Nordic American Tankers Limited (NYSE:NAT) - Acquiring Four Crude Oil Suezmax Tankers (150,000dwt) - Increasing the Fleet of NAT from 26 to 30 Vessels in One Transaction.
02 May 2016
Nordic American Tankers Limited ("NAT" or the "Company") announced today that it has entered into an agreement to acquire four existing Suezmax sister vessels built in Japan at a world-class shipyard. The aggregate price is $106 million. NAT expects the vessels to be delivered during May, June and July 2016.
Between July 2014 and January 2017 a total of 10 vessels have been added to the NAT fleet, including the previously announced two newbuildings due for delivery in August 2016 and in January 2017. Going forward, this total of a 50% fleet increase within a short time span can be expected to produce significantly increased cash flows and solid dividends compared with a smaller fleet.
The seller is a well-respected group that has owned the four more or less identical sister vessels since they were built. The fact that they are sister vessels is a positive factor of significance. Two were built in 2004, one in 2003 and one in 2000. Shipbuilding technology for crude oil tankers has not changed much over the last 20 years, so whether a ship has been around five years or fifteen years or longer does not matter anywhere near as much as the quality of the ship itself. We would note, that renewal of our fleet is a natural element on our agenda going forward. Our vessels remain first-class, and these four additional tankers only enhance our fleet's reputation for safety and dependability. We are particularly confident about the technical quality of the vessels. Members of NAT management, staff and board have comprehensive experience from Japan, having concluded business with several of its high quality shipbuilders over decades.
The Company noted that the acquisition represents a natural step in the further development of Nordic American. By adding four more ships to 30 units we increase the dividend capacity and bolster our earnings potential. Our well-defined and transparent operating model, including one type of ships, dividend policy, strong balance sheet, are elements supporting the competitive position of the Company.