Posted on: 21 October 2024
Founded in 1886, North Star owns and operates the largest wholly UK-owned fleet engaged in the UK’s offshore industry in the North Sea, providing comprehensive operational experience of the seas around the UK coastline. With advanced vessels and the experience of its highly trained crews North Star’s 1,400 workforce provide continuous offshore infrastructure support 24/7, 365 days of the year.
The company, which has sites in Aberdeen, Lowestoft, Newcastle, and Hamburg in Germany operates 41 multi-purpose ships in the North Sea. Over the past few years, North Star has also shaken up the offshore wind sector with its hybrid-propulsion offshore wind ships, swiftly establishing itself at the forefront of the UK’s service operation vessel (SOV) market. Three of four newbuild SOVs are in operation at the Dogger Bank Wind Farm with the final asset on schedule for early delivery next year. The firm has a further four newbuilds underway – a SOV for EnBW’s He Dreiht wind farm in Germany, another for Siemens Gamesa Renewable Energy at the East Anglia THREE project, and its first two larger Commissioning SOVs to further support its offshore wind clients.
£225m sustainability-linked financing to help add 40 SOVs to North Star’s fleet
North Star has secured further debt investment of up to £425million. To accelerate its ambition to become the leading player in Europe’s offshore wind sector and add 40 hybrid service operation vessels (SOVs) to its fleet by 2040, the company approached Royal Bank of Scotland as a potential lender.
Having had prior discussions about North Star’s financial requirements, the Royal Bank’s deal team (as the only UK bank) agreed to provide a £20 million capex Revolving Credit Facility (RCF) and a £10 million working capital RCF as part of a £225 million syndicated package from the six-lender consortium.
The new funding package also has a £200 million accordion that can be drawn as needed. The financing is sustainability-linked, with three ESG Key Performance Indicators (KPIs) that can affect the margin by up to ±6 basis points, depending on whether or not they are met. These KPIs relate to North Star’s growth in offshore wind sector revenue, the number of its hybrid vessels, and the company’s health & safety record.
Helping to transition to a greener economy
Fraser Dobbie, North Star’s Chief Financial Officer, commented: “This £425 million strategic investment highlights the attraction of our robust business model and ESG transition journey as we push to become the leading player in Europe’s SOV sector. The infusion of capital from a combination of institutional and bank investors secures access to the capital required to support our continued growth and provides validation from the lender market of the excellent progress we have made on our strategic journey to build our business for sustainable, long-term success in the offshore wind market.”
Ramin Mathieson, Structured Finance, Royal Bank of Scotland, said: “We are delighted to not only have been able to support North Star with a new credit facility, but to also add a sustainability component to the financing. We are proud to help our customer with their energy transition and we look forward to working with them in the future, supporting their offshore wind vessel fleet, which is expected to grow substantially in the coming years.”
