Overseas Shipholding Group, Inc. (OSG) saw a decrease of 7.49% in the aftermarket. However, the last trading session concluded at $1.87 with a decline of 1.06%.
Third Quarter 2021 Results
OSG announced third quarter 2021 results on 9th November 2021. The company reported shipping revenues of $94.0 million. Moreover, the company lost $0.7 million, or $0.01 per diluted share. Not only this, but the Company recorded a $1.0 million impairment charge on two of its leased boats in the third quarter of 2021. The Company refinanced its term loans due December 2023 and November 2026.
This enhanced their liquidity by extending the maturity of their long-term debt. Furthermore, OSG recorded an $8.0 million net loss on these transactions. Lastly, the Company revised its other debt arrangements as part of this transaction, resulting in covenant clauses that are commensurate with the new term loan’s conditions.
Was it a strong quarter for OSG?
The continuous sequential increase in quarter-to-quarter EBITDA performance was the most remarkable aspect of financial results. Moreover, vessels in operation performed well in the third quarter, generating steady cash flow. In addition, two ships were also reactivated and rejoined the working fleet in recent weeks.
As Jones Act vessel availability tightens in the fourth quarter and into 2022, OSG believes that this trend will continue. Until the first quarter of 2022, all of OSG’s operational boats will be on-time charter. Moreover, current conditions favor the reactivation of further laid-up vessels before the end of the year, giving hope that sequentially better quarterly EBITDA performance will improve.
Closing of a $325 million loan to refinance debt – Now what?
OSG finally reported on 4th October 2021 that the company has ended on a seven-year $325 million term loan credit facility with Stonebriar Commercial Finance. The proceeds will substitute its existing term loan facility with The Prudential Insurance Company of America. OSG and some other subsidiaries guarantee the borrowers’ performance under the Term Loan Refinancing. Lastly, the loan includes standard representations and warranties, as well as positive and negative covenants.
OSG’s overview
OSG is happy to have completed this important refinancing, which extends its maturity profile and improves the Company’s liquidity position significantly. Until September 2024, OSG has no debt maturities scheduled. Lastly, the company also expresses its gratitude to Stonebriar for successfully completing this transaction and becoming the most important financial partner.
