Nordic American Tankers Ltd (NYSE: NAT) – Full Financing of Two Newbuildings is in place

Rhea-AI Summary

On October 16, 2020, Nordic American Tankers (NAT) announced a financing agreement with a subsidiary of Ocean Yield ASA for two Suezmax newbuildings previously contracted with Samsung Heavy Industries. This financing covers up to 80% of the newbuilding price, secured with a 10-year bareboat charter for each vessel. NAT aims to achieve a debt-free position and has options to buy or sell the vessels during the charter period. This early financing arrangement is seen as beneficial for the company's strategic objectives.

Positive

• Secured financing for up to 80% of the newbuilding price.
• 10-year bareboat charter agreement provides stable revenue.
• Options to buy or sell vessels during the charter period enhance flexibility.

Negative

• None.

October 16, 2020

Dear Shareholders and Investors, 

Further to our message of September 23, 2020, when NAT announced two Suezmax newbuilding contracts with Samsung Heavy Industries for delivery during the first half of 2022. We now wish to announce that NAT has entered into a financing agreement with a subsidiary of Ocean Yield ASA for the two vessels. It is an advantage to secure the long term financing for these two newbuildings at an early stage and with an existing lender.

The financing is for up to 80% of the newbuilding price. The agreements are based on a 10-year bareboat charter for each vessel. NAT has certain options to buy or sell the vessels during the charter period.

Ocean Yield ASA, a company in the Aker sphere, is listed on Oslo Stock Exchange (OSE). One objective of NAT is to become a debt free company.

Best regards,

Herbjorn Hansson
Founder, Chairman & CEO

Nordic American Tankers Ltd.                                                           www.nat.bm  

 
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 worldwide 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.

NAT is a Bermuda based company.

Contacts:       

Gary J. Wolfe
Seward & Kissel LLP
New York, USA
Tel: +1 212 574 1223

Bjørn Giæver, CFO
Nordic American Tankers Limited
Tel: +1 888 755 8391 or +47 91 35 00 91       

Herbjørn Hansson, Chairman & CEO
Nordic American Tankers Limited
Tel: +1 866 805 9504 or +47 90 14 62 91

 

FAQ

What is the financing agreement announced by NAT on October 16, 2020?

NAT announced a financing agreement covering up to 80% of the price for two new Suezmax vessels with Ocean Yield ASA.

What are the terms of the charter agreement for the newbuildings?

The vessels will be under a 10-year bareboat charter agreement with options for NAT to buy or sell during that period.

Why is the financing agreement significant for NAT?

It allows NAT to secure long-term financing early, aiding the company's goal of becoming debt-free.

Which company is involved in the financing of NAT's newbuildings?

The financing is provided by a subsidiary of Ocean Yield ASA.