|
REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
OF 1934
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x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
PAGE | ||
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Term
|
Definition
|
ABS
|
American
Bureau of Shipping, an American classification society.
|
Aframax
|
A
medium size crude oil tanker of approximately 80,000 to 120,000 dwt.
Aframaxes operate on many different trade routes, including in the
Caribbean, the Atlantic, the North Sea and the Mediterranean. They are
also used in ship-to-ship transfer of cargo in the US Gulf typically from
VLCCs for discharge in ports from which the larger tankers are restricted.
Modern Aframaxes can generally transport from 500,000 to 800,000 barrels
of crude oil.
|
Annual
Survey
|
The
inspection of a vessel pursuant to international conventions by a
classification society surveyor, on behalf of the flag state, that takes
place every year.
|
Bareboat
Charter
|
A
charter under which a charterer pays a fixed daily or monthly rate for a
fixed period of time for use of the vessel. The charterer pays all voyage
and vessel operating expenses, including vessel insurance. Bareboat
charters are usually for a long term. Also referred to as a “demise
charter.”
|
Bunker
|
Fuel
oil used to operate a vessel’s engines, generators and
boilers.
|
Charter
|
Contract
for the use of a vessel, generally consisting of either a voyage, time or
bareboat charter.
|
Charterer
|
The
company that hires a vessel pursuant to a charter.
|
Charter
hire
|
Money
paid by a charterer to the ship-owner for the use of a vessel under a time
charter or bareboat charter.
|
Classification
Society
|
An
independent society that certifies that a vessel has been built and
maintained according to the society’s rules for that type of vessel and
complies with the applicable rules and regulations of the country in which
the vessel is registered, as well as the international conventions which
that country has ratified. A vessel that receives its certification is
referred to as being “in class” as of the date of
issuance.
|
Contract
of Affreightment
|
A
contract of affreightment, or “COA,” is an agreement between an owner and
a charterer that obligates the owner to provide a vessel to the charterer
to move specific quantities of cargo over a stated time period, but
without designating specific vessels or voyage schedules, thereby
providing the owner greater operating flexibility than with voyage
charters alone.
|
Double
Hull
|
A
hull construction design in which a vessel has an inner and outer side and
bottom separated by void space, usually 2 meters in
width.
|
Drydocking
|
The
removal of a vessel from the water for inspection and/or repair of those
parts of a vessel which are below the water line. During drydockings,
which are required to be carried out periodically, certain mandatory
classification society inspections are carried out and relevant
certifications issued. Drydockings are generally required once every 30 to
60
months.
|
Term | Definition |
dwt
|
Deadweight
tons, which refers to the carrying capacity of a vessel by
weight.
|
Hull
|
Shell
or body of a ship.
|
IMO
|
International
Maritime Organization, a United Nations agency that issues international
regulations and standards for shipping.
|
Lightering
|
To
partially discharge a tanker onto another tanker or
barge.
|
LOOP
|
Louisiana
Offshore Oil Port, Inc.
|
Lloyds
|
Lloyds
Register, a U.K. classification society.
|
Metric
Ton
|
A
metric ton of 1,000 kilograms.
|
Newbuilding
|
A
new vessel under construction or just completed.
|
Off
Hire
|
The
period a vessel is unable to perform the services for which it is required
under a time charter. Off hire periods typically include days spent
undergoing repairs and drydocking, whether or not
scheduled.
|
OPA
|
U.S.
Oil Pollution Act of 1990, as amended.
|
OPEC
|
Organization
of Petroleum Exporting Countries, an international organization of
oil-exporting developing nations that coordinates and unifies the
petroleum policies of its member countries.
|
Petroleum
Products
|
Refined
crude oil products, such as fuel oils, gasoline and jet
fuel.
|
Protection
and Indemnity
(or P&I) Insurance |
Insurance
obtained through mutual associations, or “clubs,” formed by ship-owners to
provide liability insurance protection against a large financial loss by
one member through contribution towards that loss by all members. To a
great extent, the risks are reinsured.
|
Scrapping
|
The
disposal of vessels by demolition for scrap metal.
|
Special
Survey
|
An
extensive inspection of a vessel by classification society surveyors that
must be completed at least each five year period. Special surveys require
a vessel to be drydocked.
|
Spot
Market
|
The
market for immediate chartering of a vessel, usually for single
voyages.
|
Suezmax
|
A
crude oil tanker of approximately 130,000 to 170,000 dwt. Modern Suezmaxes
can generally transport about 1 million barrels of crude oil and operate
on many different trade routes, including from West Africa to the
U.S.
|
Tanker
|
A
ship designed for the carriage of liquid cargoes in bulk with cargo space
consisting of many tanks. Tankers carry a variety of products including
crude oil, refined petroleum products, liquid chemicals and liquefied
gas.
|
TCE
|
Time
charter equivalent, a standard industry measure of the average daily
revenue performance of a vessel. The TCE rate achieved on a given voyage
is expressed in $/day and is generally calculated by subtracting voyage
expenses, including bunker and port charges, from voyage revenue and
dividing the net amount (time charter equivalent revenues) by the
round-trip voyage duration.
|
Time
Charter
|
A
charter under which a customer pays a fixed daily or monthly rate for a
fixed period of time for use of the vessel. Subject to any restrictions in
the charter, the customer decides the type and quantity of cargo to be
carried and the ports of loading and unloading. The customer pays the
voyage expenses such as fuel, canal tolls, and port charges. The
ship-owner pays all vessel operating expenses such as the management
expenses, crew costs and vessel
insurance.
|
Term | Definition |
Vessel
Operating Expenses
|
The
costs of operating a vessel that are incurred during a charter, primarily
consisting of crew wages and associated costs, insurance premiums,
lubricants and spare parts, and repair and maintenance costs. Vessel
operating expenses exclude fuel and port charges, which are known as
“voyage expenses.” For a time charter, the ship-owner pays vessel
operating expenses. For a bareboat charter, the charterer pays vessel
operating expenses.
|
VLCC
|
VLCC
is the abbreviation for “very large crude carrier,” a large crude oil
tanker of approximately 200,000 to 320,000 dwt. Modern VLCCs can generally
transport two million barrels or more of crude oil. These vessels are
mainly used on the longest (long haul) routes from the Arabian Gulf to
North America, Europe, and Asia, and from West Africa to the U.S. and Far
Eastern destinations.
|
Voyage
Expenses
|
Expenses
incurred due to a vessel traveling to a destination, such as fuel cost and
port charges.
|
Worldscale
|
Industry
name for the Worldwide Tanker Nominal Freight Scale, which is published
annually by the Worldscale Association as a rate reference for shipping
companies, brokers, and their customers engaged in the bulk shipping of
oil in the international markets. Worldscale is a list of calculated rates
for specific voyage itineraries for a standard vessel, as defined, using
defined voyage cost assumptions such as vessel speed, fuel consumption,
and port costs. Actual market rates for voyage charters are usually quoted
in terms of a percentage of Worldscale.
|
Worldscale
Flat Rate
|
Base
rates expressed in U.S. dollars per ton which apply to specific sea
transportation routes, calculated to give the same return as Worldscale
100.
|
Worldscale
Points
|
The
freight rate negotiated for spot voyages expressed as a percentage of the
Worldscale Flat
Rate.
|
|
●
|
future
payments of dividends and the availability of cash for payment of
dividends;
|
|
●
|
future
operating or financial results, including with respect to the amount of
basic hire and additional hire that we may
receive;
|
|
●
|
statements
about future, pending or recent acquisitions, business strategy, areas of
possible expansion and expected capital spending or operating
expenses;
|
|
●
|
statements
about tanker industry trends, including charter rates and vessel values
and factors affecting vessel supply and
demand;
|
|
●
|
expectations
about the availability of vessels to purchase, the time which it may take
to construct new vessels or vessels’ useful
lives;
|
|
●
|
expectations
about the availability of insurance on commercially reasonable
terms;
|
|
●
|
our
ability to repay our credit facility, to obtain additional financing and
to obtain replacement charters for our
vessels;
|
|
●
|
assumptions
regarding interest rates;
|
|
●
|
changes
in production of or demand for oil and petroleum products, either globally
or in particular regions;
|
|
●
|
greater
than anticipated levels of newbuilding orders or less than anticipated
rates of scrapping of older
vessels;
|
|
●
|
changes
in trading patterns for particular commodities significantly impacting
overall tonnage requirements;
|
|
●
|
changes
in the rate of growth of the world and various regional
economies;
|
|
●
|
risks
incident to vessel operation, including discharge of pollutants;
and
|
|
●
|
unanticipated
changes in laws and regulations.
|
|
|
Not
applicable.
|
|
|
|
Not
applicable.
|
|
KEY
INFORMATION
|
|
A.
|
SELECTED
FINANCIAL DATA
|
Year ended December 31, |
Year
ended December 31,
|
Year ended December 31, |
2005
|
Year ended December 31, | |||||||||||||||
Successor
|
Successor
|
Successor
|
Successor
|
Predecessor
|
Predecessor
|
||||||||||||||
2008
|
2007
|
2006
|
Oct
18 -
Dec
31
|
Jan
1 -
Oct
17
|
2004
|
||||||||||||||
Statement
of operations data:
|
(in thousands, except per
share data)
|
||||||||||||||||||
Shipping
revenues
|
$ | 114,603 | $ | 81,427 | $ | 86,793 | $ | 20,173 | $ | 84,134 | $ | 136,205 | |||||||
Total
ship operating expenses
|
52,123 | 40,469 | 37,994 | 7,899 | 35,426 | 40,870 | |||||||||||||
Income
from vessel operations
|
62,480 | 40,958 | 48,799 | 12,274 | 48,708 | 95,335 | |||||||||||||
Net
Income (loss)
|
42,148 | 27,463 | 35,750 | 9,469 | 43,641 | 86,690 | |||||||||||||
Net
income per share – basic and diluted
|
1.17 | 0.91 | 1.19 | 0.32 | 62,344 | 123,843 | |||||||||||||
Balance
sheet data (at end of year):
|
|||||||||||||||||||
Vessels,
net
|
462,387 | 398,005 | 322,577 | 339,491 | 355,571 | ||||||||||||||
Total
assets
|
532,496 | 422,208 | 349,040 | 364,062 | 388,518 | ||||||||||||||
Current
liabilities
|
40,673 | 96,633 | 9,625 | 10,828 | 7,243 | ||||||||||||||
Long-term
liabilities(1)
|
344,000 | 253,700 | 236,000 | 236,000 | 256,477 | ||||||||||||||
Stockholders’
equity
|
147,823 | 71,875 | 103,415 | 117,234 | 124,798 | ||||||||||||||
Weighted
average number of shares (basic)
|
36,055,422 | 30,024,407 | 30,007,000 | 30,006,250 | 700 | 700 | |||||||||||||
Weighted
average number of shares (diluted)
|
36,055,422 | 30,036,523 | 30,016,352 | 30,008,190 | 700 | 700 | |||||||||||||
Dividends
declared per share
|
1.15 | 1.58 | 1.74 | ||||||||||||||||
Cash
flow data:
|
|||||||||||||||||||
Net
cash provided by operating activities
|
65,016 | 49,363 | 53,998 | 15,893 | 83,039 | 84,248 | |||||||||||||
Net
cash (used in) investing activities
|
(81,185 | ) | (101,845 | ) | - | (412,580 | ) | (830 | ) | (9,696 | ) | ||||||||
Net
cash provided by (used in) financing activities
|
64,824 | 45,167 | (52,511 | ) | 412,580 | (82,209 | ) | (74,582 | ) | ||||||||||
Fleet
data:
|
|||||||||||||||||||
Number
of tankers owned (at end of period)
|
9 | 8 | 7 | 7 | 7 | 7 | |||||||||||||
Revenue
days(2)
|
3,190 | 2,514 | 2,482 | 520 | 1,987 | 2,451 | |||||||||||||
Average
daily time charter equivalent rate:
|
|||||||||||||||||||
VLCCs(3)
|
$ | 52,300 | $ | 41,500 | $ | 46,900 | 50,300 | 53,392 | $ | 77,422 | |||||||||
Aframaxes(3)
|
$ | 26,700 | $ | 25,700 | $ | 26,200 | 30,200 | 33,296 | $ | 38,831 | |||||||||
Average
daily bareboat rate:
|
|||||||||||||||||||
Suezmaxes(4)
|
$ | 28,900 | $ | 27,400 |
(1)
|
Includes
loans payable to Overseas Shipholding Group, Inc., or “OSG,” for the
periods until October 17, 2005.
|
(2)
|
Revenue
days consist of the aggregate number of calendar days in a period in which
our vessels are owned by us less days on which a vessel is off hire. Off
hire days are days a vessel is unable to perform the services for which it
is required under a time charter. Off hire days include days spent
undergoing repairs and drydockings, whether or not
scheduled.
|
(3)
|
Average
daily time charter equivalent rates, or TCE rates, are a standard industry
measure of daily revenue performance. We calculate TCE rates by dividing
our time charter equivalent revenues in a period by the number of revenue
days in the period. Time charter equivalent revenues represent shipping
revenues less voyage expenses. Voyage expenses consist of cost of bunkers
(fuel), port and canal charges and brokerage commissions. For the period
commencing on October 18, 2005, TCE revenue is the sum of the basic hire
earned by our vessels under our time charters with subsidiaries of OSG and
the additional hire, if any, earned by the vessels pursuant to the Charter
Framework Agreement between DHT and OSG. Revenue days consist of the
aggregate number of calendar days in a period in which our vessels are
owned by us less days on which a vessel is off hire. Off hire days are
days a vessel is unable to perform the services for which it is required
under a time charter. Off hire days include days spent undergoing repairs
and drydockings, whether or not scheduled.
|
(4)
|
The
2008 column includes Overseas London from
January 28, 2008 and the Overseas
Newcastle for the whole period. The 2007 column
includes the Overseas
Newcastle for the 27 day period from December 4, 2007 to December
31, 2007. Includes 33% profit sharing above TCE earnings of $35,000 per
day for the Overseas
Newcastle.
|
B.
|
CAPITALIZATION
AND INDEBTEDNESS
|
Not
applicable.
|
|
C. |
REASONS
FOR THE OFFER AND USE OF THE PROCEEDS
|
Not applicable.
|
|
D. |
RISK
FACTORS
|
|
●
|
pay
dividends if the charter-free market value of our vessels that secure our
obligations under the credit facility is less than 135% of our borrowings
under the credit facility plus the notional or actual cost of terminating
any interest rate swaps to which we are a party, if there is a continuing
default under the credit facility or if the payment of the dividend would
result in a default or breach of a loan
covenant;
|
|
●
|
incur
additional indebtedness, including through the issuance of
guarantees;
|
|
●
|
change
the management of our vessels without the prior consent of the
lender;
|
|
●
|
permit
liens on our assets;
|
|
●
|
sell
our vessels;
|
|
●
|
merge
or consolidate with, or transfer all or substantially all of our assets
to, another person;
|
|
●
|
enter
into certain types of charters; and
|
|
●
|
enter
into a new line of business.
|
|
●
|
locating
and acquiring suitable vessels;
|
|
●
|
identifying
and consummating acquisitions or joint
ventures;
|
|
●
|
adequately
employing any acquired vessels;
|
|
●
|
managing
our expansion; and
|
|
●
|
obtaining
required financing on acceptable terms so that the acquisition is
accretive to earnings and dividends per
share.
|
|
●
|
demand
for oil and oil products, which affect the need for tanker
capacity;
|
|
●
|
global
and regional economic and political conditions which, among other things,
could impact the supply of oil as well as trading patterns and the demand
for various types of vessels;
|
|
●
|
changes
in the production of crude oil, particularly by OPEC and other key
producers, which impact the need for tanker
capacity;
|
|
●
|
developments
in international trade;
|
|
●
|
changes
in seaborne and other transportation patterns, including changes in the
distances that cargoes are
transported;
|
|
●
|
environmental
concerns and regulations;
|
|
●
|
weather;
and
|
|
●
|
competition
from alternative sources of energy.
|
|
●
|
the
number of newbuilding deliveries;
|
|
●
|
the
scrapping rate of older vessels;
|
|
●
|
the
number of vessels that are out of service;
and
|
|
●
|
environmental
and maritime regulations.
|
|
●
|
a
classified board of directors with staggered three-year terms, elected
without cumulative voting;
|
|
●
|
directors
only to be removed for cause and only with the affirmative vote of holders
of at least a majority of the common stock issued and
outstanding;
|
|
●
|
advance
notice for nominations of directors by stockholders and for stockholders
to include matters to be considered at annual
meetings;
|
|
●
|
a
limited ability for stockholders to call special stockholder meetings;
and
|
|
●
|
our
board of directors to determine the powers, preferences and rights of our
preferred stock and to issue the preferred stock without stockholder
approval.
|
INFORMATION
ON THE COMPANY
|
|
A.
|
HISTORY
AND DEVELOPMENT OF THE
COMPANY
|
B.
|
BUSINESS
OVERVIEW
|
Vessel
|
Term
of Initial
Charter
|
Expiration
of
Initial Charter
|
Expiration
After
Extension
|
Maximum
Remaining
Extension
Term
|
|||
Overseas
Ann
|
6½ years
|
April
17, 2012
|
April
16, 2013
|
7
years
|
|||
Overseas
Chris
|
6 years
|
October 17, 2011
|
October
16, 2012
|
7
years
|
|||
Overseas
Regal
|
5½
years
|
April
17, 2011
|
April
16, 2012
|
5
years
|
|||
Overseas
Cathy
|
6¼
years
|
January 17, 2012
|
January
16, 2013
|
7
years
|
|||
Overseas
Sophie
|
5¾
years
|
July 17, 2011
|
July
16, 2012
|
7
years
|
|||
Overseas
Rebecca
|
5 years
|
October 17, 2010
|
April
16, 2012
|
3
½ years
|
|||
Overseas
Ania
|
5 years
|
October 17, 2010
|
April
16, 2012
|
3 ½
years
|
Charter
Year
|
End of Charter Year(1)
|
VLCCs
|
Aframaxes
(Overseas Cathy and Overseas Sophie)
|
Aframaxes
(Overseas Rebecca and Overseas Ania)
|
|||||
1
|
October
17, 2006
|
$
37,200/day
|
$
24,500/day
|
$
18,500/day
|
|||||
2
|
October
17, 2007
|
37,400/day
|
24,700/day
|
18,700/day
|
|||||
3
|
October
17, 2008
|
37,500/day
|
24,800/day
|
18,800/day
|
|||||
4
|
October
17, 2009
|
37,600/day
|
24,900/day
|
18,900/day
|
|||||
5
|
October
17, 2010
|
37,800/day
|
25,100/day
|
19,100/day
|
|||||
6
|
October
17, 2011
|
38,100/day
|
25,400/day
|
19,100/day
|
|||||
7
|
October
17, 2012
|
38,500/day
|
25,700/day
|
19,700/day
|
|||||
8
|
October
17, 2012
|
38,800/day
|
26,000/day
|
(1)
|
The charters,
including the extension options agreed to on November 26, 2008,
expire as follows for the Overseas Ann, Overseas Cathy, Overseas Chris,
Overseas Sophie, Overseas Regal, Overseas Ania and Overseas Rebecca: April 16, 2013;
January 16, 2013; October 16, 2012; July 16, 2012; April 16, 2012; April
16, 2012 and April 16, 2012,
respectively.
|
|
●
|
TCE
revenue earned or deemed earned by the charterers for all of the
applicable vessels over the calculation period is
aggregated;
|
|
●
|
the
basic hire earned by all of the applicable vessels during the calculation
period is aggregated;
|
|
●
|
additional
hire for the calculation period is equal to 40% of the excess, if any, of
the TCE revenue earned or deemed earned by the charterers over the basic
hire earned by all of the applicable
vessels;
|
|
●
|
additional
hire payable for the relevant quarter is equal to the excess, if any, of
the additional hire for the calculation period over the amount of
additional hire paid in respect of previous quarters;
and
|
|
●
|
the
calculation period for each of the four quarters beginning on the
effective date and ending on September 30, 2006 is the period
commencing on the effective date and ending on the last day of such
calendar quarter.
|
|
●
|
aggregating
all TCE revenue earned or deemed earned by the vessel in the four quarter
period ending on the last day of the quarter and dividing the result by
the number of days the vessel was on hire in that four quarter period;
and
|
|
●
|
multiplying
the resulting rate by the number of days the vessel was on hire in the
calendar quarter.
|
|
●
|
for periods under time
charters: actual time charter hire earned by the
charterer under time charters to third parties for any periods during the
quarter that the vessel operates under the time charter, less ship broker
commissions paid by the charterer to unaffiliated third parties in an
amount not to exceed 2.5% of such time charter hire and commercial
management fees paid by the charterer to unaffiliated third parties in an
amount not to exceed 1.25% of such time charter hire;
plus
|
|
●
|
for periods in the spot
market: the TCE revenue deemed earned by the charterer
in the spot market, calculated as described under the special provisions
referred to below. We define “spot market” periods as periods during the
quarter that a vessel is not subchartered by the charterer under a time
charter or operating in a pool and during which the vessel is on hire
under our time charter with the
charterer.
|
|
●
|
multiplying
the daily spot rate expressed in Worldscale Points (first divided by 100)
by the applicable Worldscale flat rate (expressed in U.S. dollars per ton
of cargo) for the notional route as set forth in the New Worldwide Tanker
Nominal Freight Scale issued by the Worldscale Association for the
relevant period and multiplying that product by the cargo size (in tons)
for each vessel type to calculate freight
income;
|
|
●
|
subtracting
voyage costs consisting of brokerage commissions of 2.5% and commercial
management costs of 1.25%, bunker costs and port charges from freight
income to calculate voyage income;
and
|
|
●
|
dividing
voyage income by voyage duration, including time in
port.
|
|
·
|
Calculation of voyage
duration. The voyage duration for each notional route will be
calculated for the laden and ballast legs of a round trip on such notional
route using the distance, speed and time in port specified below for each
vessel.
|
|
·
|
Data used in
calculations. The following data will be used in the above
calculations and is subject to annual review to ensure consistency with
industry standards:
|
Vessel
|
Year
Built
|
Dwt
|
Current
Flag
|
Classification
Society
|
||||
VLCC
|
||||||||
Overseas
Ann(1)
|
2001
|
309,327
|
Marshall
Islands
|
Lloyds
|
||||
Overseas
Chris(1)
|
2001
|
309,285
|
Marshall
Islands
|
Lloyds
|
||||
Overseas
Regal(1)
|
1997
|
309,966
|
Marshall
Islands
|
ABS
|
||||
Suezmax
|
|
|||||||
Overseas
Newcastle(2)
|
2001
|
164,626
|
Marshall
Islands
|
ABS
|
||||
Overseas
London(3)
|
2000
|
152,923
|
Marshall
Islands
|
DNV
|
||||
Aframax
|
|
|||||||
Overseas
Cathy(1)
|
2004
|
112,028
|
Marshall
Islands
|
ABS
|
||||
Overseas
Sophie(1)
|
2003
|
112,045
|
Marshall
Islands
|
ABS
|
||||
Overseas
Rebecca(1)
|
1994
|
94,873
|
Marshall
Islands
|
ABS
|
||||
Overseas
Ania(1)
|
1994
|
94,848
|
Marshall
Islands
|
ABS
|
C.
|
ORGANIZATIONAL
STRUCTURE
|
Subsidiary
|
Vessel
|
State
of Jurisdiction or
Incorporation
|
Percent
of
Ownership
|
|||
Ania
Aframax Corporation
|
Overseas
Ania
|
Marshall
Islands
|
100%
|
|||
Ann
Tanker Corporation
|
Overseas
Ann
|
Marshall
Islands
|
100%
|
|||
Cathy
Tanker Corporation
|
Overseas
Cathy
|
Marshall
Islands
|
100%
|
|||
Chris
Tanker Corporation
|
Overseas
Chris
|
Marshall
Islands
|
100%
|
|||
London
Tanker Corporation
|
Overseas
London
|
Marshall
Islands
|
100%
|
|||
Newcastle
Tanker Corporation
|
Overseas
Newcastle
|
Marshall
Islands
|
100%
|
|||
Rebecca
Tanker Corporation
|
Overseas
Rebecca
|
Marshall
Islands
|
100%
|
|||
Regal
Unity Tanker Corporation
|
Overseas
Regal
|
Marshall
Islands
|
100%
|
|||
Sophie
Tanker Corporation
|
Overseas
Sophie
|
Marshall
Islands
|
100%
|
D.
|
PROPERTY,
PLANT AND
EQUIPMENT
|
Vessel
|
Type
|
Approximate
Dwt
|
Construction
|
Flag
|
||||
Overseas
Ann
|
VLCC
|
309,327
|
Double-Hull
|
Marshall
Islands
|
||||
Overseas
Chris
|
VLCC
|
309,285
|
Double-Hull
|
Marshall
Islands
|
||||
Overseas
Regal
|
VLCC
|
309,966
|
Double-Hull
|
Marshall
Islands
|
||||
Overseas
London
|
Suezmax
|
152,923
|
Double-Hull
|
Marshall
Islands
|
||||
Overseas
Newcastle
|
Suezmax
|
164,626
|
Double-Hull
|
Marshall
Islands
|
||||
Overseas
Cathy
|
Aframax
|
112,028
|
Double-Hull
|
Marshall
Islands
|
||||
Overseas
Sophie
|
Aframax
|
112,045
|
Double-Hull
|
Marshall
Islands
|
||||
Overseas
Rebecca
|
Aframax
|
94,873
|
Double-Hull
|
Marshall
Islands
|
||||
Overseas
Ania
|
Aframax
|
94,848
|
Double-Hull
|
Marshall
Islands
|
UNRESOLVED
STAFF COMMENTS
|
|
None.
|
|
●
|
the
fixed basic charter rate that we are paid under our
charters;
|
|
●
|
the
amount of additional hire that we receive under our charter
arrangements;
|
|
●
|
with
respect to our Initial Vessels, the number of off hire days during which
we will not be entitled, under our charter arrangements, to receive either
the fixed basic charter rate or additional
hire;
|
|
●
|
the
amount of daily technical management fees payable under our ship
management agreements;
|
|
●
|
our
general and administrative and other
expenses;
|
|
●
|
our
insurance premiums and vessel
taxes;
|
|
●
|
any
future vessel acquisitions; and
|
|
●
|
our
interest expense.
|
Year
Ended
December
31, 2008
|
Year
Ended
December
31, 2007
|
Year
Ended December 31, 2006
|
||||||||||
VLCCs
(TCE)
|
$ | 52,300 | $ | 41,500 | $ | 46,900 | ||||||
Suezmaxes
(Bareboat)
(1)
|
$ | 28,900 | $ | 27,400 | - | |||||||
Aframaxes
(TCE)
|
$ | 26,700 | $ | 25,700 | $ | 26,200 |
Operating
period
|
Total
payment
|
Per
share
|
Record
date
|
Payment
date
|
||||
Oct.18-Dec.
31 2005
|
$12.9
million
|
$0.43
|
March
10, 2006
|
March
24, 2006
|
||||
Jan.
1-March 31 2006
|
$15.9
million
|
$0.53
|
June
1, 2006
|
June
16, 2006
|
||||
April
1-June 30 2006
|
$10.8
million
|
$0.36
|
August
18, 2006
|
Sept.
4, 2006
|
||||
July
1-Sept. 30 2006
|
$12.6
million
|
$0.42
|
Nov.
27, 2006
|
Dec.
6, 2006
|
||||
Oct.
1-Dec. 31 2006
|
$13.2
million
|
$0.44
|
Feb.
22, 2007
|
March
6, 2007
|
||||
Jan.
1-March 31 2007
|
$11.4
million
|
$0.38
|
May
29, 2007
|
June
12, 2007
|
||||
April
1-June 30 2007
|
$11.7
million
|
$0.39
|
Sept.
12, 2007
|
Sept.
21, 2007
|
||||
July
1-Sept. 30 2007
|
$11.1
million
|
$0.37
|
Dec.
3, 2007
|
Dec.
12, 2007
|
||||
Oct.
1-Dec. 31 2007
|
$10.5
million
|
$0.35
|
Feb.
26, 2008
|
March
11, 2008
|
||||
Jan.
1-March 31 2008
|
$9.8
million
|
$0.25
|
May
30, 2008
|
June
11, 2008
|
||||
April
1-June 30 2008
|
$9.8
million
|
$0.25
|
Sept.
15, 2008
|
Sept.
24, 2008
|
||||
July
1-Sept. 30 2008
|
$11.8
million
|
$0.30
|
Dec.
2, 2008
|
Dec.
11, 2008
|
||||
Oct.
1-Dec. 31 2008
|
$11.8
million
|
$0.30
|
Feb.
26, 2009
|
March
5,
2009
|
Summary
Long-Term Future Contractual Obligations(1)
|
||||||||||||||||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
Total
|
||||||||||||||||||||||
($
in thousands)
|
||||||||||||||||||||||||||||
Long-term
debt(2)
|
19,630 | 19,630 | 55,146 | 53,105 | 50,970 | 271,524 | 470,006 |
(1)
|
Under
the new ship management agreements for our Initial Vessels effective
January 16, 2009, we are required to pay the actual cost of operating the
vessels as well as an annual management fee to Tanker Management for their
services. Each ship management agreement for our Initial Vessels is
coterminous with the charter for each vessel but may be terminated by
either us or Tanker Management upon 90 days’ written notice to the
other
|
(2)
|
Amounts
shown include contractual interest obligations on $344 million of debt
outstanding under our secured credit facility. The interest obligations
have been determined using an interest rate of 5.60% per annum based on
the five year interest rate swap arrangement that was effective as of
October 18, 2005 for $236 million and an interest rate of 5.95% per annum
based on the five year interest rate swap arrangement that was effective
as of December 4, 2007 for $100 million. The interest on the balance
outstanding is payable quarterly and the principal is payable with
quarterly installments of $9,075,000 commencing on January 18, 2011, with
a final payment of $109,050,000 on July 18,
2017.
|
|
●
|
a
first priority mortgage on each of the vessels we have agreed to purchase
and any additional vessels that we
acquire;
|
|
●
|
an
assignment of charter hire guarantees and earnings from, and insurances
on, each of the vessels we have agreed to purchase and any additional
vessels that we acquire;
|
|
●
|
a
pledge of the balances in our bank accounts which we have agreed to keep
with RBS; and
|
|
●
|
an
unconditional and irrevocable guarantee by each of our vessel-owning
subsidiaries.
|
|
●
|
incurring
additional indebtedness without the prior consent of the
lenders;
|
|
●
|
permitting
liens on assets;
|
|
●
|
merging
or consolidating with other entities or transferring all or substantially
all of our assets to another
person;
|
|
●
|
paying
dividends if the charter-free market value of our vessels that secure our
obligations under the credit facility is less than 135% of our borrowings
under the credit facility plus the actual or notional cost of terminating
any interest rates swaps that we enter, if there is a continuing default
under the credit facility or if the payment of the dividend would result
in a default or breach of a loan
covenant;
|
|
●
|
changing
the technical manager of our vessels without the prior consent of the
lenders;
|
|
●
|
making
certain loans, advances or investments; entering into certain material
transactions with affiliated
parties;
|
|
●
|
entering
into certain types of charters, including bareboat charters and time
charters or consecutive voyage charters of greater than 13 months
(excluding our charters with OSG’s
subsidiaries);
|
|
●
|
de-activating
any of our vessels or allowing work to be done on any vessel in an
aggregate amount greater than $2.0 million without first obtaining a
lien waiver;
|
|
●
|
making
non-ordinary course acquisitions or entering into a new line of business
or establishing a place of business in the United States or any of its
territories;
|
|
●
|
selling
or otherwise disposing of a vessel or other assets or assigning or
transferring any rights or obligations under our charters and our ship
management agreements.
|
|
●
|
non-payment
of amounts due under the credit
facility;
|
|
●
|
breach
of our covenants;
|
|
●
|
misrepresentation;
|
|
●
|
cross-defaults
to other indebtedness in excess of
$2.0 million;
|
|
●
|
materially
adverse judgments or orders;
|
|
●
|
event
of insolvency or bankruptcy;
|
|
●
|
acceleration
of any material amounts that us or any of our subsidiaries is obligated to
pay;
|
|
●
|
breach
of a time charter or a charter hire guaranty in connection with any of our
vessels;
|
|
●
|
default
under any collateral documentation or any swap
transaction;
|
|
●
|
cessation
of operations;
|
|
●
|
unlawfulness
or repudiation;
|
|
●
|
if,
in the reasonable determination of the lender, it becomes impossible or
unlawful for us or any of our subsidiaries to comply with our obligations
under the loan documents; and
|
|
●
|
if
any event occurs that, in the reasonable opinion of the lender, has a
material adverse effect on our and our subsidiaries’ operations, assets or
business, taken as a whole.
|
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
|
|
A.
|
DIRECTORS
AND SENIOR MANAGEMENT
|
Name
|
Age
|
Position
|
||
Erik
A. Lind
|
53
|
Class I
Director and Chairman
|
||
Randee
Day
|
60
|
Class II
Director
|
||
Rolf
A. Wikborg
|
50
|
Class III
Director
|
||
Ole
Jacob Diesen
|
61
|
Chief
Executive Officer
|
||
Eirik
Ubøe
|
48
|
Chief
Financial Officer
|
||
Tom
R. Kjeldsberg
|
37
|
Senior
Vice President, Business
Development
|
B.
|
COMPENSATION
|
|
●
|
any
options outstanding as of the date the change of control is determined to
have occurred will become fully exercisable and vested, as of immediately
prior to the change of control;
|
|
●
|
all
cash incentive awards will be paid out as if the date of the change of
control were the last day of the applicable performance period and
“target” performance levels had been attained;
and
|
|
●
|
all
other outstanding awards will automatically be deemed exercisable or
vested and all restrictions and forfeiture provisions related thereto will
lapse as of immediately prior to such change of control.
|
|
●
|
the
consummation of a merger, reorganization or consolidation or sale or other
disposition of all or substantially all of our
assets;
|
|
●
|
the
approval by our stockholders of a plan of our complete liquidation or
dissolution; or
|
|
●
|
an
acquisition by any individual, entity or group of beneficial ownership of
50% or more of either the then outstanding shares of our common stock or
the combined voting power of our then outstanding voting securities
entitled to vote generally in the election of
directors.
|
C.
|
BOARD
PRACTICES
|
D.
|
EMPLOYEES
|
E.
|
SHARE
OWNERSHIP
|
ITEM 7. |
MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
A.
|
MAJOR
SHAREHOLDERS
|
Number
of
Shares
|
Percentage
of Outstanding Shares
|
|||||||
Persons
owning more than 5% of a class of our equity securities
|
||||||||
American
Century Companies, Inc. (1)
|
2,185,812 |
5.6
|
||||||
Directors
|
||||||||
Erik
A. Lind(2)(3)
|
20,464 |
*
|
||||||
Randee
Day(2)
|
14,464 |
*
|
||||||
Rolf
A. Wikborg(2)
|
12,464 |
*
|
||||||
Executive
Officers
|
||||||||
Ole
Jacob Diesen(4)
|
62,237 |
*
|
||||||
Eirik
Ubøe(5)
|
41,226 |
*
|
||||||
Tom
R. Kjeldsberg(6)
|
21,318 |
*
|
||||||
Directors
and executive officers as a group (6 persons)(7)
|
162,173 |
*
|
|
* Less
than 1%
|
|
(1)Based
on a Schedule 13G filed by American Century Companies, Inc with the
Commission on February 13, 2009.
|
|
(2)Includes
9,428 shares of restricted stock subject to vesting
conditions.
|