Converto Capital Fund ("Converto"), in which Aker ASA holds 99.8 per cent of the invested capital, has during the last week investigated the opportunity for an exit in American Shipping Company ASA ("AMSC") through a contemplated secondary offering. In this process and through other recent discussions with a number of financial and industrial investors, Converto has gained valuable confirmation of the future potential of AMSC and Aker Philadelphia Shipyard ("AKPS"). Converto has also received indications from several parties that there is interest in discussing and assessing strategic opportunities for AMSC and AKPS on a stand- alone or combined basis. As a result, Converto has concluded that potential strategic alternatives could create higher value than an exit at the current time and will now spend the time required to explore such options.
Converto has been a major shareholder in AMSC and AKPS since 2009 and has shared in the companies' success over the last few years. The North American shale oil revolution has created a structural change in the demand for oil transportation and refining in the United States. This has resulted in the creation of numerous jobs and significant tailwinds for the Jones Act market. AMSC and AKPS's assets are uniquely positioned to benefit from a continued tight Jones Act market and the favourable supply / demand dynamics driven by increased shale oil production, longer shipping distances, stricter vessels requirements and limited newbuilding capacity.
In Converto's opinion, AMSC and AKPS are at a crossroad of opportunities. As previously announced, AMSC is working to refinance its debt and is in final rounds of negotiations with banks to orchestrate an all encompassing refinancing to reduce the cost of capital and increase its dividend capacity. Among other strategic alternatives, AMSC and AKPS are both working towards establishing a US yieldco (an MLP- like investment vehicle) and a potential US listing.
As the principal shareholder in both companies, Converto is excited to work together with management and the Board of Directors of AMSC and AKPS to evaluate and execute potential strategic initiatives to visualize and maximize shareholder value. This could include M&A and financial restructuring in AMSC and AKPS, as well as investigating potential joint strategic alternatives for the two companies. Converto will appoint an advisor to assist in the above mentioned processes.