REGISTRATION DOCUMENT - Bourbon

MANAGEMENT REPORT3Risk factorsConcerning the credit risk on the Group’s other fi nancial assets, i.e.cash and cash equivalents, available-for-sale fi nancial assets andcertain derivative instruments, the Group works only with top-rankingbanks, particularly with the major French banks, and pays particularattention to the choice of banking institutions.4.4.2 Liquidity risksFinancing comes under a Group policy implemented by the Financeand Administration Department. This policy consists of fi nancing theGroup’s needs through a combination of cash fl ows from operationsand disposals of non-strategic assets, bank borrowings and markettransactions. Recurring cash fl ows are generated by the regulargrowth in the vessel fl eet and by the long-term contract strategy withoil company clients whose investment programs have grown sharply.As of December 31, 2011, BOURBON’s gross debts amounted to€2,185 million, including €1,565 million at more than one year. Therepayment schedule for the medium and long-term debt is presentedin note 3.15 of the Notes to the Consolidated Financial Statements.The average residual life of this debt is six years.The following table shows the composition of long and medium-term debt as of December 31, 2011:Portion of medium/longterm debtunder one yearMedium/long-termdebt(in € millions)TotalClub Deal loan – €320 million 32 144 176Club Deal loan – €450 million 45 326 371Club Deal loan – €318 million 64 239 302EIG/SNC outsourced 81 238 319Financing – Norway fl eet 33 289 32151 other bilateral loans 84 330 413TOTAL 338 1,565 1,903As of December 31, 2011, short-term lines, in the form of overdraft,spot credit or revolving credit, were used in the amount of€274 million. Accrued interest came to €9 million.The Group had cash assets of €230 million as of December 31,2011.Medium and long term borrowingsMedium and long-term borrowing is primarily constituted byborrowings of the “club deal” loan (1) and bilateral type.All these borrowings are backed by assets (vessels) taken asguarantees (fi rst ranking mortgage or “negative pledge”). Thevessels are clearly identifi ed when the loan contract is signed.During the performance of the loan contract, for technical reasons,BOURBON may have to adjust the list of vessels initially assignedto the loan. Two options then arise – either partial redemption ofthe loan or substitution with another vessel. Whichever is the case,an amendment to the loan contract is signed to refl ect the newguarantees.There are no long and medium-term loans in existence that are notassigned to fi nancing assets.In 2005, BOURBON took out a “club deal” loan of €320 million forwhich the redemption phase began in April 2007 and will end in2017. At December 31, 2011, the outstanding loan was €176 million.In the summer of 2007, a €450 million loan (a “club deal”) wassubscribed. The redemption phase began in January 2010 andwill end in 2020. At December 31, 2011, the outstanding loan was€371 million.In July 2009, a new €318 million “club deal” loan was taken out.The redemption phase began 2011 and will end in 2016. AtDecember 31, 2011, the outstanding loan was €302 million.In parallel, bilateral borrowings (in dollars and euros and NorwegianKroner) are regularly signed. In 2011, new loans worth €291 million,including €165 million with foreign banks, were taken out. €89 millionwas also drawn down in 2011 on loans signed in previous years.As of December 31, 2011, the amount remaining to be drawn downfrom existing loans totaled €15.3 million.In addition, the USD 400 million loan secured from China Exim-Bankin June 2010 will become available from 2012, as and when vesselsfi nanced on that date are delivered by the Chinese Sinopacifi cshipyard.(1) In terms of bank fi nance, “club deals” involve small groups of banks with historically close relations with the Company, which share the senior debt betweenthem. When our loans are set up, BOURBON meets with all the banks proposing the loans in order to put the credit facility in place. No one bank has anoverriding interest in the loan. For reasons of convenience, one bank becomes the “bookrunner” but the other institutions are appointed as arrangers.BOURBON - 2011 Registration Document 43