d808199_6-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the month of September 2007
Commission
File Number: 001-13944
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NORDIC
AMERICAN TANKER SHIPPING LIMITED
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(Translation
of registrant’s name into English)
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LOM
Building, 27 Reid Street, Hamilton, HM 11, Bermuda
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(Address
of principal executive office)
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Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form
20-F [X] Form 40-F
[ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ___
Note:
Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form
6-K
if submitted solely to provide an attached annual report to security
holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)7: ___
Note:
Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form
6-K
if submitted to furnish a report or other document that the registrant foreign
private issuer must furnish and make public under the laws of the jurisdiction
in which the registrant is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules of the home country exchange on
which the registrant’s securities are traded, as long as the report or other
document is not a press release, is not required to be and has not been
distributed to the registrant’s security holders, and, if discussing a material
event, has already been the subject of a Form 6-K submission or other Commission
filing on EDGAR.
Indicate
by check mark whether the registrant by furnishing the information contained
in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes
[_] No [X]
If
“Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82-______________.
INFORMATION
CONTAINED IN THIS FORM 6-K REPORT
Attached
as Exhibit 1 is a copy of a letter to shareholders from Herbjørn Hansson,
Chairman and CEO of Nordic American Tanker Shipping Limited, issued on September
6, 2007.
Exhibit
1
Nordic
American Tanker Shipping Ltd. (the Company) - (NYSE:NAT) Letter to Shareholders
from the Chairman & CEO
Hamilton,
Bermuda, September 6th, 2007
Dear
Shareholder,
It
is time for me to send you a letter summarizing aspects of our current business
and financial position. For nine consecutive years the dividend yield for NAT
has been well above 10% - a full pay out is the mainstay of our dividend
policy. In my letter to you of April 17th 2007 we indicated that the
tanker market was strong during the first months of the year - a development
that continued into the 2nd quarter. The results during the first half of 2007
enabled the Company to pay $2.41 per share for that period.
As
mentioned to you in our report for the second quarter of 2007, a soft 3rd
quarter could be expected. As we move into September, we are upholding this
view. The average Imarex spot freight rate per day was $22,481 and $16,574
for
July and August, respectively. The general weakness of the spot tanker
market rates has continued into September. The average Imarex spot freight
rate
per day for the 1st half year of 2007 was $38,004. The Imarex index measures
the
level of the day-to-day market and should not be viewed as a precise and a
direct indicator of NAT’s future performance. NAT secures employment for its
vessels through short-term contracts going a few weeks into the future.
Therefore, in a falling market, we may be expected to outperform the Imarex
index, and conversely, in a rising market, our company typically would
experience a time lag of a few weeks compared with the daily Imarex
quotations.
Many
observers in the marketplace believe that a rebound in rates may be expected
during the upcoming winter in the western world. The Imarex forward rates now
stand at $36,878 per day for 4Q07. As a matter of policy, we do not predict
short terms variations in the spot freight rates. However, we believe that
the
overall balance between supply and demand is quite tight and small variations
in
the supply and demand picture could lead to significant rate variations. We
are
in a position to reap the benefits of an upswing quickly.
Based
upon our present policy, the amount of dividend paid each quarter will typically
depend upon the level of the spot freight market. We have a stronger focus
on
the direction of the Company than on a quarter-to-quarter development.
Management has continuously expanded the fleet of NAT since 2004, and after
each
expansion, the Company has increased its dividend capacity per share. NAT
intends to continue to demonstrate dividend per share accretion via acquisitions
of vessels.
Our
objective is invariably to provide for the best possible return (the price
of
our common shares plus dividends reinvested in our common shares) for our
shareholders compared with other tanker companies irrespective of the level
of
the market. We expect to announce our dividends and earnings report for 3Q07
before the opening of NYSE on November 5th, with expected payment of dividend
November 28th to shareholders of record November 21st.
As
previously reported, we have had one vessel in scheduled drydock with 25 days
out of service in 3Q07. In our 2Q07 earnings release we reported that
in connection with a 10-year special survey, another vessel was undergoing
steel
improvements causing expected loss of income days of about 75 in
3Q07. This implies that we will not have the benefit of more than
about 90% of our transportation capacity during 3Q07. We did advance these
dockings timing wise because we saw that spot rates would be softer during
the
3rd quarter - it is relatively speaking advantageous to do dry-docking work
in a
weak market.
The
position of NAT was significantly strengthened in July following the closing
of
a public offering of 3,000,000 common shares. This offering was a block
transaction, whereby the newly issued shares were bought at a mutually agreed
upon fixed price by the investment banks of Bear Stearns and Morgan Stanley,
which subsequently placed the shares in the market. The net proceeds of
the offering were used to repay debt on our revolving credit facility and to
prepare for further expansion. The offering strengthened the equity of the
Company with $120 million and reduced the debt per vessel from $15.5 million
in
June to approximately $6 million today.
Following
the offering, we estimate that the average cash breakeven for our fleet of
twelve vessels is approximately $9,000 per day per vessel. When the freight
market is above this freight level, the Company can be expected to pay dividends
based on its full-payout policy. The breakeven rate is the amount of average
daily revenues for our vessels which would cover our vessel operating expenses,
voyage expenses, if any, cash general and administrative expenses, interest
expense and other financial charges.
The
situation in the international financial markets is in focus - often described
as a credit crunch. Conditions in the tanker market have nothing to do with
problems in the financial markets - the crucial question is whether and the
extent to which the jittery in the financial markets is impacting the business
cycle. One view is that the challenges in the US debt markets could be more
than outweighed by strong growth in other parts of the world. We do not have
a
better “crystal ball” than others. However, we are indeed clear of the fact that
the situation in the markets reminds us of the importance of having a
strong balance sheet - relatively speaking NAT has one of the strongest balance
sheets in the shipping industry. This enables NAT to grow in any freight market.
All in all, our strong balance sheet provides us with a platform for
further growth and continued dividend payments as well as the flexibility to
swiftly act on changing market conditions.
NAT
shall continue to operate a modern and homogeneous fleet, focusing on
environmentally friendly suezmax tankers with double hulls (one million barrel
vessels). Management actively pursues growth opportunities. Through prior
fleet expansions, we have significantly increased the Company’s dividend and
earnings capacity per share and reduced the average age of our fleet. We expect
to continue to grow the Company’s fleet. However, the timing of the growth
cannot be predicted with precision.
The
NAT operating model was developed at the drawing board stage in order to meet
the requirements of investors. We have delivered solid total returns over time.
With a low cost base, strong balance sheet and our net cash flow from operations
distributed every quarter to shareholders, we have achieved an aggregate total
return of 331% during the period January 1st, 2004 up to September 5th, 2007.
This performance compares favourably to other listed tanker
companies.
Longer-term
prospects for the tanker market depend upon developments at the macro-economic
level, especially continued growth in Asia, which will result in increased
demand for tankers.
In
summary, our main objective continues to be value creation via a transparent,
predictable and clear strategic platform based on a unique operating model.
We
encourage investors wishing to have tanker exposure to assess our operating
model and to invest in our Company.
For
further details on our Company, please see www.nat.bm
Sincerely,
Nordic
American Tanker Shipping Ltd.
Herbjørn
Hansson
Chairman
and CEO
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters
discussed in this press release may constitute forward-looking statements.
The Private Securities Litigation Reform Act of 1995 provides safe harbor
protections for forward-looking statements in order to encourage companies
to
provide prospective information about their business. Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events or performance, and underlying assumptions and other statements,
which are other than statements of historical facts.
The
Company desires to take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The words “believe,”
“anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,”
“may,” “should,” “expect,” “pending” and similar expressions identify
forward-looking statements.
The
forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, our management’s examination of historical
operating trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were reasonable
when made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict
and
are beyond our control, we cannot assure you that we will achieve or accomplish
these expectations, beliefs or projections. We undertake no obligation to
update any forward-looking statement, whether as a result of new information,
future events or otherwise.
Important
factors that, in our view, could cause actual results to differ materially
from
those discussed in the forward-looking statements include the strength of world
economies and currencies, general market conditions, including fluctuations
in
charter rates and vessel values, changes in demand in the tanker market, as
a
result of changes in OPEC’s petroleum production levels and world wide oil
consumption and storage, changes in our operating expenses, including bunker
prices, drydocking and insurance costs, the market for our vessels, availability
of financing and refinancing, changes in governmental rules and regulations
or
actions taken by regulatory authorities, potential liability from pending or
future litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political events,
vessels breakdowns and instances of off-hire, failure on the part of a seller
to
complete a sale to us and other important factors described from time to time
in
the reports filed by the Company with the Securities and Exchange Commission,
including the prospectus and related prospectus supplement, our Annual Report
on
Form 20-F, and our Reports on Form 6-K.
Contacts:
Scandic
American Shipping Ltd
Manager
for:
Nordic
American Tanker Shipping Limited
P.O
Box 56, 3201 Sandefjord, Norway
Tel:
+ 47 33 42 73 00 E-mail: nat@scandicamerican.com
Rolf
Amundsen, Investor Relations
Nordic
American Tanker Shipping Limited
Tel:
+1 800 601 9079 or + 47 908 26 906
Gary
J. Wolfe
Seward
& Kissel LLP, New York, USA
Tel:
+1 212 574 1223
Herbjørn
Hansson, Chairman and Chief Executive Officer
Nordic
American Tanker Shipping Limited
Tel:
+1 866 805 9504 or + 47 901 46 291
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
NORDIC
AMERICAN TANKER SHIPPING LIMITED
(registrant)
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Dated: September
6, 2007
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By:
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/s/
Herbjørn Hansson
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Herbjørn
Hansson
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Chairman,
Chief Executive Officer
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and
President
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SK
01318 0002
808199