AI assistant
AMSC ASA — Interim / Quarterly Report 2015
Oct 29, 2015
3533_rns_2015-10-29_1404a79c-5a2f-4820-96d7-d9f59e62daa6.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
AMERICAN SHIPPING COMPANY ASA
Third Quarter 2015 Report
Third Quarter 2015 Report
Oslo, 29 October 2015, American Shipping Company ASA ("AMSC or the "Company") announces results for third quarter ending 30 September 2015.
HIGHLIGHTS
- Dividend per share payment of USD 0.103 declared for 3Q 2015
- Approximately 15% dividend growth in 2016 expected
- Bank debt refinancing signed
- In advanced discussions to sell AMSC's 19.6% shareholding in Philly Tankers AS to a non- disclosed buyer with expected signing of final agreements shortly
- Q3 profit share of MUSD 1.2, which reduces the profit share overhang
- DPO accruals ended in 3Q 15, DPO will provide substantial cash flow to AMSC going forward4
MAIN EVENTS DURING THE THIRD QUARTER AND SUBSEQUENT TO QUARTER END
• Dividends: On 12 August 2015, the Board authorized a quarterly dividend payment of USD 0.103 per share, to the shareholders of AMSC on record as of 19 August 2015, which was paid on 28 August 2015.
On 28 October 2015, the Board authorized a quarterly dividend payment of USD 0.103 per share, to the shareholders of AMSC on record as of 5 November 2015. The shares in AMSC will be traded ex. Dividend from and including 4 November and will be paid on or about 13 November 2015. The dividend is classified as a return of paid in capital.
Dividends per share expected to grow as follows: 4Q 2015 USD 0.107 (maximum allowed), Q1 2016 USD 0.107 (maximum allowed). Total dividend for 2016 is expected to grow approximately 15% compared to 2015.
- Bank debt refinancing: The Company has entered into signed loan agreements for a total of MUSD 450 to refinance its secured vessel debt. The refinancing is structured in two separate facilities; one being a MUSD 300 facility secured by eight vessels with a syndicate of three banks consisting of BNP Paribas, SEB and Credit Agricole and the other a MUSD 150 facility secured by two vessels with CIT Maritime Finance as Sole Arranger and CIT Bank, N.A., Prudential Capital Group and AloStar Bank of Commerce as lenders. Funding is expected to take place shortly. On a combined basis, key terms are as follows:
- Total amount: MUSD 450
- Average weighted tenor: 6 years (80% of the loan amount with 5 year tenor and 20% with a 10 $\blacksquare$ year tenor)
- Average weighted interest cost: Libor + 325 bps margin $\blacksquare$
- Total annual installments: Year 1: MUSD 8.3, Year 2-4: MUSD 28.3, Year 5: MUSD 44.3 (the Company expects to refinance after year 4)
The Company will enter into interest rate swaps for a minimum of MUSD 210 of the new debt.
In connection with the bank debt refinancing, the Company has agreed with the holders of its unsecured bond that the cash interest element will increase from 50% to 100% following the funding of the bank debt refinancing and that the Company will not use its option to extend the bond beyond the final maturity date in February 2018.
Philly Tankers: Philly Tankers AS agreed to sell its four product tanker contracts to a subsidiary of Kinder Morgan, Inc., for a total consideration of MUSD 568 with the assignment to take place immediately before delivery of each ship. Deliveries are scheduled from Q4 2016 through Q4 2017.
AMSC has subsequently entered into advanced discussions to sell its 25,000 shares in Philly Tankers to a non-disclosed party with expected signing of final agreements shortly.
- Profit share: Q3 profit share of MUSD 1.2, which reduces the profit share overhang. Profit share in the quarter was negatively affected by scheduled drydocking.
- Deferred Payment Obligation (DPO): Q3 15 was the last quarter with DPO accruals. Going forward, DPO repayments and interest will provide substantial cash flow to AMSC over the next 18 years. In 2016, AMSC expects to receive approximately MUSD 3.9 of DPO- related payments. See note 12 for further information.
THIRD QUARTER FINANCIAL REVIEW
Third quarter results
AMSC's operating revenues for Q3 2015 and 2014 were MUSD 22.1 each. EBITDA was MUSD 21.2 in Q3 2015 (MUSD 20.9 in Q3 2014). EBIT was MUSD 12.8 in Q3 2015 and MUSD 12.4 in Q3 2014.
Net interest expense (interest expense less interest income) for Q3 2015 and 2014 was MUSD 13.0 each.
Net foreign exchange loss was MUSD 0.2 in Q3 2015 (MUSD 2.3 in Q3 2014), resulting from the translation of Norwegian kroner (NOK) cash balances into USD.
In Q3 2015, AMSC had an unrealized gain of MUSD 4.6 on the mark-to-market valuation of its interest rate swap contracts related to its vessel financing (gain of MUSD 6.2 in Q3 2014).
AMSC had a net profit before tax for Q3 2015 of MUSD 4.2 versus MUSD 3.3 in Q3 2014.
Year to date results
AMSC's operating revenues for the first nine months of 2015 and 2014 were MUSD 65.7 and MUSD 65.5, respectively. EBITDA for the nine months ending 30 September 2015 and 2014 was MUSD 63.0 and MUSD 62.5, respectively. EBIT for the nine months ending 30 September 2015 and 2014 was MUSD 38.0 and MUSD 37.2, respectively. Year to date net interest expense of MUSD 38.7, net unrealized foreign exchange loss of MUSD 0.2 and unrealized gain on interest swaps of MUSD 13.5 are included in net financial items for 2015. Figures for the same period in 2014 include net interest expense of MUSD 39.0, net unrealized foreign exchange loss of MUSD 4.3, unrealized gain on interest swaps of MUSD 15.8 and unrealized gain from the de-recognition of the bond of MUSD 9.5. Net profit for the first nine months of 2015 and 2014 was MUSD 12.6 and MUSD 19.2, respectively.
| unaudited | ||||
|---|---|---|---|---|
| Q3 | Q3 | Year to date | ||
| Amounts in USD million (except share and per share information) | 2015 | 2014 | 2015 | 2014 |
| Operating revenues | 22.1 | 22.1 | 65.7 | 65.5 |
| Operating profit before depreciation - EBITDA | 21.2 | 20.9 | 63.0 | 62.5 |
| Operating profit - EBIT | 12.8 | 12.4 | 38.0 | 37.2 |
| Gain on de-recognition of bond | 9.5 | |||
| Net interest expense | (13.0) | (13.0) | (38.7) | (39.0) |
| Unrealized gain on interest swaps | 4.6 | 6.2 | 13.5 | 15.8 |
| Net foreign exchange gain/(loss) | (0.2) | (2.3) | (0.2) | (4.3) |
| Net profit/(loss) for the period * | 4.2 | 3.3 | 12.6 | 19.2 |
| Average number of common shares ** | 60,616,505 | 60.616.505 | 60.616.505 | 60,067,531 |
| Earnings/(loss) per share (USD) | 0.07 | 0.05 | 0.21 | 0.32 |
Condensed Income Statement
* Applicable to common stockholders of the parent company.
** During Q1 2014, 33 million shares were issued and the number of shares shown above reflects the weighted average number of shares for the first nine months of 2014. Refer to note 7 to the condensed consolidated financial statements for further details.
Condensed Statement of Financial Position
| unaudited | ||||
|---|---|---|---|---|
| $30-Sep$ | $30-Sep$ | 31-Dec | ||
| Amounts in USD million | 2015 | 2014 | 2014 | |
| Vessels | 823.0 | 856.5 | 848.0 | |
| Interest-bearing long term receivables (DPO) | 33.0 | 32.7 | 33.2 | |
| Other non current assets | 24.9 | 24.9 | 24.9 | |
| Trade and other receivables | 0.5 | 0.4 | 0.3 | |
| Cash held for specified uses | 8.8 | 8.0 | 8.1 | |
| Cash and cash equivalents | 60.8 | 93.8 | 85.2 | |
| Total assets | 951.0 | 1,016.3 | 999.7 | |
| Total equity | 228.4 | 236.7 | 234.6 | |
| Deferred tax liabilities | 0.3 | 0.3 | ||
| Interest-bearing long term debt | 206.2 | 686.8 | 676.2 | |
| Derivative financial liabilities - long term portion | 16.8 | 7.5 | ||
| Interest-bearing short term debt | 492.6 | 51.3 | 52.2 | |
| Derivative financial liabilities - short term portion | 14.0 | 15.0 | 19.9 | |
| Trade and other payables | 9.5 | 9.7 | 9.0 | |
| Total equity and liabilities | 951.0 | 1.016.3 | 999.7 |
The decrease in Vessels from 31 December 2014 reflects depreciation of the Company's ten vessels for the first nine months of 2015.
During the first nine months of 2015. OSG made repayments on the deferred principal obligation (DPO) of MUSD 2.3, of which MUSD 1.2 is principal repayment. See note 12 to the condensed consolidated financial statements for additional information on the DPO.
Other non-current assets include AMSC's 19.6% investment in Philly Tankers AS.
Interest bearing debt as of 30 September 2015 was MUSD 698.8, net of MUSD 2.2 in capitalized fees versus MUSD 728.4 as of 31 December 2014. This debt relates to the bank financing of the ten vessels of MUSD 492.9 and the bond of MUSD 208.1. The vessel debt is classified as current on the balance sheet with a maturity at the end of Q2 2016. The vessel debt and associated interest rate swaps will be fully repaid upon funding of the refinancing. AMSC was in compliance with all of its debt covenants as of 30 September 2015.
Outlook
The U.S. Jones Act product tanker market has remained strong throughout 2015. During Q1, long-term time charters were secured by Philly Tankers for two of its newbuildings, scheduled for delivery in Q4 2016 and Q1 2017. In July 2015, Philly Tankers declared its two options with Aker Philadelphia Shipyard with deliveries in 2017. The four ship transaction between Philly Tankers and Kinder Morgan, which was signed after the end of the second quarter, demonstrates robust asset values and that shipping remains an attractive alternative for US domestic transportation of oil and products. With limited availability for new delivery slots at the two shipyards currently able to build Jones Act product tankers, it is expected that the Jones Act tanker market rates will remain firm in the medium term.
To date, profits generated under our profit sharing agreement with OSG have been applied to offset the Company's deficit balances with OSG ("OSG credit"). See note 11 to the condensed consolidated financial statements for additional information on profit sharing.
AMSC expects to continue paying regular quarterly dividends, with intentions of increasing the amount by approximately 15% in 2016 compared to 2015.
Risks
The risks facing AMSC principally relate to the operational and financial performance of OSG as well as overall market risk.
AMSC's activities also expose the Company to a variety of other financial risks, including currency, interest rate and liquidity risk. Refinancing is not required before 30th of June, 2016 and with the signing of the MUSD 450 loan, is not considered a significant risk in the near term.
For further details of AMSC's risks, including our guarantees, refer to the 2014 Annual Report.
Definitions
Jones Act - The U.S. cabotage law, referred to as Jones Act, requires all commercial vessels operating between U.S. ports to be built, owned, operated and manned by U.S. citizens and to be registered under the U.S. flag. In 1996 certain amendments were enacted to the U.S. vessel documentations laws, allowing increased non-U.S. participation in the ownership of vessels operating in the Jones Act trade under certain conditions, known as the finance lease exception.
Oslo, 28 October 2015 The Board of Directors and President / CEO American Shipping Company ASA
Annette Malm Justad Chairperson
Peter D. Knudsen Director
Kristian Røkke Director
Pål Magnussen President / CEO
AMERICAN SHIPPING COMPANY ASA GROUP CONSOLIDATED FINANCIAL STATEMENT FOR THE THIRD QUARTER 2015
| unaudited | ||||
|---|---|---|---|---|
| Q3 | Q3 | Year to date | ||
| Amounts in USD million (except share and per share information) | 2015 | 2014 | 2015 | 2014 |
| Operating revenues | 22.1 | 22.1 | 65.7 | 65.5 |
| Operating expenses | (0.9) | (1.2) | (2.7) | (3.0) |
| Operating profit before depreciation - EBITDA | 21.2 | 20.9 | 63.0 | 62.5 |
| Depreciation | (8.4) | (8.5) | (25.0) | (25.3) |
| Operating profit - EBIT | 12.8 | 12.4 | 38.0 | 37.2 |
| Gain on de-recognition of bond | ۰ | 9.5 | ||
| Net interest expense | (13.0) | (13.0) | (38.7) | (39.0) |
| Unrealized gain on interest swaps | 4.6 | 6.2 | 13.5 | 15.8 |
| Net foreign exchange gain/(loss) | (0.2) | (2.3) | (0.2) | (4.3) |
| Net profit/(loss) for the period * | 4.2 | 3.3 | 12.6 | 19.2 |
| Average number of common shares | 60.616.505 | 60.616.505 | 60.616.505 | 60.067.531 |
| Earnings/(loss) per share (USD) | 0.07 | 0.05 | 0.21 | 0.32 |
CONDENSED STATEMENT OF CHANGES IN COMPREHENSIVE INCOME
| unaudited | ||||
|---|---|---|---|---|
| Q3 | Q3l | Year to date | ||
| Amounts in USD million | 2014 | 2014 | 2015 | 2014 |
| Net income/(loss) for the period | 4.2 | 3.3 | 12.6 | 19.2 |
| Other comprehensive income for the period, net of tax | $\overline{\phantom{0}}$ | - | $\overline{\phantom{a}}$ | |
| Total comprehensive income/(loss) for the period * | 3.3 | 12.6 | 19.2 |
* Applicable to common stockholders of the parent company.
CONDENSED STATEMENT OF FINANCIAL POSITION
| unaudited | |||
|---|---|---|---|
| 30-Sep | 30-Sep | 31-Decl | |
| Amounts in USD million | 2015 | 2014 | 2014 |
| Assets | |||
| Non-current assets | |||
| Vessels | 823.0 | 856.5 | 848.0 |
| Interest-bearing long term receivables (DPO) | 33.0 | 32.7 | 33.2 |
| Other long term assets | 24.9 | 24.9 | 24.9 |
| Total non-current assets | 880.9 | 914.1 | 906.1 |
| Current assets | |||
| Trade and other receivables | 0.5 | 0.4 | 0.3 |
| Cash held for specified uses | 8.8 | 8.0 | 8.1 |
| Cash and cash equivalents | 60.8 | 93.8 | 85.2 |
| Total current assets | 70.1 | 102.2 | 93.6 |
| Total assets | 951.0 | 1,016.3 | 999.7 |
| Equity and liabilities | |||
| Total equity | 228.4 | 236.7 | 234.6 |
| Non-current liabilities | |||
| Bond payable | 208.1 | 199.0 | 201.3 |
| Other interest-bearing loans | 0.3 | 493.1 | 479.4 |
| Derivative financial liabilities - long term portion | 16.8 | 7.5 | |
| Capitalized fees | (2.2) | (5.3) | (4.5) |
| Deferred tax liability | 0.3 | 0.3 | |
| Total non-current liabilities | 206.5 | 703.6 | 684.0 |
| Current liabilities | |||
| Interest-bearing short-term debt | 492.6 | 51.3 | 52.2 |
| Derivative financial liabilities - short term portion | 14.0 | 15.0 | 19.9 |
| Trade and other payables | 9.5 | 9.7 | 9.0 |
| Total current liabilities | 516.1 | 76.0 | 81.1 |
| Total liabilities | 722.6 | 779.6 | 765.1 |
| Total equity and liabilities | 951.0 | 1.016.3 | 999.7 |
CONDENSED STATEMENT OF CHANGES IN TOTAL EQUITY
| unaugred | ||
|---|---|---|
| Year to date | ||
| Amounts in USD million | 2015 | 2014 |
| Equity related to the equity holders of the parent company as of beginning of period | 234.5 | 72.8 |
| Total comprehensive income/(loss) for the period | 12.6 | 19.2 |
| Equity issued | $\overline{\phantom{a}}$ | 157.0 |
| Repurchase of treasury shares | (0.9) | |
| Proceeds from sale of treasury shares | 0.7 | |
| Dividends/return of capital accrued | (18.7) | (12.0) |
| Total equity as of end of period | 228.4 | 236.7 |
CONDENSED CASH FLOW STATEMENT
| unaudited | ||
|---|---|---|
| Year to date | ||
| Amounts in USD million | 2015 | 2014 |
| Net cash flow from operating activities | 33.8 | 27.8 |
| Net cash flow from investing activities | (25.0) | |
| Net cash flow from financing activities | (57.5) | 79.4 |
| Net change in cash and cash equivalents | (23.7) | 82.2 |
| Cash and cash equivalents, including cash held for specified uses at the beginning of period | 93.3 | 19.6 |
| Cash and cash equivalents, including cash held for specified uses at end of period | 69.6 | 101.8 |
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
1. Introduction - American Shipping Company
American Shipping Company ASA ("AMSC") is a company domiciled in Norway. The condensed interim financial statements for the three and nine months ended 30 September 2015 comprise AMSC and its wholly owned subsidiaries. These financial statements have not been audited or reviewed by the Company's auditors. American Shipping Company has one operating segment.
annual The consolidated 2014 financial statements of AMSC are available at www.americanshippingco.com.
2. Basis of Preparation
These consolidated interim financial statements reflect all adjustments, in the opinion of AMSC's management, that are necessary for a fair presentation of the results of operations for the periods presented. Operating results for the three and nine month periods are not necessarily indicative of the results that may be expected for any subsequent interim period or year.
3. Statement of compliance
These consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS) applicable for interim reporting, IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as of and for the year ended 31 December 2014.
4. Significant accounting principles
The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as of and for the year ended 31 December 2014.
There have not been any new IFRS standards or interpretations issued or effective after the completion of the annual consolidated financial statements for the year 2014 that have a significant impact on AMSC's financial reporting for the three and nine months ended 30 September 2015.
5. Use of estimates
The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts in the financial statements. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from these estimates.
The most significant judgments made by management in preparing these condensed consolidated interim financial statements in applying the Group's accounting policies, and the key sources of estimation uncertainty, are the same as those that applied to the consolidated financial statements as of and for the year ended 31 December 2014.
Certain prior period reclassifications were made to conform to current year presentation.
6. Tax estimates
Income tax expense is recognized in each interim period based on the best estimate of the expected annual income tax rates. No income tax expense was recognized during Q3 2015 or Q3 2014 or the applicable year-to-date periods.
As described in note 5 of the 2014 consolidated financial statements, the Company has MUSD 431.8 of net operating losses in carryforward in the U.S. as of 31 December 2014, of which approximately MUSD 381 are subject to certain limitations under Internal Revenue Service Code Section 382. The Company also has MUSD 86 of net operating losses in carryforward in Norway.
7. Share capital and equity
As of 30 September 2015, AMSC had 60,616,505 ordinary shares at a par value of NOK 10 per share.
On 3 January 2014, 30,475,492 ordinary shares were issued in connection with the private placement and debt conversion, each with a par value of NOK 10 per share. Total outstanding shares as of that date were 58,075,492. Proceeds from the private placement net of transaction costs were MUSD 116.1
On 23 January 2014, through a subsequent offering, a total of 2,541,013 ordinary shares were issued at a par value of NOK 10 per share. The total outstanding shares of AMSC are 60,616,505. Proceeds from the subsequent offering net of transaction costs were MUSD 11.8
| Dividends paid (classified as repayment of | Year to date 2015 |
Year to date 2014 |
||||
|---|---|---|---|---|---|---|
| previously paid in share premium) | 27-Feb-15 | 29-May-15 | 28-Aug-15 | $1$ -Jul-14 | 30-Jul-14 | 30-Oct-14 |
| NOK per share | 0.77503 | 0.77049 | 0.85352 | 0.59326 | 0.61290 | 0.64912 |
| USD per share | 0.103 | 0.103 | 0.103 | 0.100 | 0.100 | 0.100 |
| Aggregate NOK (millions) | 47.0 | 46.7 | 51.7 | 36.0 | 37.0 | 39.0 |
| Aggregate USD (millions) | 6.3 | 6.3 | 6.3 | 6.0 | 6.0 | 6.0 |
8. Interest-bearing debt
The following table shows material changes in interest-bearing debt:
| 9 months to | 9 months to | |
|---|---|---|
| Amounts in USD million | 30-Sep-15 | 30-Sep-14 |
| Balance at beginning of period | 728.4 | 801.5 |
| Repayment of debt | (38.7) | (36.4) |
| Interest added to oustanding debt | 5.0 | 5.4 |
| Foreign currency impact | 2.0 | |
| Amortization of loan fees and discount | 4.1 | 27 |
| De-recognition of bond | (8.0) | |
| Conversion to equity | (29.1) | |
| Balance at end of period | 698.8 | 738.1 |
The Company is subject to a loan covenant under its bond obligation that requires the Company to maintain a minimum level of MUSD 50.0 of consolidated equity adjusted for cumulative unrealized gains and losses on interest rate swap agreements. The Company's equity as defined under the loan covenant as of 30 September 2015 was MUSD 242.3.
9. Related party transactions
AMSC believes that related party transactions are made on terms equivalent to those that prevail in arm's length transactions.
| 10. Interest | |
|---|---|
| 3 months to | 3 months to | 9 months to | 9 months to | |
|---|---|---|---|---|
| Amounts in USD million | 30-Sep-15 | 30-Sep-14 | 30-Sep-15 | 30-Sep-14 |
| Interest expense | (13.6) | (13.6) | (40.3) | (41.0) |
| Interest income | 0.6 | 0.6 | 1.6 | 2.0 |
| Net interest expense | (13.0) | (13.0) | (38.7) | (39.0) |
11. Profit sharing agreement with OSG
As disclosed, AMSC and OSG have an agreement sharing profits from OSG's operations of AMSC's 10 vessels. The calculation of profit to share is made on an aggregated fleet level. The calculation thus starts with total vessel revenue, subtracted by defined cost elements.
Profit Sharing Calculation for Q3 2015
AMSC's 50% share of the Q3 profit (MUSD 1.2) is used to reduce the OSG credit. When the OSG credit has been fully repaid, AMSC will receive its 50% share of the profit in cash. The cumulative balance as of 30 September 2015 for the OSG credit is shown in the table below. The calculations are shown with aggregated, rounded figures in USD millions. Please note that these figures are unaudited numbers and have not been subject to affirmative review.
Balance per Q3-15:
| Beginning balance | Accrued | Ending balance | ||
|---|---|---|---|---|
| as of Q2 2015 | interest | Repayment | as of Q3 2015 | |
| OSG credit | 17.1 | 0.4 | $-1.2$ | 16.3 |
12. Deferred Principal Obligation (DPO)
Pursuant to the current charter agreements, OSG had the right to defer payment of a portion of the bareboat charter hire for the first five vessels during the initial seven year fixed bareboat charter periods. OSG paid a reduced bareboat charter rate and assumed the DPO. The DPO accrued on a daily basis to a maximum liability of MUSD 7.0 per vessel. The DPO during the initial seven year period was discounted using the estimated market discount rate at lease inception. After the initial seven years, the DPO is repaid over 18 years including interest unless the bareboat charter is terminated earlier at which time the DPO becomes due immediately. 3Q 15 represented the final quarter of DPO accruals. OSG has made repayments on all five vessels delivered under the arrangement, and those vessels' cash bareboat charter hire resumed to its full contractual amount. In 2016, AMSC expects to receive approximately MUSD 3.9 of DPO- related payments, including MUSD 1.9 in principal repayments. Below are the changes to the DPO receivable:
| Amounts in USD million | 9 months to 30-Sep-15 |
9 months to 30-Sep-14 |
|---|---|---|
| Balance at beginning of period | 33.2 | 29.6 |
| DPO revenue Repayments of principal Interest accreted |
0.6 (1.2) 0.4 |
2.5 (0.5) 11 |
| Balance at end of period | 33.0 | 32.7 |
13. Financial Instruments
The only financial instruments that the Company accounts for at fair value on an ongoing basis are the interest rate swaps, which are classified in the Level 2 category as is described in the 2014 consolidated financial statements. The Company's policy is to recognize transfers into and transfers out of fair value
hierarchy levels as of the date of the event or change in circumstances that caused the transfer. During the quarter and year-to date periods ended 30 September 2015, there were no transfers between categories.
The fair values of financial instruments, the related fair value hierarchy, together with the carrying amounts shown in the balance sheet are as follows:
| Carrying amount |
Fair value |
Fair value |
|
|---|---|---|---|
| Amounts in USD millions | 30-Sep-15 | 30-Sep-15 | hierarchy* |
| Interest-bearing receivables (DPO) | 33.0 | 26.4 | |
| Interest swap used for economic hedging | (14.0) | (14.0) | っ |
| Unsecured bond issue (gross) | (208.1) | (203.2) | ົ |
| Secured loans (gross) | (492.9) | (495.1) | ີ |
The fair value of cash, accounts receivable and accounts payable approximate the carrying values due to their short-term nature.
* Described in the 2014 consolidated financial statements
14. Events after the Balance Sheet date
On 28 October 2015, AMSC signed loan agreements totaling MUSD 450 to refinance its secured vessel debt. The refinancing is structured in two separate facilities; one being a MUSD 300 facility secured by eight vessels with a syndicate of three banks consisting of BNP Paribas, Credit Agricole and SEB and the other a MUSD 150 facility secured by two vessels with CIT Maritime Finance as Lead Arranger, CIT Bank, N.A., Prudential Capital Group and AloStar Bank of Commerce as lenders.
On a combined basis, key terms are as follows:
Total amount: MUSD 450 Average weighted tenor: 6 years (80% of the loan amount with 5 year tenor and 20% with a 10 year tenor) Average weighted interest cost: Libor + 325 bps margin Total annual installments: Total annual installments: Year 1: MUSD 8.3, Year 2-4: MUSD 28.3, Year 5: MUSD 44.3 (the Company expect to refinance after year 4)
The Company will enter into interest rate swaps for a minimum of MUSD 210 of the new debt.
In connection with the bank debt refinancing, the Company has agreed with the holders of its unsecured bond that the cash interest element will increase from 50% to 100% following the closing of the bank debt refinancing and that the Company will not use its option to extend the bond beyond the final maturity date in February 2018.
Funding is expected to occur during Q4 2015. A one-time charge to the income statement of approximately MUSD 2.2 will be booked as a write off of unamortized loan fees from the existing financing. Upon funding of the refinancing, the Company's debt balance will be reclassified as long term, except the short term portion of MUSD 8.3.
AMSC has entered into advanced discussions to sell its 25,000 shares in Philly Tankers to a nondisclosed party with expected signing of final agreements shortly.
American Shipping Company ASA Fjordalléen 16 Postboks 1423 Vika 0115 Oslo NORWAY
| Pål Magnussen | Morten Hofstad | Leigh Jaros |
|---|---|---|
| President / CEO | CFO | Business Controller/ |
| Financial Manager | ||
| Tel: +47 24 13 00 00 | Tel: +47 24 13 00 87 | Tel: +1 484 732 3021 |
| Cell: +47 90 54 59 59 | Cell: +47 99 71 70 20 | Cell: +1 484 880 3741 |
| [email protected] | [email protected] | [email protected] |
Disclaimer
This release includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for American Shipping Company ASA and its subsidiaries and affiliates (the "American Shipping Company Group") lines of business. These expectations, estimates, and projections are generally identifiable by statements containing words such as "expects," "believes," "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the American Shipping Company Group's businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although American Shipping Company ASA believes that its expectations and the information in this release were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this release. Neither American Shipping Company ASA nor any other company within the American Shipping Company Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the release, and neither American Shipping Company ASA, any other company within the American Shipping Company Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the release.
American Shipping Company ASA undertakes no obligation to publicly update or revise any forward-looking information or statements in the release, other than what is required by law.
The American Shipping Company Group consists of many legally independent entities, constituting their own separate identities. American Shipping Company is used as the common brand or trade mark for most of these entities. In this release we may sometimes use "American Shipping Company"," "Group, "we," or "us," when we refer to American Shipping Company Group companies in general or where no useful purpose is served by identifying any particular company of American Shipping Company.