Philly Tankers Agrees to Sell Four Product Tanker Contracts to Kinder Morgan
Philly Tankers AS announced today that its wholly-owned U.S. subsidiary, Philly Tankers LLC, has signed definitive documentation with a subsidiary of Kinder Morgan, Inc. for the assignment of its existing contracts for the construction of four 50,000 dwt product tankers. The vessels will be constructed by Aker Philadelphia Shipyard, Inc. and are planned to be delivered between November 2016 and November 2017.
Each of the four contracts will be assigned by Philly Tankers LLC to the Kinder Morgan entity immediately prior to delivery of the relevant vessel. The transaction is valued at a total of $568 million. It is anticipated that Philly Tankers’ pre-tax gain on the assignment of all four contracts will be approximately $45 million. Proceeds from the transaction are expected to be distributed to Philly Tankers AS shareholders after delivery of all four vessels.
“We are pleased to announce today’s transaction with Kinder Morgan as a successful outcome for Philly Tankers’ shareholders. Philly Tankers has made noteworthy achievements since its inception, including securing long-term employment for two of its vessels, the opportunistic exercise of its options and now the assignment of all four of its new building contracts to Kinder Morgan, which provides an attractive return to Philly Tankers’ shareholders.” said Kristian Rokke, Chairman of Aker Philadelphia Shipyard ASA and Board member of Philly Tankers AS.
An extraordinary general meeting (EGM) of the shareholders of Philly Tankers AS will be scheduled in the third quarter of 2015 for formal shareholder approval of the transaction. Under the company’s Articles of Association, the transaction requires approval of shareholders holding 80% of the shares in the company. Shareholders accounting for over 85% of all shares in the company have already entered into irrevocable voting undertakings approving the transaction.
About Philly Tankers:
Philly Tankers was established in June 2014 to provide major oil companies and other end-users with modern tonnage and offer investors pure play exposure toward the Jones Act tanker space. Philly Tankers is listed on the Norwegian OTC and is majority-owned by Aker Philadelphia Shipyard ASA, a leading U.S. commercial shipyard constructing vessels for operation in the Jones Act market.