SINGAPORE - Offshore marine services firm Pacific Radiance has been granted S$85 million in loans under two Government-backed financing schemes.
The loans - disbursed by International Enterprise (IE) Singapore under its Internationalisation Finance Scheme (IFS) as well as Spring Singapore via the Bridging Loan (BL) scheme - will help support the group's working capital needs over the medium term, said Pacific Radiance in a statement on Thursday.
The company's executive chairman Pang Yoke Min added that the loan approvals from the participating banks, DBS and UOB, and the government agencies "reflect their strong support to help the group overcome the downturn".
Under the IFS, Pacific Radiance will be disbursed a S$70 million loan in stages, subject to the group fulfilling certain disbursement conditions. It will also receive S$15 million under the BL scheme.
The Government will take on 70 per cent of the risk share for both the IFS and BL loans, which were rolled out last November to help local offshore and marine companies weather the current prolonged industry downturn by gaining access to working capital and financing.
Mr Pang noted that the longer-term outlook for the industry has improved, as Opec and certain non-Opec producers have sustained oil production cuts until June this year and have also agreed to extend these cuts by another nine months. "This concerted effort by oil producers should enable supply and demand to balance in the medium term."
Still, he added: "These positive developments will take time to flow through. Even though vessel utilisation and charters rates are bottoming out, market conditions will remain challenging in the near term.
"To withstand the headwinds ahead, we will continue to refine our cost structure, extend our reach in key markets and work closely with our lenders to manage our working capital and loan repayments to sustain our business for the long term."
Shares of mainboard-listed Pacific Radiance closed 9.7 per cent or one cent lower at 9.3 Singapore cents on Thursday, before the announcement was made.