Nordic American Public Offering
Bermuda-based Nordic American Tankers Limited today [Jan. 19] announced an underwritten public offering of 5,500,000 common shares.
The common shares are being offered pursuant to the company’s effective shelf registration statement.
The net proceeds of the offering are expected to be used to strengthen the company’s resources, to fund future acquisitions and for general corporate purposes.
“We are actively reviewing acquisition possibilities on an ongoing basis,” said Nordic American in a statement. “The company is determined to pursue its strategy of accretive growth.”
The company’s current fleet consists of 20 double-hull Suezmax tankers.
The average daily spot market rate earned for the Company’s vessels during the third quarter of 2011 was about $8,000 per day.
The company expects to achieve a spot market rate of about $11,000 per day for the fourth quarter of 2011 which is in line with its cash break-even level.
“The company believes that the spot tanker market has improved during the month of December 2011 and that such improvement has continued into January 2012,” said the Nordic American statement. “From January 1, 2012 through January 17, 2012 the Company has covered about 25 percent of the total revenue days for the first quarter 2012.
“During this period the company has achieved an average spot market rate in excess of $20,000 per day. There is no guarantee that future rates will equal or exceed this amount.”
The daily rates as reported by shipbrokers, by Imarex or by analysts may vary significantly from the actual rates the company achieves in the market and as a matter of policy Nordic American does not attempt to predict future spot rates.
The statement continued: “A spot market rate of $11,000 per day translates into earnings per share [EPS] of about -$0.36 for the fourth quarter of 2011. A rate differential of $5,000 per day would translate into about a $0.20 change in EPS per quarter for our 20 vessel fleet. In summary, the fourth quarter of 2011 improved from the third quarter of 2011 and so far, the first quarter of 2012 has improved from the fourth quarter of 2011.
“We have previously communicated to the market that having paid a dividend of $0.30 per share in the third quarter of 2011 and $0.30 per share in the fourth quarter of 2011, we wish to keep this level of dividend for the dividend payment that is expected to take place on or about March 2, 2012. The shares sold in this offering are eligible for the dividend expected to be paid on or about March 2, 2012.”
Morgan Stanley is acting as the bookrunning manager for the offering and DNB Markets and FBR are acting as co-managers of the offering.
The company has granted the underwriters a 30-day option to purchase up to 825,000 additional shares to cover over-allotments.
The common shares purchased by the underwriters are expected to be offered for resale from time to time in negotiated transactions or otherwise, at market prices on the New York Stock Exchange prevailing at the time of sale, at prices related to such prevailing market prices or otherwise.
Incorporated in Bermuda in 1995, the company is an international tanker company that owns 20 modern double-hull Suezmax tankers.
