Aker American Shipping to be split

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

29 Nov 2007

The Board of Directors of Aker American Shipping has decided to implement a split of the company's business activities into a shipowning company and a shipyard. The split will establish a solid foundation for further development of two leading US maritime companies.- Both the shipyard and the shipowning company are already capable of stand-alone operations. Making them into two niche focused, independent stock-exchange listed companies also highlights shareholder value. The split is an aggressive measure to further advance businesses in the US market, says Leif-Arne Langøy, President and CEO of Aker and Chairman of Aker and Aker American Shipping.Pursuant to the Board’s decision to split Aker American Shipping, the corporate structure will be as follows: American Shipping Corporation will be a vessel owning subsidiary of Aker American Shipping ASA. Today’s shipyard activities will be organized in the newly established company Aker Philadelphia Shipyard ASA.Aker Philadelphia Shipyard ASAAker American Shipping will offer existing and new shareholders the opportunity to acquire Aker Philadelphia Shipyard shares. The shares in Aker Philadelphia Shipyard, which are currently owned by Aker American Shipping, will be sold through a secondary sale. Aker American Shipping will receive the proceeds from the secondary sale.In connection with the secondary sale of shares, Aker Philadelphia Shipyard will also complete a new share issue of USD 25 million. The transaction will be completed as a private placement and will take place through a bookbuilding process. The indicative price range for the bookbuilding process values Aker Philadelphia Shipyard’s equity between USD 70 million and USD 80 million before the completion of the new share issue. The bookbuilding period runs from 27 November through 4 December 2007, but can end sooner. Aker Philadelphia Shipyard will seek to give preferential allocation to existing shareholders of Aker American Shipping.Initially, the offer to purchase Aker Philadelphia Shipyard shares will be extended to institutional and professional investors. Following completion of the bookbuilding process and in connection with the listing of Aker Philadelphia Shipyard, the company intends to complete a small retail offering to offer individual shareholders the opportunity to purchase shares at the same price paid by institutional investors.- Aker aims to buy a sufficient number of shares in the offering to maintain an ownership interest in Aker Philadelphia Shipyard ASA of at least 53 percent, says Mr. Langøy.Aker American Shipping ASAAker currently controls 53 percent of Aker American Shipping ASA; however, it plans to reduce its ownership interest in the shipowning company. This reduction is related to US Jones Act restrictions that may limit Aker’s further ambitions for developing maritime businesses outside the United States.Aker American Shipping will be continued as the vessel owning company, following the Aker Philadelphia Shipyard sale. The shipowning company has a fleet of ten product tankers and two shuttle tankers, under construction or chartered to customers. In 2007, three product tankers have been delivered and chartered. The nine remaining vessels will be delivered in the period 2008 to 2011. All twelve vessels have been bareboat chartered to Overseas Shipholding Group (OSG), whereas eleven of the vessels have already been time chartered by OSG to oil companies and refineries in the US.The aforementioned ships are built at Aker Philadelphia Shipyard, the most modern and cost-efficient shipyard in the United States. The shipyard company has applied for Oslo Axess listing at the Oslo Stock Exchange, starting in middle of December 2007. The listing application is scheduled for consideration by the Board of Directors of the Oslo Stock Exchange on 28 November 2007.- Now we’re going a step further, and developing two leading US maritime companies. Two independent companies, each with a focused management, is an ideal starting point for further value creation - to the benefit of shareholders, customers, employees, and the Philadelphia community of which we are a part, says Langøy.Management and Board of DirectorsRobert Kurz is appointed as President and CEO of Aker American Shipping ASA. Mr. Kurz is a seasoned and well recognized US Jones Act shipping industry executive and was the former President of Keystone Shipping Co.Dave Meehan, who has served as President and CEO of Aker American Shipping since it’s inception in 2005, will continue as President & CEO of Aker Philadelphia Shipyard ASA. Aker American Shipping will hold an extraordinary shareholders’ meeting on 10 December 2007 to elect a new Board of Directors. The company’s nomination committee will propose the election of the following Board members: Gary Mandel (chairman), Bob Caruso, Annette Malm Justad, Hege Yli Melhus and Ørjan Svanevik. The current Aker American Shipping Board of Directors has been nominated to constitute the new Board of Directors of Aker Philadelphia Shipyard ASA.Aker American Shipping has employed the services of SEB Enskilda ASA as financial advisor for the transaction.