By Divya Lad
Feb 17 Overseas Shipholding Group,
the world's second-largest independent tanker operator, said it
withdrew a $241.8 million loan guarantee application with the
U.S. Maritime Administration, after the federal agency indicated
it could not be approved.
The company had filed the application in February 2010 under
Title XI Federal Ship Financing Program, which guarantees
fixed-rate long-term loans from the private sector.
"Both the company and investors were counting on it to come
through to help with the liquidity situation...it is a surprise
and it is rather disappointing," Evercore Partners analyst
Jonathan Chappell said.
Chappell said the company could dispose some assets if they
really need to.
The withdrawal of the application will not affect the
company's financial position and it remains in compliance with
its financial covenants, Overseas said.
The company had sought the loan for two shuttle tankers,
which were delivered in 2010 and 2011, and are on time charters
expiring in 2015.
"It is not unusual for Title 11 loan guarantee applications
to be withdrawn during the review process," representative of
Maritime administration Meghan Keck said via an email.
Overseas, incorporated in 1969, has a long-term debt of
$2.07 billion and cash and short-term investments of $182.1
million as of Sept. 30, according to Thomson Reuters data.
Last week, Overseas suspended its dividend to "preserve
liquidity and maintain financial flexibility."
Overseas Shipholding shares were trading down 3 percent on
Friday after market close on the New York Stock Exchange.