Portfolio, Investment & Restructuring
Loan-to-own Strategies in Maritime Finance
Summary
Loan-to-own strategies acquire or restructure debt with a possible path to control of the borrower or vessel asset.
Why this matters in ship finance
Returns depend on creditor priority, recovery process, new capital and the economics of operating or selling the vessel.
The concept
Debt purchase does not automatically transfer shares or ownership of the ship. Security enforcement, insolvency votes and debt-equity conversion depend on legal instruments and jurisdiction.
How it is used in practice
Map creditor ranking, voting classes, collateral, litigation and post-acquisition operating cost before estimating equity recovery.
Practical issues
Transfer of a distressed loan may trigger servicing or purchaser regulation in the EU; assess whether Directive (EU) 2021/2167 applies to the transaction.
How ShipFinance.ai uses this concept
Present multi-path recovery trees for cash settlement, enforcement and consensual control conversion.
Key takeaways
- Buying debt is not the same as owning a ship.
- Creditor priority drives control options.
- Regulatory and enforcement pathways must be checked.