Philly Shipyard ASA : Philly Shipyard places TOTE containership project on hold and considers alternative projects
January 26 2018 - 5:55PM
Philadelphia,
PA (January 26, 2018). Reference is made to a release today by
TOTE where the company announced that its plans to enter the U.S.
mainland to Hawai'i containership service are on hold as a result
of its Phase 1 technical review of Piers 1 and 2 in Honolulu
Harbor. As a result of this delay, TOTE and Philly Shipyard, Inc.
(PSI) will not extend their Letter of Intent (LOI), which is set to
expire on January 31, 2018.
In September 2017, Piers 1 and 2,
along with 40+ acres of adjacent land, were allocated to TOTE by
the Hawai'i Department of Transportation (HDOT) for its access and
use commencing in 2020, to coincide with the planned start of
TOTE's new operations in Hawai'i. According to TOTE's
release, its preliminary study of the site's infrastructure
indicated that this terminal space will require upgrades and
improvements to accommodate TOTE's new Hawai'i service.
The LOI, which was signed by TOTE
and PSI in July 2017, contemplates the construction and sale of up
to four state-of-the-art, cost-effective and eco-friendly vessels,
with planned deliveries for the first pair (Hulls 031-032) in 2020
and the second pair (Hulls 033-034) in 2021. Due to the scope
and timing of the required upgrades and improvements to Piers 1 and
2, the LOI will not be renewed.
TOTE, however, noted in today's
release that it continues to be open to working with HDOT to update
plans and a timeline for access to a deep water terminal in
Honolulu Harbor that would allow TOTE to launch its new Hawai'i
service.
Based on these developments, the
project to build Hulls 031-034 as containerships is being put on
hold. PSI is suspending substantially all
construction-related activities on these vessels, including design,
planning and procurement work. As previously disclosed, PSI
has placed orders for all major long-lead items for the first
pair. If these orders were to be cancelled, then the
cancellation costs would be substantially lower than the value of
the orders placed.
PSI intends to resume this project
when there is more clarity regarding the new order situation and
related capital requirements. Accordingly, PSI is exploring
alternatives in order to secure contracts and financing for these
vessels. In addition, PSI is continuing to pursue potential
new construction projects for other types of Jones Act vessels.
PSI has delivered 28 vessels in
its 20 year history, including four vessels for use in the Hawai'i
containership trade which were delivered in 2003-2006.
Currently, PSI is building two 3,600 TEU containerships for use in
the Hawai'i trade for Matson (Hulls 029-030).
About Philly
Shipyard:
Philly Shipyard is a leading U.S.
commercial shipyard constructing vessels for operation in the Jones
Act market. It possesses a state-of-the-art shipbuilding
facility and has earned a reputation as the preferred provider of
oceangoing merchant vessels with a track record of delivering
quality ships. Philly Shipyard is listed on the Oslo Stock Exchange
and is majority-owned by Aker Capital AS, which in turn is
wholly-owned by Aker ASA. Aker is a Norwegian industrial investment
company that creates value through active ownership. Aker's
investment portfolio is concentrated on key Norwegian industries
that are international in scope: oil and gas, fisheries and
biotechnology, and marine assets. Aker's industrial holdings
comprise ownership interests in Aker Solutions, Kvaerner, Aker BP,
Aker BioMarine, Ocean Yield and Akastor.
For more information on Philly
Shipyard transactions and projects, please visit
www.phillyshipyard.com.
Important
information about this release:
This information is subject to the
disclosure requirements pursuant to section 5-12 of the Norwegian
Securities Trading Act.
This press release includes and is
based, inter alia, on forward-looking information and statements
that are subject to risks and uncertainties that could cause actual
results to differ. Such forward-looking information and statements
are based on current expectations, estimates and projections about
global economic conditions, the economic conditions of the regions
and industries that are major markets for Philly Shipyard ASA and
its subsidiaries and affiliates (the "Philly Shipyard Group") lines
of business. These expectations, estimates, and projections are
generally identifiable by statements containing words such as
"expects", "believes", "estimates," "anticipates," "intends" or
similar expressions. Important factors that could cause actual
results to differ materially from those expectations include, among
others, economic and market conditions in the geographic areas and
industries that are or will be major markets for the Philly
Shipyard Group's businesses, oil prices, market acceptance of new
products and services, changes in existing laws and governmental
regulations, interest rates, fluctuations in currency exchange
rates and such other factors as may be discussed from time to time.
Although Philly Shipyard ASA believes that its expectations and the
information in this press release were based upon reasonable
assumptions at the time when they were made, it can give no
assurance that those expectations will be achieved or that the
actual results will be as set out in this press release. Neither
Philly Shipyard ASA nor any other company within the Philly
Shipyard Group is making any representation or warranty, expressed
or implied, as to the accuracy, reliability or completeness of the
information in the press release, and neither Philly Shipyard ASA,
any other company within the Philly Shipyard Group nor any of their
directors, officers or employees will have any liability to you or
any other persons resulting from your use of the information in the
press release. Philly Shipyard ASA undertakes no obligation
to publicly update or revise any forward-looking information or
statements in the press release, other than what is required by
law.
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Philly Shipyard ASA via Globenewswire
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