• News

Ulstein sells Blue PSVs to NAT sponsored start-up

Written by Nick Blenkey
image description

Blue Fighter at work in North Sea

NOVEMBER 1, 2013 — A company being established by Nordic American Tankers (NYSE:NAT) is to buy all six of the Blue Ship PX121 platform supply vessels that the Ulstein Group built for itself at its Ulstein Verft shipyard.

The new company — Nordic American Offshore (NAO) — is expected to follow the same strategy as NAT, with dividend payment as an important element.

Nordic American Offshore is expected to undertake a private equity placement to finance at least 80% of the acquisition price of these vessels; 20% or less of the cost is expected to be financed via debt.

NAT and Ulstein Shipping AS will participate in the private placement with 15%/20% and 5% respectively. The NAT investment is planned to be about $50 million.

“We are very pleased with this agreement with NAO,” says Gunvor Ulstein, CEO, Ulstein Group. “We invested in these ships because we wanted to introduce new products with flexible and first-class innovative solutions to the market. All the ships have been regularly in work since delivery and feedback has been very good. We strongly believe that NAO will be satisfied with these vessels.”

Chairman of the Board and CEO of NAT is Herbjørn Hansson, who has been in the maritime industry since the 1970s. He says: “We have significant experience in the offshore sector. We believe there will be an increase in the demand for offshore supply services, and that these vessels will have the properties that we need for our fleet.”

NAT says the establishment of Nordic American Offshore and the NAT investment in the new company do not in any way constitute a departure from NAT’s commitment to a homogenous Suezmax tanker fleet. There will be no change as to how NAT operates its business, including how it determines quarterly dividends from its fleet of Suezmax tankers. Nordic American Offshore will seek listing on the New York Stock Exchange as soon as possible.

Because of the investment in NAO and as Manager of Nordic American Offshore, the objective for Nordic American Tankers is to pay a higher dividend to NAT shareholders than otherwise would be the case. The new company will have existing contracts in place for several of these vessels and spot charters for the remainder. As with NAT, NAO can be expected to operate on a cash break-even basis that is highly competitive within the industry.

“The establishment of Nordic American Offshore with a capital contribution from NAT is a move with the objective to increase the dividend payments to shareholders of Nordic American Tankers,” said Mr. Hansson. “We have significant expertise in the offshore sector, and we think this new offshore business venture will help maximize total return to NAT shareholders. We wish to extract cost synergies and to leverage the NAT customer relationship in the energy business. Our presence in the U.S. capital market will also help us to achieve our objectives for this new project.”

Categories: News Tags:

Leave a Reply