AMSC is making moves around the offshore construction vessel it acquired last year.
The Oslo-listed company said on Wednesday that it is looking to increase the size of one portion of the loan financing the 178-loa Normand Maximus (built 2016) while refinancing the entirety of the debt at some point this year.
The ship is on bareboat charter to a Solstad Offshore subsidiary until 2027, and AMSC said Solstad had sub-chartered the vessel for a minimum of 490 days beginning in the first quarter of 2024.
AMSC said the Normand Maximus had limited charter coverage in the fourth quarter of 2022 and the first quarter of 2023 and that Solstad had deferred charter payments with a balance of $9.5m as of 31 March.
Solstad could defer up to $10m in payments with 12% interest, with those figures rising to $20m and 15% in the second quarter.
“With Solstad Offshore’s current contract cover for the vessel, we expect the deferred charter payments to be repaid during 2023,” the company said.
It added that the market for offshore services is experiencing activity not seen for nearly a decade.
The Normand Maximus is AMSC’s only vessel that is not a US-flag MR product tanker.
It acquired the ship in May 2022 for $157m, $110m of which was two tranches of debt — $75m and the $35m. AMSC intends to raise the $35m potion by $10m.
Financing costs for the vessel — which chief executive Pal Lothe Magnussen has said could bring in an annual Ebitda of $30m — dragged on AMSC earnings for the second consecutive quarter.
The company reported a $4.3m adjusted profit for the first three months of 2023, even as leasing revenues jumped from $21.7m to $30.3m from the same period last year.
It represented a drop from the $11.5m reported in the first quarter of 2022.
What increased were finance expenses, which jumped to $12.2m from $7.5m, plus the flip in interest rate swaps from a $6.5m gain to an $800,000 loss year over year.
“[The first quarter] represented our first full quarter with three of our Jones Act tankers on new bareboat contracts and Normand Maximus on bareboat contract to a subsidiary of Solstad Offshore,” said Magnussen, noting that Ebitda had jumped by 38% to $28.9m.
“The Jones Act tanker market remains strong and Solstad recently announced a letter of intent for a new term contract for Normand Maximus. Long-term prospects for our fleet continue to look promising.”
The three Jones Act tankers — vessels allowed to trade between points in the US — were on charter with Overseas Shipholding Group but were rechartered to Keystone Shipping when Keystone decided to evaluate its future business.
The ships are the 46,800-dwt Seakay Star (built 2007), Seakay Valor and Seakay Sky (both built 2007).
AMSC said the Seakay Valor went on special survey at the end of the first quarter and returned to trading in the second quarter.
