Business Context and Reporting Period
This Form 6-K filing by Nordic American Tankers Limited (NAT) covers the month of April 2012. The document serves as a Notice of Annual General Meeting and Proxy Statement for a meeting scheduled for May 21, 2012, in Hamilton, Bermuda. The filing solicits shareholder votes on the election of directors, the appointment of independent auditors, and a significant capital structure adjustment.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, or debt figures for the current period. It references the audited financial statements for the year ended December 31, 2011, which are available in the separate 2011 Annual Report.
- Outstanding Shares: 52,915,639 common shares (as of April 10, 2012).
- Par Value: $0.01 per share.
- Aggregate Share Capital: $529,156.
- Share Premium Account: Approximately $75.5 million.
- Dividend Policy: Quarterly dividends based on net operating cash flow (net income plus depreciation and non-cash charges) divided by weighted average shares, subject to solvency tests under Bermuda law.
Material Changes and Proposals
The primary material change proposed is a reduction of the Company's share premium account by approximately $75.5 million to zero. This is a non-cash accounting adjustment intended to reclassify the surplus to the contributed surplus account.
- Purpose: To increase the Company's ability to declare and distribute dividends under Bermuda law, as share premium is currently not available for dividend payments.
- Impact: The reduction will not result in an immediate distribution to shareholders but will provide the Board with greater flexibility to declare dividends when the Company is solvent and has available cash.
- Implementation: A notice of the reduction is expected to be published on or about June 1, 2012.
Guidance, Outlook, and Risks
The filing contains no specific financial guidance or market outlook for future periods. Management commentary focuses on the mechanics of the proposed capital reduction and the importance of shareholder voting.
- Risks/Contingencies: The Company notes that under Bermuda law, dividends cannot be declared if there are reasonable grounds to believe the Company would be unable to pay liabilities as they become due or if the realizable value of assets would be less than liabilities.
- Auditor Appointment: The Board proposes appointing Deloitte AS as the independent auditor for the ensuing year.
- Director Election: Seven directors are nominated for re-election, including Chairman and CEO Herbjørn Hansson.
Investor Verification Checklist
- Verify the outcome of the shareholder vote on the $75.5 million share premium reduction at the May 21, 2012 meeting.
- Review the full 2011 Annual Report (available at www.nat.bm) for detailed revenue, profit, and debt metrics not included in this proxy statement.
- Confirm the publication of the capital reduction notice in an appointed newspaper as required by Bermuda law.
- Monitor future dividend declarations to assess the practical impact of the share premium reduction on cash distributions.