Nordic American Offshore Initiates $100m IPO, Order for New PSVs

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June 2, 2014

The 4,000 dwt VARD 1 08 platform supply vessel will measure 81 meters in length and 18 meters wide. Illustration courtesy VARD Holdings

Platform supply vessel company Nordic American Offshore has announced plans to raise more than $100 million through its IPO that will help fund the purchase of at least two new platform supply vessels, which would bring the fledgling offshore suppliers’ fleet to a total of 10 vessels.

Bermuda-based NAO announced Monday the commencement of its initial public offering of 5,882,352 common shares for listing on the New York Stock Exchange, which are expected to be priced between $16 and $18 per share.

The common shares will be listed under the symbol “NAO,” subject to official notice of issuance.

Nordic American Offshore, Ltd. was formed as a spinoff of Nordic American Tankers in October 2013 and has been listed on the Norwegian OTC market since November.

NAO says it intends to use approximately $81 million of the net proceeds from the IPO towards the purchase of two newbuild platform supply vessels to be built by VARD Holdings Limited, a Norwegian specialized offshore shipbuilder.

NAO and VARD announced a Letter of Intent of the two newbuild PSV’s on Monday, along with an option for third vessel.

The vessels will be of the VARD 1 08 design, developed by Vard Design in Ålesund, Norway. The hulls of the vessels will be built at Vard Braila in Romania, with delivery scheduled from Vard Aukra in Norway in 2Q and 3Q 2015.

The LOI is valid until the end of 2Q 2014, with the option for the third vessel expiring at the end of July 2014.

Nordic American Offshore currently owns eight platform supply vessels. Assuming all the options are exercised, NAO will have a fleet of 11 platform supply vessels in 2015.

Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and DNB Markets, Inc. are acting as joint book-running managers and Global Hunter Securities, LLC is acting as a co-manager for the initial public offering.

At the NAO’s request, the underwriters have reserved up to $13.0 million of the common shares for sale to Nordic American Tankers, Ltd. at the initial public offering price.

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