Hamilton, Bermuda, February 27, 2006
Nordic American Tanker
Shipping Ltd. has agreed to acquire a double hull Suezmax vessel of 157,332 dwt built in Korea in 1998, for a price of $69 million. The vessel is expected to be delivered from the seller to the Company in early April 2006. This acquisition will increase the NAT fleet to 9 vessels with an aggregate capacity of 1,383,491 dwt.
The vessel is expected to be employed in the spot market, thus increasing the number of the Company's ships in the spot market from seven to eight Suezmax tankers. The Company's remaining Suezmax is employed on a long term contract.
In conjunction with this acquisition, the Company also announced today that it is commencing a public offering of 3,750,000 common shares pursuant to the Company's effective shelf registration statement
. Bear, Stearns & Co. Inc. and UBS Investment Bank will act as joint bookrunning managers and DnB NOR Markets, Inc. will act as a co-manager. The Company will grant the underwriters an option to purchase an additional 562,500 common shares to cover any over-allotments, exercisable within 30 days.
The net proceeds of this offering are expected to be used to finance the acquisition of the Company's ninth Suezmax tanker and an additional tanker that the Company is presently planning to acquire later this year in line with the Company's policy of accretive growth and of maintaining indebtedness in the region of $15 million per vessel in the current market conditions.