Converto Sticks with Shipping

 Norway’s Converto Capital Fund, in which Aker ASA holds 99.8 per cent of the invested capital, has decided to remain in the shipping business and scrap the idea of an exit from American Shipping Company ASA (AMSC) through a contemplated secondary offering.

The decision came after Converto gained confirmation of the future potential of AMSC and Aker Philadelphia Shipyard (AKPS), in which Converto has been a major shareholder since 2009.

Converto has also received indications from several parties that there is interest in discussing and assessing strategic opportunities for AMSC and AKPS on a stand-alone or combined basis. As a result, the company has concluded that potential strategic alternatives could create higher value than an exit at the current time, and will now spend the time required to explore such options.

The North American shale oil revolution has created a structural change in the demand for oil transportation and refining in the United States.

Converto believes that AMSC and AKPS can benefit from a continued tight Jones Act market and the favourable supply / demand dynamics driven by increased shale oil production, longer shipping distances, stricter vessels requirements and limited newbuilding capacity.

According to Converto, AMSC and AKPS are at a crossroad of opportunities. As previously announced, AMSC is working to refinance its debt and is in final rounds of negotiations with banks to orchestrate an all encompassing refinancing to reduce the cost of capital and increase its dividend capacity.