Overseas Shipholding Group, Inc. Announces New Bareboat Charter and Completion of Refinancing
January 03 2019 - 11:05AM
Business Wire
Overseas Shipholding Group, Inc. (NYSE:OSG) (“OSG”), a provider
of energy transportation services for crude oil and petroleum
products in the U.S. Flag markets, announced today that it has
entered into a Bareboat Charter Party Agreement with the owner of
the vessel known as the Oregon Voyager. OSG will rename the
1999-built U.S. flagged product tanker the Overseas Key West and
intends to use this vessel in the U.S. coastwise trade under the
Jones Act. The Bareboat Charter extends for 10 years, into 2029.
OSG will undertake the vessel’s fourth special survey following the
vessel’s expected delivery and expects the vessel to commence
commercial operations during the second quarter of 2019.
Sam Norton, OSG’s President and CEO, remarked, “Following
closely on our decision to extend all of the leases for our
AMSC-owned tankers, the addition of the Overseas Key West to our
fleet of Jones Act tank vessels is an important and visible signal
of OSG’s continuing commitment to sustaining our leading position
in the markets which we serve. The extended duration of this new
lease agreement is both an affirmation of our positive outlook for
the future as well as a validation of OSG’s reputation as a
preferred counterparty in operating Jones Act tank vessels to the
high standards demanded by its customers.”
Mr. Norton added, “At current market levels, we expect the
Overseas Key West to contribute more than $18 million per annum in
time charter equivalent revenue once she enters into service. At
this revenue level, we estimate that the Overseas Key West would
add approximately $5.5 million in net annual vessel operating
contribution, which would be a welcome addition toward building a
solid future cash flow profile.”
OSG’s announcement of its new bareboat charter is the latest in
a series of transactions previously announced, including:
- The closing on December 21, 2018 of a
five-year $325 million term loan credit facility with The
Prudential Insurance Company of America and other syndicate lenders
(the “Term Loan Refinancing”). OSG’s subsidiary, OSG Bulk Ships,
Inc. (“OBS”) and certain of OBS’s subsidiaries obtained this new
loan facility to refinance and replace its existing term loan
facility, which was fully repaid as a result of the Term Loan
Refinancing.
- In connection with The Term Loan
Refinancing, the amendment and extension of its secured asset-based
revolving loan facility with Wells Fargo Bank, N.A. The amendment
reduced the maximum credit line available from $75 million to $30
million and extended the term through August 2, 2019. The amendment
also reduced the number of vessels serving as collateral.
- The extension of OSG’s bareboat charter
agreements with American Shipping Company ASA (“AMSC”) for nine
vessels currently under charter from AMSC. Charter agreements for
five of the vessels were extended for additional three-year terms,
commencing in December 2019 and ending in December 2022. The
charter agreements for the other four vessels were extended for
one-year terms commencing in December 2019 and ending in December
2020. OSG previously exercised its option to extend its charter for
the tenth vessel that it leases from AMSC, extending that charter
into 2025. As a result, all 10 bareboat charter agreements with
AMSC have now been extended for additional periods.
- The completion on November 19, 2018 of
a financing from Wintrust Commercial Finance, a division of
Wintrust Asset Finance Inc., in the amount of $27,500,000, which is
secured by first preferred ship mortgages on the Overseas Mykonos
and Overseas Santorini and a guaranty from OSG.
“We had a busy and highly productive fourth quarter,” commented
Dick Trueblood, Vice President and CFO of OSG. “Having extended the
maturities of all of our material liabilities and having resolved
any perceived uncertainty regarding the future deployment of our
principal revenue generating assets, we believe that we have
enhanced the future visibility of our cash flow streams. We are
optimistic that this improved visibility will highlight the
value-generating prospects of our business model and provide us
with the capability to pursue additional growth opportunities.”
About Overseas Shipholding Group, Inc.
Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly
traded tanker company providing energy transportation services for
crude oil and petroleum products in the U.S. Flag markets. OSG is a
major operator of tankers and ATBs in the Jones Act industry. OSG’s
21 vessel U.S. Flag fleet consists of five ATBs, two lightering
ATBs, three shuttle tankers, nine MR tankers, and two non-Jones Act
MR tankers that participate in the U.S. MSP. In addition to the
currently operating fleet, OSG has on order two additional
non-Jones Act MR tankers and one Jones Act compliant barge which
are scheduled for delivery in 2019 and 2020 respectively. OSG is
committed to setting high standards of excellence for its quality,
safety and environmental programs. OSG is recognized as one of the
world’s most customer-focused marine transportation companies and
is headquartered in Tampa, FL. More information is available
at www.osg.com.
Forward-Looking Statements; Non-GAAP Financial
Measures
This release contains forward-looking statements. In addition,
OSG may make or approve certain statements in future filings with
the Securities and Exchange Commission (“SEC”), in press releases,
or in oral or written presentations by representatives of OSG. All
statements other than statements of historical facts should be
considered forward-looking statements. These matters or statements
may relate to OSG’s prospects, OSG’s future results of operations,
OSG’s ability to maintain its market position, OSG’s ability to
operate without interruption, OSG’s ability to pursue growth
opportunities, and OSG’s ability to comply with the terms of its
credit facilities and other material contracts. Forward-looking
statements are based OSG’s current plans, estimates and
projections, and are subject to change based on a number of
factors. Investors should carefully consider the risk factors
outlined in more detail in OSG’s Annual Report on Form 10-K and in
similar sections of other filings made by OSG with the SEC from
time to time. OSG assumes no obligation to update or revise any
forward-looking statements. Forward-looking statements and written
and oral forward-looking statements attributable to OSG or its
representatives after the date of this release are qualified in
their entirety by the cautionary statements contained in this
paragraph and in other reports previously or hereafter filed OSG
with the SEC. “TCE revenue” and “net annual vessel operating
contribution” are non-GAAP financial measures, which are defined in
OSG’s most recent Quarterly Report on Form 10-Q and the related
earnings release, a copy of which was filed as an Exhibit to OSG’s
Current Report on Form 8-K filed with the SEC on November 9, 2018.
These Non-GAAP measures are used because management makes economic
decisions, and evaluates OSG’s financial performance, based on
these measures.
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version on businesswire.com: https://www.businesswire.com/news/home/20190103005488/en/
Investor Relations & Media Contact:Susan Allan,
Overseas Shipholding Group, Inc.(813) 209-0620sallan@osg.com
Overseas Shipholding (NYSE:OSG)
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