Business Context and Reporting Period
This Form 6-K filing by Nordic American Tanker Shipping Limited (NAT) relates to the period ending June 30, 2010. The document serves as a notice and proxy statement for the Annual General Meeting of Shareholders scheduled for June 29, 2010. The Company is a Bermuda-based foreign private issuer listed on the NYSE under the symbol "NAT."
Key Financial Metrics
The filing does not contain specific revenue, profit, cash flow, or debt figures for the current period. It references the audited financial statements for the year ended December 31, 2009, which are available separately in the 2009 Annual Report. The following capital structure details are provided:
- Outstanding Shares: 46,898,782 common shares (as of May 26, 2010).
- Par Value: $0.01 per share.
- Aggregate Par Value: $468,988.
- Share Premium: Approximately $136.4 million (excess of price paid over par value).
Material Changes and Proposals
The filing outlines three primary proposals for shareholder approval:
- Election of Directors: Election of seven directors. Two current directors, Torbjørn Gladsø and Andrew W. March, are retiring. The Board intends to appoint Andreas Ove Ugland to the Audit Committee to fill the vacancy left by Mr. Gladsø.
- Appointment of Auditors: Ratification of Deloitte AS as the independent auditors for the ensuing year.
- Reduction of Share Premium: Approval to reduce the Company's paid-up share capital by approximately $136.4 million. This reduction targets the share premium account (the amount exceeding par value). The surplus will be credited to the contributed surplus account.
Guidance, Outlook, and Management Commentary
Dividend Policy and Rationale for Capital Reduction: Management states the primary reason for the proposed $136.4 million reduction in share premium is to increase the Company's ability to declare and distribute dividends. Under Bermuda law, dividends cannot be paid if the realizable value of assets is less than the sum of liabilities, issued share capital, and share premium. By reducing the share premium to zero, the Board seeks to ensure that dividends can be declared as long as the Company is solvent and the realizable value of assets exceeds liabilities plus the nominal par value ($468,988). Dividend Calculation: The Company aims to declare quarterly dividends substantially equal to net operating cash flow (net income plus depreciation and non-cash charges) after reserves. The filing notes that the reduction will not result in an immediate distribution to shareholders but will provide future flexibility.
Investor Verification Checklist
- Verify the outcome of the shareholder vote on the $136.4 million share premium reduction at the June 29, 2010 meeting.
- Review the full 2009 Annual Report (available at www.nat.bm) for detailed revenue, profit, and debt metrics not included in this proxy statement.
- Confirm the appointment of Andreas Ove Ugland to the Audit Committee following the retirement of Torbjørn Gladsø.
- Monitor future dividend declarations to assess the impact of the capital structure change on cash distributions.