International Seaways, which operated a fleet of 55 oil tankers as at 30 September 2016, is anticipating to recognise impairment charges of $50m to $55m on two LR1s, an aframax and a panamax.
The impairments for these vessels are a result of “industry-wide declines in vessel valuations during 2016”, OSG mentioned in a filing to the Securities and Exchange Commission.
New York-listed OSG announced that it will separate its international and domestic businesses into two independent, publicly traded companies – OSG and International Seaways.
Upon separation, International Seaways will own and operate a fleet of international crude and product tankers worldwide. OSG will consist of the currently existing US flag business, which operates a fleet of tankers and articulated tug barges (ATBs) in the blue water Jones Act market.
Ian Blackley, president and ceo of OSG, commented: “As two independent, industry-leading companies, OSG and International Seaways can drive more focused business strategies and benefit from enhanced operating and financial flexibility. The separation will also present a unique opportunity for investors by creating two distinct and attractive investment profiles, which will allow each company to attract a broader base of shareholders.”
The business separation plan also revealed that International Seaway’s ability to obtain additional financing on acceptable terms may be difficult in view of the current state of the global financial markets and current economic conditions
“If additional financing is not available when needed (…), the company may be unable to meet its obligations as they come due or the company may be unable to execute its business strategy, complete additional vessel acquisitions, or otherwise take advantage of potential business opportunities as they arise,” the OSG filing said.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.