KG STRUCTURE – OPEN FOR MORE THAN BOXSHIPS

By Nicolai Heidenreich

Following-on from our KS article in our September issue we will take a brief look at the German KG market explaining the pros and cons putting it all into perspective with a recent deal. Again the focus of the article will be to explain the benefits from a shipowners perspective and next month we will continue this series by looking at a straight forward sale-leaseback and compare these three off balance sheet structures.

KG Structure
The KG structure or German Limited Partnership is a financial structure where most often a shipowner will sell and charter back his vessel to a special purpose company which is set up to primarily own the vessel during the charter hire period. The arranger of the structure will negotiate with banks and will sell the equity to a group of German private individuals who will use the investment to reduce their individual income tax.

This is only an excerpt of KG STRUCTURE – OPEN FOR MORE THAN BOXSHIPS

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