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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT 12 TO SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES
EXCHANGE ACT OF 1934)
Nordic American Tanker Shipping Limited
(NAME OF ISSUER)
Nordic American Tanker Shipping Limited
(NAME OF PERSON(S) FILING STATEMENT)
COMMON SHARES, PAR VALUE $.01 PER SHARE G65773106
(TITLE OF CLASS OF SECURITIES) (CUSIP NUMBER OF CLASS OF
SECURITIES)
Herbjorn Hansson
Nordic American Tanker Shipping Limited
Cedar House
41 Cedar Avenue
Hamilton HM EX
Bermuda
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF PERSONS(S) FILING
STATEMENT)
COPIES TO:
Gary J. Wolfe
Seward & Kissel
One Battery Park Plaza
New York, New York 10004
(212) 574-1200
OCTOBER 29, 1998
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY
HOLDERS)
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE
$29,000,000 $5,800
- - Calculated solely for the purpose of calculating the filing
fee, based on the purchase of 1,870,967 shares at $15.50
per share.
\ \ Check box if any part of the fee is offset as provided by
Rule 0-11 (a)(2) and identify the filing with which the
offsetting fee was previously paid.
Identify the previous filing by registration statement number or
the Form or Schedule and the date of its filing
Amount Previously Paid: Not applicable Filing party: Not applicable
Form or Registration No.: Not applicable Date Filed: Not applicable
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INTRODUCTION
This Schedule 13E-4 relates to the cash tender offer by
Nordic American Tanker Shipping Limited, a Bermuda company (the
"Company"), to purchase its common shares, par value $0.01 per
share (the "Shares"), at a price between $11.50 and $15.50, net
to the seller in cash, without interest, and upon the terms and
conditions set forth in the offer to purchase dated October 29,
1998 (the "Offer to Purchase") (a copy of which is filed as
Exhibit (a)(1) hereto) and the form of letter of transmittal (the
"Letter of Transmittal") (a copy of which is filed as Exhibit
(a)(2) hereto). The Offer to Purchase together with the related
Letter of Transmittal, as may be amended, constitute the "Offer."
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Nordic American Tanker
Shipping Limited and the address of its principal executive
office is Cedar House, 41 Cedar Avenue, Hamilton HM EX, Bermuda.
(b) The class of securities to which this statement relates
is the Shares, of which up to 16% of such outstanding Shares are
being sought net to seller in cash. According to the most recent
Annual Report on Form 20-F of the Company, there are issued and
outstanding 11,813,850 Shares. Additional information concerning
the number of outstanding Shares is set forth under the caption
"Introduction" in the Offer to Purchase and is incorporated
herein by reference. The information set forth in Section 1 of
the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in the Introduction and in
Section 7 of the Offer to Purchase is incorporated herein by
reference.
(d) This statement is being filed by the Company.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the Introduction and in
Section 8 of the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth in the Introduction and in
Section 8 of the Offer to Purchase is incorporated herein by
reference.
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ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS
OF THE ISSUER OR AFFILIATE.
(a-j) The information set forth in the Introduction and in
Section 2 of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Section 10 of the Offer to
Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS
WITH RESPECT TO THE ISSUER'S SECURITIES.
The information set forth in Section 10 of the Offer to
Purchase is incorporated herein by reference.
ITEM 6. RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 15 of the Offer to
Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a-b) The information set forth in Section 9 of the Offer to
Purchase is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not Applicable.
(b) The information set forth in Section 12 of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in Section 11 of the Offer to
Purchase is incorporated herein by reference.
(d) None.
(e) None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated October 29, 1998.
(a)(2) Form of Letter of Transmittal dated October 29,
1998, together with Guidelines for Certification of
Taxpayer Identification Number on Substitute Form
W-9.
(a)(3) Form of Notice of Guaranteed Delivery.
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(a)(4) Form of letter from Lazard Freres & Co. LLC to
Brokers, Dealers, Commercial Banks, Trust Companies
and other Nominees dated October 29, 1998.
(a)(5) Form of letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies and other
Nominees dated October 29, 1998.
(a)(6) Form of letter to shareholders from Herbjorn
Hansson, Chairman of the Board and Chief Executive
Officer of the Company dated October 29, 1998.
(a)(7) Summary Advertisement dated October 29, 1998.
(a)(8) Press Release dated October 29, 1998.
(a)(9) English translation of Norwegian Language
Explanatory Letter sent to holders of the Company's
common shares traded on the Oslo Stock Exchange.
(b) Commitment Letter Agreement, dated October 23, 1998,
between the Company and Den norske Bank ASA
(c) Not Applicable.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is
true, complete and correct.
Dated: October 29, 1998
Nordic American Tanker Shipping Limited
/s/ Herbjorn Hansson
___________________________________
(Name) Herbjorn Hansson
(Title) Chairman and Chief Executive Officer
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EXHIBIT INDEX
(a)(1) Form of Offer to Purchase dated October 29, 1998 1
(a)(2) Form of Letter of Transmittal dated October 29, 1998,
together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 35
(a)(3) Form of Notice of Guaranteed Delivery 53
(a)(4) Form of letter from Lazard Freres & Co. LLC to Brokers,
Dealers, Commercial Banks, Trust Companies and other
Nominees dated October 29, 1998 57
(a)(5) Form of letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees
dated October 29, 1998 60
(a)(6) Form of letter to shareholders from Herbjorn Hansson,
Chairman of the Board and Chief Executive Officer of the
Company dated October 29, 1998 65
(a)(7) Summary Advertisement dated October 29, 1998 67
(a)(8) Press Release dated October 29, 1998 68
(a)(9) English translation of Norwegian Language Explanatory
Letter sent to holders of the Company's common shares
traded on the Oslo Stock Exchange 69
(b) Commitment Letter, dated October 23, 1998, from Den
norske Bank ASA to the Company. 74
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NORDIC AMERICAN TANKER SHIPPING LIMITED
Offer To Purchase For Cash Up To 1,870,967 Common Shares
At A Purchase Price Not In Excess Of $15.50 Nor
Less Than $11.50 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
11:00 P.M., OSLO TIME AND 5:00 P.M., NEW YORK CITY TIME, ON
NOVEMBER 30, 1998, UNLESS THE OFFER IS EXTENDED OR TERMINATED
NORDIC AMERICAN TANKER SHIPPING LIMITED
Nordic American Tanker Shipping Limited, a Bermuda company
(the "Company"), hereby invites its shareholders to tender shares
of its common shares, $0.01 par value per share (the "Shares"),
upon the terms and subject to the conditions set forth herein and
in the related Letter of Transmittal, which together as may be
amended constitute the "Offer." The Company will determine the
single per Share price, not in excess of $15.50 nor less than
$11.50 per Share, net to the seller in cash, without interest,
that it will pay for Shares properly tendered pursuant to the
Offer, taking into account the number of Shares so tendered and
the prices specified by tendering shareholders (the "Purchase
Price"). The Company will select the lowest Purchase Price that
will allow it to buy up to 1,870,967 Shares (or such lesser
number of Shares as are properly tendered at prices not in excess
of $15.50 nor less than $11.50 per Share) at an aggregate
purchase price not exceeding $29.0 million. All Shares properly
tendered at prices at or below the Purchase Price and not
withdrawn will be purchased at the Purchase Price, upon the terms
and subject to the conditions of the Offer, including the
proration provisions. Shares tendered at prices in excess of the
Purchase Price and Shares not purchased because of proration will
be returned at the Company's expense to the shareholders who
tendered such Shares. The Company reserves the right, in its
sole discretion to purchase more than 1,870,967 Shares pursuant
to the Offer. See Section 14.
The Offer is being made in connection with a Special General
Meeting of the shareholders of the Company to be held on November
30, 1998 (the "Special General Meeting") duly called by the Board
of Directors of the Company on October 15, 1998 in accordance
with the Bermuda Companies Act 1981 (the "Companies Act") to
consider and take action upon, among other things, an amendment
to the Bye-Laws of the Company (the "Amendment") to permit the
Company to incur debt to fund the purchase of Shares pursuant to
the terms and conditions of the Offer. The Company gave notice
to the shareholders of the Company of the Special General Meeting
on October 29, 1998 concurrently herewith and has delivered to
each shareholder of record together with this Offer to Purchase a
proxy statement describing the matters to be voted upon,
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including the Amendment. As the Company is a foreign private
issuer, the proxy statement is not subject to the proxy rules of
the United States Securities and Exchange Commission under the
Securities Exchange Act of 1934 (the "Exchange Act"). See
"Special Factors" herein.
The Company has arranged to obtain the funds necessary to
finance the Offer from bank borrowings in the form of a loan. A
loan will be provided by Den norske Bank ASA (the "Lender"). The
Lender has issued a commitment letter dated October 23, 1998 (the
"Commitment Letter"), under which, subject to certain conditions,
including the approval of the Amendment by an affirmative vote of
holders of not less than 66 2/3% of the Company's outstanding
Shares at the Special General Meeting, it has agreed to enter
into a loan agreement (the "Loan Agreement") with the Company.
Under the Loan Agreement, subject to certain conditions, the
Lender will agree to make available to the Company a loan
facility in the principal amount of $30 million (the "Loan").
See Section 2.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES
BEING TENDERED. THE OFFER IS SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 6.
__________________________________________________
The Dealer-Manager for the Offer is: The International
Dealer-Manager for the
Offer is:
LAZARD FRERES & CO. LLC Lazard Capital Markets
The date of this Offer to Purchase is October 29, 1998
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS (I) THE
COMPANY, ACTING THROUGH ITS BOARD OF DIRECTORS AND IN ACCORDANCE
WITH THE COMPANIES ACT, HOLDING THE SPECIAL GENERAL MEETING TO
CONSIDER THE AMENDMENT; (II) THE AFFIRMATIVE VOTE OF 66 2/3 % OF
THE OUTSTANDING SHARES AT THE SPECIAL GENERAL MEETING ADOPTING
AND APPROVING THE AMENDMENT; (III) THE RATIFICATION AND APPROVAL
OF THE LOAN AGREEMENT BY THE BOARD OF DIRECTORS OF THE COMPANY IN
RESPECT OF FUNDS TO PURCHASE SHARES AND FULFILLMENT OF THE
CONDITIONS FOR DRAWDOWN OF THE LOAN THEREUNDER; AND (IV) IF
REQUIRED, THE FILING WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION, THE OSLO STOCK EXCHANGE (THE "OSE") OR ANY
OTHER REGULATING AGENCY, AS APPLICABLE, OF ANY DOCUMENTS REQUIRED
TO BE FILED WITH ANY SUCH AGENCY AND DISTRIBUTED TO THE
SHAREHOLDERS. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER
OF SHARES BEING TENDERED. THE OFFER IS SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 6.
The Shares are listed and traded on the American Stock
Exchange (the "AMEX") under the symbol "NAT" and are traded on
the OSE under the symbol "NAT." On October 28, 1998, the last
full trading day on the AMEX prior to the announcement and
commencement of the Offer the closing per Share sales price as
reported by the AMEX was $11 7/8. On October 8, 1998, the last
fully trading day on the OSE prior to the announcement and
commencement of the Offer on which a transaction with the Shares
was reported, the quotation per Share as reported on the OSE was
NOK 125. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES. SEE SECTION 7. The cash dividend of
$0.30 per Share for the fourth quarter of 1998, payable on
November 12, 1998 to a holder of record at the close of business
on October 28, 1998, will be paid on Shares tendered and
purchased by the Company, but no dividend will be paid in respect
of such Shares for any dividend period commencing on or after
October 28, 1998. See Section 7.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING THEIR SHARES. EACH SHAREHOLDER MUST MAKE THE
DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES AND
AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED. THE COMPANY
HAS BEEN ADVISED THAT NEITHER ITS MANAGER, UGLAND NORDIC SHIPPING
ASA NOR ANY OF THE COMPANY'S DIRECTORS OR EXECUTIVE OFFICERS
INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
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IMPORTANT
Any holder of Shares who holds Shares that trade on the AMEX
and are not entered in the Norwegian Verdipapirsentralen (the
"VPS"), an electronic clearing system used in connection with
stocks that trade on the Oslo Stock Exchange, wishing to tender
all or any part of his or her Shares should either (a) complete
and sign a Letter of Transmittal (or a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal and
either mail or deliver it with any required signature guarantee
and any other required documents to ChaseMellon Shareholder
Services, L.L.C. (the "US Depositary"), and either mail or
deliver the share certificates for such Shares to the US
Depositary (with all such other documents) or tender such Shares
pursuant to the procedure for book-entry tender set forth in
Section 3, or (b) request a broker, dealer, commercial bank,
trust company or other nominee to effectuate the transaction for
such holder. Holders of Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee
should contact such person if they desire to tender their Shares.
Any shareholder who desires to tender Shares and whose
certificates for such Shares cannot be delivered to the US
Depositary or who cannot comply with the procedure for book-entry
transfer or whose other required documents cannot be delivered to
the US Depositary, in any case, by the expiration of the Offer
must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3. Any holder of Shares that
trade on the OSE and are entered in the VPS may tender all or
part of his or her Shares and acceptance of the Offer in respect
of Shares traded on the OSE can be made by means of the Letter of
Transmittal in accordance with the instructions provided in the
Norwegian Language Explanatory Letter provided to holders of
Shares traded on the OSE and in the Letter of Transmittal and
either mail or deliver it with any required documents to Den
norske Bank ASA (the "Norwegian Depositary)." See Section 16 of
the Offer to Purchase.
TO PROPERLY TENDER SHARES, SHAREHOLDERS MUST VALIDLY COMPLETE
THE LETTER OF TRANSMITTAL INCLUDING THE SECTION RELATING TO THE
PRICE AT WHICH THEY ARE TENDERING SHARES.
Questions and requests for assistance or for additional
copies of this Offer to Purchase, the Letter of Transmittal or
the Notice of Guaranteed Delivery may be directed to the
Information Agents or to the Dealer-Managers at the irrespective
addresses and telephone numbers set forth on the back cover of
this Offer to Purchase. Additional copies of this Offer to
Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be obtained from the Information Agents.
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THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY
RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER
SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES
PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY PERSON
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN
CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN
THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH
RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
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SUMMARY
This general summary is provided for the convenience of the
Company's shareholders and is qualified in its entirety by
reference to the full text and more specific details of this
Offer to Purchase.
Number of Shares to be Purchased............1,870,967 Shares (or such lesser
number of Shares as are validly
tendered at prices not in excess
of $15.50 nor less than $11.50 per
Share) at an aggregate purchase
price not exceeding $29.0 million.
Purchase Price..............................The Company will determine a
single per Share net cash price,
not greater than $15.50 nor less
than $11.50 per Share, that it
will pay for Shares validly
tendered. All Shares acquired in
the Offer will be acquired at the
Purchase Price. Each shareholder
desiring to tender Shares must
(i) specify in the Letter of
Transmittal the minimum price (not
greater than $15.50 nor less than
$11.50 per Share) at which such
shareholder is willing to have
Shares purchased by the Company or
(ii) elect to have such
shareholder's Shares purchased at
a price determined by the Dutch
Auction tender process, which
could result in such Shares being
purchased at the minimum price of
$11.50 per Share.
Market Price of Shares......................On October 28, 1998, the last full
trading day on the AMEX and the
OSE prior to the announcement of
the Offer, the closing per Share
sales price as reported on the
AMEX was $11 7/8 and on October 8,
1998, the last fully trading day
on the OSE prior to the
announcement and commencement of
the Offer on which a transaction
on the Shares was reported, the
closing per Share quotation sales
price as reported on the OSE was
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NOK 125. The Company urges
shareholders to obtain current
quotations of the market price of
the Shares.
Dividends...................................The Company has declared a
quarterly dividend of $0.30 per
Share payable on November 12,
1998, to shareholders of record at
the close of business on October
28, 1998. Shareholders of record
at the close of business on
October 28, 1998 who tender their
Shares pursuant to the Offer will
receive the dividend.
How to Tender Shares........................See Section 3. Call the
Information Agent or consult your
broker for assistance.
Brokerage Commissions and Stock
Transfer Tax................................Tendering shareholders will not be
obligated to pay brokerage fees or
commissions to the Dealer-
Managers, the US Depositary, the
Norwegian Depositary or or the
Information Agents or except as
set forth in Instruction 7 to the
Letter of Transmittal, transfer
taxes on the sale of Shares
pursuant to the Offer. A
tendering shareholder who holds
securities with such shareholder's
broker may be required by such
broker to pay a service charge or
other fee.
Expiration and Proration Dates..............November 30, 1998, at 11:00 p.m.,
Oslo time, 5:00 p.m., New York
City time, unless extended by the
Company.
Payment Date................................As soon as practicable after the
Expiration Date.
Position of the Company and its
Directors...................................Neither the Company nor its Board
of Directors makes any
recommendation to any shareholder
as to whether to tender or refrain
from tendering Shares. See
Section 10 for information
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regarding the intentions of the
Company's manager and the
Company's directors and executive
officers with respect to tendering
Shares pursuant to the Offer.
Withdrawal Rights...........................Tendered Shares may be withdrawn
at any time until 11:00 p.m., Oslo
time, 5:00 p.m., New York City
time, on November 30, 1998, and
unless theretofore accepted for
payment by the Company pursuant to
the Offer, may also be withdrawn
at any time after 11:00 p.m. Oslo
time, and 5:00 p.m. New York City
time on December 24, 1998 unless
the Offer is extended by the
Company.
Odd Lots....................................There will be no proration of
Shares tendered by any shareholder
owning beneficially fewer than 100
Shares in the aggregate if such
shareholder tenders all such
Shares at or below the Purchase
Price prior to the Expiration Date
and checks the "Odd Lots" box in
the Letter of Transmittal.
Further Developments Regarding the Offer....Call the Information Agents, or
the Dealer-Managers or consult
your broker.
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY
RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER
SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES
PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY PERSON
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN
CONNECTION WITH THE OFFER ON BEHALF OF THE COMPANY OTHER THAN
THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF
TRANSMITTAL. DO NOT RELY ON ANY SUCH RECOMMENDATION OR ANY SUCH
INFORMATION OR REPRESENTATION, IF GIVEN OR MADE, AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
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TABLE OF CONTENTS
SECTION PAGE
SUMMARY
INTRODUCTION...............................................4
SPECIAL FACTORS............................................10
Special General Meeting to Consider the Amendment..........10
THE OFFER..................................................11
1. Number of Shares; Proration...........................11
2. Purpose of The Offer and Plans for the Company after the
Offer.................................................13
3. Procedures for Tendering Shares.......................15
4. Withdrawal Rights.....................................17
5. Purchase of Shares and Payment of Purchase Price......18
6. Certain Conditions of the Offer.......................19
7. Price Range of Shares; Dividends......................20
8. Source and Amount of Funds............................22
9. Certain Information Concerning the Company............22
10. Interest of Directors and Officers; Transactions
and Arrangements Concerning Shares....................26
11. Effects of the Offer on the Market For Shares;
Registration Under the Exchange Act...................26
12. Certain Legal Matters; Regulatory Approvals...........26
13. Certain United States Federal Income Tax
Consequences..........................................27
14. Extension of Offer; Termination; Amendment............30
15. Fees and Expenses.....................................31
16. Overseas Tender Procedures, Currency Risk and Tax
Consequences..........................................32
17. Miscellaneous.........................................33
THIS OFFER TO PURCHASE CONTAINS CERTAIN "FORWARD LOOKING
STATEMENTS" THAT ARE SUBJECT TO RISK AND UNCERTAINTIES. THE
COMPANY'S ACTUAL RESULTS AND PERFORMANCE COULD DIFFER MATERIALLY
FROM THOSE ANTICIPATED DEPENDING ON, AMONG OTHER THINGS,
FLUCTUATIONS IN OIL AND GAS PRICES, REGIONAL ECONOMIC AND
POLITICAL CONDITIONS AND INSTABILITY, THE STATE OF THE
INTERNATIONAL OIL TANKER MARKET, ADVERSE CURRENCY FLUCTUATIONS
AND OTHER FACTORS NOT WITHIN THE COMPANY'S ABILITY TO PREDICT OR
CONTROL.
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To the Holders of Common Shares of Nordic American Tanker
Shipping Limited:
INTRODUCTION
Nordic American Tanker Shipping Limited, a Bermuda company
(the "Company"), invites its shareholders to tender shares of its
common shares, par value $0.01 per share (the "Shares"), to the
Company at prices not in excess of $15.50 nor less than $11.50
per Share in cash, as specified by shareholders tendering their
Shares, upon the terms and subject to the conditions set forth
herein and in the related Letter of Transmittal, which together
as may be amended constitute the "Offer." The Company will
determine the single per Share price, not in excess of $15.50 nor
less than $11.50 per Share, net to the seller in cash and without
interest thereon (the "Purchase Price"), that it will pay for
Shares properly tendered pursuant to the Offer, taking into
account the number of Shares so tendered and the prices specified
by tendering shareholders. The Company will select the lowest
Purchase Price that will allow it to buy 1,870,967 Shares (or
such lesser number of Shares as are properly tendered at prices
not in excess of $15.50 nor less than $11.50 per Share) at an
aggregate purchase price not exceeding $29.0 million. All Shares
properly tendered prior to the expiration of the Offer at prices
at or below the Purchase Price and not withdrawn will be
purchased at the Purchase Price, upon the terms and subject to
the conditions of the Offer, including the proration provisions.
Shares tendered at prices in excess of the Purchase Price and
Shares not purchased because of proration will be returned at the
Company's expense to the shareholders who tendered such Shares.
The Company reserves the right, in its sole discretion, to
purchase more than 1,870,967 Shares pursuant to the Offer. See
Section 14.
The Offer is being made in connection with a Special General
Meeting of the shareholders of the Company to be held on November
30, 1998 (the "Special General Meeting") duly called by the Board
of Directors of the Company on October 1529, 1998 in accordance
with the Bermuda Companies Act 1981 (the "Companies Act") to
consider and take action upon, among other things, an amendment
to the Bye-Laws of the Company (the "Amendment") to permit the
Company to incur debt to fund the purchase of Shares pursuant to
the terms and conditions of the Offer. The Company gave notice
to the shareholders of the Company of the Special General Meeting
on October 29, 1998 concurrently herewith and has delivered to
each shareholder of record together with this Offer to Purchase a
proxy statement describing the matters to be voted upon,
including the Amendment. As the Company is a foreign private
issuer, the proxy statement is not subject to the proxy rules of
the United States Securities and Exchange Commission under the
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Securities Exchange Act of 1934 (the "Exchange Act"). See
"Special Factors" herein.
The Company has arranged to obtain the funds necessary to
finance the Offer from bank borrowings in the form of a loan. A
loan will be provided by Den norske Bank ASA (the "Lender"). The
Lender has issued a commitment letter dated October 23, 1998 (the
"Commitment Letter"), under which, subject to certain conditions,
including the approval of the Amendment by an affirmative vote of
holders of not less than 66 2/3% of the Company's outstanding
Shares at the Special General Meeting, it has agreed to enter
into a loan agreement (the "Loan Agreement") with the Company.
Under the Loan Agreement, subject to certain conditions, the
Lender will agree to make available to the Company a loan
facility in the principal amount of $30 million (the "Loan").
See Section 2.
The cash dividend of $0.30 per Share for the fourth quarter
of 1998, payable on November 12, 1998 to a holder of record at
the close of business on October 28, 1998, will be paid on Shares
tendered and purchased by the Company, but no dividend will be
paid in respect of such Shares for any dividend period commencing
on or after October 28, 1998. See Section 7.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS (I) THE
COMPANY, ACTING THROUGH ITS BOARD OF DIRECTORS AND IN ACCORDANCE
WITH THE COMPANIES ACT, HOLDING THE SPECIAL GENERAL MEETING TO
CONSIDER THE AMENDMENT; (II) THE AFFIRMATIVE VOTE OF 66 2/3% OF
THE OUTSTANDING SHARES ADOPTING AND APPROVING THE AMENDMENT AT
THE SPECIAL GENERAL MEETING;, (III) THE RATIFICATION AND APPROVAL
OF THE LOAN AGREEMENT BY THE BOARD OF DIRECTORS OF THE COMPANY IN
RESPECT OF FUNDS TO PURCHASE SHARES AND FULFILLMENT OF THE
CONDITIONS FOR DRAWDOWN OF THE LOAN THEREUNDER;, AND (IV) IF
REQUIRED, THE FILING WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION"), THE OSLO STOCK EXCHANGE
("OSE") OR ANY OTHER REGULATING AGENCY, AS APPLICABLE, OF ANY
DOCUMENTS REQUIRED TO BE FILED WITH ANY SUCH AGENCY AND
DISTRIBUTED TO THE SHAREHOLDERS (THE "DISCLOSURE DOCUMENTS").
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES
BEING TENDERED. THE OFFER IS SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 6.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY
APPROVED THE BYE-LAW AMENDMENT AND THE OFFER. HOWEVER, NEITHER
THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING
THEIR SHARES. EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES AND AT WHAT PRICE OR
PRICES SHARES SHOULD BE TENDERED. THE COMPANY HAS BEEN ADVISED
THAT NEITHER ITS MANAGER, UGLAND NORDIC SHIPPING ASA (THE
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"MANAGER") NOR ANY OF THE COMPANY'S DIRECTORS OR EXECUTIVE
OFFICERS INTEND TO TENDER ANY SHARES PURSUANT TO THE OFFER.
Upon the terms and subject to the conditions of the Offer, if
at the expiration of the Offer more than 1,870,967 Shares (or
such greater number of Shares as the Company may elect to
purchase) are properly tendered at or below the Purchase Price
and not withdrawn, the Company will buy Shares first from all
Odd-Lot Holders (as defined in Section 1) who validly tender all
their Shares at or below the Purchase Price (and do not withdraw
them prior to the expiration of the Offer) and then on a pro rata
basis from all shareholders who properly tender Shares at prices
at or below the Purchase Price (and do not withdraw them prior to
the expiration of the Offer). See Section 1. The Purchase Price
will be paid net to the tendering shareholder in cash without
interest for all Shares purchased. Tendering shareholders will
not be obligated to pay brokerage commissions, solicitation fees
or, subject to Instruction 7 of the Letter of Transmittal, share
transfer taxes on the purchase of Shares by the Company.
Shareholders holding Shares through brokers or banks are urged to
consult such brokers or banks to determine whether transaction
costs are applicable if shareholders tender Shares through such
brokers or banks and not directly to the Norwegian Depositary or
US Depositary. HOWEVER, ANY TENDERING US SHAREHOLDER OR OTHER
PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO THE US DEPOSITARY
THE SUBSTITUTE FORM W-9 THAT IS INCLUDED AS PART OF THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED UNITED STATES FEDERAL
INCOME TAX BACKUP WITHHOLDING OF 31% OF THE GROSS PROCEEDS
PAYABLE TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER.
SEE SECTION 3. The Company will pay all fees and expenses of
Lazard Freres & Co. LLC (the "Dealer-Manager"), Lazard Capital
Markets (the "International Dealer-Manager"), ChaseMellon
Shareholder Services L.L.C. (the "US Depositary"), Den norske
Bank ASA (the "Norwegian Depositary"), and ChaseMellon
Shareholder Services L.L.C. (the "US Information Agent") and DnB
Markets (the "Scandinavian Information Agent") incurred in
connection with the Offer. See Section 15.
The Company was incorporated by the Bermuda Registrar of
Companies in June, 1995. The Company operates a modern fleet of
three vessels consisting of Suezmax tankers (the "Vessels"). The
Vessels were delivered in 1997 at an aggregate price of
approximately $170.7 million. The Company was formed and
continues to operate for the purpose of owning, chartering and
disposing of the Vessels. The Vessels are chartered to BP
Shipping Limited (the "Charterer"), a wholly-owned subsidiary of
the British Petroleum Company plc ("British Petroleum"), on
separate "hell and high water" bareboat charters (each a
"Charter") with original seven year terms (the "Original Term"),
plus seven one-year extension options on the part of the
Charterer. British Petroleum has guaranteed the obligation of
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<PAGE>
the Charterer under the Charters. Pursuant to the terms of the
Charters, the obligation of the Charterer to pay charterhire is
absolute and does not depend on whether the Vessels are damaged,
unfit for use or for any other reason whatsoever. The Company's
policy is to pay dividends to the holders of Shares in amounts
substantially equal to the amounts received by the Company under
the Charters, less expenses. See Section 9 hereof.
The Board of Directors has determined that the Company's
financial condition and outlook and current market conditions,
including recent trading prices for the Shares, make this an
attractive time to repurchase a significant portion of the
outstanding Shares. The Board believes such purchase should
benefit the Company and its shareholders over the long term. In
particular, the Board of Directors believes that the purchase of
Shares at this time in a "Dutch Auction" procedure will increase
shareholder value.
The Offer provides shareholders who are considering a sale of
all or a portion of their Shares with the opportunity to
determine the price or prices (not in excess of $15.50 nor less
than $11.50 per Share) at which they are willing to sell their
Shares and, subject to the terms and conditions of the Offer, to
sell those Shares for cash without, where Shares are tendered by
the registered owner thereof directly to the US Depositary, (or
through the Norwegian Depositary), the usual transaction costs
associated with open market sales. The Offer also allows
shareholders to sell a portion of their Shares while retaining a
continuing equity interest in the Company. Shareholders who
determine not to accept the Offer will realize a proportionate
increase in their relative equity interest in the Company, and
thus in the Company's future earnings and assets.
The Company estimates that the amount required to purchase
1,870,967 outstanding Shares that may be tendered and accepted
for purchase pursuant to the Offer at a price of $15.50 per Share
and to pay related fees and expenses in respect of the Offer is
approximately US$30 million.
Pursuant to the terms to the Commitment Letter, subject to
certain conditions, including the approval of the Amendment by an
affirmative vote of not less than 66 2/3% of outstanding Shares
at the Special General Meeting, the Lender has agreed to enter
into a Loan Agreement pursuant to which subject to fulfillment of
certain conditions, the Lender will agree to make the Loan
available to the Company. See Section 2.
The Loan is expected to be secured by a mortgage on each of
the Vessels together with an assignment of charterhire due to the
Company under each of the Charters. The Loan will be made
available to the Company subject to fulfillment of all relevant
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<PAGE>
conditions of the Loan Agreement, and will be used by the Company
to acquire the Shares being purchased pursuant to the Offer. The
Loan Agreement will require the Loan to be repaid in full on the
sixth anniversary of the date the Loan was advanced unless the
Loan Agreement is extended or the Loan refinanced on terms deemed
reasonable to the Company. Interest on the Loan shall be payable
quarterly at the rate per annum of the London Inter-bank Offered
Rate ("LIBOR") for the relevant amount of US Dollars at the rate
per annum of LIBOR plus .525%. The Company will enter into an
interest rate hedge agreement under which interest will be fixed.
The Company believes that based on current rates, such interest
would be fixed at approximately 5.1% per annum.
The foregoing summary of the Commitment Letter and its terms
are qualified in their entirety by reference to the text of such
document, which is included as an exhibit to the Schedule 13E-4
and incorporated herein by reference.
As of October 28, 1998, the Company had issued and
outstanding 11,813,850 Shares. The 1,870,967 Shares that the
Company is offering to purchase pursuant to the Offer represent
approximately 16% of the Company's Shares outstanding on October
289, 1998. The Shares are listed and trade on the American Stock
Exchange (the "AMEX") and the OSE under the symbol "NAT." On
October 28, 1998, the last full trading day on the AMEX prior to
the announcement and commencement of the Offer, the closing per
Share sales price as reported by the AMEX was $11 7/8. On
October 8, 1998, the last full trading day on the OSE on which a
transaction on the Shares was reported, the quotation per share
as reported on the OSE was NOK 125. SHAREHOLDERS ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. See Section 7.
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<PAGE>
SPECIAL FACTORS
Special General Meeting to Consider the Amendment
At present, the Company's Bye-Laws do not permit the Company
to incur debt. The business of the Company is limited to the
ownership, disposition and chartering of the Vessels until the
termination of the Charters. The scope of the activities in
which the Company may engage is strictly limited by its Bye-Laws.
See Section 9 hereof.
The obligations of the Company to consummate the Offer and to
accept for payment and to pay for Shares tendered pursuant to the
Offer is conditioned upon, among other things (i) the Company
holding the Special Meeting to approve the Amendment; (ii) the
approval by not less than 66 2/3% of the outstanding Shares of
the Amendment ; (iii) the ratification and approval of the Loan
Agreement by the Board of Directors of the Company and the
fulfillment of the conditions for the drawdown of the Loan
thereunder; and (iv) and, if required, the filing of Disclosure
Documents.
Concurrently herewith, the Company has duly called and and
given notice of the Special Meeting to be held on November 30,
1998 for shareholders to consider and vote upon the proposal to
amend the Bye-Laws of the Company to allow the Company to incur
debt in an amount of $30 million to be used primarily to
purchase the Shares tendered and accepted in the Offer and to pay
related fees and expenses.
The Board of Directors has determined that it is in the best
interest of the Company to purchase the Shares pursuant to the
terms and conditions of the Offer in light of recent trading
prices and current market conditions. In addition, the Board has
determined that incurring debt pursuant to the terms of the
Commitment Letter to purchase Shares pursuant to the Offer is
consistent with its dividend policy and in light of recent
trading prices and current market conditions, makes this an
attractive time to repurchase a significant portion of the
outstanding Shares. Accordingly, the Board has proposed, amongst
others amendments, inserting the following amendment to Bye-Law
84 in order to expand the purposes of the Company to encompass
the incurrence of debt for borrowed money and repurchasing the
Shares:
(x) entering into, or becoming a party to, and taking
all actions including amending the Management
Agreement and any other Agreements to which the
Company is a party and furnishing such security
over the Company's assets as may be necessary or
desirable in connection with the incurrence of debt
20
<PAGE>
for borrowed money in the amount of up to
US$30,000,000 to purchase its Common Shares and
authorizing the Company to pay from the proceeds of
such debt and from its income any costs, fees and
expenses in connection with such incurrence, or any
refinancing or replacement thereof, costs, expenses
and fees related to any current or future proposals
submitted by the Board of Directors to amend these
Bye-Laws, including any related proxy solicitation
and regulatory filings, and costs , expenses and
fees related to the purchase by the Company of its
Common Shares, including the costs and fees related
to the preparation and conduct of a "Dutch Auction"
self-tender offer.
Adoption of the Amendment would include empowering the Board
to amend the management agreement (the "Management Agreement")
pursuant to which the Vessels are operated to allow the costs of
the proxy solicitation, this Offer and associated costs to be
borne by the Company. The Company will pay for the proxy
solicitation and the Offer (including legal fees and printing and
distribution costs) out of the funds received from the Loan
entered into in connection with the Offer.
Certain Effects of the Offer
The holders of Shares are entitled to receive dividends pro
rata based on the number of Shares held, in the sole discretion
of the Board. The Company's policy is to pay dividends to
holders of Shares equal to the charterhire paid by the Charterer,
less certain expenses. Upon the liquidation or winding up of the
Company, the liquidator of the Company may divide among the
holders of Shares the assets of the Company, including the value
of the Vessels received minus expenses in the sale of such
assets, after payment of the Company's debts.
The Shares purchased pursuant to the Offer will be paid for
using the proceeds of the Loan. The Company will be required to
repay principal and interest on the Loan. During the term of the
Charters, the Company will only be required to pay interest on
the Loan. Such payments would reduce funds available for future
distributions to shareholders. However, it is anticipated that
non-tendering shareholders will benefit from the reduction in the
number of outstanding Shares as a result of the purchase of
Shares pursuant to the Offer resulting in a corresponding
increase in the pro rata distribution of charterhire among
shareholders after payment of interest (and principal after
November 2004) on the Loan. See Section 7.
The quarterly cash dividend of $0.30 per Share for the fourth
quarter of 1998, payable on November 12, 1998 to each holder of
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<PAGE>
record at the close of business on October 28, 1998, will be paid
on Shares tendered and purchased by the Company, but no dividend
will be paid in respect of such Shares for any dividend period
commencing on or after October 28, 1998. See Section 7.
The Company will be required to repay the full amount of the
Loan, including all accrued interest and principal, upon maturity
of the Loan, which is anticipated to coincide with the expiration
of the Charters (excluding any option period exercised by the
Charterer beyond the original term). Upon the Loan's expiration,
the Company would either extend the terms of the Loan Agreement,
refinance the Loan or sell the Vessels to repay the Loan. As of
delivery in 1997, the aggregate book-value of the Vessels was
$170.7 million. Assuming that the Company is not able to extend
the terms of the Loan Agreement or refinance the Loan, a
distribution to shareholders of the proceeds upon the sale of the
Vessels, or any one Vessel, would be reduced by the amount
necessary to repay the Loan. At the current rate of
depreciation, the Vessels would have an aggregate book-value of
approximately $122,957,374 in November 2004, assuming normal wear
and usage based upon standard depreciation schedules of like
equipment. The Company cannot represent or warrant what the fair
market value of the Vessels will be in 2004. Prices for tankers,
such as the Vessels, are dependent upon many factors beyond the
ability of the Company to predict, including the price of oil and
global economic conditions. If the Vessels were to be sold,
depending upon the price received by the Company upon the sale of
the Vessels, it is possible that no funds may be available for
distribution to shareholders of the Company.
The terms of the Loan will require the Vessels to be
mortgaged as collateral. Default by the Company in repayment of
the Loan could result in the loss of one or more of the Vessels
by the Company should the Lender demand payment, accelerate the
Loan, and foreclose on one or more of the Vessels. The terms of
the Loan Agreement will require an assignment of the charterhire
under the Charters to the Lender as security for the Company's
obligations under the Loan Agreement. See Section 9. Default by
the Company in repayment of the Loan could result in the Lender
enforcing its security under the assignment of charterhire, and,
as a result, no funds may be paid to the Company to be available
to be distributed to the shareholders of the Company. See
Section 9.
THE OFFER
1. Number of Shares; Proration.
Upon the terms and subject to the conditions of the Offer,
the Company will purchase 1,870,967 Shares or such lesser number
of Shares as are properly tendered (and not withdrawn in
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<PAGE>
accordance with Section 4) prior to the Expiration Date (as
defined below) at prices not in excess of $15.50 nor less than
$11.50 per Share.
The term "Expiration Date" means 11:00 p.m., Oslo time, and
5:00 p.m., New York City time, on November 30, 1998 unless and
until the Company, in its sole discretion, shall have extended
the period of time during which the Offer will remain open, in
which event the term "Expiration Date" shall refer to the latest
time and date at which the Offer, as so extended by the Company,
shall expire. See Section 14 for a description of the Company's
right to extend, delay, terminate or amend the Offer. The
Company reserves the right to purchase more than 1,870,967 Shares
pursuant to the Offer. In accordance with applicable regulations
of the United States Securities and Exchange Commission (the
Commission), the Company may purchase pursuant to the Offer an
additional amount of Shares not to exceed 2% of the outstanding
Shares without amending or extending the Offer. See Section 14.
In the event of an over-subscription of the Offer as described
below, Shares tendered at or below the Purchase Price prior to
the Expiration Date will be subject to proration, except for Odd
Lots as explained below. The proration period also expires on
the Expiration Date.
The Company will select the lowest Purchase Price that will
allow it to buy 1,870,967 Shares (or such lesser number of Shares
as are properly tendered at prices not in excess of $15.50 nor
less than $11.50 per Share) at an aggregate purchase price not
exceeding $29.0 million. All Shares properly tendered at prices
at or below the Purchase Price and not withdrawn will be
purchased at the Purchase Price, upon the terms and subject to
the conditions of the Offer, including the proration provisions.
All Shares purchased in the Offer will be purchased at the
Purchase Price.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THE
COMPANY, ACTING THROUGH ITS BOARD OF DIRECTORS AND IN ACCORDANCE
WITH THE COMPANIES ACT, HOLDING THE SPECIAL GENERAL MEETING TO
CONSIDER THE AMENDMENT; (II) THE AFFIRMATIVE VOTE OF 66 2/3% OF
THE OUTSTANDING SHARES ADOPTING AND APPROVING THE AMENDMENT AT
THE SPECIAL GENERAL MEETING; (III) THE RATIFICATION AND APPROVAL
OF THE LOAN AGREEMENT BY THE BOARD OF DIRECTORS OF THE COMPANY
AND FULFILLMENT OF THE CONDITIONS FOR THE DRAWDOWN OF THE LOAN
THEREUNDER; AND (IV) IF REQUIRED, THE FILING WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION, THE OSE OR ANY OTHER
REGULATING AGENCY, AS APPLICABLE, ANY DOCUMENTS REQUIRED TO BE
FILED WITH ANY SUCH AGENCY AND DISTRIBUTED TO THE SHAREHOLDERS.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES
BEING TENDERED. THE OFFER IS SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 6.
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<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY
APPROVED THE BYE-LAWS AMENDMENT AND THE OFFER. HOWEVER, NEITHER
THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING
THEIR SHARES. EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES AND AT WHAT PRICE OR
PRICES SHARES SHOULD BE TENDERED. THE COMPANY HAS BEEN ADVISED
THAT NEITHER THE MANAGER NOR ANY OF THE COMPANY'S DIRECTORS OR
EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE
OFFER.
In accordance with Instruction 5 of the Letter of
Transmittal, each shareholder desiring to tender Shares must (i)
specify the price, not in excess of $15.50 nor less than $11.50
per Share, at which such shareholder is willing to have the
Company purchase Shares or (ii) elect to have such shareholder's
Shares purchased at a price determined by the Dutch Auction
tender process, which could result in such Shares being purchased
at the minimum price of $11.50 per Share. As promptly as
practicable following the Expiration Date, the Company will, in
its sole discretion, determine the Purchase Price that it will
pay for Shares properly tendered pursuant to the Offer and not
withdrawn, taking into account the number of Shares tendered and
the prices specified by tendering shareholders. The Company
intends to select the lowest Purchase Price, not in excess of
$15.50 nor less than $11.50 net per Share in cash, that will
enable it to purchase 1,870,967 Shares (or such lesser number of
Shares as are properly tendered) pursuant to the Offer at an
aggregate purchase price not exceeding $29.0 million. Shares
properly tendered pursuant to the Offer at or below the Purchase
Price and not withdrawn will be purchased at the Purchase Price,
upon the terms and subject to the conditions of the Offer,
including the proration provisions. All Shares tendered and not
purchased pursuant to the Offer, including Shares tendered at
prices in excess of the Purchase Price and Shares not purchased
because of proration, will be returned to the tendering
shareholders at the Company's expense as promptly as practicable
following the Expiration Date.
Priority of Purchases. Upon the terms and subject to the
conditions of the Offer, if more than 1,870,967 Shares (or such
greater number of Shares as the Company may elect to purchase)
have been properly tendered at prices at or below the Purchase
Price and not withdrawn prior to the Expiration Date, the Company
will purchase properly tendered Shares on the basis set forth
below:
(a) first, all Shares tendered and not withdrawn prior to
the Expiration Date by any Odd Lot Holder (as defined
below) who:
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<PAGE>
(1) tenders all Shares beneficially owned by such Odd
Lot Holder at a price at or below the Purchase
Price (tenders of fewer than all Shares owned by
such shareholder will not qualify for this
preference); and
(2) completes the box captioned "Odd Lots" on the
Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery;
(b) second, after purchase of all of the foregoing Shares,
all other Shares properly tendered at prices at or below
the Purchase Price and not withdrawn prior to the
Expiration Date, on a pro rata basis (with appropriate
adjustments to avoid purchases of fractional Shares) as
described below.
Odd Lots. The Company, upon the terms and subject to the
conditions of the Offer, will accept for purchase, without
proration, all Shares validly tendered at or below the Purchase
Price by Odd Lot Holders. For purposes of the Offer, the term
"Odd Lots" shall mean all Shares properly tendered prior to the
Expiration Date at prices at or below the Purchase Price and not
withdrawn by any person (an "Odd Lot Holder") who owned,
beneficially or of record, as of the close of business on October
28,1998 and as of the Expiration Date, an aggregate of fewer than
100 Shares and so certified in the appropriate place on the
Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery. To avoid proration an Odd Lot Holder must
tender all such Shares in accordance with the procedures
described in Section 3. This preference is not available to
partial tenders or to beneficial or recordholders of an aggregate
of 100 or more Shares, even if such holders have separate
accounts or certificates representing fewer than 100 Shares. By
accepting the Offer, an Odd Lot Holder would not only avoid the
payment of brokerage commissions but also would avoid any
applicable odd lot discounts in a sale of such holder's Shares.
Any shareholder wishing to tender all of such shareholder's
Shares pursuant to this Section should complete the box captioned
"Odd Lots" on the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery.
Proration. In the event that proration of tendered Shares is
required, the Company will determine the proration factor as soon
as practicable following the Expiration Date. Proration for each
shareholder tendering Shares, other than Odd Lot Holders, shall
be based on the ratio of the number of Shares properly tendered
and not withdrawn by such shareholder to the total number of
Shares properly tendered and not withdrawn by all shareholders,
other than Odd Lot Holders, at or below the Purchase Price. The
Company does not expect that it will be able to announce the
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<PAGE>
final proration factor or commence payment for any Shares
purchased pursuant to the Offer until approximately seven AMEX
trading days after the Expiration Date. The preliminary results
of any proration will be announced by press release as promptly
as practicable after the Expiration Date. Shareholders may
obtain such preliminary information from the Information Agent or
the Dealer-Manager and may be able to obtain such information
from their brokers.
As described in Section 13, the number of Shares that the
Company will purchase from a shareholder may affect the United
States Federal income tax consequences to the shareholder of such
purchase and, therefore, may be relevant to a shareholder's
decision whether or not to tender Shares. The Letter of
Transmittal affords each tendering shareholder the opportunity to
designate the order of priority in which Shares tendered are to
be purchased in the event of proration.
This Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares and will be furnished
to brokers, banks and similar persons whose names, or the names
of whose nominees, appear on the Company's shareholder list or,
if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
2. Purpose of the Offer and Plans for the Company After
the Offer.
The Offer provides shareholders who are considering a sale of
all or a portion of their Shares with the opportunity to
determine the price or prices (not in excess of $15.50 nor less
than $11.50 per Share) at which they are willing to sell their
Shares and, subject to the terms and conditions of the Offer, to
sell those Shares for cash without, where Shares are tendered by
the registered owner thereof directly to the US Depositary (or
Norwegian Depositary), the usual transaction costs associated
with market sales. The Offer also allows shareholders to sell a
portion of their Shares while retaining a continuing equity
interest in the Company. Shareholders who determine not to
accept the Offer will realize a proportionate increase in their
relative equity interest in the Company, and thus in the
Company's future earnings and assets.
The Board of Directors has determined that the Company's
financial condition and outlook and current market conditions,
including recent trading prices of Shares, make this an
attractive time to repurchase a significant portion of the
outstanding Shares. The Board of Directors believes that the
purchase of Shares will increase shareholder value. The funds
26
<PAGE>
required to complete the Offer and pay related expenses will be
provided from the proceeds of the Loan (see the Introduction).
Following the consummation of the Offer, the business and
operations of the Company will be continued by the Company
substantially as they are currently being conducted. Except as
disclosed in this Offer to Purchase, the Company has no present
plans or proposals that would result in (i) the acquisition by
any person of additional securities of the Company, or the
disposition of securities of the Company other than in the
ordinary course of business, (ii) an extraordinary corporate
transaction, such as a merger, reorganization, liquidation or
sale or transfer of a material amount of assets, involving the
Company, (iii) any change in the Board of Directors of the
Company or management of the Company, including, but not limited
to, a plan or proposal to change the number or term of the
directors, to fill any existing vacancy on the Board of Directors
or to change any material term of the employment contract of any
executive officer, (iv) any material change in the present
dividend policy or indebtedness or capitalization of the Company,
except as specifically provided in the Offer to Purchase in
respect of repayment of the Loan (see Special Factors), (v) any
other material change in the Company's corporate structure or
business or (vi) any change in the Company's Memorandum of
Association and Bye-Laws or instruments corresponding thereto,
except as specifically provided in the Offer to Purchase in
respect of the Amendment and in the proxy materials for the
Special General Meeting (see Special Factors), or any other
actions which may impede the acquisition or control of the
Company by any person.
The Shares of the Company acquired pursuant to the Offer will
be treated as cancelled and the amount of the Company's issued
share capital shall be diminished by the nominal value of the
Shares acquired. The Company has no current plans for the Shares
purchased pursuant to the Offer.
The purchase of the Shares pursuant to the Offer will reduce
the number of holders of Shares and the number of Shares that
might otherwise trade publicly, and, depending upon the number of
Shares so purchased, could adversely affect the liquidity and
market value of the remaining Shares held by the public.
Depending upon the aggregate market value and per Share price
of any Shares not purchased pursuant to the Offer, the Shares may
no longer meet the standards for continued inclusion in the AMEX.
If these standards are not met, quotations might continue to be
published in the over-the-counter "additional list" or in one of
the "local lists," but if the number of holders of Shares held by
US citizens or residents falls below 300, or if the aggregate
market value of publicly held Shares should fall below
27
<PAGE>
$1,000,000, the AMEX rules provide that the securities would no
longer be "authorized" for AMEX reporting and the AMEX would
cease to provide any quotations. Shares held directly or
indirectly by an officer or director of the Company, or by any
beneficial owner of more than 10% of the Shares, ordinarily will
not be considered as being publicly held for the purpose of
determining what are publicly held Shares.
In the event the Shares were no longer eligible for trading
on the AMEX, trades might still be available from other sources.
The extent of the public market for the Shares and availability
of such quotations would, however, depend upon, among other
things, the number of holders of Shares remaining at such time,
the interest in maintaining a market in the Shares on the part of
securities firms and the possible termination of registration
under the Exchange Act as described below.
The Shares are currently registered under the Exchange Act.
Registration of the Shares under the Exchange Act may be
terminated upon application by the Company to the Commission if
the Shares are not listed on a national securities exchange and
there are fewer than 300 record holders of the Shares.
Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be
furnished by the Company to its shareholders and to the
Commission and would make certain provisions of the Exchange Act,
such as the requirements of Rule 13e-3 with respect to "going
private" transactions, no longer applicable to the Company.
Furthermore, if the Company acquires a substantial number of
Shares, the ability of "affiliates" of the Company and persons
holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 under the Securities Act of 1933,
as amended, may be impaired or eliminated. If registration of
the Shares under the Exchange Act were terminated, the Shares
would no longer be "margin securities" or be eligible for AMEX
reporting.
However, it is expected that following the Offering by the
Company, the Shares will continue to be eligible for trading on
the AMEX and the Shares will continue to be eligible for listing
on the OSE. In addition, it is expected that the Shares will
remain registered pursuant to the Exchange Act. See Section 11.
3. Procedures for Tendering Shares.
Proper Tender of Shares. Holders of Shares who are not
citizens or residents of the US and holders of Shares that are
registered in the VPS should follow the procedures for acceptance
of the Offer by overseas shareholders in Section 16. For Shares
held by holders in the US to be validly tendered pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of
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<PAGE>
receipt of such Shares pursuant to the procedures for book-entry
transfer set forth below), together with a properly completed and
duly executed Letter of Transmittal (or manually signed facsimile
thereof) including any required signature guarantees and any
other documents required by the Letter of Transmittal, must be
received prior to the Expiration Date by the US Depositary at its
address set forth on the back cover of this Offer to Purchase or
(b) the tendering shareholder must comply with the guaranteed
delivery procedure set forth below. IN ACCORDANCE WITH
INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, EACH SHAREHOLDER
DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST EITHER (A)
PROPERLY INDICATE IN THE SECTION CAPTIONED "SHARES TENDERED AT A
PRICE DETERMINED BY SHAREHOLDER" ON THE LETTER OF TRANSMITTAL THE
PRICE AT WHICH THEIR SHARES ARE BEING TENDERED OR (B) CHECK THE
BOX IN THE SECTION CAPTIONED "SHARES TENDERED AT A PRICE
DETERMINED BY DUTCH AUCTION."
A shareholder who desires the maximum chance that such
shareholder's Shares will be purchased at the relevant Purchase
Price should check the box on the Letter of Transmittal marked
"Shares Tendered at a Price Determined by Dutch Auction." Note
that this election could result in such shareholder's Shares
being purchased at the minimum price of $11.50 per Share.
Shareholders who desire to tender Shares at more than one price
must complete a separate Letter of Transmittal for each price at
which Shares are tendered, provided that the same Shares cannot
be tendered (unless properly withdrawn previously in accordance
with the terms of the Offer) at more than one price. TO PROPERLY
TENDER SHARES, EITHER THE BOX IN THE SECTION CAPTIONED "SHARES
TENDERED AT A PRICE DETERMINED BY DUTCH AUCTION" OR ONE OF THE
BOXES IN THE SECTION CAPTIONED "SHARES TENDERED AT A PRICE
DETERMINED BY SHAREHOLDER" MUST BE CHECKED IN THE APPROPRIATE
SECTION ON EACH LETTER OF TRANSMITTAL.
IN ADDITION, ODD LOT HOLDERS WHO TENDER ALL SUCH SHARES MUST
COMPLETE THE BOX CAPTIONED "ODD LOTS" ON THE LETTER OF
TRANSMITTAL AND, IF APPLICABLE, ON THE NOTICE OF GUARANTEED
DELIVERY, TO QUALIFY FOR THE PREFERENTIAL TREATMENT AVAILABLE TO
ODD LOT HOLDERS AS SET FORTH IN SECTION 1.
SHAREHOLDERS WHO HOLD SHARES THROUGH BROKERS OR BANKS ARE
URGED TO CONSULT SUCH BROKERS OR BANKS TO DETERMINE WHETHER
TRANSACTION COSTS ARE APPLICABLE IF SHAREHOLDERS TENDER SHARES
THROUGH SUCH BROKERS OR BANKS AND NOT DIRECTLY TO THE DEPOSITARY.
Signature Guarantees and Method of Delivery. No signature
guarantee is required if the Letter of Transmittal is signed by
the registered holder of the Shares (which term, for purposes of
this Section 3, shall include any participant in The Depository
Trust Company or the Philadelphia Depository Trust Company (each,
a the "Book-Entry Transfer Facility" and collectively, the Book-
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<PAGE>
Entry Transfer Facilities) whose name appears on a security
position listing as the owner of the Shares) tendered therewith
and such holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special
Payment Instructions" on the Letter of Transmittal. In all other
cases, for Shares held by citizens or residents of the US,
signatures of the Letter of Transmittal must be guaranteed by a
member firm of a registered national securities exchange, a
member of the AMEX, or by a commercial bank or trust company
having an office or correspondent in the US (each of the
foregoing being referred to as an "Eligible Institution"). If a
certificate for Shares is registered in the name of a person
other than the person executing a Letter of Transmittal, or if
payment is to be made, or Shares not purchased or tendered are to
be issued, to a person other than the registered holder, then the
certificate must be endorsed or accompanied by an appropriate
share power, in either case, signed exactly as the name of the
registered holder appears on the certificate, or share power
guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made only after timely
receipt by the US Depositary or of certificates for such Shares
(or a timely confirmation of a book-entry transfer of such Shares
into the US Depositary's account at a Book-Entry Transfer
Facility as described above), a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile
thereof) and any other documents required by the Letter of
Transmittal.
Book-Entry Delivery. The US Depositary will establish an
account with respect to the Shares for purposes of the Offer at a
Book-Entry Transfer Facility within two business days after the
date of this Offer to Purchase, and any financial institution
that is a participant in the respective Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by
causing such facility to transfer Shares into the US Depositary's
account in accordance with the respective Book-Entry Transfer
Facility's procedures for transfer. Although delivery of Shares
may be effected through a book-entry transfer into the US
Depositary's account at the Book-Entry Transfer Facility, either
(i) a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof) with any required
signature guarantees and any other required documents must, in
any case, be transmitted to and received by the US Depositary at
its address set forth on the back cover of this Offer to Purchase
prior to the Expiration Date, or (ii) the guaranteed delivery
procedure described below must be followed. DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE US DEPOSITARY.
30
<PAGE>
Guaranteed Delivery. If a shareholder desires to tender
Shares pursuant to the Offer and such shareholder's Share
certificates cannot be delivered to the US Depositary prior to
the Expiration Date (or the procedures for Book-Entry Transfer
cannot be completed on a timely basis) or if time will not permit
all required documents to reach the US Depositary prior to the
Expiration Date, such Shares may nevertheless be tendered,
provided that all of the following conditions are satisfied:
(a) such tender is made by or through an Eligible
Institution;
(b) the US Depositary receives by hand, mail,
overnight carrier, telegram or facsimile
transmission, prior to the Expiration Date, a
properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form the
Company has provided with this Offer to Purchase
(specifying the price at which the Shares are being
tendered), including (where required) a signature
guarantee by an Eligible Institution; and
(c) the certificates for all tendered Shares, in proper
form for transfer (or confirmation of book-entry
transfer of such Shares into the US Depositary's
account at one of the Book-Entry Transfer
Facility), together with a properly completed and
duly executed Letter of Transmittal (or a manually
signed facsimile thereof) and any required
signature guarantees or other documents required by
the Letter of Transmittal, are received by the US
Depositary within three AMEX trading days after the
date of receipt by the US Depositary of such Notice
of Guaranteed Delivery.
Risk of Delivery. THE METHOD OF DELIVERY OF ALL DOCUMENTS,
INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND
ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, THEN REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
Return of Tendered Shares. If any tendered Shares are not
purchased, or if fewer than all Shares evidenced by a
shareholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable
after the expiration or termination of the Offer or, in the case
of Shares tendered by book-entry transfer at a the Book-Entry
Transfer Facility, such Shares will be credited to the
appropriate account maintained by the tendering shareholder at
31
<PAGE>
the appropriate Book-Entry Transfer Facility, in each case
without expense to such shareholder.
Determination of Validity; Rejection of Shares; Waiver of
Defects; No Obligation to Give Notice of Defects. All questions
as to the number of Shares to be accepted, the price to be paid
for Shares to be accepted and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Company, in its sole
discretion, and its determination shall be final and binding on
all parties. The Company reserves the absolute right to reject
any or all tenders of any Shares that it determines are not in
proper form or the acceptance for payment of or payment for which
may, in the opinion of the Company's counsel, be unlawful. The
Company also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in any
tender with respect to any particular Shares or any particular
shareholder and the Company's interpretation of the terms of the
Offer will be final and binding on all parties. No tender of
Shares will be deemed to have been properly made until all
defects or irregularities have been cured by the tendering
shareholder or waived by the Company. None of the Company, the
Dealer Manager, the International Dealer-Manager, the US
Depositary, the Norwegian Depositary, the US Information Agent,
the Scandinavian Information Agent or any other person shall be
obligated to give notice of any defects or irregularities in
tenders, nor shall any of them incur any liability for failure to
give any such notice.
Backup Withholding Tax. The Company's acceptance for payment
of Shares tendered pursuant to the Offer will constitute a
binding agreement between the tendering shareholder and the
Company upon the terms and subject to the conditions of the
Offer. Under the US United States Federal income tax laws, the US
Depositary may be required to withhold 31% of the amount of any
payments made to certain shareholders pursuant to the Offer. To
prevent backup US United States Federal income tax withholding
with respect to payments made pursuant to the Offer, each
tendering shareholder must provide the US Depositary with such
shareholder's correct taxpayer identifications number and certify
that such shareholder is not subject to backup withholding by
completing the Substitute Form W-9 included in the Letter of
Transmittal. See Instruction 139 of the Letter of Transmittal.
Any holder of Shares should consult immediately his or her
independent professional advisor with respect top to his or her
own tax position. See Section 13 and Section 16.
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<PAGE>
4. Withdrawal Rights.
Except as otherwise provided in this Section 4, tenders of
Shares pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by
the Company pursuant to the Offer, may also be withdrawn at any
time after 11:00 p.m., Oslo time, and 5:00 p.m., New York City
time, on December 24, 1998.
For a withdrawal to be effective, a notice of withdrawal must
be in written, telegraphic or facsimile transmission form and
must be received in a timely manner by the US Depositary or the
Norwegian Depositary at its address set forth on the back cover
of this Offer to Purchase. Any such notice of withdrawal must
specify the name of the tendering shareholder, the name of the
registered holder, if different from that of the person who
tendered such Shares, the number of Shares tendered and the
number of Shares to be withdrawn. If the certificates for Shares
held by US citizens or residents to be withdrawn have been
delivered or otherwise identified to the US Depositary, then,
prior to the release of such certificates, the tendering
shareholder must also submit the serial numbers shown on the
particular certificates for Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of Shares tendered by an
Eligible Institution). If Shares have been tendered pursuant to
the procedure for book-entry tender set forth in Section 3, the
notice of withdrawal also must specify the name and the number of
the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares.
None of the Company, the Dealer-Manager, the International
Dealer-Manager, the US Depositary, the Norwegian Depositary, the
US Information Agent, the Scandinavian Information Agent or any
other person shall be obligated to give notice of any defects or
irregularities in any notice of withdrawal nor shall any of them
incur liability for failure to give any such notice. All
questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Company, in
its sole discretion, which determination shall be final and
binding.
Withdrawals may not be rescinded and any Shares withdrawn
will thereafter be deemed not properly tendered for purposes of
the Offer unless such withdrawn Shares are properly retendered
prior to the Expiration Date by again following one of the
procedures described in Section 3, or Section 16 with respect to
overseas shareholders.
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<PAGE>
5. Purchase of Shares and Payment of Purchase Price.
Upon the terms and subject to the conditions of the Offer, as
promptly as practicable following the Expiration Date, the
Company (i) will determine the Purchase Price it will pay for the
Shares properly tendered and not withdrawn prior to the
Expiration Date, taking into account the number of Shares so
tendered and the prices specified by tendering shareholders, and
(ii) will accept for payment and pay for (and thereby purchase)
Shares properly tendered at prices at or below the Purchase Price
and not withdrawn prior to the Expiration Date. For purposes of
the Offer, the Company will be deemed to have accepted for
payment (and therefore purchased) Shares that are properly
tendered at or below the Purchase Price and not withdrawn
(subject to the proration provisions of the Offer) only when, as
and if it gives oral or written notice to the US Depositary of
its acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer,
promptly following the Expiration Date the Company will accept
for payment and pay a single per Share Purchase Price for
1,870,967 Shares (subject to increase or decrease as provided in
Section 14) or such lesser number of Shares as are properly
tendered at prices not in excess of $15.50 nor less than $11.50
per Share and not withdrawn as permitted in Section 4 at an
aggregate purchase price of $29.0 million and not withdrawn as
permitted in Section 4.
The Company will pay for Shares purchased pursuant to the
Offer by depositing the aggregate Purchase Price therefor with
the US Depositary, which will act as agent for all tendering
shareholders for the purpose of receiving payment from the
Company and transmitting payment to the tendering shareholders.
In the event of proration, the Company will determine the
proration factor and pay for those tendered Shares accepted for
payment as soon as practicable after the Expiration Date;
however, the Company does not expect to be able to announce the
final results of any proration and commence payment for Shares
purchased until approximately seven AMEX trading days after the
Expiration Date. Certificates for all Shares tendered and not
purchased, including all Shares tendered at prices in excess of
the Purchase Price and Shares not purchased due to proration,
will be returned (or, in the case of Shares tendered by book-
entry transfer, such Shares will be credited to the account
maintained with the applicable Book-Entry Transfer Facility by
the participant therein who so delivered such Shares) to the
tendering shareholder at the Company's expense as promptly as
practicable after the Expiration Date without expense to the
tendering shareholders. Under no circumstances will interest on
the Purchase Price be paid by the Company by reason of any delay
34
<PAGE>
in making payment. In addition, if certain events occur, the
Company may not be obligated to purchase Shares pursuant to the
Offer. See Section 6.
The Company will pay all share transfer taxes, if any,
payable on the transfer to it of Shares purchased pursuant to the
Offer. If, however, payment of the Purchase Price is to be made
to, or (in the circumstances permitted by the Offer) if
unpurchased Shares are to be registered in the name of, any
person other than the registered holder, or if tendered
certificates are registered in the name of any person other than
the person signing the Letter of Transmittal, the amount of all
share transfer taxes, if any (whether imposed on the registered
holder or such other person), payable on account of the transfer
to such person will be deducted from the Purchase Price unless
satisfactory evidence of the payment of the share transfer taxes,
or exemption therefrom, is submitted. See Instruction 7 of the
Letter of Transmittal.
6. Certain Conditions Of The Offer.
Notwithstanding any other provision of the Offer, the Company
shall not be required to accept for payment, purchase or pay for
any Shares tendered, and may terminate or amend the Offer or may
postpone the acceptance for payment of, or the purchase of and
the payment for Shares tendered, subject to Rule 13e-4(f) under
the Exchange Act, if at any time on or after October 29, 1998 and
prior to the Expiration Date any of the following events shall
have occurred (or shall have been determined by the Company to
have occurred) that, in the Company's reasonable judgment in any
such case and regardless of the circumstances giving rise thereto
(including any action or omission to act by the Company), makes
it inadvisable to proceed with the Offer or with such acceptance
for payment:
(a) there shall have been threatened, instituted or
pending any action or proceeding by any government
or governmental, regulatory or administrative
agency, authority or tribunal or any other person,
domestic or foreign, before any court, authority,
agency or tribunal that directly or indirectly (i)
challenges the making of the Offer, the acquisition
of some or all of the Shares pursuant to the Offer
or otherwise relates in any manner to the Offer,
or (ii) in the Company's reasonable judgment, could
materially and adversely affect the business,
condition (financial or other), income, operations
or prospects of the Company, or otherwise
materially impair in any way the contemplated
future conduct of the business of the Company or
35
<PAGE>
materially impair the contemplated benefits of the
Offer to the Company;
(b) there shall have been any action threatened,
pending or taken, or approval withheld, or any
statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced
or deemed to be applicable to the Offer or the
Company, by any court or any authority, agency or
tribunal that, in the Company's reasonable
judgment, would or might directly or indirectly
(i) make the acceptance for payment of, or payment
for, some or all of the Shares illegal or
otherwise restrict or prohibit consummation of the
Offer, (ii) delay or restrict the ability of the
Company, or render the Company unable, to accept
for payment or pay for some or all of the Shares,
(iii) materially impair the contemplated benefits
of the Offer to the Company or (iv) materially and
adversely affect the business, condition
(financial or other), income, operations or
prospects of the Company, or otherwise materially
impair in any way the contemplated future conduct
of the business of the Company;
(c) there shall have occurred (i) any general
suspension of trading in, or limitation on prices
for, securities on the OSE, any national securities
exchange or in the over-the-counter market, (ii)
the declaration of a banking moratorium or any
suspension of payments in respect of banks in the
United States or Norway, (iii) the commencement of
a war, armed hostilities or other international or
national calamity directly or indirectly involving
the United States or Norway, (iv) any limitation
(whether or not mandatory) by any governmental,
regulatory or administrative agency or authority
on, or any event that, in the Company's reasonable
judgment, might affect, the extension of credit by
banks or other lending institutions in the United
States or Norway, (v) any significant decrease in
the market price of the Shares or any change in the
general political, market, economic or financial
conditions in the United States or abroad that
could, in the reasonable judgment of the Company,
have a material adverse effect on the Company's
business, operations or prospects or the trading in
the Shares, or (vi) in the case of any of the
foregoing existing at the time of the commencement
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<PAGE>
of the Offer, a material acceleration or worsening
thereof;
(d) a tender or exchange offer for any or all of the
Shares (other than the Offer) shall have been
proposed, announced or made by any person other
than the Company;
(e) (i) any entity, "group" (as that term is used in
Section 13(d)(3) of the Exchange Act) or person
(other than the Manager) shall have acquired or
proposed to acquire beneficial ownership of more
than 5% of the outstanding Shares or (ii) of any
person, entity or group shall have filed a
Notification and Report Form under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the "HSR
Act") or made a public announcement reflecting an
intent to acquire the Company or any of its assets
or securities other than in connection with a
transaction authorized by the Board of Directors of
the Company;
(f) any change or changes shall have occurred in the
business, financial condition, assets, income,
operations, prospects or share ownership of the
Company that, in the Company's reasonable judgment,
is or may be material to the Company;
(g) the Amendment is not approved by the requisite vote
of the shareholders of the Company;
(h) the Board of Directors does not approve the Loan
Agreement;
(i) the filing of any Disclosure Documents is not made;
(j) the Company is unable to enter into a satisfactory
interest rate hedging agreement with respect to the
Loan; or
(k) any conditions for drawdown of the Loan are not
fulfilled. Such conditions, contained in the Loan
Agreement between Den norske Bank ASA and the
Company, are as follows:
"(a) the Agent shall have received not less than 5
Banking Days prior to the proposed Drawdown
Date the following in form and content
satisfactory to it:
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(i) a counterpart of this Agreement duly
signed on behalf of the Borrower;
(ii) a company certificate evidencing that the
Borrower is duly registered as a limited
company and a copy of its Bye-Laws. The
Bye-Laws shall have been amended to allow
the Borrower to borrow funds;
(iii) a copy of the resolution of the board of
directors of the Borrower approving the
execution and performance by the Borrower
of this Agreement and the Security
Documents and specifying the persons
authorised to sign this Agreement and
such Security Documents on its behalf;
(iv) a copy of the resolutions of the
shareholders of the Borrower approving
the amendment of the Bye-Laws referred to
in (ii) above;
(v) the Security Documents;
(vi) legal opinion(s) from such counsel in
such jurisdictions as the Agent may
reasonably have requested addressing
questions or circumstances of relevance
to this Facility;
(vii) a copy of any consent necessary from
governmental or other authorities for the
execution of and performance under this
Agreement by the Borrower;
(viii) a letter confirming that the lawfirm of
Langangen & Engeseth will act as process
agent for the Borrower;
(ix) copies of the following documents
relating to each of the Vessels:
(A) the shipbuilding contracts dated
15 September 1995 between the
Borrower, Samsung Corporation and
Samsung Heavy Industries Co., Ltd.
regarding the construction and sale
of the Vessels;
(B) the protocol of delivery and
acceptance;
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<PAGE>
(C) the certificate of class;
(D) the management agreement between the
Borrower and Ugland Nordic Shipping
ASA; and
(E) the Charterparty and the Charter
guarantee.
(b) the Agent shall have received not later
than 12:00 noon Oslo time on the fourth
Banking Day prior to the proposed
Drawdown Date an irrevocable written
drawdown notice substantially in the form
of Exhibit 2 attached hereto;
(c) the Agent shall not have received notice
from any Bank prior to 11:00 a.m. London
time on the Quotation Date prior to the
Drawdown Date that it is unable to obtain
deposits in USD in the London Interbank
Eurocurrency Market in a sum necessary to
fund its participation in the Loan.
A complete copy of the Loan Agreement is included in the
Company's Schedule 13E-4, as amended, filed with Securities and
Exchange Commission.
The foregoing conditions are for the sole benefit of the
Company and may be asserted by the Company regardless of the
circumstances (including any action or inaction by the Company)
giving rise to any such condition, and may be waived by the
Company, in whole or in part, at any time and from time to time
in its reasonable discretion. The Company's failure at any time
to exercise any of the foregoing rights shall not be deemed a
waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at anytime and from time to
time. Any determination by the Company concerning the events
described above will be final and binding.
7. Price Range of Shares; Dividends.
Price Range of Shares. The Shares are listed and traded on
the AMEX and OSE under the symbol "NAT." The AMEX is the
Company's primary listing. The secondary trading market for the
Shares is the OSE. The following table sets forth, for the two
most recent fiscal years and the 1998 fiscal quarters indicated,
the high and low closing per Share (warrants before September 30,
1997) sales prices as reported by AMEX and the high and low
market quotations for Shares on the OSE as derived from its daily
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<PAGE>
official list, in Norwegian Krone per share and the cash
dividends paid or to be paid, per Share:
AMEX (1)(2) OSE(1)(2) Dividends
__________ _________ _________
Paid
Per
High Low High Low Share
____ ___ ____ ___ _______
1996
1st Quarter $ 4 3/8 $ 3 3/8 NOK 23.00 NOK 21.00 --
2nd Quarter $ 4 1/4 $ 3 1/4 NOK 24.00 NOK 20.00 --
3rd Quarter $ 4 3/4 $ 3 3/4 NOK 27.00 NOK 22.00 --
4th Quarter $ 4 1/2 $ 3 3/4 NOK 28.00 NOK 24.00 --
1997
1st Quarter $ 4 5/8 $ 3 3/4 NOK 30.00 NOK 24.00 --
2nd Quarter $ 5 $ 3 5/8 NOK 34.00 NOK 25.00 --
3rd Quarter $ 7 5/8 $ 5 NOK 48.00 NOK 35.00 --
4th Quarter $ 19 1/8 $ 16 3/8 NOK 130.00 NOK 110.00 $0.30
1998
1st Quarter $ 16 1/2 $ 14 7/8 NOK 120.00 NOK 110.00 $0.40
2nd Quarter $ 16 1/2 $ 14 3/4 NOK 129.00 NOK 115.00 $0.41
3rd Quarter $ 15 1/2 $ 11 3/4 NOK 125.00 NOK 125.00 $0.32
______________________
1. The quotations represent interdealer quotations, without
retail mark-ups, mark-downs or commissions and do not
necessarily reflect the actual transaction.
2. Prior to September 1997, Shares were represented as
warrants listed on the AMEX and the OSE. No dividends were
declared in connection with its warrants. The Shares were
issued by the Company upon exercise of the warrants on
September 30, 1998 at an exercise price of $10.21 per
warrant. Each warrant entitled the holder to one share.
The Company received aggregate proceeds from the exercise
of the warrants of $119,779,768.13 before deducting
expenses.
3. The Company intends to pay a quarterly cash dividend of
$0.30 for the fourth quarter of 1998 on November 12, 1998
to holders of record at the close of business on October
28, 1998.
On October 28, 1998, the last full trading day on the AMEX
prior to the announcement and commencement of the Offer, the
closing price per Share sales price on the AMEX was $11 7/8. On
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<PAGE>
October 8, 1998, the last fully trading day on the OSE prior to
the announcement and commencement of the Offer on which a
transaction in the Shares was reported, the quotation per share
as reported on the OSE was NOK 125. SHAREHOLDERS ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
Dividends. Charterhire payable by the Charterer constitutes
the Company's primary source of cash for distributions. Daily
charterhire is equal to: (i) a fixed minimum rate of charterhire
of $13,500 per Vessel per day (the "Base Rate"), payable
quarterly in advance, and (ii) additional charterhire (which may
equal zero) ("Additional Hire") which is the excess of a weighted
average of the daily time charter rates for two round trip trade
routes traditionally served by Suezmax tankers over the sum of
(A) $8,500 representing daily operating costs and (B) the Base
Rate. The sum of the Base Rate, Additional Hire (if any), and
the $8,500 operating costs component is generally known in the
shipping industry as a "time charter equivalent" rate.
The Company's expenses include: (i) the Management fee under
the Management Agreement equal to $250,000 per annum; (ii)
premiums payable in respect of the directors' and officers' and
general liability insurance equal to approximately $180,000 per
annum; and (iii) commissions payable to independent shipbrokers
equal to 1.25% of the Base Rate paid by the Company under the
Charters. Assuming consummation of the Offer, until November,
2004, the Company will also incur interest on the Loan in the
approximate amount of $1,665,000 per annum (assuming the Loan
equals $30 million and the interest rate is fixed at 5.1%) with a
margin of .525% plus annual agent's fees in the amount of
$10,000. See Section 15. Repayment of the Loan in full is due
November, 2004. See Section 8. No assurance can be given that
the Company will not incur other expenses that may reduce the
amount of charterhire available to make distributions to the
shareholders of the Company.
Dividends are declared at the discretion of the Board of
Directors. The Company intends dividends to be payable quarterly
in arrears, when, as and if declared by the Board of Directors of
the Company out of funds legally available therefor. Each such
dividends is payable to holders of record at the close of
business on the record date as they appear in the share registry
of the Company. There are no contractual or legal restrictions
on the Company's current or future ability to pay dividends,
including under its Memorandum of Association and Bye-Laws except
those restrictions imposed under the Companies Act (which, as
applied to the Company, requires the realizable value of the
Vessels to be less than the sum of the Company's liabilities and
surplus) or as may apply in the event of a default by the Company
under the Loan Agreement.
41
<PAGE>
The following is a table of possible dividend rates that the
Company would be able to pay depending on the number of Shares
tendered, the Purchase Price for the Shares, and the number of
Shares that the Company purchases pursuant to the Offer. These
figures assume that the Company will maintain its present
dividend policy. These figures also assume that the Company will
not incur expenses other than those normally incurred for
brokerage commissions and directors' and officers' liability
insurance. The Company may well incur such expenses. In
addition, the following figures are based on the assumption that
the Company will borrow $30 million, due in six years, will apply
$29 million to purchase of the Shares and $1 million to fees and
expenses, and pay interest only quarterly at the fixed rate of
5.1% and a margin of .525% per annum, with a bullet repayment of
principal in six years and an agent's fee of $10,000 per annum.
Shareholders should not assume that the Company will actually fix
its interest costs at this rate, which will depend upon the
market at the time of drawdown, or that fees and expenses will
not exceed $1,000,000, leaving less than $29 million for the
purchase of Shares. The figures below set forth possible
dividends based on receipt by the Company of charterhire at the
Base Rate of $13,500 per Vessel per day, plus Additional Hire to
the amounts shown. Shareholders should not assume that the
Company will actually receive any Additional Hire.
These figures also assume that the Company will amend the
Offer to increase the number of Shares purchased in the event the
Purchase Price is below $15.50. The Company has no obligation to
do so.
<TABLE>
CHARTERHIRE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Purchase
Price 11.50 12.00 12.50 13.00 13.50 14.00 14.50 15.00 15.50
Net Shares Outstanding
9,292,111 9,397,183 9,493,850 9,583,081 9,665,702 9,742,421 9,813,850 9,880,517 9,942,883
13,500 1.35 1.34 1.32 1.31 1.30 1.29 1.28 1.27 1.26
14,000 1.41 1.39 1.38 1.37 1.36 1.34 1.33 1.33 1.32
14,500 1.47 1.45 1.44 1.42 1.41 1.40 1.39 1.38 1.37
15,000 1.53 1.51 1.49 1.48 1.47 1.46 1.45 1.44 1.43
15,500 1.59 1.57 1.55 1.54 1.53 1.51 1.50 1.49 1.48
16,000 1.65 1.63 1.61 1.60 1.58 1.57 1.56 1.55 1.54
16,500 1.70 1.69 1.67 1.65 1.64 1.63 1.61 1.60 1.59
17,000 1.76 1.74 1.73 1.71 1.69 1.68 1.67 1.66 1.65
17,500 1.82 1.80 1.78 1.77 1.75 1.74 1.73 1.71 1.70
18,000 1.94 1.92 1.90 1.88 1.86 1.85 1.84 1.82 1.81
</TABLE>
42
<PAGE>
8. Source and Amount of Funds.
Assuming the Company purchases 1,870,967 Shares pursuant to
the Offer at a purchase price of $15.50 per Share, the Company
expects the maximum aggregate cost, including all fees and
expenses applicable to the Offer, to be approximately $30
million. It is anticipated that the Company will fund the
purchase of Shares pursuant to the Offer and the payment of
related fees and expenses from the proceeds of the Loan (see the
Introduction).
On October 23, 1998 the Company received a Commitment Letter
from Den norske Bank to obtain funds to purchase the Shares under
the Offer. The Company will enter into a Loan Agreement that
will reflect the material terms of the Commitment Letter. The
Loan will bear interest payable quarterly at a rate per annum
equal to LIBOR plus the applicable margin rate of 0.525%. The
Company intends to enter into an interest rate hedge agreement
under which interest will be fixed. The Company believes that
based on current rates, such interest would be fixed at 5.1% per
annum. Borrowings under the Loan Agreement will be secured by a
mortgage on each Vessel and an assignment of charterhire under
the Charters. The Loan Agreement also will contain certain
representations and warranties, covenants and conditions
customary to facilities of this nature. As of the date hereof,
there have been no borrowings under the Loan Agreement.
Principal on the Loan under the Loan Agreement will be repaid
in full in November, 2004, unless such agreement is refinanced or
extended on terms deemed reasonable to the Company.
The preceding description of the Commitment Letter is
qualified in its entirety by reference to the text of the
Commitment Letter, which is an exhibit to the Issuer Tender Offer
Statement on Schedule 13E-4 (the "Schedule 13E-4") of which this
Offer to Purchase forms a part. A copy of the Schedule 13E-4 may
be obtained from the United States Securities and Exchange
Commission in the manner provided in Section 9 under the heading
"Additional Information."
9. Certain Information Concerning the Company.
General
The Company, a Bermuda company, was organized in June, 1995.
Its principal executive office is located at Cedar House, 41
Cedar Avenue, Hamilton HM EX, Bermuda. The business of the
Company is limited to the disposition, ownership and chartering
of the Vessels. The Company's activities are limited by its Bye-
Laws to (i) entering into or becoming a party to shipbuilding
contracts for the Vessels, (ii) entering into or becoming party
43
<PAGE>
to a supervision agreement with the Charterer to monitor
construction of the Vessels, (iii) entering into the Charters or
subsequent Charters with any subsequent charterer of the Vessels,
(iv) entering into certain United Kingdom finance leases, (v)
entering into the Management Agreement and agreements related to
the issuance of warrants and the public offering of the Shares,
and (vi) entering into agreements to charter, lease or otherwise
dispose of a Vessel upon termination of its original charter.
The Charterer is obligated to charter the Vessels for the
Original Term and may extend the Charters. The Company's policy
is to pay dividends in amounts substantially equal to the
charterhire received from the Charterer under the Charters.
The Vessels are approximately 150,000 deadweight tonne double
hull Suezmax oil tankers. The Vessels were acquired from the
builder by the Company at a cost per Vessel of approximately
$56.9 million.
Certain Financial Information
Set forth below is certain summary historical financial
information of the Company. The historical financial information
(other than the ratios of earnings to fixed charges) was derived
from the audited consolidated financial statements included in
the Company's Annual Report on Form 20-F for the year ended
December 31, 1997 (the "Company's 1997 Annual Report"), and from
the unaudited summary consolidated financial statements included
in the Company's quarterly reports on Form 6-K for the periods
ended September 30, 1997 and September 30, 1998 (the "Company's
Quarterly Reports"), and other information and data contained in
the Company's 1997 Annual Report and the Company's Quarterly
Reports. The ratio of earnings to fixed charges is not shown as
the Company did not have any fixed charges during the applicable
periods. More comprehensive financial information is included in
such reports and the financial information which follows is
qualified in its entirety by reference to such reports and all of
the financial statements and related notes contained therein,
copies of which may be obtained as set forth below under the
caption "Additional Information."
Set forth below is certain summary historical financial
information of the Company. The historical financial information
(other than the ratios of earnings to fixed charges) was derived
from the audited consolidated financial statements included in
the Company's Annual Report on Form 20-F for the year ended
December 31, 1997 (the "Company's 1997 Annual Report"), and from
the unaudited summary consolidated financial statements included
in the Company's quarterly reports on Form 6-K for the periods
ended September 30, 1997 and September 30, 1998 (the "Company's
Quarterly Reports"), and other information and data contained in
the Company's 1997 Annual Report and the Company's Quarterly
44
<PAGE>
Reports. More comprehensive financial information is included in
such reports and the financial information which follows is
qualified in its entirety by reference to such reports and all of
the financial statements and related notes contained therein,
copies of which may be obtained as set forth below under the
caption "Additional Information".
45
<PAGE>
Summary Historical Financial Information
(in U.S. dollars)
Year Ended December 31
1996 1997
INCOME STATEMENT DATA:
Operating Revenues $ 0 $ 5,265,880
Commissions Paid 0 (47,081)
___________ __________
Administrative
expenses (430,000) (461,674)
Depreciation and
amortization 0 (1,707,807)
Net Operating Income (430,000) 3,049,318
___________ ___________
Financial Income
and expenses
Interest Income 0 147,504
Bank Charges 0 (330)
___________ ___________
Net Financial Income 0 147,174
Net Profit for
the Year (430,000) 3,196,492
___________ ___________
<eb=1>
<bb=1>
BALANCE SHEET DATA
Assets
Total Current Assets 374,919 1,614,715
Total Assets 51,599,679 174,327,878
___________ ___________
Liabilities and
Shareholders' Equity
Prepaid hire 0 3,645,000
Dividend payable 0 1,181,385
Shareholders' Equity 51,599,679 169,501,493
___________ ___________
Book value per
common share outstanding 4.37 14.45
46
<PAGE>
Summary Historical Financial Information
(in U.S. dollars)
Year Ended December 31,
1996 1997
________ _______
INCOME STATEMENT DATA:
Operating Revenues $ 0 $ 5,265,880
Commissions Paid 0 (47,081)
____________ ___________
Administrative expenses (430,000) (461,674)
Depreciation and amortization 0 (1,707,807)
Net Operating Income (430,000) 3,049,318
____________ ___________
Financial Income and expenses
Interest Income 0 147,504
Bank Charges 0 (330)
____________ ___________
Net Financial Income 0 147,174
Net Profit for the Year (430,000) 3,196,492
============
===========
Earnings per share (5.23) .27
BALANCE SHEET DATA
Assets
Total Current Assets 374,919 5,259,715
Total Assets 51,599,679 174,327,878
____________ ___________
Liabilities and Shareholders' Equity
Prepaid hire. 0 3,645,000
Dividend payable 0 1,181,385
Shareholders Equity. 51,599,679 169,501,493
____________ ___________
Book value per common share outstanding 4.37 14.45
47
<PAGE>
Summary Historical Financial Information
(in U.S. dollars)
Nine Months Year September 30,
1997 1998
INCOME STATEMENT DATA:
Operating Revenues -- $12,307,140
Commissions Paid -- (138,207)
___________ ___________
Administrative
expenses -- (283,336)
Depreciation and
amortization -- (5,123,421)
Net Operating Income -- 6,762,176
___________ ___________
Financial Income
and expenses
Interest Income -- 63,027
Bank Charges -- 0
___________ ___________
Net Financial Income -- 63,027
Net Profit for
the Year -- 6,825,203
___________ ___________
BALANCE SHEET DATA
Assets
Total Current Assets 123,164,170 154,997
Total Assets 174,396,430 167,825,739
___________ ___________
Liabilities and
Shareholders' Equity
Prepaid hire 0 3,726,000
Dividend payable 0 0
Shareholders' Equity 174,396,430 164,099,739
___________ ___________
Book value per
common share outstanding 14.76 13.89
48
<PAGE>
Nine Months Ended Nine Months Ended
September 30, 1997 September 30, 1998
__________________ (unaudited)
__________________
INCOME STATEMENT DATA:
Operating Revenues $12,307,140
Commissions Paid - (138,207)
Administrative expenses - (283,336)
Depreciation and amortization - (5,123,421)
Net Operating Income - 6,762,176)
============ ===========
Financial Income and expenses -
Interest Income - 63,027
Bank Charges - 0
Net Financial Income - 63,027
Net Profit for the Year - 6,825,203
============ ===========
Earnings per share .58
BALANCE SHEET DATA
Assets
Total Current Assets
Total Assets $123,164,170 3,880,997
Liabilities and 174,396,430 167,825,739
Shareholders' Equity ____________ ___________
Prepaid hire 3,726,000
Dividend payable 0
Shareholders Equity..
Book value per common 174,396,430 164,099,739
share outstanding ____________ ___________
14.76 13.89
Summary Unaudited Pro Forma Financial Information
The following summary unaudited pro forma financial
information is based on historical information which has been
adjusted to reflect the assumed purchase pursuant to the Offer of
1,870,967 Shares at a $15.50 Purchase Price as if the Offer had
occurred on January 1, 1997 for income statement purposes and
December 31, 1997 for balance sheet purposes for the fiscal year
ended December 31, 1997 and on January 1, 1998 for income
statement purposes and September 30, 1998 for balance sheet
purposes for the nine month period ended September 30, 1998. The
assumptions on which the pro forma financial information is based
are further described in the Notes to the Summary Unaudited Pro
Forma Financial Information table. The summary unaudited pro
49
<PAGE>
forma financial information should be read in conjunction with
the summary historical financial information and does not purport
to be indicative of the results that would actually have been
obtained had the purchase of the Shares pursuant to the Offer
been completed at the dates indicated or that may be obtained in
the future.
Summary Unaudited Pro Forma Financial Information
The following summary unaudited pro forma financial
information is based on historical information which has been
adjusted to reflect the assumed purchase pursuant to the Offer of
1,870,967 Shares at a $15.50 Purchase Price as if the Offer had
occurred on January 1, 1997 for income statement purposes and
December 31, 1997 for balance sheet purposes for the fiscal year
ended December 31, 1997 and on January 1, 1997 for income
statement purposes and September 30, 1998 for balance sheet
purposes for the nine month period ended September 30, 1998. The
assumptions on which the pro forma financial information is based
are further described in the Notes to the Summary Unaudited Pro
Forma Financial Information table. The summary unaudited pro
forma financial information should be read in conjunction with
the summary historical financial information and does not purport
to be indicative of the results that would actually have been
obtained had the purchase of the Shares pursuant to the Offer
been completed at the dates indicated or that may be obtained in
the future.
50
<PAGE>
Summary Unaudited Pro Forma Financial Information (1)(2)
Year Ended Nine Months Ended
December 31, 1997 September 30, 1998
INCOME STATEMENT DATA
Operating Revenues $ 5,265,880 $ 12,307,140
Commissions Paid (47,081) (138,207)
Net Income 5,218,799 12,168,933
Administrative Expenses (461,674) (283,336)
Depreciation and
Amortization (1,707,807) (5,123,421)
Net Operating Income 3,049,318 6,762,176
Financial Income and Expenses
Interest Expense(4)(274,416)(281,871)(1,624,653)(1,225,098)
Bank charges (1,000,330)(8,663) (25,000)--
Net Financial
Income (1,274,746)(290,534)(1,624,653)(1,250,098)
Net profit for the
Year 1,774,5722,758,784 5,137,5235,512,078
Earnings per share 0.1836.29 0.5316.57
Dividend per share 0.34 1.07
BALANCE SHEET DATA
Assets
Total Current Assets 5,259,715 154,9973,880,997
Prepaid Lenders Fee 200,000 200,000
Total Assets 174,527,878327,878164,099,739168,025,739
Liabilities and
Shareholders' Equity
Liabilities
Prepaid hire 3,645,000 3,726,000
Dividend Payable 1,181,385 0
Bank Loan 30,000,000 30,000,000
Shareholders' Equity139,701,493501,493 134,299,739099,739
Book value per common
share outstanding 14.586 13.898
Ratio of earnings to
fixed charges (3) 10.1050 5.525.41
(1) The pro forma data assumes the Company has purchased
1,870,967 shares (9,942,883 outstanding) pursuant to the
Offer at the purchase price per share of $15.50. Under
Bermuda law, these shares are not kept in Treasury but
rather are automatically cancelled. The Company
estimates the expense for the Offer to aggregate
51
<PAGE>
$1,000,000. The pro forma figures assume that the
lLenders and legal fees, totaling approximately
$200,000, are not material and thus are expensed in the
fourth quarter of 1998have been capitalized and are
amortized over the six year term of the Loan. The
balance of the estimated costs, $800,000, is considered
part of the cost of the repurchased common stockshares.
(2) A rate of interest of 5.725% was used to calculate the
pro forma increase in interest expense for the year
ended December 31, 1997 and the nine month period ended
September 30, 1998. This rate consists of the current
London Interbank Offered Rate ("LIBOR") plus a margin of
.525% p.a. As the share were issued on October 1, 1997,
pro forma interest expense for the year ended
December 31, 1997 is calculated from October 1, 1997
through December 31, 1997. A 1/8% change in LIBOR would
increase (or decrease) pro forma net profit by $9,375
for the year ended December 31, 1997 (calculated for the
period from October 1, 1997 through December 31, 1997,
and by $28,125 for the nine months ended September 30,
1998.
(3) Ratio of earnings to fixed charges is calculated by
taking the sum of net profits plus interest expense plus
the amortization of deferred bank charges and dividing
that sum by interest expense and the amortization of
deferred bank changes. As the Charters commenced on
October 1, 1997, the Company's net profit for the year
ended December 31, 1997 reflects income received only
during the fourth calendar quarter.
(4) Interest expense for 1997 was $429,375. This figure was
calculated assuming a loan in the amount of $30 million
and an interest rate of 5.725% for three months.
Interest income was $147,504, thereby producing net
interest expense of $281,871. Interest expense for 1998
was $1,288,125 (loan in principal amount of $30 million,
interest at 5.725% for nine months). Interest income
was $63,027, producing net interest expense of
$1,225,098.
The terms of the Offer are set forth in the Offer to
Purchase, as amended, and related Letter of Transmittal. Except
as so amended, the terms of the Offer remain in full force and
effect.
Dated: December 11, 1998
52
<PAGE>
Additional Information
The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is
obligated to file reports and other information with the
Commission relating to its business, financial condition and
other matters. The Company is exempt from the proxy rules of
Regulation 14A under the Exchange Act because it is a "foreign
private issuer" within the meaning of such regulation. The
Company does distribute proxy forms to its shareholders that do
not conform to Schedule 14A of the Exchange Act. Such reports,
proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 2120, Washington, D.C.
20549; at its regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade
Center, New York, New York 10048. Copies of such material may
also be obtained by mail, upon payment of the Commission's
customary charges, from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a Web site
on the World Wide Web at http://www.sec.gov that contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the
Commission. Such reports, proxy statements and other information
concerning the Company also can be inspected at the offices of
the AMEX, 86 Trinity Place, New York, New York, 10006, on which
the Shares are listed.
10. Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares.
The Manager owns approximately 1,762,471 Shares as of
October 28, 1998 (the "Record Date"). The Manager receives a
management fee of $250,000 per year in respect of its duties
under the Management Agreement.
Based on the Company's records and information provided to
the Company by its directors, executive officers, and associates,
neither the Company nor any of its associates or persons
controlling the Company nor, to the best of the Company's
knowledge, any of the directors or executive officers of the
Company, nor any associates of such directors or executive
officers, has effectuated any transactions in the Shares during
the 40 business days prior to the date hereof.
Except as set forth in this Offer to Purchase, neither the
Company nor any person controlling the Company nor, to the
Company's knowledge, any of its directors or executive officers,
is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or
53
<PAGE>
indirectly, to the Offer with respect to any securities of the
Company (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures,
loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies,
consents or authorizations).
11. Effects of the Offer on the Market for Shares;
Registration Under the Exchange Act.
The Company's purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise be traded
publicly and may reduce the number of shareholders. Nonetheless,
the Company anticipates that there will be a sufficient number of
Shares outstanding and publicly traded following consummation of
the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the AMEX, the Company does not
believe that its purchase of Shares pursuant to the Offer will
cause the Company's remaining Shares to be delisted from the
AMEX. The Shares are currently "margin securities" under the
rules of the Federal Reserve Board. This has the effect, among
other things, of allowing brokers to extend credit to their
customers using such Shares as collateral. The Company believes
that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of
the Federal Reserve Board's margin regulations. The Shares are
registered under the Exchange Act, which requires, among other
things, that the Company furnish certain information to its
shareholders and the Commission. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the
Shares becoming eligible for deregistration under the Exchange
Act. See Section 2.
12. Certain Legal Matters; Regulatory Approvals.
Except as set forth in this Offer to Purchase, the Company
is not aware of any license or regulatory permit that appears to
be material to its business that might be adversely affected by
its acquisition of the Shares pursuant to the Offer, or, except
as set forth below, of any approval or other action by any US
state, US federal or foreign governmental, administrative or
regulatory agency or authority, that would be required for the
acquisition or ownership of Shares by the Company pursuant to the
Offer. Should any such approval or other action be required, the
Company currently contemplates that such approval or other action
will be sought. While the Company does not currently intend to
delay the acceptance for payment of Shares tendered pursuant to
the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed,
would be obtained or would be obtained without substantial
54
<PAGE>
conditions or that adverse consequences might not result to the
Company's business, or that certain parts of the Company's
business might not have to be disposed of or held separate or
other substantial conditions complied with, in the event that
such approvals were not obtained or such other actions were not
taken or in order to obtain any such approval or action. The
Company's obligation under the Offer to accept for payment and
pay for Shares is subject to certain conditions, including
conditions relating to the legal matters discussed in this
Section 12. See Section 6 for a description thereof.
Antitrust. Under the HSR Act and the rules promulgated
thereunder by the Federal Trade Commission (the "FTC") certain
transactions may not be consummated unless certain information
has been furnished to the Antitrust Division of the Department of
Justice and the FTC and certain waiting period requirements have
been satisfied.
The Company believes that the Offer is exempt from the
notification and information requirements under the HSR Act.
Other Foreign Approvals. The Company is a Bermuda company
and the Shares are listed on the OSE. In connection with the
acquisition of Shares pursuant to the Offer, the laws of certain
of those foreign countries and jurisdictions may require the
filing of information with, or the obtaining of approval of,
governmental authorities in such countries and jurisdictions.
13. Certain United States Federal Income Tax Consequences.
The following summary describes the principal United States
federal Federal income tax consequences of an exchange of Shares
for cash pursuant to the Offer by United States Holders (as
defined below). This summary is based upon the Internal Revenue
Code of 1986, as amended to the date hereof (the "Code"),
existing and proposed United States Treasury Regulations
promulgated thereunder, rulings, administrative pronouncements
and judicial decisions, changes to which could affect the tax
consequences described herein and could be made on a retroactive
basis.
This summary discusses only Shares held as capital assets,
within the meaning of Section 1221 of the Code, and does not
address all of the tax consequences that may be relevant to
particular shareholders in light of their personal circumstances,
or to certain types of shareholders (such as certain financial
institutions, dealers or traders in securities or commodities,
insurance companies, tax-exempt organizations, persons who own
10% or more of the voting stock of the Company, or persons who
hold Shares as a position in a "straddle" or as part of a
"hedging" or "conversion" transaction for United States federal
55
<PAGE>
income tax purposes or that have a functional currency other than
the United States dollar). For purposes of this summary, a
"United States Holder" is a holder of Shares that for United
States federal income tax purposes is (i) a citizen or resident
of the United States, (ii) a corporation created or organized in
or under the laws of the United States or any State or division
thereof (including the District of Columbia), (iii) an estate the
income of which is subject to United States federal income
taxation regardless of its source or (iv) a trust (a) the
administration over which a United States court can exercise
primary supervision and (b) all of the substantial decisions of
which one or more United States persons have the authority to
control. Notwithstanding the preceding sentence, to the extent
provided in United States Treasury Regulations, certain trusts in
existence on August 20, 1996, and treated as United States
persons prior to such date, that elect to continue to be treated
as United States persons will also be United States Holders. A
"Non-United States Holder" is a holder of Shares other than a
United States Holder. This summary does not address the state,
local or foreign tax consequences of participating in the Offer.
EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S TAX ADVISOR AS
TO THE PARTICULAR CONSEQUENCES TO SUCH HOLDER OF PARTICIPATION IN
THE OFFER.
Consequences to Tendering Shareholders of the Exchange of
Shares for Cash Pursuant to the Offer. An exchange of Shares for
cash in the Offer by a United States Holder will be a taxable
transaction for United States federal income tax purposes. As a
consequence of the exchange, the United States Holder will,
depending on such holder's particular circumstances, be treated
either as having sold such holder's Shares or as having received
a dividend distribution from the Company with the tax
consequences described below.
Under Section 302 of the Code, a United States Holder whose
Shares are exchanged pursuant to the Offer will be treated as
having sold such holder's Shares, and thus will recognize gain or
loss if the exchange (i) results in a "complete termination" of
all of such holder's equity interest in the Company, (ii) is a
"substantially disproportionate" redemption with respect to such
holder or (iii) is "not essentially equivalent to a dividend"
with respect to the holder, each as discussed below. In applying
each of the Section 302 tests, a United States Holder will be
treated as owning Shares actually or constructively owned by
certain related individuals and entities and any Shares that such
holder has the right to acquire by exercise of an option or by
conversion of a security.
A United States Holder that exchanges all Shares actually
and constructively owned by such holder for cash pursuant to the
Offer will be treated as having completely terminated such
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holder's equity interest in the Company if either (a) all the
Shares actually and constructively owned by the Holder are sold
pursuant to the Offer, or (b) all the Shares actually owned by
the Holder are sold pursuant to the Offer and the Holder is
eligible to waive and does effectively waive attribution of all
Shares constructively owned by the Holder pursuant to the
otherwise applicable "family attribution" rules in accordance
with the special exception provided in Section 302(c) of the
Code. An exchange of Shares for cash will be "substantially
disproportionate" with respect to a United States Holder if the
percentage of the then outstanding Shares actually and
constructively owned by such holder immediately after the
exchange is less than 80% of the percentage of the Shares
actually and constructively owned by such holder immediately
before the exchange. A United States Holder will satisfy the
"not essentially equivalent to a dividend" test if the reduction
in such holder's proportionate interest in the Company
constitutes a "meaningful reduction" given such holder's
particular facts and circumstances. The IRS has indicated in
published rulings that any reduction in the percentage interest
of a shareholder whose relative share interest in a publicly held
corporation is minimal (an interest of less than 1% should
satisfy this requirement) and who exercises no control over
corporate affairs should constitute such a "meaningful
reduction." However, United States Holders expecting to rely
upon the "not essentially equivalent to a dividend" test should
consult their tax advisors as to its application in their
particular situations.
If a United States Holder sells Shares to persons other than
the Company at or about the time such holder also sells Shares to
the Company pursuant to the Offer, and the various sales effected
by the holder are part of an overall plan to reduce or terminate
such holder's proportionate interest in the Company, then the
sales to persons other than the Company may, for United States
federal income tax purposes, be integrated with the holder's
exchange of Shares pursuant to the Offer and, if integrated, may
be taken into account in determining whether the holder satisfies
any of the three tests described above. Conversely, a United
States Holder may not be able to satisfy one of the above three
tests because of contemporaneous acquisitions of Shares by such
Holder or a related party whose Shares would be attributed to
such Holder.
If a United States Holder is treated as having sold such
holder's Shares under the tests described above, such holder will
recognize gain or loss equal to the difference between the amount
of cash received and such holder's adjusted tax basis in the
Shares exchanged therefor. Subject to the discussion under
"Passive Foreign Investment Company Considerations", below, any
such gain or loss will be capital gain or loss. Gain, if any,
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generally will be U.S. United States source gain. In the case of
a noncorporate United States Holder, the maximum marginal United
States federal income tax rate applicable to such gain will be
lower than the maximum marginal United States federal income tax
rate applicable to ordinary income if such United States Holder's
holding period for such Shares exceeds one year.
Subject to the discussion under "Passive Foreign Investment
Company Considerations", below, if a United States Holder who
exchanges Shares pursuant to the Offer is not treated under
Section 302 as having sold such holder's Shares for cash, cash
received by such holder will be treated as a dividend to the
extent of such holder's rateable share of the Company's current
and accumulated earnings and profits. Such a dividend will be
includible in the United States Holder's gross income as ordinary
income without reduction for the adjusted tax basis of the Shares
exchanged, and no loss will be recognized. In such event the
United States Holder's adjusted tax basis in its remaining the
exchanged Shares exchanged generally will be added to such
holder's adjusted tax basis in the remaining Shares. To the
extent that cash received in exchange for Shares is treated as a
dividend to a corporate United States Holder, such holder will
not be eligible for a dividends-received deduction. To the
extent, if any, that the cash received by a United States Holder
exceeds the Company's current and accumulated earnings and
profits, it will be treated first as a tax-free return of such
United States Holder's tax basis in the Shares and thereafter as
capital gain.
The Company cannot predict whether or to what extent the
Offer will be over subscribed. If the Offer is oversubscribed,
proration of tenders pursuant to the Offer will cause the Company
to accept fewer shares than are tendered. Therefore, a United
States Holder can be given no assurance that a sufficient number
of such holder's Shares will be exchanged pursuant to the Offer
to ensure that such exchange will be treated as a sale, rather
than as a dividend, for United States federal income tax purposes
pursuant to the rules discussed above.
Consequences to Shareholders Who Do not Tender or Whose
Tender is not Accepted Pursuant to the Offer. Shareholders, none
of whose Shares will be exchanged pursuant to the Offer, will not
incur any United States federal income tax liability as a result
of the consummation of the Offer.
Passive Foreign Investment Company Considerations. The
Company is a "passive foreign investment company" ("PFIC") for US
United States Federal Federal income tax purposes. United States
persons owning shares of a PFIC are subject to a special United
States federal income tax regime with respect to certain
distributions received from the PFIC and with respect to gain
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from the sale or disposition of stock of the PFIC. A United
States shareholder of a PFIC is subject to different rules
depending on whether the shareholder makes an election to treat
the corporation as a "Qualified Electing Fund" (a "QEF election")
for the first taxable year of the shareholder that includes any
part of a taxable year of the corporation for which it is a PFIC
(a "timely QEF election"). For this purpose, a person may be
treated as a shareholder of the Company if that person owns a
warrant entitling him to acquire Shares (a "Warrant").
A United States Holder who makes a timely QEF election (an
"Electing Holder") must report for federal income tax purposes
his pro rata share of the "ordinary earnings" (i.e., the net
operating income) and the net capital gain, if any, of the
Company for the taxable year of the Company that ends with or
within the taxable year of the Electing Holder. The "net capital
gain" of the Company is any excess of any net long-term capital
gains over net short-term capital losses of the Company and is
reported by the Electing Holder as long-term capital gain. Any
net operating losses or net capital losses of the Company do not
pass through to the Electing Holder and do not offset any
ordinary earnings or net capital gains of the Company reportable
to Electing Holders in subsequent years. Dividends received from
the Company by an Electing Holder are excluded from the Electing
Holder's gross income to the extent of the Electing Holder's
inclusions of "ordinary earnings" and "net capital gain." Any
gain or loss recognized by an Electing Holder who is treated
under Section 302 of the Code as having sold Shares in the
exchange will be treated as capital gain or loss. In addition,
with respect to a United States Holder who has in effect at the
time of the exchange an election under Section 1294 of the Code
to extend the time for payment of tax on the undistributed
earnings of the Company, participation in the exchange will
terminate that election with respect to the undistributed
earnings that are attributable to the exchanged Shares.
A United States Holder who does not make a timely QEF
election (a "Non-Electing Holder") is subject to special
rules with respect to (i) any "excess distribution" (generally,
the portion of any distributions received by the Non-Electing
Holder on the Shares in a taxable year in excess of 125% of the
average annual distributions received by the Non-Electing Holder
in the three preceding taxable years, or, if shorter, the Non-
Electing Holder's aggregate holding period for the Shares and
Warrants) and (ii) any gain realized on the sale or other
disposition of Shares. Under these rules, (i) the excess
distribution or gain is allocated ratably over the Non-Electing
Holder's aggregate holding period for the Shares and Warrants;
(ii) the amount allocated to the current taxable year is taxed as
ordinary income; and (iii) the amount allocated to each of the
other taxable years is subject to tax at the highest rate of tax
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in effect for the applicable class of taxpayer for that year and
an interest charge for the deemed deferral benefit is imposed
with respect to the resulting tax attributable to each such other
taxable year. These penalties do not apply to a pension or
profit sharing trust or other tax-exempt organization that did
not borrow money or otherwise utilize leverage in connection with
its acquisition of Shares. Accordingly, the ordinary income
treatment and interest charges as described in this paragraph
apply to a Non-Electing Holder with regard to any gain recognized
or dividend received by the holder, as the case may be.
For taxable years beginning after 1997, a United States
Holder could elect to "mark to market" the Shares if the Shares
are listed on the AMEX. Under such an election, the United
States Holder would include in income each year an amount equal
to the excess, if any, of the fair market value of the Shares as
of the close of the taxable year over the United States Holder's
adjusted basis in the Shares. The United States Holder would be
allowed a deduction for the excess, if any, of the adjusted basis
of the Shares over the fair market value of the Shares as of the
close of the taxable year, but only to the extent of any net
mark-to-market gains included by the United States Holder for
prior taxable years. The United States Holder's adjusted basis
in the Shares would be adjusted to reflect the amounts included
in, or deducted from, income under this election. Amounts
included in income pursuant to this election, as well as gain
realized on the sale or other disposition of the Shares, would be
treated as ordinary income. The deductible portion of any mark-
to-market loss, as well as loss realized on the sale or other
disposition of the Shares to the extent that such loss does not
exceed the net mark-to-market gains previously included by the
United States Holder, would be treated as ordinary loss. A
United States Holder generally would not be subject to the
deferred tax and interest charge provisions discussed above with
respect to Shares for which a mark-to-market election has been
made. Accordingly, a United States Holder who has in effect a
"mark to market" election with respect to its Shares at the time
of the exchange will be subject to ordinary income treatment as
described in this paragraph with respect to any gain recognized
or dividend received by the holder, as the case may be.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH SHAREHOLDER IS URGED TO CONSULT SUCH
HOLDER'S OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO SUCH HOLDER OF THE OFFER, INCLUDING THE
APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
United States Federal Income Tax Backup Withholding. Under
the US United States federal income tax backup withholding rules,
unless an exemption applies under the applicable law and
regulations, 31% of the gross proceeds payable to a shareholder
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or other payee pursuant to the Offer must be withheld and
remitted to the IRS, unless the shareholder or other payee
provides its taxpayer identification number (employer
identification number or social security number) to the US
Depositary (as payor) and certifies under penalties of perjury
that such number is correct. Therefore, each tendering
shareholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide
the information and certification necessary to avoid backup
withholding, unless such shareholder otherwise establishes to the
satisfaction of the US Depositary that it is not subject to
backup withholding. If the US Depositary is not provided with
the correct taxpayer identification number, the United States
Holder (as defined in Section 13 herein) also may be subject to a
penalty imposed by the IRS. If withholding results in an
overpayment of taxes, a refund may be obtained from the IRS.
Certain "exempt recipients" (including, among others, all
corporations and certain Non-United States Holders (as defined in
Section 13 herein)) are not subject to these backup withholding
and information reporting requirements. In order for a Non-
United States Holder to qualify as an exempt recipient, that
shareholder must submit an IRS Form W-8 or a Substitute Form W-8,
signed under penalties of perjury, attesting to that
shareholder's exempt status. Such statements can be obtained
from the US Depositary. See Instruction 14 of the Letter of
Transmittal.
TO PREVENT UNITED STATES FEDERAL INCOME TAX BACKUP
WITHHOLDING EQUAL TO 31% OF THE GROSS PAYMENTS MADE TO
SHAREHOLDERS FOR SHARES PURCHASED PURSUANT TO THE OFFER, EACH
SHAREHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM
SUCH BACKUP WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE
SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND PROVIDE
CERTAIN OTHER INFORMATION BY COMPLETING THE SUBSTITUTE FORM W-9
INCLUDED AS PART OF THE LETTER OF TRANSMITTAL.
14. Extension of Offer; Termination; Amendment.
The Company expressly reserves the right, in its sole
discretion, at anytime and from time to time, and regardless of
whether or not any of the events set forth in Section 6 shall
have occurred or shall be deemed by the Company to have occurred,
to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any
Shares by giving oral or written notice of such extension to the
US Depositary and Norwegian Depositary and making a public
announcement thereof. The Company also expressly reserves the
right, in its sole discretion, to terminate the Offer and not
accept for payment or pay for any Shares not theretofore accepted
for payment or paid for or, subject to applicable law, to
postpone payment for Shares upon the occurrence of any of the
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conditions specified in Section 6 hereof by giving oral or
written notice of such termination or postponement to the US
Depositary and Norwegian Depositary and making a public
announcement thereof. The Company's reservation of the right to
delay payment for Shares which it has accepted for payment is
limited by Rule 13e-4(f)(5) promulgated under the Exchange Act,
which requires that the Company must pay the consideration
offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with
applicable law, the Company further reserves the right, in its
sole discretion, and regardless of whether any of the events set
forth in Section 6 shall have occurred or shall be deemed by the
Company to have occurred, to amend the Offer in any respect
(including, without limitation, by decreasing or increasing the
consideration offered in the Offer to holders of Shares or by
decreasing or increasing the number of Shares being sought in the
Offer). Amendments to the Offer may be made at any time and from
time to time effected by public announcement thereof, such
announcement, in the case of an extension, to be issued no later
than 3:00 p.m., Oslo time, and 9:00 a.m., New York City time, on
the next business day after the last previously scheduled or
announced Expiration Date. Any public announcement made pursuant
to the Offer will be disseminated promptly to shareholders in a
manner reasonably designed to inform shareholders of such change.
If the Company materially changes the terms of the Offer or
the information concerning the Offer, or if it waives a material
condition of the Offer, the Company will extend the Offer to the
extent required by Rules 13e-4 (d)(2) and 13e-4(e)(2) promulgated
under the Exchange Act. These rules require that the minimum
period during which an offer must remain open following material
changes in the terms of the Offer or information concerning the
Offer (other than a change in price or a change in percentage of
securities sought) will depend on the facts and circumstances,
including the relative materiality of such terms or information.
If (i) the Company increases or decreases the price to be paid
for Shares, the number of Shares being sought in the Offer or the
Dealer Manager's soliciting fees and, in the event of an increase
in the number of Shares being sought, such increase exceeds 2% of
the outstanding Shares, and (ii) the Offer is scheduled to expire
at any time earlier than the expiration of a period ending on the
tenth business day from, and including, the date that such notice
of an increase or decrease is first published, sent or given in
the manner specified in this Section 14, the Offer will be
extended until the expiration of such period of ten business
days. For the purposes of the Offer, a "business day" means any
day other than a Saturday, Sunday or bank holiday and consists of
the time period from 12:01 a.m. through 12:00 midnight, New York
City time or Oslo time.
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15. Fees and Expenses.
The Company has retained Lazard Freres & Co. LLC and Lazard
Capital Markets, to act as the Dealer-Managers in connection with
the Offer for which it will receive reasonable and customary
fees, and the Company will reimburse its their out of pocket
expenses including attorneys fees. In addition, the Company has
agreed to indemnify the Dealer-Managers against certain
liabilities and expenses, including certain liabilities under the
federal securities laws.
ChaseMellon Shareholder Services, L.L.C. and DnB Markets
L.L.C has have been retained to act as the Information Agents in
the US and Norway, respectively, in connection with the Offer.
The Information Agents may contact holders of Shares by mail,
telephone, telex, telegraph and personal interview and may
request brokers, dealers, commercial banks, trust companies and
other nominees to forward the Offer material to beneficial
owners. In addition, ChaseMellon Shareholder Services, L.L.C.
has been retained as the US Depositary and Den norske Bank ASA
has been retained as the Norwegian Depositary. The Information
Agents, the US Depositary and the Norwegian Depository Agent each
will receive reasonable and customary compensation for their
services, will be reimbursed for certain reasonable out-of-pocket
expenses and will be indemnified against certain liabilities and
expenses in connection therewith, including certain liabilities
under the federal securities laws.
The Offer will be made through Lazard Freres & Co. LLC as
the Dealer-Manager, or one or more registered brokers or dealers
that are licensed under the laws of each such jurisdiction in
jurisdictions in the United States in which it must be made
through a registered broker-dealer. The Company will not pay any
fees or commissions to any broker or dealer or other person for
soliciting tenders of Shares pursuant to the Offer (other than
the Information Agent). Brokers, dealers, commercial banks,
trust companies or other persons will be reimbursed by the
Company, upon request, for reasonable and customary clerical and
mailing expenses incurred by them in forwarding offering
materials to their customers.
It is estimated that the expenses incurred by the Company in
connection with the Offer will be approximately $1,000,000. The
Company will be responsible for paying all expenses, including
fees for the Dealer-Managers, U.S. Depositary, Norwegian
Depositary, Information Agents, and the printing, filing, mailing
and legal fees.
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16. Overseas Tender Procedures, Currency Risk and Tax
Consequences.
The making of the Offer in, or to certain persons who are
citizens, residents or nationals of, jurisdictions outside the
United States may be prohibited or affected by the laws of the
relevant overseas jurisdiction. Holders of Shares who are
citizens, residents or nationals of jurisdictions outside the
United States should inform themselves about and observe any
applicable legal requirements. It is the responsibility of any
such holder of Shares wishing to accept the Offer to satisfy
himself as to the full observance of the laws of the relevant
jurisdiction in connection therewith, including the obtaining of
any governmental, exchange control or other consents which may be
required, compliance with other necessary formalities and the
payment of any issue, transfer or other taxes or duties in such
jurisdiction. Any such holder of Shares will be responsible for
payment of any issue, transfer or other taxes or duties or other
requisite payments due in such jurisdiction by whomsoever payable
and Company or one of its associates and any such person acting
on their behalf shall be entitled to be fully indemnified and
held harmless by such holder of Shares for any issue, transfer or
other taxes or duties as the Company or one of its associates or
such person may be required to pay.
Holders of Shares Entered in the VPS. Holders of Shares
entered in the VPS should deliver their Letters of Transmittal
and related documents to the Norwegian Depositary. In all other
respects, the provisions of Section 3 shall apply. The
provisions of this Section and/or other terms of the Offer
relating to overseas holders of Shares may be waived, varied or
modified as regards specific holders of Shares by the Company.
Reference in this Section to holders of Shares shall include
references to the person or persons executing a Letter of
Transmittal and, in the event of more than one person executing a
Letter of Transmittal, the provisions of this Section shall apply
to them jointly and severally.
The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in
which the making of the Offer or the acceptance thereof would not
be in compliance with the laws of such jurisdiction.
Payments to holders of Shares that are registered entered in
the VPS will be made in Norwegian Krone.
Holders of such Shares will receive funds on the following
basis:
THE ACTUAL AMOUNT OF FUNDS RECEIVED WILL DEPEND UPON THE
EXCHANGE RATE PREVAILING ON THE DATE ON WHICH FUNDS ARE MADE
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AVAILABLE TO THE RELEVANT PAYMENT AGENT BY IN US DOLLARS AND THE
COST OF THE NORWEGIAN DEPOSITARY TO CONVERT US DOLLARS TO
NORWEGIAN KRONE. HOLDERS OF SHARES SHOULD BE AWARE THAT THE US
DOLLAR/NORWEGIAN KRONE EXCHANGE RATE WHICH IS PREVAILING AT THE
DATE OF DISPATCH OF PAYMENT MAY BE DIFFERENT FROM THAT PREVAILING
ON THE DATE ON WHICH FUNDS ARE MADE AVAILABLE TO THE RELEVANT
PAYMENT AGENT BY THE COMPANY. IN ALL CASES, FLUCTUATIONS IN THE
U.S. DOLLAR/NORWEGIAN KRONE EXCHANGE RATE AND THE COST OF
CONVERSION ARE AT THE RISK OF ACCEPTING HOLDERS OF SHARES. THE
COMPANY SHALL HAVE NO RESPONSIBILITY WITH RESPECT TO THE CASH
CONSIDERATION PAYABLE TO HOLDERS OF SHARES ENTERED IN THE VPS
OTHER THAN TO MAKE PAYMENT IN US DOLLARS.
The Company has been advised that, under current Norwegian
practice, the taxation treatment of the acceptance of the Offer
for holders of Shares will depend on the particular circumstances
of such holders of Shares. The following summary is applicable
only to holders of Shares who are the beneficial owners of their
Shares, who hold their Shares as an investment, and who are
resident in Norway for tax purposes.
A valid acceptance of the Offer by a holder of Shares will
constitute a disposal, or part disposal, for the purpose of
taxation of capital gains in Norway. Such a disposal or part
disposal, may, depending on such holder's particular
circumstances, give rise to a liability to taxation of capital
gains.
Any holder of Shares who is in any doubt about his or her
own tax position or who is subject to taxation in any
jurisdiction other than the US is urged to consult his or her
independent professional adviser immediately.
See Section 13 with respect to the backup withholding tax
requirements for Non-United States Holders.
17. Miscellaneous.
The Company is not aware of any jurisdiction where the
making of the Offer is not in compliance with applicable law. If
the Company becomes aware of any jurisdiction where the making of
the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law.
If, after such good faith effort, the Company cannot comply with
such law, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares residing in
such jurisdiction. In any jurisdiction the securities or blue
sky laws of which require the Offer to be made by a licensed
broker or dealer, the Offer is being made on the Company's behalf
by Lazard Freres & Co. LLC, as Dealer-Manager, or one or more
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registered brokers or dealers licensed under the laws of such
jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations
under the Exchange Act, the Company has filed with the Commission
an Issuer Tender Offer Statement on Schedule 13E-4 which contains
additional information with respect to the Offer. Such Schedule
13E-4, including the exhibits and any amendments thereto, may be
examined, and copies may be obtained, at the same places and in
the same manner as is set forth in Section 9 with respect to
information concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
MAKE ANY REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER
DEALER-MANAGERS IN CONNECTION WITH THE OFFER OTHER THAN THOSE
CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE DEALER-MANAGER.
NORDIC AMERICAN TANKER SHIPPING LIMITED
October 29, 1998
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Facsimile copies of the Letter of Transmittal will be
accepted from Eligible Institutions. The Letter of
Transmittal and certificates for Shares and any other
required documents should be sent or delivered
by each shareholder or such shareholder's broker,
dealer, commercial bank, trust company or nominee to
the US Depositary at one of its addresses set forth below.
The US Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail:
ChaseMellon Shareholder Services, L.L.C.
Post Office 3301
South Hackensack, NJ 07606
Attn: Reorganization Department
By Overnight Courier:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Mail Drop - Reorg
Ridgefield Park, NJ 07660
Attn: Reorganization Department
By Hand:
ChaseMellon Shareholder Services, L.L.C.
120 Broadway, 13th Floor
New York, NY 10271
Attn: Reorganization Department
By Facsimile Transmission:
(for Eligible Institutions Only)
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
Toll Free Number:
(800) 774-5469
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The Norwegian Depositary for the Offer is:
Den norske Bank ASA
By Mail:
Den norske Bank ASA
Registrars Dept.
P.O. Box 1171 Sentrum
0107 Oslo
Norway
By Overnight Courier, Hand:
Den norske Bank ASA
Registrars Dept.
Stranden 21, Aker Brygge
0250 Oslo
Norway
Facsimile: +47 22 48 29 80
Confirm by Telephone: +47 22 48 35 86
Any questions or requests for assistance or additional
copies of the Offer to Purchase, the Letter of Transmittal or the
Notice of Guaranteed Delivery may be directed to the Information
Agents or the Dealer-Managers at the telephone numbers and
locations listed below. Shareholders may also contact their
local broker, dealer, commercial bank, trust company or nominee
for assistance concerning the Offer. To confirm delivery of
Shares, shareholders are directed to contact the US Depositary or
the Norwegian Depositary.
The Information Agent for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
450 West 33rd Street
New York, New York 10001
Banks and Brokers (call collect) (212) 273-8080
All others (call toll free) (800) 774-5469
The Dealer-Manager for the Offer is:
Lazard Freres & Co.
30 Rockefeller Plaza
New York, NY 10020
(212) 632-6717 (call collect)
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The International Dealer-Manager for the Offer is:
Lazard Capital Markets
21, Moorfields
London, EC2P 2HT
+44 171-588-3000
The Scandinavian Information
Agent for the Offer is:
DnB Markets
Stranden 49
N-0170 Oslo, Norway
+47-22-94-88-89
October 29, 1998
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