In Oslo-listed AMSC’s fourth-quarter earnings report it said the company continued to make payments tied to bareboat charters involving all ten of its Jones Act product tankers on time throughout the period.
The owner acknowledged that the contracts were not mentioned in the so-called ‘plan support agreement’ that OSG filed with the bankruptcy court overseeing the restructuring last week but still believes the charterer is unlikely to hand the ships back or assign them to a third party.
“There is no specific mention in the plan of OSG’s relationship to AMSC,” it told investors Tuesday, adding: “Considering the markets for the vessels, however, it is not expected that OSG would choose to reject the bareboat charters with AMSC.”
The company noted that OSG, which is aiming to emerge from Chapter 11 by the third quarter of this year, has until 28 February 2014 to file a formal reorganisation plan with the US bankruptcy court and pointed out that a hearing on its initial proposal will likely be held on 20 March.
AMSC also mentioned that the Jones Act product tanker market remained strong in the fourth quarter of 2013 and said it expects positive trends like the spike in North American shale oil production to continue to support its core segment in the foreseeable future.
“Capacity at the two US shipyards currently able to build product tankers is nearly fully utilised through 2017 with 11 tankers on order and a limited number of options,” it said. “The output from refineries on the Gulf Coast continues to increase, as does the shale oil production.”
The commentary came as AMSC reported operating revenues of $22.1m for the fourth-quarter of 2013, which was only $0.1m lower than the figure posted 12 months prior, while earnings before interest, taxes, depreciation and amortization remained unchanged year-on-year at $21.3m.
You can read AMSC’s fourth-quarter earnings report in full by clicking on the link located under the Related Media section to the right of this article
