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Maritime Partners in $747m Jones Act tanker acquisition from AMSC

Photo: Barry Parker OSG tanker at sea
One of the Jones Act’s biggest financial shipowners Maritime Partners just got bigger acquiring a fleet of 10 tankers from AMSC.

In the just announced deal, a fund owned and controlled by Maritime Partners LLC, best known for its bareboat charters in the inland waterways business where it has fleet over 1,000 vessels, has now acquired the equity interest in a fleet of 10 tankers nine coastwise MRs, and one handy shuttle tanker.

The seller in a deal expected to close before end-October, is American Tanker Holding Company, Inc (AHTC) a wholly-owned subsidiary of AMSC-established in 2005 - sometimes called “American Shipping”, and listed on the Euronext Oslo Stock Exchange.

According to Maritime Partners, “AMSC will receive gross cash proceeds from the Transaction, subject to certain adjustments, of in an aggregate amount of $249.3 million, divided between consideration for the shares in ATHC and repayment of a shareholder loan, reflecting an enterprise value of ATHC of $746.7 million based on the balance sheet of ATHC as at March 31, 2023.” This suggests that the fleet is supported by approximately $500 million of debt financing in addition to the equity component.

AMSC’s largest shareholders, holding nearly 35% in the aggregate, are Aker Capital AS and DNB Bank ASA-both have given the pending deal their approval.

AMSC had acquired the 10 vessels following their construction, with deliveries from 2007- 2011, at the Philly Shipyard (which was formerly known as the Aker Philadelphia Shipyard) and put them on long-term charters to Overseas Shipholding Group (OSG, listed on the NYSE, with headquarters in Tampa, Fla). Late last year, three of the vessels came off their leases with OSG, and were put on charter to Jones Act stalwarts Keystone Shipping (privately held, based outside Philadelphia). Following the expected closing of the deal, the charters to OSG and Keystone will remain in place.

Ship financier David Herman, in the Long Island, New York office of SSY Finance, told Seatrade Maritime News: “Maritime Partners has established a tremendous track record of deploying capital across the Jones Act space and this transaction is a continuation of that theme.  The current BB charters on these assets expire in 2025-2026 so MP has good visibility on medium term cash flow with strong counter parties.  Plus, the price of $75 million per ship for 14-year old assets compares favorably with the newbuild replacement cost.”

The outlook in the Jones Act coastwise tanker trades is bright. In an early August 2023 regulatory filing, OSG, referring to its prospects for out-chartering its controlled tankers, and tug/barge units,  said: “There are few vessels available in the spot market, and spot activity decreased from 49 spot fixtures in the first half of 2022 to 21 in the first half of 2023.”

The tankers will add to Maritime Partners extensive existing fleet,  which it describes as consisting of 525 towboats, and more than a thousand barges, including tank barges (30k and 10k barrels), bunker barges, covered hopper barges, open hopper barges, and deck barges. It is well known for a late 2021 transaction where it acquired the substantial fleet of inland tugs and barges - more than 1000 vessels, overall - from inland towboat independent J. Russell Flowers.

      Firm BB   Optional 
Vessel Delivery   Charter   Periods
      expiry   expiry
Overseas Houston 2007 2026   2029
Overseas Long Beach 2007 2026   2029
Seakay Star 2007 2027   2027
Seakay Valor 2008 2025   n/a
Seakay Sky 2008 2027   2027
Overseas Boston 2009 2026   2029
Overseas Nikiski 2009 2026   2029
Overseas Martinez 2010 2026   2029
Overseas Anacortes 2010 2026   2029
Overseas Tampa (shuttle capable) 2011 2024.5   2029
all vessels described as MT 46 Veteran Class