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American Shipping Company ASA: Update Regarding Charter Extensions

American Shipping Company ASA (AMSC) today announced that Overseas Shipholding Group (OSG) has declared its options to extend the bareboat charter agreements for two vessels currently under charter from AMSC to OSG by one year, moving the new bareboat expiry date to December 2023. In addition, OSG has provided notice not to extend the bareboat agreements for three vessels. These vessels will remain contracted with associated cash flows from OSG until the present charters expire in December 2022. Upon charter expirations and vessel redeliveries, the deferred payment obligations related to these three contracts of approximately USD 12 million will fall due and become immediately payable by OSG to AMSC.

AMSC’s bareboat contract coverage is as follows:

  • Vessel Firm contract until OSG’s extension 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 for the next 12 months while management works toward rechartering or developing other business opportunities for the three vessels.

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

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