Overseas Shipholding Group Reduces Outstanding Debt
23 Ottobre 2023 - 10:15PM
Business Wire
Under bareboat arrangements with new owner
of seven tankers operated by OSG
Overseas Shipholding Group, Inc. (“OSG”) announced today that it
has prepaid deferred payment obligations (“DPO”) and entered into
new bareboat charter agreements in respect of the seven vessels
comprising OSG’s Veteran Class products tanker fleet, all of which
are now indirectly owned by a private fund (the “MP Fund”) managed
by Maritime Partners, LLC. Prior to their recent acquisition by a
Jones Act qualified subsidiary of the MP Fund, these seven vessels
were previously owned indirectly by AMSC ASA (“AMSC”). The
transaction presented OSG with an opportunity to reduce its overall
outstanding debt while also simplifying the underlying arrangements
that govern the relationship between OSG and the new vessel
owners.
OSG prepaid all of its remaining outstanding DPO, which date
back to an agreement made with AMSC in 2005, at a 14% discount to
the aggregate outstanding DPO liability of $6.5mm. Other material
commercial terms of the revised bareboat agreements remain
unchanged from the original agreements. Each of the Veteran Class
products tankers has been leased by OSG and operated by its wholly
owned subsidiary, OSG Ship Management, since its delivery from the
Aker Philadelphia Shipyard.
Commenting on the transaction, Sam Norton, OSG’s President and
CEO said, “Opportunistic repayment of outstanding debt has been one
of the principal targets that OSG has set for the productive use of
the surplus cashflow being generated by our vessel operations. We
are more than pleased that in our first interaction with the new
owners of our leased Veteran Class products tankers, we were able
to come to an agreement the effect of which is to simplify the
balance sheet of both parties while providing a positive income
statement impact for OSG’s 4th quarter results. With the agreed
prepayment of DPO liabilities linked to the Overseas Houston and
Overseas Long Beach, OSG will realize a gain of $911,000 and will
see its interest expense going forward reduced by nearly $1.7mm as
compared with the original contractual payment structure of the
DPOs.”
Mr. Norton added, “We remain optimistic that anticipated near
term strength in our core businesses will continue to produce
cashflows in excess of scheduled debt service and capital
expenditures, providing the flexibility to take advantage of future
business and debt reduction opportunities. We are looking forward
to a positive relationship with Maritime Partners.”
The Veteran Class products tanker fleet includes six MR products
tankers, each with charter terms ending in December of 2026 unless
otherwise extended by OSG, and one shuttle tanker, the Overseas
Tampa, with a term scheduled to expire in June of 2025 unless
otherwise extended.
About Overseas Shipholding Group, Inc
Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly
traded company providing liquid bulk transportation services in the
U.S. Flag markets. OSG’s U.S. Flag fleet consists of Suezmax crude
oil tankers doing business in Alaska, conventional and lightering
ATBs, shuttle and conventional MR tankers, and non-Jones Act MR
tankers that participate in the U.S. Tanker Security Program.
Headquartered in Tampa, Florida, OSG is committed to setting
high standards of excellence for its quality, safety, and
environmental programs and is recognized as one of the world’s most
customer-focused marine transportation companies.
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version on businesswire.com: https://www.businesswire.com/news/home/20231023264577/en/
Susan Allan, Overseas Shipholding Group, Inc. (813) 209-0620
sallan@osg.com
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