HAMILTON, Bermuda, Jan. 15, 2014 (GLOBE NEWSWIRE) -- Nordic American Tankers (NAT) announced today that NAO yesterday took delivery of the last of the six recently built Platform Supply Vessels (PSVs) from the Ulstein Group of Norway. NAO is fully operational. NAT is the sponsor of NAO, owning 26% of the share capital in NAO. A subsidiary of NAT is the manager of NAO.
The PSV vessels play an integral role in the logistical chain in offshore exploration and production of oil and gas. NAO has its six PSV vessels in the demanding North Sea market, where there are numerous offshore oil platforms that need to be served. PSVs are highly sophisticated vessels. The NAO vessels represent the latest in design and technology.
NAO is an important investment for NAT. Three vessels were delivered from the seller to NAO in December 2013. The last three were delivered in January 2014, a few days later than planned because of bad weather which delayed necessary underwater inspections. The vessels were delivered from the yard to the seller between January 2012 and September 2013.
Five of the six vessels are now on contract employment. Unlike the NAT crude tanker business in which the spot market plays a larger role, contract employment is more the norm in the PSV charter market. The PSV vessels are on contracts to major energy companies with an average duration (including options) of a little over two years with rates between $25,000 and $29,000 per day per vessel. Like NAT, NAO is expected to have a cash breakeven rate of around $12,000 per day per vessel.
NAT participated in the private placement of NAO shares in November 2013 with an investment of $65 million, which was financed by a follow-on equity offering in NAT at the same time. NAT has previously announced that it expects NAO to list its shares on the New York Stock Exchange as early as possible, hopefully during the first quarter of 2014. NAT is considering distributing to NAT shareholders about $10 million worth of NAO shares as a dividend in kind around the time of listing. This dividend equates to about $0.13 per NAT share. In addition, NAT is planning to declare a cash component to the NAT dividend expected to be paid in late February, 2014. Further information will be available when NAT releases its 4Q2013 results on February 10, 2014.
NAO offered the shares at $15 per share or about Norwegian Kroner (NOK) 91.50. The shares are trading in the Oslo OTC (Over the Counter) market at NOK 98.00 ($16.06 equivalent) at the time of this release. NAT expects NAO to pay dividends to its shareholders, including NAT. Dividends received by NAT are expected, in turn, to be distributed to NAT's shareholders.
Nordic American Tankers continues to enjoy a strong tanker market and NAT will continue to operate as in the past.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker market, as a result of changes in OPEC's petroleum production levels and world wide oil consumption and storage, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission, including the prospectus and related prospectus supplement, our Annual Report on Form 20-F, and our reports on Form 6-K.
Press Release (PDF): http://hugin.info/201/R/1754907/592442.pdf