Aker turns to MarAd to avoid closure
Aker Philadelphia Shipyard Inc. (APSI) may begin a “systematic closure” in March 2010 if it does not receive “short-term credit support from the federal government” of $150 million in the form of a Maritime Administration loan guarantee.
The shipyard’s need for assistance was revealed in a letter dated Sept. 10 to Vice President Joseph Biden from Pennsylvania Gov. Edward Rendell and provided by Rendell’s office.
In the letter Rendell asked the Obama administration to secure “enactment of the necessary authorizing language and reprogramming of funds prior to the end of October. If no help is coming, it is a certainty that APSI will have to take steps that will result in the loss of 1,200 highly skilled manufacturing jobs at a time when we can least afford it.”
Rendell said the yard needs $190 million to build two tankers and has committed $40 million of “at-risk capital” for the two ships. He said the assistance would be short term, with the company expecting to pay off the loads in June and October 2011 when the ships are delivered.
Susan Clark, a spokesman for MarAd, said the agency has “not received any formal request for assistance from Aker Shipyards through any existing programs.”
The yard was founded in 1997 following the closure of the Philadelphia Navy Yard in 1994 when more than 10,000 jobs were eliminated.
Norwegian shipbuilder and engineering company Kvaerner signed an agreement to develop a yard for building commercial ships.
A quasi-governmental authority formed by the U.S. government, Pennsylvania and the city of Philadelphia invested more than $400 million in grants, loans and loan guarantees into the venture. Kvaerner and Aker, another Norwegian shipbuilder that merged with Kvaerner in 2005, made an additional investment of $250 million in items such as tools and training.
The yard, which typically has several ships under construction at any one time, built four containerships for Matson Line from 2000 to 2006 and since that time has delivered 7 identical 46,000 deadweight ton product tankers and has four additional tankers in various stages of construction. The tankers are owned by American Shipping Co., a company that spun off the shipyard in June 2008. They are bareboat chartered to the OSG America affiliate of Overseas Shipholding Group, which operates them for various oil companies such as Shell, BP, Petrobras and Tesoro.
The yard has generally been seen as a rare success story in the moribund U.S. shipbuilding industry, helped, in part, by its success in getting numerous orders for the same type ship. This kind of series building has long been considered a hallmark of successful shipyards because it reduces cost.
Aker Philadelphia Shipyard is a public company, whose stock is listed on the Oslo B'rs. Major shareholders, according to the company’s Web site, include Aker ASA, which owns 50.3 percent of the shares, and Deutsche Bank and Goldman Sachs, which each own about 14 percent of the firm. Just 20 shareholders own 99 percent of the company’s shares. ' Chris Dupin