Nordic American Tankers Acquires Scandic
Bermuda-incorporated Nordic American Tankers Ltd. announced today [Dec.17] the company will acquire Scandic American Shipping Ltd.
Nordic American Tankers Limited [NAT] was incorporated in Bermuda in 1995
Following an agreement between Scandic and NAT, NAT has announced that it will acquire 100 per cent of the shares of Scandic, its management company since 2004.
When Scandic began actively managing NAT eight years ago, NAT owned three vessels. Today NAT owns 20 vessels. Scandic is currently owned by a company controlled by Herbjorn Hansson, NAT’s chairman and CEO, and his closest family.
Under its management agreement with NAT, Scandic has administrative, commercial and operational responsibility for NAT and is required to manage NAT’s day-to-day business, subject to the objectives, decisions and policies of the NAT Board of Directors.
By acquiring Scandic, NAT will gain full control of all aspects of its operations. The purchase price is $25 million, two-thirds of which will be paid in shares — $17 million — and the remaining one-third in cash.
The share component of the sale will be subject to a one-year lock-up, while the cash component will be used primarily by the seller to pay tax associated with this transaction. The part that is payable in shares has been set at $8.90 per share which is above the closing price on the NYSE on Friday, December 14, 2012 of $8.52 per share. Scandic is now expected to become a wholly owned subsidiary of NAT.
In addition to gaining full direct control of its operations, NAT will no longer be subject to the obligation to maintain Scandic’s ownership of NAT’s common shares at two per cent.
To the benefit of shareholders, this dilutive provision is thereby removed. The NAT shares currently owned by Scandic are not a part of the transaction and will remain with the seller. Mr. Hansson has recused himself from the Board deliberations surrounding the acquisition.
Commented Mr. Hansson: “NAT will continue its established long-term strategy. The NAT acquisition of Scandic will have no effect on the management of NAT in any way. I paid cash for Scandic when I acquired 100 per cent of it in 2004 and thereafter from third parties. We will now convert most of our ownership in Scandic into NAT shares as a result of the current transaction. Our shareholding in NAT will increase from the present level and as large equity holders our interests will be further aligned with those of all shareholders. This increased shareholding in NAT is showing my continued strong support of the company and its policies. I plan to serve as chairman and CEO for a good many years to come.”
The acquisition is expected to close in January of 2013
