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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November, 1998
NORDIC AMERICAN TANKER SHIPPING LIMITED
(Translation of registrant's name into English)
Cedar House
41 Cedar Avenue
Hamilton HMEX
Bermuda
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing
the information to the commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
Yes No X
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INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Set forth herein are the Letter from the Chairman,
Notice of Special General Meeting and Proxy Statement of Nordic
American Tanker Shipping Limited (the "Company"), as the same
were first mailed on October 30, 1998 to the holders of the
Company's common shares, par value $0.01.
ADDITIONAL INFORMATION
The British Petroleum Company p.l.c. files annual
reports on Form 20-F (File No. 1-6262) and periodic reports on
Form 6-K with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended.
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[NATS LOGO]
October 29, 1998
TO THE SHAREHOLDERS OF
NORDIC AMERICAN TANKER SHIPPING LIMITED
Enclosed are a Notice of a Special General Meeting of
Shareholders ("Notice") of Nordic American Tanker Shipping
Limited (the "Company") which will be held at the officers of
Seward & Kissel, One Battery Park Plaza, 19th Floor, New York,
New York on November 30, 1998 at 10:00 a.m. (New York City time),
and related materials.
At this Special General Meeting (the "Meeting"),
shareholders of the Company will consider and vote upon proposals
to (i) amend the Bye-Laws of the Company to allow the Company to
incur debt in an amount up to US$30,000,000 to be used to
purchase its Common Shares, $0.01 par value per share (the
"Shares"), pursuant to a "Dutch Auction" tender offer,
(ii) encourage the Board of Directors to look into and explore
potential opportunities with major oil companies to secure
charter arrangements for additional ships similar to the
arrangements with the current Vessels and (iii) make a technical
amendment to Bye-Law 87. Adoption of Proposals One and Three
requires the affirmative vote of holders of two-thirds of the
Company's outstanding Shares. As Proposal Two is non-binding,
that proposal only requires the affirmative vote of a majority of
the holders of the Shares present and voting at the Meeting.
Concurrently with the mailing of this letter, the
Company has commenced a "Dutch Auction" tender offer (the
"Offer") to purchase up to 1,870,967 of its Shares from Existing
shareholders. Documents related to the Offer are also enclosed.
The closing of the Offer and acceptance of Shares for payment is
conditioned on the approval by the Company's shareholders of
Proposal One to amend the Bye-Laws to allow the Company to incur
debt. The price will not be in excess of $15.50 nor less than
$11.50 per Share. The "Dutch Auction" tender offer procedure
allows you to select the price within the specified price range
at which you are willing to sell all or a portion of your Shares
to the Company. Alternatively, this procedure allows you to
elect to sell all or a portion of your Shares to the Company at a
price determined by the "Dutch Auction" process. The Company
reserves the right to purchase additional Shares.
Based upon the number of Shares tendered and the prices
specified by the tendering shareholders, the Company will
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determine the since per Share price within the range that will
allow it to buy 1,870,967 Shares (or such lesser number of Shares
that are validly tendered). If Proposal One to amend the
Bye-Laws to allow the Company to incur debt is not approved, the
Company will withdraw the Offer. Approval of Proposal One to
amend the Bye-Laws to incur debt, however, is not conditioned on
approval of the other two proposals.
On October 28, 1998, the last trading day prior to the
announcement and commencement of the Offer, the closing price per
Share for the Company's Shares on the American Stock Exchange
("AMEX") was $11 7/8 and on October 8, 1998, the last trading day
on the Oslo Stock Exchange ("OSE") on which a transaction in the
Shares was reported, the closing price for the Shares was NOK
125. Any shareholder tendering Shares directly to the US
Depositary or Norwegian Depositary, whose shares are purchased in
the Offer will receive the net purchase price in cash and will
not incur the usual transaction costs associated with open-market
sales. Any shareholder owning an aggregate of fewer than 100
Shares whose Shares are properly tendered directly to the US
Depositary and purchased pursuant to the Offer will avoid the
applicable odd lot discounts payable on sales of odd lots on the
AMEX.
The Offer is explained in detail in the enclosed Offer
to Purchase and Letter of Transmittal. I encourage you to read
these materials carefully before making any decision with respect
to the Offer. The instructions on how to tender Shares are also
explained in detail in the accompanying materials.
Neither the Company nor the Board of Directors makes any
recommendation to shareholders as to whether to tender or refrain
from tender their Shares. Each shareholder must make the
decision whether to tender Shares and, if so, how many Shares and
at which price or prices Shares should be tendered. The Company
has been advised that none of its directors or executive officers
intends to tender any Shares pursuant to the Offer. Similarly,
Ugland Nordic Shipping ASA, the Company's Manager, has advised
the Company that it does not intend to tender any Shares.
If you do not wish to participate in the Offer, you do
not need to take any action with respect to the Offer. Whether
or not you participate in the Offer, the Company's Board of
Directors believes that the proposed amendments to the Bye-Laws
and corresponding incurrence of debt by the Company upon the
terms and conditions set forth in the accompanying Proxy
Statement are in the best interests of our shareholders.
Therefore, the Board recommends that you vote in favor of
amending the Bye-Laws of the Company. Ugland Nordic Shipping
ASA, which beneficially owns approximately 15% of the Shares, has
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indicated that it will vote its Shares in favor of all three
proposals.
You are cordially invited to attend the Meeting in
person. Whether or not you plan to attend the Meeting, please
sign, date and return as soon as possible the enclosed proxy in
the enclosed stamped, self-addressed envelope. If you attend the
Meeting, you may revoke your proxy and vote your shares in
person.
Please note that the Offer is scheduled to expire at
11:00 p.m., Oslo time, and at 5:00 p.m., New York City time, on
November 30, 1998, unless extended by the Company. Questions
regarding the Offer should not be directed to the Company but
should instead be directed to ChaseMellon Shareholder Services
L.L.C., the Information Agent, DnB Markets, the Scandinavian
Information Agent, Lazard Freres & Co. LLC, the Dealer-Manager,
or Lazard Capital Markets, the International Dealer-Manager, at
their respective addresses and telephone numbers set forth on the
back cover of the Offer to Purchase.
Very truly yours,
Herbjorn Hansson
Chairman and Chief Executive Officer
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NORDIC AMERICAN TANKER SHIPPING LIMITED
NOTICE OF SPECIAL GENERAL MEETING OF SHAREHOLDERS
NOVEMBER 30,1998
NOTICE IS HEREBY given that a Special General Meeting of
the shareholders of Nordic American Tanker Shipping Limited (the
"Company") will be held on November 30, 1998 at 10:00 a.m., New
York City time, at the offices of Seward & Kissel, One Battery
Park Plaza, 19th Floor, New York, New York, for the following
purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
1. To amend the Company's Bye-Laws to enable the
Company to (i) incur debt of up to US$30,000 000 in the aggregate
to be used by the Company to purchase its Common Shares, $0.01
par value per share (the "Shares") and furnish related security;
and (ii) bear the costs associated with the incurrence of debt,
the current proposals and any future proposals by the Board of
Directors to amend the Bye-Laws, and the offer by the Company to
purchase the Shares.
2. To seek shareholder support for the Board of
Directors to look into and explore potential opportunities with
major oil companies to secure charter arrangements for additional
ships similar to the arrangements with the current Vessels;
3. To make a technical amendment to Bye-Law 87.
4. To transact other such business as may properly
come before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business
on October 28, 1998, as the record date for the determination of
the shareholders entitled to receive notice and to vote at the
Special General Meeting or any adjournment thereof.
Ugland Nordic Shipping ASA, which beneficially owns
approximately 15% of the Shares, has indicated that it will vote
its Shares in favor of all three proposals.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL GENERAL
MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
PROXY IN THE ENCLOSED ENVELOPE, WHICH DOES NOT REQUIRE POSTAGE IF
MAILED IN THE UNITED STATES. THE VOTE OF EVERY SHAREHOLDER IS
IMPORTANT AND YOUR COOPERATION IN RETURNING YOUR EXECUTED PROXY
PROMPTLY WILL BE APPRECIATED. ANY SIGNED PROXY RETURNED AND NOT
COMPLETED WILL BE VOTED BY MANAGEMENT IN FAVOR OF ALL PROPOSALS
PRESENTED BY MANAGEMENT.
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IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND
VOTE IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
John Campbell
Secretary
October 29, 1998
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NORDIC AMERICAN TANKER
SHIPPING LIMITED
CEDAR HOUSE
41 CEDAR AVENUE
HAMILTON HM EX, BERMUDA
________________
PROXY STATEMENT
FOR
SPECIAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 30,1998
_________________
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board
of Directors ("Board" or "Directors") of Nordic American Tanker
Shipping Limited, a Bermuda company (the "Company"), for use at
the Special General Meeting of Shareholders to be held at the
offices of Seward & Kissel, One Battery Park Plaza, 19th Floor,
New York, New York, on November 30, 1998, at 10:00 a.m. in New
York City time (the "Meeting"), or at any adjournment or
postponement thereof, for the purposes set forth herein and in
the accompanying Notice of Special Meeting of Shareholders. This
Proxy Statement and the accompanying form of proxy are expected
to be mailed to shareholders of the Company entitled to vote at
the Special Meeting on or about October 29, 1998.
VOTING RIGHTS AND OUTSTANDING SHARES
The outstanding securities of the Company on October 28,
1998 (the "Record Date"), consisted of 11,813,850 common shares,
par value $0.01 (the "Shares"). Each shareholder of record at
the close of business on the Record Date is entitled to one (1)
vote for each Share then held. The Shares represented by any
proxy in the enclosed form will be voted in accordance with the
instructions given on the proxy if the proxy is properly executed
and is received by the Company prior to the close of voting at
the Meeting or any adjournment or postponement thereof. Any
proxies returned without instructions will be voted for the
proposals set forth on the Notice of Special Meeting of
Shareholders.
The Shares are listed on the American Stock Exchange
("AMEX") under the symbol "NAT" and on the Oslo Stock Exchange
("OSE") under the symbol "NAT".
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REVOCABILITY OF PROXEES
A shareholder giving a proxy may revoke it at any time
before it is exercised. A proxy may be revoked by filing with
the Secretary of the Company at the Company's principal office,
Cedar House, 41 Cedar Avenue, Hamilton HM EX, Bermuda, a written
notice of revocation by a duly executed proxy bearing a later
date, or by attending the Meeting and voting in person.
PROPOSALS
PROPOSAL ONE - AMENDMENT OF THE COMPANY'S
BYE-LAWS TO INCUR DEBT TO PURCHASE ITS SHARES
The Board has determined to submit to the Company's
shareholders a proposal to amend the Company's Bye-Laws to allow
the Company to incur debt for borrowed money of up to
US$30,000,000 in the aggregate to fund a "Dutch Auction" tender
offer in which the Company would purchase the Company's
outstanding Shares at a single price per Share not in excess of
$15.50 nor less than $11.50, and related fees and expenses. The
terms and conditions of the "Dutch Auction" tender offer are set
forth in the Offer to Purchase dated October 29, 1998, and in the
related Letter of Transmittal, which together as may be amended
constitute the "Offer." The Offer is conditioned upon, among
other things, the affirmative vote of holders of two-thirds of
the Company's outstanding Shares adopting and approving Proposal
One. The complete text of the Offer to Purchase, including
exhibits, has been mailed with this Proxy Statement and is
incorporated by reference. The Offer to Purchase should be read
in its entirety.
The Board proposes to insert the following amendment in
Bye-Law 84 in order to expand the purposes of the Company to
encompass the incurrence of debt for borrowed money and the
purchase by the Company of its 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 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 refinancing or replacement thereof, costs
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
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and costs 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.
If Proposal One is not approved, the Company will withdraw the
Offer.
Discussion
Background. The Company was organized in June, 1995,
for the purpose of having constructed, owning, chartering and
disposing of three Suezmax oil tankers (the "Vessels") chartered
to BP Shipping Limited (the "Charterer"), a wholly-owned
subsidiary of the British Petroleum Company plc, on separate
"hell and high water" bareboat charters (the "Charters") with
original seven year terms (the "Original Terms"), plus seven one-
year extension options on the part of the Charterer. The Company
funded the down payments in respect of the construction of the
Vessels primarily by means of an initial public offering of
warrants (the "Warrants") in September, 1995.
On September 30, 1997, the Warrants became exercisable.
The Company funded the balance due to the builder of the Vessels
by means of payments received from holders of the Warrants on
their exercise, together with the purchase of 38,500 Common
Shares in respect of unexercised warrants by Silver Island
Corporation n.v. The Vessels were constructed and delivered in
1997. The Charterer commenced payment of charterhire to the
Company on October 1, 1997.
The business activities of the Company are limited by
its Bye-Laws to the acquiring, leasing, chartering and disposing
of the three Vessels and any necessary activities in connection
with or incidental to the foregoing. They do not permit the
Board to cause the Company to incur debt for borrowed money.
However, the Company's Bye-Laws may be amended upon the
affirmative vote of holders of two-thirds of the outstanding
Shares. In order to effectuate the purchase of Shares pursuant
to the Offer, the Company's Board of Directors voted unanimously
to authorize and approve the Offer, which provides for the
adoption by the Company of Proposal One.
Summary of the Offer. Under the terms of the Offer, a
tendering shareholder has two choices for setting a price at
which he is willing to tender his shares: (1) the shareholder
must specify in the Letter of Transmittal a price within a range
not in excess of $15.50 nor less than $11.50 per Share in
increments of $.125 at which he desires to tender his Shares; or
(2) the tendering shareholder must check the appropriate box in
the Letter of Transmittal, that he desires to have the Company
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select the price per Share for his Shares within the range under
the "Dutch Auction" process. At the expiration of the offer
period, the Company will determine the single per Share price,
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 in excess of
US$29,000,000. All Shares properly tendered prior to the
expiration of the Offer (1) at prices at or below the Purchase
Price or (2) where the Shareholder has chosen the Company to
select the Purchase Price, and (3) not withdrawn, will be
purchased at the Purchase Price, upon the terms and subject to
the conditions of the Offer, including the priority and proration
provisions. The 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 will reserve the right, in its
sole discretion, to purchase more than 1,870,967 Shares pursuant
to the Offer.
Summary of the Loan. 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 Proposal
One by an affirmative vote of not less than two-thirds of the
shareholders of the Company, 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 a loan facility in the principal amount of $30
million (the "Loan") available to the Company. The availability
of the Loan will be conditioned, among other things, on the
provision by the Company of binding and valid first priority
mortgages over the Vessels and assignments of hire in favor of
the Lender. The Loan will bear interest payable quarterly at a
rate per annum equal to the London Inter-bank Offered Rate
("LIBOR") plus the applicable margin rate of .525%. On drawdown
of the Loan, the Company will also enter into an interest rate
hedging arrangement. At current rates, the Company expects the
interest under an interest rate hedging arrangement to be fixed
at approximately 5.1% per annum. The Company cannot predict
which fixed rate it will actually obtain. Principal on the loan
will be repaid in fall in November, 2004, unless the Loan
Agreement is refinanced or extended on terms deemed reasonable to
the Company.
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Miscellaneous. In connection with amending the Bye-Laws
to allow the Company to incur debt, Proposal One would empower
the Board to amend the Management Agreement to allow the costs of
this proxy solicitation and any future proxy solicitation on
behalf of the Board, the Offer and associated costs to be borne
by the Company. Currently, under the Management Agreement the
Manager is obligated to pay all expenses of the Company not
specifically designated as costs to be paid by the Company. Such
costs are currently limited to payment of the management fee,
shipbroker fees, insurance premiums and costs associated with
litigation or investigations. If Proposal One is not approved,
the Manager has indicated that it will bear the costs of this
proxy solicitation. If Proposal One is approved, the Company
will pay for this proxy solicitation, the negotiation of the Loan
and the Offer, (including legal fees and printing and
distribution costs) out of charterhire received from the
Charterer and the funds received from the Loan. The Company will
also bear the costs of any future proxy solicitation approved by
the Board. Currently, the Bye-Laws and Management Agreement
would require the Manager to incur such costs.
Proposal One also authorizes the Board to further amend
the Management Agreement or amend any other agreements into which
the Company has entered, including the respective Charters in
order to allow the Company to incur debt in accordance with the
Proposal.
Special Considerations
The incurrence of debt and the purchase of Shares by the
Company entail special considerations of which shareholders
should be aware.
Debt service may reduce amounts otherwise available for
distribution to shareholders. While the proceeds of the Loan
would be used to purchase Shares from Shareholders, the terms of
the Loan Agreement would require the Company to make periodic
repayments. However, only interest payments will be required
during the Original Term of the Charters. The term of the Loan
coincides with the Original Term. See "Summary of the Terms."
Such payments may reduce funds otherwise available for future
distributions to shareholders. However, whether future
distributions will be reduced, all other things being equal, will
depend on the number of Shares tendered in the Offer and the
Purchase Price paid for them. While the Company will be obliged
to allocate a portion of its cash flow to interest payments,
there will be fewer Shares outstanding among which to make cash
distributions.
Charterhire payable by the Charterer constitutes the
Company's primary source of cash for distributions. Daily
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charterhire is equal to: (i) a fixed premium 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) 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 ("Additional Hire").
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 directors and officers and
general liability insurance equal to approximately $180,000 per
annum; (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 $1,655,000 per annum (assuming the Loan equals $30
million and interest is fixed at 5.1%) plus annual agents' fees
in the amount of $10,000. If Proposal One is approved, the
Company will use a portion of the proceeds of the Loan, estimated
at $1,000,000, to pay fees and expenses in connection with this
proxy solicitation, negotiation of the Loan, and the Offer. In
addition, the Company would bear costs of future proxy
solicitations approved by the Board of Directors. 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
dividend is payable to holders of record at the close of business
on the record date set therefor as they appear in the share
registry of the Company, as shall be fixed by the Board of
Directors. The amount of dividend payments will depend on the
Company's earnings, financial condition, cash requirements and
availability, the provisions of Bermuda law affecting the payment
of dividends and other factors.
Under Bermuda law, a Company may not declare or pay a
dividend, or make a distribution out of a contributed surplus, if
there are reasonable grounds for believing that, after giving
effect to such payment, (a) the Company will not be able to pay
its liabilities as they fall due, or (b) the realizable- value of
the Company's assets (as reasonably determined by the Board) is
less than an amount equal to the sum of the Company's
liabilities, issued share capital (which equals the product of
the par value of each common share and the number of common
shares then outstanding), and share premium (which equals the
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aggregate amount of consideration paid to the Company for such
common shares in excess of their par value). There can be no
assurance that the realizable value of the Vessels will remain at
a level sufficient to enable the Company to continue to pay
dividends under Bermuda law.
Need to repay principal amount. The Company would be
required to repay the full amount of the Loan, including all
accrued interest and principal, upon the date of 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 initial seven year Original Term) in November, 2004.
Upon the Loan's expiration, the Company will either be required
to refinance the Loan, extend the term of the Loan Agreement or
sell the Vessels to repay the Loan. If the Company is unable to
refinance the Loan or extend the terms of the Loan Agreement, any
distribution available to shareholders upon sale of the Vessels
would be reduced by the amount necessary to repay the Loan. The
Company cannot predict what the market value of each Vessel will
be in 2004. Prices for tankers, such as the Vessels, are subject
to - numerous factors beyond the ability of the Company to
predict, including the price for oil and global economic
conditions. If the Vessels were to be sold, depending upon the
price received by the Company upon sale of the Vessels, it is
possible that no funds would be available for distribution to
shareholders.
Charterer's exercise of an option period. It is
anticipated that the Loan's maturity will coincide with the end
of the Original Term At that time, the Company will be obligated
to repay or refinance the Loan. Even if the Charterer exercises
any option to extend the Charters, there is a risk that the
Company will be unable to refinance the Loan on terms acceptable
to the Company and the Company could be forced to sell one or
more of the Vessels to repay the Loan. In such a case, there is
likewise no assurance that the price received upon sale of the
Vessels would allow the Company to fund a distribution to
shareholders. (See "Need to repay principal amount" above).
Consequences of Loan default. It is anticipated that
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 the Vessels by the Company. As such,
the equity of the shareholders' investment in the Company would
likely be reduced to zero.
Effect on Liquidity. 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.
Nonetheless, the Company anticipates that there will be a
sufficient -number of Shares outstanding and publicly traded
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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 Company believes that its
purchase of Shares pursuant to the Offer will not result in the
Shares becoming eligible for deregistration under the Securities
Exchange Act of 1934.
Recommendation of Board. The Board has approved the
amendment to the Bye-Laws of the Company as set out in Proposal
One as well as the Commitment Letter from the Lender. The Board
believes 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 believes that the
repurchase of the Shares will enhance shareholder value.
Required Vote. Approval of Proposal One will require
the affirmative vote of holders of two-thirds of the Company's
Shares.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR
OF THE PROPOSAL TO AMEND THE BYE-LAWS.
PROPOSAL TWO - SHAREHOLDER SUPPORT FOR BOARD OF DIRECTORS TO
SEEK NEW CHARTER ARRANGEMENTS
The Board has also decided to submit to the Company's
shareholders a non-binding proposal to encourage the Board of
Directors to look into and explore potential opportunities with
major oil companies to secure charter arrangements for additional
ships similar to the arrangements with the current Vessels. The
proposal does not authorize the Board to take any action on
behalf of the Company and is intended solely to measure
shareholder support for actions by the Board that may lead to
future business opportunities. The Company's business activities
are limited by its Bye-Laws and any actions not already
authorized by the Bye-Laws resulting from the Board's inquiries
must still be approved by the shareholders.
Required Vote. Approval of Proposal Two will require
the affirmative vote of holders of a majority of the Shares
present and voting at the Meeting.
THIS PROPOSAL IS INTENDED ONLY TO MEASURE SHAREHOLDER SUPPORT.
THE BOARD OF DIRECTORS DOES NOT MAKE ANY RECOMMENDATION FOR OR
AGAINST PROPOSAL TWO.
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PROPOSAL THREE - AMENDMENT TO BYE-LAW 87
The Board has decided to submit to the Company's
shareholders a proposal to allow the Board to make a technical
amendment to Bye-Law 87 to correct a typographical error in such
Bye-Law. At present, Bye-Law 87 incorrectly cross-references
Bye-Law 83 instead of Bye-Law 84, which was intended when the
Bye-Laws were first adopted. This proposal would allow the Board
to correct this error in Bye-Law 87 by deleting the cross-
reference to Bye-Law 83 and replacing it with a reference to
Bye-Law 84.
Required Vote. Approval of Proposal Three will require
the affirmative vote of holders of two-thirds of the Company's
Shares.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF
PROPOSAL THREE TO MAKE A TECHNICAL AMENDMENT TO BYE-LAW 87.
SOLICITATION
As described above, if Proposal One is approved, the
cost of soliciting proxies will be borne by the Company. If
Proposal One is not approved, the costs will be borne by the
Manager in accordance with the Management Contract. Solicitation
will be made primarily by mail, but shareholders may be solicited
by telephone, telegraph, or personal contact. The Board may
retain the services of a proxy soliciting firm for soliciting
proxies from those entities holding shares in street name.
EFFECT OF ABSTENTIONS
The affirmative vote of holders of two-thirds of the
outstanding Shares, either voting in person or by proxy, is
necessary to approve Proposal One and Proposal Three. Because
approval by two-thirds of the outstanding Shares is required,
abstentions effectively will be votes against approval of these
Proposals. Abstentions will not be counted in determining
whether Proposal Two has been approved.
VOTE OF MANAGER
The Company has been advised by Ugland Nordic Shipping
ASA, the Manager of the Company, which as of the Record Date
owned 1,762,471 Shares constituting approximately 15% of the
Shares, that the Manager will vote all its Shares in favor of the
Proposals.
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OTHER MATTERS
No other matters are expected to be presented for action
at the Meeting.
By Order of the Directors
John Campbell
Secretary
October 29, 1998
Hamilton, Bermuda
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
NORDIC AMERICAN TANKER SHIPPING LIMITED
(registrant)
Dated: November 4, 1998 By: /s/Herbjorn Hansson
Herbjorn Hansson
President and Chief
Executive Officer
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01318006.AA7
