The Malaysian Shipowners’ Association hopes to be represented in a committee to be set up by Bank Industri & Teknologi Bhd to assist in the disbursement of the recently-allocated RM1 billion to the Malaysian Shipping Finance Fund.

According to the chairman of the Association Dato Hj Mohd Ali said this was necessary to help Bank Industri to evaluate the applicants, in particular to ensure that the loans were given out to only bona-fide local owners.

“We do not want the money going to owners of some dubious background or serving foreign interest since it is the government’s objective that the money should be utilized to strengthen and expand the Malaysian merchant fleet,” he was quoted as saying in the latest issue of the Association’s newsletter, Ship Monitor.

The report said MASA was earlier this year invited by Bank Industri to assist in drawing up new guidelines for the disbursement of the loan following which the government-owned Bank advised the Ministry of Finance on the proposed new guidelines.

According to the proposal, the sum allocated by the Government will be in three tranches. An equal sum of RM300 million per annum will be allocated over a three year period for shipping while shipyard will get RM50 million per annum for two years.

Shipping companies seeking loans from the Bank must be 100 per cent Malaysian controlled and if public listed companies, with at least 70 per cent Malaysian controlled.

Bank Industri has also proposed that borrowers will categorized into three groups based on financial risks and related factors. For vessels built locally, companies rated with “A” risk will pay interest at 5.50 per cent, while those rated “B” pay 6.00 per cent and the “C” rated pay 6.50 per cent.

For vessels built overseas, the interest rates will be 6.0 per cent for “A”, 6.50 per cent for “B” and 7.00 per cent for “C”. Terms loans are extended to borrowers up to 75 per cent of project cost.

Shipyard loans will be offered at 6.00 per cent.

The Bank has indicated that the financial assistance if meant for the acquisition of new and secondhand vessels registered in Malaysia and plying home and foreign trades. 

Considerations will be given to specialized vessels and those constructed at local yards. The type of vessels include, dry bulkers, liquid bulkers, specialized vessels (cement clinker carriers and car carriers) container vessels and offhshore support vessels.

For second hand vessel financing, the age of the vessel must not exceed 17 year at the end of the repayment period.