Nordic Shipholding released a report covering the period January 1-June 30, 2013 and consisting of figures related to both the chemical tankers (discontinued operations) that was sold in Q2 2012 and product tankers (continued operations).
The company has had a moratorium on its product tanker debt in the past years and has therefore been in close dialogue with its banks and several potential solutions to the company’s financial problems have been considered.
However, the banks have notified the company that installments and loan covenants are only deferred three months at a time and latest until December 31, 2013. As a consequence of this, the company has by the end of 2012 written-down the value of its vessels to an estimated market level of $123 million, accordingly, the share capital is lost, and the debt is reclassified as short-term.
Both the company and its banks are in firm discussions with a potential investor regarding equity injections. The company expects to enter into an agreement with the new investor. In case these discussions with the potential investor prove futile, the company's banks desire to carry out a controlled winding up of the company. The company and its banks continue discussions regarding a potential extension of the moratorium that expires on December 31, 2013 in order to allow sufficient time to negotiate and conclude a potential equity injection or a controlled wind up and to ensure there is no disruption to the operation of the vessels.
In December 2012, Nordic Ruth went off-hire due to severe damages in the vessel’s water ballast tanks. The vessel went on-hire again in July 2013 and is now trading in the Handytankers pool. The cost of approximately $8.5 million related to the repair and part of the off-hire period is expected to be covered by the insurance.
The company has in 2013 closed down 12 subsidiaries in Singapore, the U.S. and Denmark by solvent liquidation, which were dormant after the sale of the chemical tanker activity.
In the first half of 2013, the Time Charter Equivalent (TCE) revenue decreased by $1.6 million to $11.8 million ($13.4 million). The decline in revenue is due to the off-hire of Nordic Ruth.
EBITDA declined from $4.7 million in the first half 2012 to $ 1.7 million in 2013.
Year to date, the cash flow from operations was -$2.0 million primarily deriving from operating activities and was impacted by decreased TCE revenue due to Nordic Ruth being off-hire and other one-off costs. The comparable figure for the first half 2012 was -$3.5 million excluding discontinued activities.
The average broker valuation of the fleet is on par with book values.
For both the handy tanker vessels and the LR1 vessel the spot earnings have declined in Q3 compared to the average earnings in the first half of 2013.