Business Context and Reporting Period
Company: Nordic American Tanker Shipping Limited (NYSE: NAT)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: May 2009 (Notice of Annual General Meeting)
Meeting Date: June 19, 2009
Record Date: May 5, 2009
This filing serves as a Notice of Annual General Meeting and Proxy Statement. The Company is a Bermuda-domiciled tanker shipping firm. The filing does not contain operational results for May 2009 but focuses on corporate governance proposals and capital structure adjustments.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, or debt figures for the current period. It references the audited financial statements for the year ended December 31, 2008, which are distributed separately. The following capital metrics are disclosed:
- Outstanding Common Shares: 37,893,679 (as of May 5, 2009)
- Par Value per Share: $0.01
- Aggregate Par Value: $378,937
- Share Premium: Approximately $107.1 million
- Dividend Policy: Quarterly dividends substantially equal to net operating cash flow (net income plus depreciation and non-cash charges) after reserves, subject to Bermuda solvency tests.
Material Changes and Proposals
Shareholders are asked to vote on four specific proposals at the Annual General Meeting:
- Board Expansion: Increase the maximum number of Directors from seven to nine and delegate authority to the Board to fill casual vacancies.
- Election of Directors: Re-elect the current seven Directors to serve until the next Annual General Meeting.
- Reduction of Share Premium: Ratify a reduction of paid-up share capital by approximately $107.1 million. This amount represents the share premium (excess of issue price over par value). The surplus will be credited to the contributed surplus account.
- Auditor Appointment: Ratify the appointment of Deloitte AS as independent auditors for the fiscal year ending December 31, 2009.
Management Commentary, Risks, and Outlook
Rationale for Capital Reduction: Management states the primary reason for reducing the share premium is to increase flexibility in declaring 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 eliminating the share premium, the Company can declare dividends as long as asset value exceeds liabilities plus the nominal par value ($378,937), provided the Company remains solvent.
Dividend Constraints: The filing highlights that without this reduction, a decline in asset saleable value could prevent dividend payments even if the Company is solvent and has available cash flow.
Outlook: No specific operational guidance or market outlook is provided in this document. The focus is strictly on corporate governance and capital structure optimization.
Investor Verification Checklist
- Verify the outcome of the vote on the $107.1 million share premium reduction to confirm the change in capital structure.
- Review the separate 2008 Annual Report for actual revenue, net income, and cash flow figures, as they are not included in this proxy statement.
- Confirm the Company's current asset valuation relative to liabilities to assess the immediate impact of the proposed capital reduction on dividend eligibility.
- Monitor the appointment of Deloitte AS and any subsequent audit findings for the 2009 fiscal year.