April 12, 2010
Nordic American Tankers to add two Suezmax newbuilds
Nordic American Tanker Shipping Limited (NYSE:NAT) says it has entered into a preliminary agreement with Korean shipbuilder Samsung Heavy Industries Co., Ltd. to build two 158,000 dwt suezmax tankers for delivery in the third and fourth quarters of 2011.
The definitive contracts with Samsung are expected to be signed at the end of April or in early May 2010
The purchase prices are $64.5 million and $65.0 million, about half to be paid on signing the definitive contracts and the balance on delivery. Nordic American says that advance payments will be guaranteed by a first class financial institution and that the acquisitions will be financed by the company's resources. There are no plans for a follow-on equity offering in connection with either these two 2011 newbuildings or two previously announced newbuildings scheduled to be delivered later this year.
Assuming no other acquisitions or dispositions, delivery of the newbuildings will take the Nordic American fleet to 20 modern double hull suezmax tankers by the end of 2011 compared to 12 In January 2009 -- an increase of 67 percent over a period of 36 months. In the same period, the company's share count is expected to have increased by about 36 percent assuming that no further acquisitions or follow-on equity offerings are made in the meantime.
Chairman and CEO Herbjørn Hansson stated: "This is an important step forward in the organic growth of our company. By adding two more ships to our fleet, we will increase our dividend capacity and bolster our earnings potential. Our strong balance sheet enables us to contract for these two newbuildings from Samsung. Our dividend policy remains the same as in the past -- a full pay out model. We already have seven vessels built by Samsung in our fleet."