Consolidated Financial Statements - Minoan Lines

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MINOAN LINES SHIPPING S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENS (Amounts expressed in thousands of drachmae unless otherwise stated) On June 4, 1997, the Company entered into a loan agreement for EURO 125 million with a multi-currency option to partly finance the acquisition and delivery cost of the vessels "Pasiphae" and "Ikarus". The loan was obtained via three drawdowns: a) EURO 60.5 million on December 5, 1997, b) EURO 12.5 million on December 29, 1997, and c) EURO 52 million on June 6, 1998. The loan bears interest at Libor plus 1.125% per annum with respect to the single repayment installments and Libor plus 1.1875% per annum with respect to the balloon payments. The first advance is payable in 20 consecutive semi-annual installments beginning on June 1998 with a balloon payment of EURO 17.5 million due on December 7, 2007 together with the final installment. The second and third advances are payable in 23 consecutive semi-annual installments beginning on June14, 1998 with a balloon payment of EURO 19.8 million due on December 7, 2008 together with the final installment. The balances outstanding at December 31, 1999 and June 30, 2000 were GRD 36,862,849 and GRD 36,249,104 respectively. The weighted average rate of interest on the loan was 4.31% for 1999 and 4.51% for the six months ended June 30, 2000. On June 12, 1998, the Company obtained a loan for EURO 8 million with a multi-currency option to provide corporate liquidity to fund part of the predelivery and/or delivery payments in respect of the vessel "Pasiphae". The loan bear interest at Libor plus 1.125% per annum which was payable in 8 consecutive quarterly installments of EURO 1 million beginning on September 14, 1999 with a balloon payment of EURO 4 million payable together with the final installment on June 15, 2001. The weighted average interest rate on the loan for the six months ended June 30, 2000 was 2.12%. The loan was fully repaid on June 15, 2000. On September 12, 1998, the Company obtained a loan for EURO 11.15 million with a multi-currency option to refinance part of the existing indebtedness of the Company under the loan in DEM mentioned above for the construction of the vessel "Aretousa". The loan bears interest at Libor plus 1% per annum with respect to the single repayment installments and Libor plus 1.1875% per annum with respect to the balloon payment. The loan is repayable in 28 consecutive semi-annual and quarterly installments of EURO 549,000 beginning on December 14, 1998 and a balloon payment of EURO 4,014,000 due on June 15, 2005. The balance outstanding at December 31, 1999 and June 30, 2000 was GRD 3,148,809 and GRD 3,024,855 respectively. The weighted average rate of interest on the loan was 4.04% for 1999 and 4.42% for the six months ended June 30, 2000. On December 8, 1999, the Company converted an existing overdraft facility of JPY 600 million to a long-term loan. The loan bears interest at Libor plus 1% per annum and the principal is fully repayable on April 2002. The balance outstanding of the JPY at June 30, 2000 was GRD 2,015,550. The weighted average interest rate on the loan was 0.6% for the six months ended June 30, 2000. On December 9, 1999 the Company converted an existing overdraft facility of JPY 1,800 million to a long-term loan. The loan bears interest at Libor plus 1.25% per annum and the principal is fully repayable on December 9, 2002. The balance outstanding at the JPY at June 30, 2000 was GRD 6,046,650. The weighted average interest rate on the loan was 0.64% for the six months ended June 30, 2000. On December 23, 1999 the Company converted an existing overdraft facility of JPY 300 million to a long-term loan. The loan bears interest at Libor plus 1.25% per annum and the principal is fully repayable on December 23, 2001. The balance outstanding of the JPY at June 30, 2000 was GRD 1,007,775. The weighted average interest rate on the loan was 0.68% for the six months ended June 30, 2000. On December 30, 1999 the Company converted an existing overdraft facility of JPY 650 million to a long-term loan. The loan bears interest at Libor plus 0.85% per annum and the principal is fully repayable on December 31, 2001. The balance outstanding of the JPY at June 30, 2000 was GRD 2,183,512. The weighted average interest rate on the loan was 0.6% for the six months ended June 30, 2000. On June 6, 2000 the Company converted an existing short-term loan of USD 22.4 million to a long-term loan. The loan bears interest at Libor plus 1.125% per annum and the principal is fully repayable on August 31, 2002. The balance outstanding of the USD at June 30, 2000 was GRD 7,903,504. The weighted average interest rate on the loan was 3.62% for the six months ended June 30, 2000. 17
MINOAN LINES SHIPPING S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENS (Amounts expressed in thousands of drachmae unless otherwise stated) All the loans above are secured as follows based on the vessels to which they relate: (i) (ii) (iii) (iv) First preferred mortgages on vessels: "Aretousa", "El Greco", "Daedalus", "Ikarus", "King Minos", "Pasiphae" and "N. Kazantzakis". Second preferred mortgages on vessels: "Aretousa" and "Daedalus". First and second legal assignments of earnings First and second legal assignments of insurances and requisition compensation The Company has to meet various covenants in respect to some or all of the loans, the most significant being: (i) (ii) (iii) (iv) (v) The Company may not, without prior written consent of the financing banks, make any declaration or payment of dividends at an amount in excess of 50% of the net income of each fiscal year. The Company may not sell, lease, transfer or otherwise dispose of the whole or any part of its revenues or assets without the prior written consent of the financing banks. The Company undertakes, depending on the specific terms of each loan, that if the aggregate market value of the vessels to which the loan relates falls at any time during the security period below 135% of the aggregate of the loan in question and the existing indebtedness, it shall either provide the financing banks with such additional security as shall at the opinion of the banks be adequate to make up such deficiency or prepay such part of the loan as will ensure that the aggregate market value of the vessels and any such additional security is, after such prepayment, at least 135% of the outstanding amount of the loan. The Company, during the life of the loan and so long as an amount of the loan is outstanding, covenants to ensure that at all times the aggregate of the market value of the mortgaged vessels to which the loan relates shall be equal to at least 150% of the outstanding amount of the loan. The Company shall have to effect insurances for the market value of the vessels (free of any charter) for an amount of up to USD 120 million which shall be readjusted by the financing banks and in any case may not be lower than the 125% of the total of (a) the remaining unpaid balance of the loan facility in capital, interest and charges and (b) the total aggregate of all other outstanding loan or credit facilities (together with interest and charges thereon) which are secured by mortgages on certain of the Company's vessels. The Company is obliged to renew at its expense the insurance policies effected on the vessels within fifteen days before their expiration. The aggregate annual maturity on all long-term debt on June 30, 2000 was GRD 64,856,942. 2001 688,828 2002 8,164,903 2003 12,086,442 2004 4,182,533 Thereafter 39,734,235 64,856,942 18
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Consolidated Financial Statements - Minoan Lines

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