIVABLES AND SHORT-TERM LIABILITIES
Current receivables consist mainly of accrued revenues, and receivables related to operation of the ships. Other short term liabilities mainly include short term liability related to the ordinary operation of the ships. All current receivables and liabilities are due within 12 months.