September 1, 2009
OSG and American Shipping sign settlement proposal
Overseas Shipholding Group, Inc. (NYSE: OSG) says it has signed a nonbinding settlement proposal with American Shipping Company ASA (AMSC) that seeks to settle all outstanding commercial disagreements between the two companies.
Versions of pretty much the same release published on the Oslo Stock Exchange by American Shipping Company and Aker Philadelphia Shipyard note that Aker Philadelphia is also a signatory to the agreement (which may explain why OSG headlined its release "Nonbinding Settlement Proposal Signed with Aker.)
The proposal is intended to resolve certain liquidity issues previously disclosed by Aker Philadelphia Shipyard ASA (AKPS), for AKPS to continue its 12-ship newbuild program. All 12 vessels have been chartered out to OSG, seven of which have delivered and are trading in the Jones Act market.
OSG says the proposal also provides for the dismissal with prejudice of all the claims in the arbitration among the parties and contains a number of provisions materially altering the prior agreements among the parties. OSG cautions that the proposal is nonbinding and there can be no assurance that definitive agreements will be entered into. In addition, the proposal is subject conditions that include getting approvals from various lenders and governmental authorities, the execution and delivery of satisfactory definitive documentation and the completion of satisfactory due diligence.