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Nordic Shipholding reports fall in charter revenues

Logistic News - Published on Fri, 23 Nov 2018

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Nordic Shipholding announced that it had breached certain of its loan covenants. Following successful negotiations among management, the major shareholder and the lenders, an agreement has been reached which will result in an improved balance sheet structure for the Company. Documentation of this restructuring is targeted to be finalised by end-2018. Elements of the re-negotiated financing agreements include but are not limited to (i) the major shareholder of the Company providing additional liquidity in the form of loans, (ii) increase in interest margin, and (iii) covenants and undertakings modified/relieved in order to secure that the Company will have more time – up to September 2020 to finalise the implementation of its various strategies.

The Company is also pleased to announce that the legal dispute with a total value of about USD 1.5 million, disclosed in 2017 Annual Report, was resolved at the end of September 2018. That dispute was related to a sizeable demurrage and deviation claim and the exit from the pool. The Group received the full amount of USD 1.5 million by early-November 2018.

The tanker market, however, continued to soften into Q3 2018. Compounded by higher bunker prices, the average daily Time Charter Equivalent (“TCE”) rates earned by the 6 vessels deployed in the three pools came in below their forecasted daily rate in the first 9 months of the financial year.

Compared to the same period last year, total TCE revenue fell to USD 13.4 million (USD 18.0 million) in 9M 2018. Further, the TCE revenue from the LR1 vessel deployed in Straits Tankers Pool in 9M 2018 was USD 1.7 million lower than the TCE revenue derived from the 3-year time charter locked in for the LR1 vessel in the same period last year.

For the 9 months ended 30 September 2018, the Group incurred a loss after tax of USD 20.8 million (which included a one-off impairment loss of USD 13.2 million for the vessels), compared to a loss after tax of USD 2.2 million in the same period last year. Excluding the impairment loss of USD 13.2 million, the Group generated a loss after tax of USD 7.6 million for the 9 months under review (USD -2.2 million). Lower tanker TCE revenue from the vessels deployed in the three pools in 2018 contributed to the higher losses in 9M 2018.

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Posted By : Joykumar Irom on Fri, 23 Nov 2018
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