NETHERLANDS Law and Practice Contributed by: Rik van Waasbergen, Sander Metzelaar, Wiebe Wajer, Iris Stielstra and Daan Komen, HerikLegal
may be visible in the public register. As long as the arrest on a vessel flying the Dutch flag has not been registered, it has no blocking effect and the debtor may still dispose of the attached property. Third parties may obtain this information by request - ing official extracts or registration products from the Kadaster relating to the relevant vessel. These extracts allow interested parties, such as purchasers, financi - ers and other creditors, to verify the legal status of a vessel. Public access to the registers promotes trans - parency and legal certainty and is a key feature of the maritime legal framework. Ship loan financing is typically structured as secured debt provided to a special purpose vessel-owning company. The most common transactions involve bilateral or syndicated term loans used for vessel acquisition, refinancing or newbuilding financing. Facilities are generally amortising and often include a balloon repayment at maturity. Interest is usually calculated on a floating rate basis with an agreed margin. Depending on the operational profile of the borrower, ancillary or working capital facilities may also be included. Equity is normally injected at the level of the vessel owning company and may consist of share capital and subordinated shareholder loans. Financing docu - mentation commonly includes restrictions on distribu - tions, subordination provisions and, where applicable, equity cure mechanisms that allow shareholders to remedy financial covenant breaches. Group support may be provided in the form of guarantees or similar arrangements, depending on the ownership structure and credit assessment. 2. Ship Finance and Leasing 2.1 Ship Loan Finance Loan financing is secured by a comprehensive secu - rity package. In addition to a ship mortgage, lenders typically require pledges over the shares in the vessel- owning company, pledges or assignments of receiva - bles such as charter hire and earnings, assignments of insurances and, where relevant, account pledges. In
syndicated financings, security is commonly held by a security agent for the benefit of the lending group. Enforcement depends on the nature of the security exercised. Mortgage enforcement follows established judicial procedures and may be preceded by arrest as a protective measure, ultimately resulting in a foreclo - sure sale of the vessel. Enforcement of share pledges focuses on control or disposal of the owning compa - ny, while receivables and account security is enforced through notification and cash flow control. Lenders may pursue these routes in parallel or sequentially, subject to contractual arrangements and applicable law. 2.2 Ship Leasing Ship leasing transactions have increased in recent years. This trend is driven by reduced appetite among traditional banks for shipping exposure, stricter regu - latory capital requirements and ship-owners’ need for alternative sources of liquidity and longer tenors. As a result, private equity-backed credit providers have become prominent participants in the shipping finance market. The legal relationship in a leasing structure differs fundamentally from that in a loan financing. Under a lease, ownership of the vessel remains with the les - sor, and the lessee pays hire for the use of the ves - sel. Risk allocation is largely governed by contractual provisions on maintenance, insurance, redelivery and termination. By contrast, under a loan structure the borrower owns the vessel and grants security to the lender, who is a secured creditor rather than the owner of the asset. These differences are also reflected in enforcement. Enforcement of a ship mortgage is based on propri - etary security rights and follows established judicial procedures, including arrest and executorial sale of the vessel. Lease default enforcement is contractual in nature and typically focuses on termination of the lease and repossession or return of the vessel, with the practical approach depending on the location of the vessel and the applicable forum. Sale and lease - back transactions are common and are used as a tool to release capital while retaining operational control.
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