OCTOBER 23, 2012 – American Petroleum Tankers Parent LLC (APT), a shipping company backed by private equity giant Blackstone, is having another go round at getting a Title XI loan guarantee out of Marad. If it does so, it will place an order with General Dynamics NASSCO for two more product tankers to add to the five that it has already taken delivery of from the shipbuilder.
Yesterday, APT announced its commitment to build the two new state-of-the-art tanker vessels at NASSCO, but said the commitment is "contingent upon approval of a $340 million Title XI loan guarantee from the U.S. Department of Transportation's Maritime Administration that would be used to refinance APT's existing five tankers."
Should construction of the vessels proceed, they will be the first new product tankers to be ordered in the U.S. in two years.
On August 1, 2012, Maritime Administration denied an application by APT for a $470 million loan guarantee relating to the five ships. That came after APT sued the agency seeking a decision on its loan guarantee application, which had been pending for almost two years. You can read the Marad decision letter HERE
Yesterday, APT noted that Title XI has historically provided between 80 to 87 percent of new build construction costs to support the U.S. shipbuilding industry and said that construction of the new product tankers will help support the future of NASSCO as a key asset in the U.S. industrial base for military and commercial shipbuilding, will sustain up to 500 jobs during construction, and create some 84 long-term seagoing jobs when the vessels become operational.
Rob Kurz, Chief Executive Officer of APT said, "This is a demonstration of our long-term commitment to the U.S. maritime industry and to bolstering job creation in the U.S. It is a win-win for the Maritime Administration and our company, and we are committed to working with the Maritime Administration and the Department of Transportation to close this financing and support our nation's important maritime industry."
Sean Klimczak, Managing Director of Blackstone said, "We have worked closely with MarAd over the past two years to present a loan application that would be the safest loan in Title XI history and that has met every MarAd program requirement. This loan is supported by five modern, state-of-the-art tankers, valued in excess of two times the amount of the loan requested by APT. We are looking forward to receiving MarAd's approval of the loan so that we may begin construction of these two new vessels without further delay."