American Shipping Company ASA: New vessel acquisition and new long-term bareboat contract
12 May 2022
American Shipping ASA (“AMSC” or the “Company”) is pleased to announce its purchase of the offshore construction vessel Normand Maximus from Maximus Limited, a company controlled by its secured lenders (the “Transaction”). In conjunction with the Transaction AMSC will enter into a long-term bareboat agreement with a subsidiary of leading offshore services provider Solstad Offshore ASA (“Solstad”).
Total purchase price for the vessel is about USD 157 million and the Company expects to take delivery in Q4 2022. AMSC intends to finance the Transaction through 70% debt and the remaining amount through a combination of cash on hand and new equity. AMSC has already received indicative debt financing terms and has strong support from key stakeholders to finance the Transaction.
AMSC CEO, Pål Lothe Magnussen, comments “We are excited about this value accretive acquisition as it creates significant growth in cash flows and leads to a substantial increase in annual EBITDA. It also diversifies AMSC’s leasing portfolio and adds additional stable and predictable returns to our shareholders. We look forward to working together with Solstad as a long-term tonnage provider going forward. We have for some time been looking for the right growth opportunity and we are very satisfied with concluding on this transaction. The Transaction is accretive on all key financial metrics and is projected to produce more than 20% annual return on equity with strong running dividend yield. The offshore services market is in recovery and is currently experiencing increased activity and positive outlook. We believe the timing of the Transaction is favorable and the risk/reward attractive”.
The Normand Maximus is a premier offshore construction vessel and one of the most modern heavy duty subsea construction vessels globally. The vessel was built in 2016, has 2600m2 working deck, accommodation capacity for 180 people and a carousel for flexible products with about 4000t capacity. Main workscope is laying flexible pipes and umbilicals and installation of subsea equipment. Additional workscope in the future includes installation of power cables for the offshore wind industry.
Solstad is a leading offshore services company with a large fleet of offshore vessels operating globally. Solstad is the present operator of the Normand Maximus and will continue to do so under a new bareboat contract with AMSC.
Company contacts:
Pål Magnussen, Chief Executive Officer +47 90 54 59 59
Morten Bakke, Chief Financial Officer +47 900 955 94
Leigh Jaros, Controller +1 484 880 3741
About American Shipping Company ASA:
Established in 2005 and listed on the OSE, AMSC is a ship owning company with nine modern handy size product tankers and one modern handy size shuttle tanker on bareboat charter with Overseas Shipholding Group (OSG). OSG charters the vessels out on time charters to major oil companies in the U.S. coastwise Jones Act trade. AMSC has a significant contract backlog as well as a profit sharing agreement with OSG which offers visibility with respect to future earnings and potential dividend capacity. The Company has an ambition to pay attractive dividends to its shareholders. Further information is available at www.americanshippingco.com.
This information is considered to include inside information pursuant to the EU Market Abuse Regulation article 7 and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Leigh Jaros, Controller, American Shipping Company ASA, on May 12, 2022 at 16:40 CET
