American Shipping Company ASA: Update on Charter Extensions

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American Shipping Company ASA (AMSC) today announced that Overseas Shipholding Group (OSG) has declared its options to extend bareboat charter agreements for one year for two vessels currently chartered by AMSC to OSG, moving the new bareboat expiration date to December 2023. Additionally, OSG has notified not to extend bareboat agreements for three vessels. These vessels will remain under contract with OSG’s associated cash flows until the expiry of the current charters in December 2022. Upon expiry of the charter and return of the vessels, the deferred payment obligations associated with these three contracts of approximately $12 million will become due and will become immediately payable by OSG. at AMSC.

AMSC’s bareboat contract coverage is as follows:

  • Vessel Firm contract up to GSO expansion options
  • OVERSEAS LOS ANGELES Dec. 2022 None
  • OVERSEAS NEW YORK Dec. 2022 None
  • OVERSEAS TEXAS CITY Dec. 2022 None
  • OVERSEAS HOUSTON Dec 2023 Unlimited 3 or 5 years
  • OVERSEAS LONG BEACH Dec 2023 Unlimited 3 or 5 years
  • OVERSEAS BOSTON Dec 2023 Unlimited 3 or 5 years
  • OVERSEAS NIKISKI Dec 2023 Unlimited 3 or 5 years
  • OVERSEAS MARTINEZ Dec 2023 Unlimited 3 or 5 years
  • OVERSEAS ANACORTES Dec 2023 Unlimited 3 or 5 years
  • OVERSEAS TAMPA June 2025 2 x 5 years followed by 5 x 1 year

AMSC remains current on all financial covenants and other loan terms, which will not change due to OSG’s decision not to extend three of the bareboat contracts. AMSC’s cash flow profile will remain unchanged over the next 12 months as management strives to recharter or develop other business opportunities for all three vessels.

AMSC CEO Pål Lothe Magnussen said: “We are excited about the opportunity to develop new business for the three vessels that will be returned to us in December 2022. The Jones Act tanker market has recently shown increased activity. Charter growth and long-term fundamentals remain attractive with negative fleet growth and no new builds likely to enter the market for many years. We look forward to working with the broader Jones Act tanker community to capitalize on opportunities in the recovering Jones Act tanker market.
Source: American Shipping Company ASA

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