Aker Philadelphia Shipyard Sells Interest in Tanker Joint Venture with Crowley

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September 22, 2015

Photo: Crowley

Aker Philadelphia Shipyard ASA (OSLO: AKPS) says that its wholly-owned U.S. subsidiary, Aker Philadelphia Shipyard, Inc. (APSI), has entered into definitive agreements Marathon Petroleum Corporation for the buy-out of APSI’s interest in its joint venture with Crowley Maritime Corporation.

The joint venture with Crowley was established in 2013 with the intention of operating and chartering four Jones Act qualified 50,000 dwt product tankers now under construction at Aker Philadelphia Shipyard. The transaction is based on an enterprise value of $150 million per vessel.

The buy-out of APSI’s interest with respect to each vessel will occur at its delivery from APSI. The delivery of all four vessels is expected from Q3 2015 to Q3 2016.

APSI says it expects to recognize a pre-tax gain of approximately $10 million per vessel from the transaction.

APSI will make an investment in the vessels during their construction, but will no longer maintain the previously planned long-term investment in the vessels post-delivery, which was expected to be approximately $110 million in the aggregate.

“This transaction is an important part of AKPS’s plan to divest its shipping investments and realize the value created for shareholders,” remarked Kristian Rokke, Chairman of AKPS. “We are proud of what we have accomplished together with Crowley under the joint-venture and look forward to serving both Crowley and Marathon Petroleum as shipbuilders into the future.”

The new 50,000 DWT product tankers are based on a proven Hyundai Mipo Dockyards (HMD) design incorporation fuel efficiency technologies, flexible cargo capability, and the latest regulatory requirements. The vessels will also be constructed with consideration for the use of LNG fuel in the future.

APSI has also begun construction of the first two of four additional 50,000 dwt tankers for a subsidiary of Kinder Morgan, Inc., which are planned to be delivered between November 2016 and November 2017. The shipyard also has contracts for two 3,600 TEU containerships for Matson Navigation Company, Inc., which are planned to be delivered in 2018.

On July 16, 2015, APSI announced that it intends to change its name to Philly Shipyard by the end of the year, pending shareholder approval.

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