Nordic Tankers divests chemical tankers under duress

Nordic Tankers A/S (CPH: NORDIC) said it has entered into a conditional agreement to divest its chemical tanker activities including the organisation for 30 million USD to European investment firm Triton Fund  III. Two thirds of this will be loaned back to the buyer. Triton already owns Danish oil and chemical tankers firms Herning Shipping. These two will be combined and Nordic Tankers’ CEO Tommy Thomsen will head the new combined company.

Nordic Tankers has stated that its core competence is to manage and operate highly sophisticated chemical tankers between 3,000-25,000 dwt. The company transformed into a full service shipping company by incorporating Clipper Group’s chemical tanker activities only couple years ago. Nordic Tankers still has financial obligations towards Clipper.

Most recently Nordic Tankers has had close to 100 chemical tankers in operation. Most of them have been operated in pools. Nordic Tankers owns 9 and has six in-chartered vessels. The organisation has some 140 employees who will also be moved.

The segment has recently been loss making and the company admitted that the segment outlook has remained poor. The agreement is done under stress stemming from the coming expiry on debt repayment freeze by its creditors Nordea and Danish Ship Finance as well as continued low freight rates. In connection with this deal another freeze period of one year will be granted.

The Chemical Tanker segment has recently brought over 80% of the revenues, averaging around 30 million USD per quarter. The company is left with a fleet of six product tankers in 37,000-73,000 dwt range, five of which are under commercial management with Maersk and one with Hafnia.

It will change its name from Nordic Tankers A/S" to Nordic Shipholding A/S as the combined company with Herning Shipping will operate under Nordic Tankers brand. The transaction is subject to Nordic Tankers AGM approval on 20th of April. The already battered stock lost 13% in Tuesday trading.