Nordic American Tankers Ltd. (NYSE:NAT) has created a new offshore supply vessel company, Nordic American Offshore Ltd. that has completed a $250m private placement. It will seek listing on the NYSE.

GlobeNewswire Europe

Hamilton, Bermuda, November 27, 2013

In a press release November 1 2013, the investor market was informed that NAT was coordinating the establishment of Nordic American Offshore Ltd. ("NAO").  NAO, an offshore supply ship company, has now been established and NAT is its largest shareholder (26%) with an investment of $65 mill.

NAO has agreed to buy six platform supply vessels (PSVs) from the highly reputable Ulstein engineering and shipbuilding group of Norway that holds 4% of NAO. The ships (2012 and 2013 built) are operating already and are expected to be taken over in December 2013. NAO has an option for a 7th vessel on the same terms as for the 6 units.

A PSV is a part of the logistical chain in the offshore oil exploration business, transporting stores, provisions and equipment to offshore oil installations in such places as the North Sea, the US Gulf of Mexico, off the coast of Brazil and in other locations where there are offshore oil activities. Typically, a PSV is about 4,000 deadweight tons (dwt), i.e. much smaller than a suezmax tanker of about 150,000 dwt.

Nordic American Offshore has now completed a $250 million equity private placement. The transaction was upsized from $230 million to accommodate high demand. NAO will use the proceeds from the offering to finance the purchase of the six PSVs. More than 80% of the acquisition costs are expected to be financed with equity.  

The objective of the NAT investment in NAO is over time to produce higher dividend for shareholders of NAT than otherwise would have been the case. Like Nordic American Tankers, NAO will pursue a strategy of accretive growth based on a conservative financial strategy of high equity capitalization and a full dividend pay-out model. The new company will have existing time charter contracts in place for several of the vessels and spot charters for the remainder.  NAO can be expected to operate on a cash break-even basis that is highly competitive within the industry.  Cost synergies are expected to be achieved both for NAT and NAO. The suezmax strategy for NAT will remain firmly in place.

The NAO share is expected to begin trading in the Norwegian OTC (Over The Counter) market shortly. Later the OTC listing in Oslo is expected to cease concurrently with the planned listing of NAO on the New York Stock Exchange, which we expect will take place during the first quarter of 2014.

"The private placement in Nordic American Offshore received strong interest from investors acquainted with the NAT strategy and from investors familiar with the positive outlook for the offshore supply market,`` said NAT Chairman and CEO Herbjørn Hansson. "We have significant expertise in the offshore sector, and by using the NAT strategy and customer relationships, we think NAO will be able to grow and establish itself as a leading player in the market. It is important to stress that NAT will be operated 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.

Contacts:
Scandic American Shipping Ltd 
Manager for:
Nordic American Offshore Ltd.
P.O Box 56, 3201 Sandefjord, Norway
Tel: + 47 33 42 73 00 E-mail:  nat@scandicamerican.com   

Jacob Ellefsen,
Manager, Investor Relations and Research, Monaco
Nordic American Offshore Ltd.
Tel: + 377 93 25 89 07 or + 33 678 631 959

Rolf Amundsen, Advisor, Norway
Nordic American Offshore Ltd.
Tel: +1 800 601 9079 or + 47 908 26 906

Turid M. Sørensen, CFO, Norway
Nordic American Offshore Ltd.
Tel: +47 33 42 73 00 or +47 90 57 29 27 Press release (PDF)



This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Nordic American Tankers Limited via GlobeNewswire

HUG#1746309

Rates