Aker Philadelphia Shipyard forms Philly Tankers

marinelink.com
Tuesday, June 10, 2014
Kristian Rokke, Chairman of AKPS

Aker Philadelphia Shipyard and financial sponsors, including American Shipping Company and funds affiliated with Apollo Global Management, create pure play Jones Act shipping company, Philly Tankers.

Aker Philadelphia Shipyard ASA (OSE: AKPS) is pleased to announce the planned establishment of Philly Tankers AS, a Norwegian limited liability company, and its wholly-owned subsidiary, Philly Tankers LLC, a Delaware limited liability company (together “Philly Tankers”). Philly Tankers has successfully secured equity commitments necessary to finance the purchase of two product tankers from AKPS with deliveries in 2016 and 2017 (the “Transaction”), and will have a post-money market capitalization of USD 127.5 million. Together with best-in-class partners, Philly Tankers will operate and charter the vessels in the Jones Act market.

“We are delighted to see so much interest in Philly Tankers. The company offers pure-play exposure to an increasingly strong market and is targeting growth through a combination of newbuilds, acquisitions of existing vessels, and potentially through market consolidation,” says Kristian Rokke, Chairman of AKPS. “There are two key trends currently shaping the Jones Act market – the tight oil revolution, which has increased demand for product tankers, and a surge in containership orders, which has constrained shipyard capacity. Philly Tankers is well positioned to benefit from the effects of these trends by offering customers modern tonnage in a supply constrained market, as well as reliable operations and substantially improved fuel-efficiency versus the existing fleet.”

As part of the Transaction, AKPS will invest USD 58.5 million for 54% of the shares, which AKPS expects to fund through existing cash and proceeds from operations. The remaining sponsors will invest USD 59.0 million for 46% of the shares at a subscription price of USD 1,000.00 per share.

AKPS and Philly Tankers, through their U.S. subsidiaries, will enter into binding shipbuilding contracts for the first two product tankers, designated as AKPS Hulls 025-026. The total contract value is approximately USD 250 million, excluding construction period financing, initial owner expenses, G&A, and transaction costs. The anticipated profitability of the shipbuilding project for AKPS is in-line with previous guidance for AKPS Hulls 021-030. An option agreement will also be signed for two identical product tankers with deliveries in 2017, designated as AKPS Hulls 027-028, on substantially the same terms and conditions as AKPS Hulls 025-026.

The vessels will be 50,000 dwt product tankers based on a proven Hyundai Mipo Dockyards (HMD) design that incorporates numerous fuel efficiency features, flexible cargo capability, and the latest regulatory requirements. The vessels will be constructed with consideration for the use of LNG for propulsion in the future. The vessels will be identical to the vessels currently under construction at AKPS that will be included in the AKPS-Crowley joint venture.

Philly Tankers expects to hire a best-in-class technical operator prior to delivery of the first vessel to arrange for maintenance and crewing of the vessels, and to ensure that the vessels satisfy all regulatory requirements, among other things. Philly Tankers has a number of attractive options for commercial management and will consider all its alternatives when seeking and arranging employment for the vessels.

Prior to delivery of the first vessel, Philly Tankers will have an ownership and corporate structure that is fully compliant with all applicable Jones Act requirements.  Philly Tankers will explore value-enhancing initiatives such as the establishment of a Master Limited Partnership. Philly Tankers will have a Board of Directors comprised of independent and investor-designated members.  Philly Tankers will initially list its shares on the Norwegian OTC, with a target of a U.S. listing by mid-2016.

Closing of the Transaction remains subject to satisfaction of customary conditions precedent, including the execution and delivery of satisfactory definitive documentation, and the approval by the general meeting of American Shipping Company of its participation in the Transaction. It is expected the Transaction will be closed in mid-July 2014.

Arctic Securities and Pareto Securities have acted as Joint Lead Managers for the Transaction. Advokatfirmaet BA-HR DA and Blank Rome LLP have acted as legal adviser to AKPS in connection with the private placement. Wiersholm has acted as the legal adviser to the Joint Lead Managers.

Aker Philadelphia Shipyard is a leading U.S. commercial shipyard constructing vessels for operation in the Jones Act market.  It possesses a state-of-the-art shipbuilding facility and has earned a reputation as the preferred provider of oceangoing merchant vessels with a track record of delivering quality ships. Aker Philadelphia Shipyard is listed on the Oslo Stock Exchange and

is majority-owned by Converto Capital Fund, which in turn is majority-owned by Aker ASA. Aker is a Norwegian industrial investment company that creates value through active ownership. Aker's investment portfolio is concentrated on key Norwegian industries that are  international in  scope: oil  and  gas,  fisheries  and biotechnology,  and marine assets. Aker's industrial holdings comprise ownership interests in Aker Solutions, Kvaerner, Det norske oljeselskap, Aker BioMarine, Ocean Yield and Havfisk.

Highlights
 

  • Philly Tankers established to provide pure play exposure toward Jones Act shipping market with firm contracts for two eco-design product tanker newbuilds and options for two additional vessels
  • Vessels will be built by Aker Philadelphia Shipyard with deliveries of the initial two vessels in Q4 2016 and Q1 2017 and deliveries of the two option vessels in Q3 2017 and Q4 2017
  • Philly Tankers has ambitions to grow through a combination of additional newbuilds, acquisitions of existing vessels, and participation in expected market consolidation
  • Corporate structure suitable for future transformation to a Master Limited Partnership (MLP), potentially offering significant value enhancement
  • Philly Tankers to be listed on the Norwegian OTC by mid-July 2014 with goal of a U.S. listing by mid-2016
  • Aker Philadelphia Shipyard to invest USD 58.5 million in Philly Tankers for 54% of the company, gaining additional shipping exposure in-line with Aker Philadelphia Shipyard’s previously communicated strategy
  • Philly Tankers’ sponsors to invest USD 59.0 million in Philly Tankers for the remaining 46% of the company, and include American Shipping Company (OSE: AMSC), funds managed by affiliates of Apollo Global Management, LLC (NYSE: APO) and other U.S. institutional investors
Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

Abu Dhabi Ports Shift Far More Breakbulk Cargo

Abu Dhabi Ports Company (ABPC) says that general cargo moving through Abu Dhabi’s commercial Ports has increased by 37% this year. ADPC’s commercial ports (Musaffah,

GDI Awards N-KOM US$110-M Contracts

Gulf Drilling International (GDI) Limited, a subsidiary of Gulf International Services (GIS), the largest oilfield service company in Qatar, has awarded two contracts

Bechtel Plant Awarded Nuclear Propulsion Contract Modification

U.S. Department of Defense informs it has awarded a $39,437,949 cost-plus-fixed-fee modification to a previously awarded contract (N00024-12-C-2106) for naval nuclear propulsion components.

Shipbuilding

Saab Completes Acquisition of TKMS (Kockums)

Defence and security company Saab's acquisition of the Swedish shipyard Thyssen Krupp Marine Systems (TKMS, formerly Kockums) has now been completed. The acquisition

GDI Awards N-KOM US$110-M Contracts

Gulf Drilling International (GDI) Limited, a subsidiary of Gulf International Services (GIS), the largest oilfield service company in Qatar, has awarded two contracts

Navios Announces VLCC Delivery

Navios Maritime Acquisition Corporation, an owner and operator of tanker vessels, has announced that the Nave Electron, a 2002-built VLCC of 305,178 dwt, was delivered

Tanker Trends

Maritime Reporter @ 75: The Daily Cartoon

Maritime Reporter & Engineering News was founded by John J. O'Malley (1905-1980) in 1939, and today ranks as the world's largest audited trade publication in the world serving the maritime industry,

Trading Dutch Well Placed to Pursue Russia Sanctions

The seafaring Netherlands prides itself on being a trading nation, reluctant to let politics get in the way of a good deal. But since the downing, allegedly

Navios Announces VLCC Delivery

Navios Maritime Acquisition Corporation, an owner and operator of tanker vessels, has announced that the Nave Electron, a 2002-built VLCC of 305,178 dwt, was delivered

Finance

Royal Caribbean Profit Jumps on Higher European Demand

Royal Caribbean Cruises Ltd, the world's second-largest cruise operator, reported a big jump in quarterly profit as demand for its European cruises rose and passengers spent more onboard.

Seadrill Bondholders: Majority Accept Conversion Offer

Seadrill Limited says that holders of approximately US$547 million of Seadrill's convertible bonds due 2017 (representing approx. 84.1% of the total outstanding

General Dynamics Reports 2Q 2014 Earnings

General Dynamics today reported 2014 second-quarter earnings from continuing operations of $646 million, or $1.88 per share on a diluted basis, compared to second-quarter

 
 
Maritime Standards Navigation Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1173 sec (9 req/sec)