Hamilton, Bermuda, January 5th, 2009.
Nordic American Tanker Shipping Ltd. (NYSE:NAT) (the "Company")
announced today that it has agreed to acquire a double-hull
Suezmax tanker which is expected to be delivered to the Company by
March 15, 2009. The agreed price for the acquisition is $56.7
million.
Management expects that the Company's quarterly dividend and earnings
per share will be higher after the delivery of the vessel than had
the purchase not taken place.
This acquisition will increase the Company's fleet to 15 double-hull
Suezmax vessels, including the two previously announced newbuildings
the Company has agreed to acquire. These newbuildings are expected to
be delivered by the end of 2009 and by the end of April 2010,
respectively. The Company has no net debt at this time and an unused
credit line of $500 million. The acquisition is expected to be
financed from out of the Company's financial resources.
The vessel to be acquired was built in 1999 and was dry-docked in
December 2008. The vessel has been controlled by one shipping group
since it was delivered from the Samsung shipyard in 1999. After the
acquisition, the Company will own seven vessels built at this yard,
facilitating further economies of scale and cost-efficient
operations. The vessel is expected to be employed in the spot market.
Typically, based on the dividend model of the Company, also going
forward the dividend can be expected to show volatility of the same
nature as the spot Suezmax tanker market rates. The Company
announced that its dividend per share for the 4th quarter of 2008 is
expected to be approximately $0.85 per share. The dividend for the
comparable period of 2007 was $0.50 per share. The average charter
rate level for the Company's trading spot fleet, including offhire
days, is estimated to be in the range of $40,000 per day per vessel
for the 4th quarter of 2008. In the 4th quarter of 2008 the fleet of
the Company had 35 days offhire due to unscheduled repairs during the
quarter. The spot rate contracts entered into for 2009 at the time
of this writing are well above the level achieved on average for the
4th quarter of 2008.
As a matter of policy, the Company does not predict future spot
rates. The Company is not involved in derivative contracts of any
nature.
The Company's Chairman and CEO, Herbjørn Hansson, commented:
"The acquisition of this high quality vessel will increase the
dividend and earnings capacity of the Company and we expect this
acquisition to be accretive. Further acquisitions are under
planning. We are continuously working to enhance the Company's
ability to pay quarterly dividends based upon the Company's dividend
model which we expect will continue. The Company has now paid
dividends for 45 consecutive quarters. We believe that our strong
balance sheet, well defined and transparent operating model provide
the Company with a solid competitive position going forward."
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. This press release and any other written or oral
statements made by us or on our behalf may include forward-looking
statements which reflect our views with respect to future events and
financial performance. 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, dry-docking 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.
Contacts:
Scandic American Shipping Ltd
Manager for:
Nordic American Tanker Shipping Limited
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail: nat@scandicamerican.com
Rolf Amundsen, Investor Relations
Nordic American Tanker Shipping Limited
Tel: +1 800 601 9079 or + 47 908 26 906
Gary J. Wolfe
Seward & Kissel LLP, New York, USA
Tel: +1 212 574 1223
Turid M. Sørensen, CFO
Nordic American Tanker Shipping Limited
Tel: + 47 33 42 73 00 or + 47 905 72 927
Herbjørn Hansson, Chairman and Chief Executive Officer
Nordic American Tanker Shipping Limited
Tel: +1 866 805 9504 or + 47 901 46 291
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