DnB Markets - American Shipping Company ASA (AMSC) AMSC ASA (Buy, TP: NOK52.00) - Offloading tankers for USD747m

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DnB Markets

Jørgen Lian

EUR 88.86 For Business Accounts Only

AMSC ASA (Buy, TP: NOK52.00) - Offloading tankers for USD747m

Today’s announcement that AMSC has agreed to sell its Jones Act tanker fleet for USD747m looks reasonable to us given a limited pool of potential buyers and the recent equity valuation. AMSC intends to pay a one-off DPS of ~NOK25 post-transaction close (which it expects by end-October), and we believe the deal would defend a ~NOK48–49/share value. However, for AMSC as a going concern the transaction would remove the current asset and counterparty diversification and leave pro forma operations sub-scale until new projects are announced. On the other hand, it would also remove limitations of being a Jones Act company and free cash for future projects. The deal is contingent upon two-thirds shareholder acceptance at an EGM in September.

22/08/2023 1 EN

Underlying

American Shipping Company ASA

American Shipping Company is a U.S. ship owning and lease finance company with focus on building a premier ownership position. Through its subsidiaries, Co. is engaged in the purchase and bareboat chartering of product tankers, shuttle tankers, and other vessels to operators and end users in the Jones Act market. Co. owns ten modern 46,000 dwt MR product tankers that were built by Aker Philadelphia Shipyard. All ten vessels are on long term fixed rate bareboat charters with Overseas Shipholding Group Inc. Co. also holds an equity stake in Philly Tankers AS/LLC, founded in 2014 to build two new product tankers at Aker Philadelphia Shipyard.

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NO0010272065 Oslo Bors Norway

Provider

DnB Markets

DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.

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Analysts

Jørgen Lian

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AMSC ASA (Buy, TP: NOK52.00) - Offloading tankers for USD747m

Yard response and dry bulk qualms

A brewing challenge for the yards

AMSC ASA (Hold, TP: NOK23.30) - Set to be a derivative of Solstad

Skistar (Buy, TP: SEK180.00) - Solid outlook for 2024/25e

TGS (Hold, TP: NOK125.00) - Q3 set for soft utilisation

Norsk Hydro (Sell, TP: NOK50.00) - Aluminium is not a scarce resource

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