Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | NORDIC AMERICAN OFFSHORE LTD. |
Entity Central Index Key | 0001597659 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Shell Company | false |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Entity Common Stock, Shares Outstanding | 7,648,486 |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Operations [Abstract] | |||
Charter Revenues | $ 20,654 | $ 17,895 | $ 17,697 |
Charter Costs | (2,215) | (1,815) | (1,448) |
Vessel Operating Costs | (25,173) | (20,454) | (24,137) |
General and Administrative Costs | (4,757) | (4,222) | (4,503) |
Depreciation Costs | (17,298) | (17,472) | (16,152) |
Impairment Loss on Vessels | (160,080) | 0 | 0 |
Net Operating Loss | (188,869) | (26,068) | (28,543) |
Interest Income | 207 | 298 | 10 |
Interest Costs | (8,031) | (4,880) | (3,467) |
Other Financial Costs | (601) | 327 | (151) |
Total Financial Costs | (8,425) | (4,255) | (3,608) |
Loss before income taxes | (197,294) | (30,323) | (32,151) |
Income Tax Benefit | 0 | 997 | 0 |
Net Loss and Comprehensive Loss | $ (197,294) | $ (29,326) | $ (32,151) |
Basic and Diluted Loss per Share (in dollars per share) | $ (31.50) | $ (5.33) | $ (15.35) |
Basic and Diluted Average Number of Common Shares Outstanding (in shares) | 6,263,094 | 5,499,561 | 2,093,926 |
Cash dividends declared per common share (in dollars per share) | $ 0.30 | $ 0.80 | $ 2.80 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and Cash Equivalents | $ 8,446 | $ 31,506 |
Accounts Receivable, net | 2,602 | 2,096 |
Prepaid Expenses | 755 | 1,274 |
Inventory | 1,181 | 1,510 |
Other Current Assets | 1,176 | 690 |
Total Current Assets | 14,160 | 37,076 |
Non-Current Assets | ||
Vessels, net | 176,914 | 350,635 |
Total Non-Current Assets | 176,914 | 350,635 |
Total Assets | 191,074 | 387,711 |
Current Liabilities | ||
Accounts Payable | 842 | 317 |
Accounts Payable, related party | 492 | 728 |
Other Current Liabilities | 3,147 | 1,764 |
Total Current Liabilities | 4,481 | 2,809 |
Long-Term Debt | 132,457 | 136,552 |
Other Non-Current Liabilities | 71 | 77 |
Total Non-Current Liabilities | 132,528 | 136,629 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Preferred shares, par value $0.01 per Share, 50,000,000 and 50,000,000 shares authorized, none issued at December 31, 2018 and December 31, 2017 respectively. | 0 | 0 |
Common shares, par value $0.10 per Share; 35,000,000 and 20,000,000 shares authorized, 7,648,611 shares issued, 7,374,159 outstanding and 274,452 treasury shares at December 31, 2018 and 6,473,136 shares issued, 6,198,684 outstanding and 274,452 treasury shares at December 31, 2017 | 764 | 647 |
Additional Paid-In Capital | 322,914 | 319,947 |
Accumulated Deficit | (269,614) | (72,321) |
Total Shareholders' Equity | 54,064 | 248,273 |
Total Liabilities and Shareholders' Equity | $ 191,074 | $ 387,711 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Shareholders' Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 35,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 7,648,611 | 6,473,136 |
Common stock, shares outstanding (in shares) | 7,374,159 | 6,198,684 |
Treasury stock, shares (in shares) | 274,452 | 274,452 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance (in shares) at Dec. 31, 2015 | 2,256,053 | |||
Balance at Dec. 31, 2015 | $ 234 | $ 291,467 | $ (10,844) | $ 280,857 |
Increase (decrease) in Shareholders' Equity [Roll Forward] | ||||
Repurchase of shares (in shares) | (187,368) | |||
Repurchase of shares | $ 0 | (8,513) | 0 | (8,513) |
Dividends distributed | 0 | (5,997) | 0 | (5,997) |
Net Loss | $ 0 | 0 | (32,151) | (32,151) |
Balance (in shares) at Dec. 31, 2016 | 2,068,684 | |||
Balance at Dec. 31, 2016 | $ 234 | 276,957 | (42,995) | $ 234,196 |
Increase (decrease) in Shareholders' Equity [Roll Forward] | ||||
Common Shares Issued, net of issuance cost (in shares) | 4,130,000 | 4,130,000 | ||
Common Shares Issued, net of issuance cost | $ 413 | 47,923 | 0 | $ 48,336 |
Dividends distributed | 0 | (4,933) | 0 | (4,933) |
Net Loss | $ 0 | 0 | (29,326) | (29,326) |
Balance (in shares) at Dec. 31, 2017 | 6,198,684 | |||
Balance at Dec. 31, 2017 | $ 647 | 319,947 | (72,321) | $ 248,273 |
Increase (decrease) in Shareholders' Equity [Roll Forward] | ||||
Common Shares Issued, private placement, net of issuance cost (in shares) | 1,175,475 | 1,175,475 | ||
Common Shares Issued, private placement, net of issuance cost | $ 117 | 4,827 | 0 | $ 4,941 |
Dividends distributed | 0 | (1,860) | 0 | (1,860) |
Net Loss | $ 0 | 0 | (197,294) | (197,294) |
Balance (in shares) at Dec. 31, 2018 | 7,374,159 | |||
Balance at Dec. 31, 2018 | $ 764 | $ 322,914 | $ (269,614) | $ 54,064 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract] | ||
Common Shares Issued, issuance costs | $ 0.1 | $ 0.9 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities | |||
Net Loss | $ (197,294) | $ (29,326) | $ (32,151) |
Reconciliation of Net Loss to Net Cash Used In Operating Activities | |||
Depreciation Costs | 17,298 | 17,480 | 16,053 |
Amortization of Deferred Finance Costs | 359 | 359 | 359 |
Overhaul of Engines Costs and Dry-dock | (3,610) | (341) | (151) |
Impairment loss on Vessels | 160,080 | 0 | 0 |
Foreign currency loss | 198 | (12) | 31 |
Changes in Operating Assets and Liabilities | |||
Accounts Receivables | (506) | (606) | 2,485 |
Inventory | 329 | (270) | (446) |
Prepaid and Other Current Assets | (326) | 262 | 2,603 |
Accounts Payable, Accrued Liabilities | 1,902 | (1,725) | (5,031) |
Accounts Payable, Related Party | (237) | 147 | (15) |
Net Cash Used In Operating Activities | (21,807) | (14,032) | (16,262) |
Cash Flows from Investing Activities | |||
Investment in Vessels | (46) | (830) | (61,583) |
Net Cash Used in Investing Activities | (46) | (830) | (61,583) |
Cash Flows from Financing Activities | |||
Proceeds from Issuance of Common Stock | 4,945 | 48,336 | 0 |
Repayment of credit facility | (4,095) | 0 | 0 |
Proceeds from Use of Credit Facility | 0 | 0 | 90,000 |
Repurchase of Treasury Stock | 0 | 0 | (8,513) |
Cash Dividends Paid to Shareholders | (1,860) | (4,933) | (5,997) |
Net Cash (Used in) / Provided by Financing Activities | (1,010) | 43,403 | 75,490 |
Net (Decrease)/Increase in Cash and Cash Equivalents | (22,863) | 28,541 | (2,355) |
Cash and Cash Equivalents at Beginning of Period | 31,506 | 2,953 | 5,339 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (198) | 12 | (31) |
Cash and Cash Equivalents at the End of Period | 8,446 | 31,506 | 2,953 |
Cash Paid for Interest, Net of Amounts Capitalized | 7,090 | 4,417 | 2,803 |
Cash Paid for Tax | $ 0 | $ 0 | $ 214 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
NATURE OF BUSINESS [Abstract] | |
NATURE OF BUSINESS | 1. NATURE OF BUSINESS Nordic American Offshore Ltd. was formed on October 17, 2013 under the laws of the Republic of the Marshall Islands. Effective September 26, 2016, we discontinued our existence as a company organized under the laws of the Republic of the Marshall Islands and continued our existence as an exempted company incorporated under the laws of Bermuda, which we refer to as the Redomiciliation. There was no change in our business, assets and liabilities, principal locations, fiscal year, directors or executive officers following the Redomiciliation, and our financials are presented on an un-interrupted basis. On November 10, 2016, our shareholders approved the adoption of the new bye-laws, or the Bye-laws, at our annual general meeting of shareholders. As a result of the Redomiciliation, the rights of holders of our common shares are now governed by our Bermuda Memorandum of Continuance, the Bye-laws and the Companies Act 1981 of Bermuda, or the Companies Act. On December 12, 2018, the Company announced that it had entered into a share purchase agreement with Scorpio Offshore Investments Inc, or SOI, pursuant to SOI invested $5,000,000 in a private placement of the Company’s common shares at a price of $4.20 per share, or the Private Placement. As part of the Private Placement, Mr. Emanuele was appointed Chairman and Chief Executive Officer of the Company. In addition, Mr. Robert Bugbee was appointed to the Company’s Board of Directors and to the office of President, Mr. Cameron Mackey was appointed Chief Operating Officer, and Mr. Filippo Lauro was appointed Vice President. Concurrent with the Private Placement Mr. Herbjørn Hansson resigned from the Board of Directors. Reverse stock split On January 28, 2019, the Company effected a one-for-ten reverse stock split. All share and per share information has been retroactively adjusted to reflect the reverse stock split. The par value was adjusted from $0.01 per share to $0.10 per share as a result of the reverse stock split. The Company’s Fleet As of December 31, 2018, the Company owned and operated Platform Supply Vessels (“PSV”) in the North Sea. This fleet consisted of: Vessel Name Yard Year Built Delivered to NAO NAO Fighter Ulstein 2012 January 2014 NAO Prosper Ulstein 2012 January 2014 NAO Power Ulstein 2013 January 2014 NAO Thunder Ulstein 2013 December 2013 NAO Guardian Ulstein 2013 December 2013 NAO Protector Ulstein 2013 December 2013 NAO Storm Ulstein 2015 January 2015 NAO Viking Ulstein 2015 January 2015 NAO Horizon Vard 2016 April 2016 NAO Galaxy Vard 2016 June 2016 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting: Principles of Consolidation: Use of Estimates: Foreign Currency Translation: Revenue Recognition: For the year ended December 31, 2018, the Company has entered into two longer term time charter contracts for two of its vessels with commitments through 2020. Expected time charter revenues for these contracts is $7.2 million in 2019 and $3.7 million in 2020. The aggregate cost of these vessels was $82.7 million and the aggregate accumulated depreciation (including impairment charges) and carrying value as of December 31, 2018 was $47.9 million and $34.8 million, respectively. There are no long-term time charter contracts that extend beyond 2020. As of December 31, 2017 and 2016, there were no longer term time charter contracts. Vessel Operating Costs: Cash and Cash equivalents: Accounts Receivable: Inventories: Vessels, net: Certain subsequent expenditures for conversions and major improvements are also capitalized if it is determined that they appreciably extend the life, increase the earnings capacity or improve the efficiency or safety of the vessel. Repairs and maintenance are expensed as incurred. The vessels’ estimated residual values and useful life are reviewed when there has been a change in circumstances that indicate the original estimate may no longer be appropriate. Residual values are estimated at $1.5 million for each vessel in the fleet at December 31, 2018 and 2017. Impairment of Long-Lived Assets: Drydocking and engine overhaul: The Company’s vessels are required to be drydocked approximately every 30 - 60 months (depending on vessel age), and to have engines overhauled after 10,000 – 11,000 running hours. The Company will capitalize a substantial portion of the costs incurred during drydocking and overhaul, and amortize those costs on a straight line basis from the completion of a drydocking, intermediate survey or overhaul to the estimated completion of the next drydocking or overhaul. Consistent with prior periods, drydocking costs include a variety of costs incurred while vessels are placed within drydock, including expenses related to the dock preparation and port expenses at the drydock shipyard, general shipyard expenses, expenses related to hull, external surfaces and decks, expenses related to machinery and engines of the vessel, as well as expenses related to the testing and correction of findings related to safety equipment on board. The Company includes in capitalized drydocking those costs incurred as part of the drydock to meet classification and regulatory requirements. The Company expenses costs related to routine repairs and maintenance performed during drydocking, and for annual class survey costs. The capitalized and unamortized drydocking costs are included in the book value of the vessels. Amortization expense of the drydocking costs is included in depreciation expense. For the PSVs acquired an estimate of $500,000 and $250,000 for drydock cost and overhaul costs respectively has been allocated from the purchase price. Drydocking is depreciated over five years, and engine overhauls are depreciated based on the number of running hours within the reporting period according to the built-in overhaul method. Geographical segments: The Company has not presented segment information as it considers it operates as one reportable segment, the offshore support vessel market, where the majority of our vessels operated in the North Sea during the years ended December 31, 2018, 2017 and 2016. The Company had one vessel operating in West Africa during 2018, on a three-month term contract. Fair Value of Financial Instruments: The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate carrying value because of the short-term nature of these instruments. Termination Fee: In 2015 the Company received $3.9 million related to a termination of a charter contract for one of its vessels. The termination fee received was subject to future conditions, and was deferred and recognized in future periods when these conditions have been met. $0.4 million and $1.2 million of the termination fee were recognized as charter revenue for the years ended December 31, 2018 and December 31, 2017, respectively. There were no Deferred termination fees as of December 31, 2018. As of December 31, 2017, $0.4 million and $0 were recorded as Accrued Liabilities and Other Non-Current Liabilities. Income Taxes: The Company is incorporated in Bermuda. Under current Bermuda law, the Company is not subject to corporate income taxes. The statutory applicable rate to consolidated corporate earnings is 0%. On March 10, 2014 the Company’s vessels were accepted into the UK Tonnage Tax regime. The Company no longer qualifies for inclusion in the UK Tonnage Tax regime and made an exit as of February 2017, and subsequent to this the Company was subject to the regular tax regime in the UK. No deferred tax asset in respect of losses incurred was recognized at the end of 2017 as the UK operations ceased and so the losses cannot be utilized to offset future UK or other taxable income. On April 1, 2018 eight vessels operated by NAO UK and related bareboat charter agreements were transferred to NAO Norway AS that was established on January 26, 2018 to provide commercial services. On September 28, 2018 the Company NAO UK was placed into members’ voluntary liquidation and on March 19, 2019 the final pre-liquidation tax returns were submitted. The liquidation of NAO UK will be concluded in May 2019. NAO Norway AS is subject to income tax in Norway for the year ended December 31, 2018 at a rate of 23% of its taxable result. NAO Norway AS recorded a taxable loss of $15.3 million and the income tax expense was $0 for the year ended December 31, 2018. The Company recorded a deferred tax asset of $3.5 million from its net operating loss in Norway and a corresponding full valuation allowance of $3.5 million for the year ended December 31, 2018. A full valuation allowance has been recognized due to the uncertainty related to the utilization of any carry forward tax losses. The Norwegian net operating losses may be carried forward for an indefinite period according to Norwegian tax law. There are no other permanent or temporary differences in NAO Norway AS Concentration of Credit Risk: For the year ended December 31, 2018, two charterers accounted for 25% of the total revenues, with 13% and 12% respectively. For the year ended December 31, 2017, three charterers accounted for 44% of the total revenues with 21%, 13%, and 10%, respectively. For the year ended December 31, 2016, three charterers accounted for 36% of the total revenues, with 14%, 11%, and 11%, respectively. For the year ended December 31, 2018, three charterers accounted for 76% of the outstanding accounts receivable, with 32%, 30%, and 14% respectively. For the year ended December 31, 2017, three charterers accounted for 66% of the outstanding accounts receivable, with 28%, 19%, and 19%, respectively. Recent Accounting Pronouncements: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. It also offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. Further, the FASB issued ASU 2018-11, Leases (Topic 842) in July 2018 related to the optional transition method for implementing ASC 842. The Company will apply the practical expedient to not separate nonlease components from the associated lease component and instead to account for those components as a single component if the nonlease component otherwise would be accounted for under the new revenue guidance (ASC 606); and both of the following are met: (1) the timing and patterns of transfer of the nonlease component and associated lease are the same; and (2) the lease component, if accounted for separately, would be classified as an operating lease. We will adopt ASC 842 using the modified retrospective transition approach. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit losses (ASC 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model known as the current expected credit loss (“CECL”) model that is based on expected losses rather than incurred losses. Under the new guidance, an entity is required to recognize as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. Unlike the incurred loss models under existing standards, the CECL model does not specify a threshold for the recognition of an impairment allowance. Rather, an entity will recognize its estimate of expected credit losses for financial assets as of the end of the reporting period. Credit impairment will be recognized as an allowance or contra-asset rather than as a direct write-down of the amortized cost basis of a financial asset. However, the carrying amount of a financial asset that is deemed uncollectible will be written off in a manner consistent with existing standards. The standard will be effective for the first reporting period within annual periods beginning after December 15, 2019 and early adoption is permitted. We are in the process of evaluating financial assets on our balance sheet for potential credit losses under the CECL model. Accounting standards implemented in 2018: Effective January 1, 2018, the Company adopted Revenue from Contracts with Customers (ASC 606), which superseded nearly all existing revenue recognition guidance under U.S. GAAP, applying the modified retrospective method. It was determined that there was no cumulative effect of applying the new standard and therefore no adjustment to the opening accumulated losses balance was recorded. The Company’s revenues are based on leases or rental agreements with customers which is not addressed in the new standard. As a result, the adoption of the new accounting standard did not have material effect on the Company’s consolidated balance sheet, results of operations or cash flows. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | 3. RELATED PARTY TRANSACTIONS Nordic American Tankers Limited: Nordic American Tankers (“NAT”) participated in the offering in March 2017 by buying 800,000 shares of NAO. NAT announced that its shareholders are expected to receive NAO shares as a part dividend payment from NAT during August 2017. In December 2013, NAO entered into a management agreement with Scandic American Shipping Ltd, or “Scandic”, a wholly owned subsidiary of NAT, for the provision of administrative services in accordance with its objectives and policies as established and directed by its Board of Directors. For services under the management agreement, the Company paid $100,000 for 2018, $100,000 for 2017, and $100,000 for 2016 and all directly attributable costs related to the Company are reimbursed. For the years ended December 31, 2018, 2017 and 2016, an aggregate of $2.2 million, $2.3 million and $2.2 million , respectively, for such directly attributable costs were incurred which were included in General and Administrative Costs. On May 1, 2019, the Company tendered notice to NAT that it shall terminate the management agreement with NAT upon the expiration of 180 days from the date of such notice, or October 28, 2019. Our former Executive Chairman and High |
VESSELS, NET
VESSELS, NET | 12 Months Ended |
Dec. 31, 2018 | |
VESSELS, NET [Abstract] | |
VESSELS, NET | 4. VESSELS, NET Vessels, Net consist of the carrying value of 10 vessels for the year ended December 31, 2018 and December 31, 2017, respectively. Vessels, Net includes drydocking, engine overhaul costs and capitalized interest from the period of the vessel being constructed. Depreciation is calculated based on cost less estimated residual value of $1.5 million per vessel over the estimated useful life of the vessel using the straight-line method. The estimated useful life of a vessel is 25 years from the date the vessel is delivered from the shipyard. All Figures in USD ‘000 2018 2017 Vessels 404,324 404,377 Drydocking 4,379 2,179 Engine Overhaul 5,246 3,737 Total 413,949 410,293 Less Accumulated Depreciation 76,956 59,658 Less impairment of vessels 160,079 - Vessels, Net 176,914 350,635 Impairment Loss on Vessels As of December 31, 2018, our operating fleet consisted of ten PSVs. Our vessels are evaluated for possible impairment whenever events or changes in circumstances indicate that the carrying amount of a vessel may not be recoverable. If the estimated undiscounted future cash flows expected to result from the use of the vessel and its eventual disposition is less than the carrying amount of the vessel, the vessel is deemed impaired. Impairment charges may be limited to each individual vessel. We evaluated the carrying amount of our fleet at December 31, 2018 (consisting of ten PSVs) and we recorded an impairment charge of $160.1 million on these vessels for the year ended December 31, 2018. An impairment charge was not recorded for the years ended December 31, 2017 or In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about its vessels' future performance, with the significant assumptions being related to charter rates, fleet utilization, operating costs, capital expenditures, residual value and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows for our impairment analysis are based on historical trends as well as future expectations. The estimated undiscounted cash flows are determined by estimating daily charter and utilization rates for the remaining operating days. The Company estimates daily charter and utilization rates for the remaining operating days considering the historical company-specific performance, average for similar vessels and utilizing available market data to estimate charter and utilization rates over the remaining estimated useful life of the vessel, assumed to be 25 years from the delivery of the vessel from the shipyard for PSVs, net of brokerage commissions, expected outflows for vessels' maintenance and vessel operating costs (including planned drydocking and engine overhaul expenditures). Future estimated charter rates in other currencies than USD are converted to USD based on an historical average When forecasting the daily charter rates for the remaining useful life of the vessels, we have applied an internally developed model in combination with external data. For the first and second year of our analysis we have applied the lowest of our weighted company-specific achieved average rates and the rates provided by a third party for the preceding three For the 15-year historical average charter rate in GBP, provided by a third party, we have applied a 10-year average conversion Cost associated with vessels in lay-up have been included in the estimation for the relevant vessels and When we calculate the expected undiscounted net cash flows for the vessels, we deduct operating expenses and expected cost of dry-docking and other expected capital expenditures from the operating revenues before adding an estimated scrap value of the vessel at the end of its useful life. The operating expenses applied are based on the forecasted operating cost for the vessels, which is adjusted in subsequent We have applied a probability-weighted approach (as per ASC 360-10-35-30) to reflect the possibility of different ranges and outcomes in our estimated cash flows. We recognize that there is more uncertainty related to assumption for cash flows that are several years ahead for long-lived assets like our vessels with a significant number of years left of remaining useful life and we have experienced a slower market recovery than expected in prior years. As such, we have prepared a probability based approach taking into account possible lower than expected outcomes for the main inputs to the model. The different outcomes are mainly applied to the long-term assumption in the model rather than the initial three-year period in our model. We have applied probabilities to the following main inputs: · Rates · Utilization · Foreign currency conversion Rates and utilization in the offshore industry are closely related. As demand for ships increases and supply decreases, the rates tend to be driven up. lower prices per barrel and a strive for lower break even costs. In addition, there are many laid-up vessels and owners eager to get them back in operation, In the low case scenario, we have excluded the peak period for utilization and rates pre-2009 and accordingly applied a 10-year average for rates and utilization. This estimate is applied for the cash flows from year four and onwards in the calculation. The rate applied in year three (ramp-up period) is set as 75% of the long-term rate. In our base case we have applied the 10-year average currency rate. Historical data for this period shows a declining USD/GBP currency cross and in our low case scenario we have applied the three-year average currency rate. The table below indicates the (1) charter rates applied in our impairment assessment, (2) company-specific achieved rates and (3) historical market rates for the North Sea, obtained from an external party. Rates used (1) Achieved rates (2) Market rates (3) $ per day First year Second year Third year Thereafter 2018 2017 2004- 2018 2009- 2018 Rates $ 9,523 $ 9,523 $ 13,067 $ 17,423 $ $12,470 $ 10,784 $ 19,582 $ 14,874 Utilization 62 % 62 % 75 % 84.6 % 60 % 65 % 87 % 82 % As a result of our impairment test, we have recorded an impairment loss of $160.1 million related to our ten PSVs to write the carrying values of these vessels down to their estimated fair values as of December 31, 2018. During the years ended December 31, 2017 and 2016, the market value of our PSVs declined, and we identified impairment indicators. However, in each of those years under our approach, we determined that the sum of the undiscounted cash flows for each vessel exceeded its carrying value and therefore, an impairment charge was not recorded. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2018 | |
DEBT [Abstract] | |
DEBT | 5. DEBT Initial Credit Facility On December 19, 2013, the Company entered into a $60.0 million revolving credit facility (“Initial Credit Facility”) with a syndicate of lenders in order to secure available liquidity for general corporate purposes. Amounts borrowed under the Initial Credit Facility bear interest at an annual rate equal to LIBOR plus a margin, and the Company pays a commitment fee on any undrawn amounts. The Initial Credit Facility originally matured in December 2018. In March 2015 the Company expanded its Initial Credit Facility from $60.0 million to $150.0 million. The new maturity of the expanded Initial Credit Facility is March 2020. There were no repayment requirements before maturity on the Initial Credit Facility. Borrowings under the Initial Credit Facility are secured by first priority mortgages on the Company’s vessels and assignments of earnings and insurance. Under the Initial Credit Facility, the Company is subject to certain covenants requiring among other things, the maintenance of (i) a minimum value adjusted amount of equity, and (ii) a minimum value adjusted equity ratio, and (iii) a minimum level of liquidity, and (iv) a positive working capital. The Initial Credit Facility also includes customary events of default, including non-payment, breach of covenants, insolvency, cross defaults and material adverse change. A breach of any of these covenants would result in the Initial Credit Facility being callable by the lenders. In connection with the establishment and expansion of the Initial Credit Facility the Company incurred $0.8 million and $1.2 million in 2013 and 2015, respectively, in deferred financing cost, which is amortized over the term of the loan. As of December 31, 2016 the Company was in breach with three of its debt covenants, (i) the minimum value adjusted amount of equity, (ii) the minimum value adjusted equity ratio clause and (iii) a minimum level of liquidity. In 2017 a waiver was obtained from the lenders lowering (i) the minimum value of equity and (ii) the minimum value adjusted equity ratio covenant requirements to levels at which the Company was in compliance, and suspending (iii) the minimum level of liquidity covenant. These waivers were effective until April 30, 2018. Under the waiver the Company was unable to draw further on the Initial Credit Facility. On April 30, 2018 the Company entered into an amendment to the credit agreement for the Initial Credit Facility that extended the waiver period up until December 31, 2019. Under the terms of the waiver obtained, the Company was unable to draw further on the Initial Credit Facility until it complies with the original terms and conditions under the Initial Credit Facility agreement and the interest rate increased from LIBOR plus 2.0% to LIBOR plus 4.0%. The Company can distribute dividends, subject to a corresponding amount being repaid under the Initial Credit Facility. In September 2018, we made an unscheduled payment of $1.575 million on our Initial Credit Facility to regain compliance with the Security Coverage Ratio (requiring that the aggregate fair market value of the vessels securing the loan does not fall below 150% of the outstanding loan) set forth thereunder. At the end of September 2018, vessel values were remeasured and, given a further deterioration in such values, we were again in non-compliance of the Security Coverage Ratio at September 30, 2018. In December 2018, the Company entered into a share purchase agreement with Scorpio Offshore Investment Inc., or SOI. SOI invested $5 million in a private placement of the Company’s shares at a price of $4.20 per share, or the Private Placement. The Private Placement was finalized December 12, 2018 and effective upon closing of the Private Placement, $1.9 million of the proceeds were immediately used to cure the covenant breach at third quarter. As a result of this transaction, the composition of senior management and the Board of Directors changed. Subsequent to the Private Placement, the new management commenced negotiations with the banks under the Initial Credit Facility, with the goal to secure the long-term financing of the Company. A waiver was granted on December 12, 2018 that effectively waived the prior financial covenants up until February 6, 2019 and reintroduced the original covenants upon expiry of the waiver. Under the waiver the Company is required to have a minimum liquidity of $5 million, which increases to $7.5 million immediately following any drawdown on the Equity Line of Credit that was entered into in March 2019 (as described below and in Note 12). The private placement with SOI and the $1.9 million repayment on the Initial Credit Facility were conditions to executing this waiver and consent. As of December 31, 2018, we were in compliance with the modified terms under the Initial Credit Facility and the loan was not considered callable. In March 2019, the lenders under the Initial Credit Facility further extended the waiver period, and ultimately an agreement was reached in March 2019 to extend the waiver period until January 31, 2020 as part of a broader set of agreements to recapitalize the Company. This agreement includes a commitment by the lenders under the Initial Credit Facility, subject to certain conditions precedent, the most significant of which is the requirement to raise an additional $15 million of equity before January 31, 2020, for a new $132.9 million term loan facility with maturity of December 6, 2023 to refinance the Initial Credit Facility. These transactions, including the terms under the new $132.9 million term loan facility are described in Note 12. As at December 31, 2018 and 2017, the Company had $132.9 million and $137.0 million drawn on its Initial Credit Facility, respectively. Liquidity Outlook Under ASC paragraph 205-40, or the Standard, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both The Company regularly performs cash flow projections to evaluate whether it will be in a position to cover the liquidity needs for the next 12-month period and the compliance with financial and security ratios under the existing and future financing agreements. In developing estimates of future cash flows, the Company makes assumptions about the vessels’ future performance, market rates, operating expenses, capital expenditure, fleet utilization, general and administrative expenses, loan repayments and interest charges. The assumptions applied are based on historical experience and future expectations. Nevertheless, volatility in the offshore market makes forecasting difficult, and there is the possibility that our actual trading performance during the coming year may be materially different from expectations. Current economic conditions in the offshore market are challenging, resulting in the incurrence of recurring losses. These conditions have resulted in breaches of the Company’s financial covenants under its Initial Credit Facility and have prompted the Company to secure additional liquidity to continue in operation. If the rates and utilization of our vessels continue to face headwinds for the coming 12 months, then we may have to ask our lenders for further waivers to meet the obligations of the Company and to comply with our financial covenants. We could also pursue other means to raise liquidity to meet our obligations such as through the sale of vessels, however there can be no assurance that these or other measures will be successful. The Company’s efforts to secure additional liquidity included the entrance into a common stock purchase agreement, or the Equity Line of Credit, with SOI (a related party affiliate) and Mackenzie Financial Corporation in March 2019. The Equity Line of Credit provides for $20 million to be available on demand to the Company in exchange for common shares of the Company priced at 0.94 multiplied by the then-prevailing 30-day trailing volume weighted average price. In April 2019, 3,240,418 common shares were issued under the Equity Line of Credit for approximately $2.78 per share and net proceeds of $9.0 million. Additionally, as discussed above, we have agreed to the extension of waivers of certain financial covenants with which the Company was in breach, to extend such waivers up until January 31, 2020. We also received commitments from the lenders under the Initial Credit Facility, upon the satisfaction of certain conditions precedent, to a new $132.9 million term loan facility with a maturity of December 6, 2023 (which is further described in Note 12) to refinance the Initial Credit Facility, which had an outstanding balance of $132.9 million as of December 31, 2018. Among these conditions precedent is the requirement to raise an additional $15.0 million of equity, which is uncommitted as of the date of these financial statements. Management’s plans include raising additional equity via the capital markets in order to meet this condition. As those plans have not been finalized, the satisfaction of this condition is not considered probable under the Standard. As such contingency plans have not commenced, such actions also are not considered probable for purposes of the Standard. Accordingly, under the Standard, neither the raising of $15.0 million of additional equity, nor management’s contingency plans to negotiate further waivers beyond January 31, 2020, are considered probable and as a result substantial doubt is deemed to exist about the Company’s ability to continue as a going concern . |
INTEREST COSTS
INTEREST COSTS | 12 Months Ended |
Dec. 31, 2018 | |
INTEREST COSTS [Abstract] | |
INTEREST COSTS | 6. INTEREST COSTS Interest costs consist of interest incurred on the long-term debt, the commitment fee and amortization of the deferred financing cost related to the Credit Facility described in Note 5. All amounts in USD ‘000 2018 2017 2016 Interest Costs, net of capitalized interest 7,574 4,428 2,781 Commitment Fee 98 93 327 Amortization of Deferred Financing Cost 359 359 359 Total interest costs 8,031 4,880 3,467 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 7. EARNINGS PER SHARE Basic earnings per share (“EPS”) is calculated by dividing net (loss) income by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding during the period. For the years ended December 31, 2018, 2017 and 2016, the Company had a net loss, thus any effect of common stock equivalents outstanding would be antidilutive. All figures in USD 2018 2017 2016 Numerator Net Loss (197,294,000 ) (29,326,000 ) (32,151,000 ) Denominator Basic and diluted - Weighted Average Common Shares Outstanding 6,263,094 5,499,561 2,093,926 Loss per Common Share Basic and diluted (31.50 ) (5.33 ) (15.35 ) |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
SHAREHOLDERS' EQUITY [Abstract] | |
SHAREHOLDERS' EQUITY | 8. SHAREHOLDERS’ EQUITY Authorized, issued and outstanding common shares for the years ended December 31, 2016, 2017 and 2018: Authorized common shares Authorized preferred shares Issued Shares Outstanding Shares Balance, January 1, 2016 20,000,000 50,000,000 2,343,136 2,256,053 Common Shares Repurchased under Share Repurchase Program (30,194 ) Common Shares Repurchased in Private Transaction (157,175 ) Balance, December 31, 2016 20,000,000 50,000,000 2,343,136 2,068,684 Common Shares Issued 4,130,000 4,130,000 Balance, December 31, 2017 20,000,000 50,000,000 6,473,136 6,198,684 Authorized share capital 15,000,000 Common Shares Issued, Private Placement 1,175,475 1,175,475 Balance, December 31, 2018 35,000,000 50,000,000 7,648,611 7,374,159 Common shares authorized and issued On December 11, 2018 on The Annual General Meeting of the shareholders it was resolved to increase the company’s authorized share capital from $2,000,000 to $4,000,000. As a result of this increase, the Company’s authorized share capital is 35,000,000 common shares, par value $0.10 per share (or $3,500,000) and 50,000,000 preferred shares, par value $0.01 per share (or $500,000). In December 2018, we issued an aggregate of 1,175,474 common shares in a private placement with SOI at $4.20 per share, resulting in net proceeds to us of $4.9 million. $1.9 million of the proceeds were immediately used to cure the covenant non-compliance existing at the third quarter of 2018. In March 2017, the Company completed an underwritten public follow-on offering of 4,130,000 common shares, which included 130,000 common shares sold pursuant to the underwriters' partial exercise of the overallotment option to purchase additional common shares, at a price of $12.50 per share. The net proceeds the Company received from the offering were used for general corporate purposes and working capital purposes. The net proceeds of this offering were approximately $48.3 million. Repurchase plan In May 2015 the Company announced a share repurchase program under which the Company may repurchase up to 2.5 million of NAO’s outstanding common stock over the two subsequent years. The Company repurchased 30,194 shares under the share repurchase program during the year ended December 31, 2016. The Company has repurchased a total of 117,277 shares under the share repurchase program since inception. |
FINANCIAL INSTRUMENTS AND OTHER
FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES [Abstract] | |
FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES | 9. FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES The majority of NAO and its subsidiaries’ transactions, assets and liabilities are denominated in United States dollars, the functional currency of the Company. There is no significant risk that currency fluctuations will have a negative effect on the value of the Company’s cash flows. The Company categorizes its fair value estimates using a fair value hierarchy based on the inputs used to measure fair value for those assets and liabilities that are recorded on the balance sheet as fair value. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value as follows: Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2. Inputs, other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The following methods and assumptions were used to estimate the fair value of each class of financial instruments and other assets accounted for under fair value. - The carrying value of cash and cash equivalents is a reasonable estimate of fair value. - The estimated fair value for the long-term debt is considered to be equal to the carrying values since it reflects both a recently revised margin and variable interest rates which approximate market rates. The carrying value and estimated fair value of the Company’s financial instruments and other assets accounted for under fair value at December 31, 2018 and 2017 are as follows: All figures in USD ‘000 Fair Value Hierarchy Level 2018 Fair Value 2018 Carrying Value 2017 Fair Value 2017 Carrying Value Recurring Cash and Cash Equivalents 1 8,446 8,446 31,506 31,506 Initial Credit Facility 2 (132,900 ) (132,900 ) (137,000 ) (137,000 ) Non-recurring Vessels 2 176,914 176,914 - - The estimated fair value for the Initial Credit Facility is considered to be approximately equal to the carrying value since it reflects both a recently revised margin and a variable interest rate. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | 10. ACCRUED LIABILITIES The following table sets forth the components of our accrued liabilities as of December 31, 2018 and December 31, 2017: Accrued Liabilities All figures in USD ‘000 2018 2017 Accrued Interest 1,274 692 Accrued Costs 1,872 684 Deferred Revenues - 388 Total as of December 31, 3,146 1,764 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES The Company may become a party to various legal proceedings generally incidental to its business and is subject to a variety of environmental and pollution control laws and regulations. As is the case with other companies in similar industries, the Company faces exposure from actual or potential claims and legal proceedings. Although the ultimate disposition of legal proceedings cannot be predicted with certainty, it is the opinion of the Company’s management that the outcome of any claim which might be pending or threatened, either individually or on a combined basis, will not have a materially adverse effect on the financial position of the Company, but could materially affect the Company’s results of operations in a given year. No claims have been filed against the Company, nor has it been party to any legal proceedings for the fiscal years ended December 31, 2018 and 2017. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS Reverse Stock Split On January 28, 2019, the Company completed a one-for-ten reverse stock split. Pursuant to this reverse stock split, the common shares outstanding were reduced from 73,741,595 shares to 7,374,034 shares (which reflects adjustments for fractional share settlements). The par value was adjusted to $0.10 per share as a result of the reverse stock split. On March 1, 2019, the Company received confirmation from the NYSE that it regained compliance with the NYSE’s continued listing standards as a result of the increased market price for the Company’s common shares following the reverse stock split. Equity Line of Credit In April 2019, the Company also entered into a common stock purchase agreement, or the Equity Line of Credit, with SOI (a related party affiliate) and Mackenzie Financial Corporation. SOI is a closely held company that is owned and controlled by certain members of the Lolli-Ghetti family Acquisition of SOHI vessels and assumed indebtedness with DVB In April 2019, the Company acquired 13 vessels, including associated debt, consisting of two anchor handling tug supply vessels (“AHTS”) and 11 crew boats from Scorpio Offshore Holding Inc., or SOHI, a related party affiliate that is a closely held company owned and controlled by certain members of the Lolli-Ghetti family, including Emanuele Lauro and Filippo Lauro, in exchange for 8,126,219 common shares of the Company at approximately $2.78 per share for aggregate net consideration of $22.6 million. As part of the transaction, the Company also assumed the aggregate outstanding indebtedness under a term loan facility with (“DVB”) relating to two of the acquired vessels of $9.0 million. This credit facility, which we refer to as our ‘DVB Credit Facility’ was supplemented on April 10, 2019 (the “DVB Supplemental Agreement”) as part of this transaction, and is described below. Additionally, as discussed in Note 5, we also received commitments from the lenders under the Initial Credit Facility, upon the satisfaction of certain conditions precedent, to a new $132.9 million term loan facility with a maturity of December 6, 2023 (which is further described below) to refinance the Initial Credit Facility, which had an outstanding balance of $132.9 million as of December 31, 2018. Among these conditions precedent is the requirement to raise an additional $15.0 million of equity in cash to be raised by January 31, 2020, which is currently uncommitted as of the date of these financial statements. Under the terms of the DVB Supplemental Agreement, DVB has the right, but not the obligation, to unwind the sales of the two AHTS vessels if the additional $15.0 million of equity is not raised by October 31, 2019. Under this scenario, the shares in the vessel owning subsidiaries for these two vessels (which would include the related net working capital and outstanding indebtedness under the DVB Credit Facility) would be exchanged for the shares of the Company that were previously issued as consideration for the transaction on the date of the unwinding. Background for the transaction The market for offshore support vessels in general, and the Company specifically has experienced adverse market conditions since 2015. As a result, the Company has undertaken efforts to stabilize the Company’s financial position including, but not limited to engaging with the lenders of its Initial Credit Facility to obtain waivers and extensions on the terms of such facility, As part of this process, and given the constraints on the Company’s liquidity position throughout this trough in the cycle, the Company sought ways to reduce the financial leverage of the Company through the issuance of equity. The rationale for considering the transaction was twofold: · The opportunity presented itself to acquire complementary assets in exchange for the issuance of equity. By incorporating assets with a debt to capitalization ratio of 28%, the Company took a significant step towards its objective of reducing its financial leverage. · Moreover, both fleets operate in the offshore support vessel market and although the Company operated exclusively in the North Sea while the SOHI vessels operated in West Africa, both fleets were exposed to the same market dynamics. Both fleets believed that the consolidation of two fleets in the same industry will create a more efficient investment vehicle with a broader footprint in the offshore market. Accounting for the transaction The accounting treatment for this transaction is in the process of being determined. The Company has preliminarily concluded that the transaction will be accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable group of similar identifiable assets Waiver Extension of Initial Credit Facility As part of the aforementioned transactions, the lenders to the Company’s Initial Credit Facility have agreed to the extension of waivers of certain financial covenants with which the Company was in breach, to extend such waivers up until January 31, 2020. Moreover, the Company has received commitments from the lenders under its Credit Facility, upon satisfaction of certain conditions precedent by the Company, the most significant of which is the requirement to raise an additional $15 million of equity before January 31, 2020, to a new $132.9 million term loan facility with maturity of December 6, 2023 to refinance the Initial Credit Facility, which has an outstanding balance of $132.9 million as of the date of this annual report. The new $132.9 million term loan is expected to be collateralized by the ten PSVs that currently collateralize the Initial Credit Facility in addition to the 11 crew boats acquired from SOHI, bears interest at LIBOR plus a margin 3.50% (which can be reduced if the Company meets certain Net Debt to EBITDA thresholds) and is expected to be repayable in equal, semi-annual installments of $7.5 million beginning in December 2021 with a balloon payment due upon the maturity date of December 6, 2023. This new credit facility is also expected to contain restrictive financial covenants as follows: · Cash and cash equivalents shall at all times be equal to or greater of (i) $12,500,000 and (ii) $750,000 per vessel above 2,500 DWT. · Current assets shall at all times exceed current liabilities less the current portion of long term liabilities. · The ratio of net debt to total capitalization no greater than 0.60 to 1.00. DVB Credit Facility As described above, the Company assumed the indebtedness of $9.0 million as part of the acquisition of two AHTS vessels from SOHI under a credit facility with DVB Bank SE Nordic Branch. We refer to this credit facility as our DVB Credit Facility. This loan was executed and fully drawn in September 2017. The DVB Credit Facility bears interest at LIBOR plus a margin of 2.75% and contains a financial covenant whereby the Company must maintain minimum liquidity of an aggregate of $0.8 million in the bank accounts that are pledged as security under the facility. The terms of this credit facility also require that the Company fund any Excess Earnings (defined as each vessels’ earnings less budgeted operating expenses, interest payments and the maintenance of the minimum liquidity requirement) related to such vessels, up to $3.6 million in aggregate, to a drydock reserve account, the proceeds of which are to be utilized for the vessel’s next scheduled drydock. For the first 36 months after the initial drawdown date (through September 2020), any Excess Earnings related to each vessel, after funding the minimum liquidity requirement and drydock reserve account, shall be utilized to repay the credit facility. Starting 39 months after the initial drawdown date, the DVB Credit Facility shall be repaid in consecutive quarterly installments of $0.2 million in aggregate with a balloon payment due upon the maturity date of September 2022. The outstanding balance under this facility was $9.0 million as of the date of this report. This facility contains financial and restrictive covenants, which require the borrowers to, among other things, comply with certain financial tests (as described above); deliver semi-annual and annual financial statements and annual projections; comply with restrictive covenants, including maintaining adequate insurances; comply with laws (including environmental laws); and maintain flag and class of the vessels. Other such covenants may require the borrowers to obtain lender approval on changes in the borrowers vessels’ managers; limit the borrowers’ ability to place liens on the borrowers’ assets; limit the borrowers’ ability to incur additional indebtedness; prohibit the borrowers from paying dividends if there is a covenant breach under the loan or an event of default has occurred or would occur as a result of payment of such dividend. This facility is secured by, among other things: · a first preferred mortgage over the two AHTS vessels which are collateralized under this facility; · an assignment of earnings, insurances and charters from the two mortgaged AHTS vessels; · a pledge of the related earnings accounts and drydock reserve accounts of the borrowers in respect of the two mortgaged AHTS vessels; and · a pledge of the equity interests in each of the borrowers. Commercial and Technical Management – AHTS Vessels and crew boats The Company’s AHTS vessels and crew boats are commercially managed by and technically managed by pursuant to a Master Agreement, which may be terminated by either party upon 12 months' notice, unless terminated earlier in with the provisions of the Master Agreement. SSM and SCM owned by the Lolli-Ghetti family of which Emanuele Lauro, our Chairman and Chief Executive Officer, and Filippo Lauro, our Vice President, are members. In the event of the sale of one or more vessels, a notice period of three months and a payment equal to three months of management fees will apply, provided that the termination does not amount to a change in control of the AHTS vessels or crew boats, including a sale of all or substantially all of the AHTS vessels or crew boats, in which case a payment equal to 12 months of management fees will apply. SCM and SSM are related parties of ours. We expect that additional vessels that we may acquire in the future will also be managed under the Master Agreement or on substantially similar terms. SCM’s services include securing employment, in the spot market and on time charters, for our AHTS vessels and crew boats. We pay SCM a management fee equal to 1.25% of gross revenues per charter fixture. SCM may these services to third parties pursuant to the Master Agreement. SSM’s services include day-to-day vessel operations, performing general maintenance, monitoring regulatory classification society compliance, customer vetting procedures, supervising the maintenance and general efficiency of vessels, arranging the hiring of qualified officers and crew, arranging and supervising drydocking and repairs, purchasing supplies, spare parts and new equipment for vessels, appointing supervisors and technical consultants and providing technical support. SSM may subcontract these services to third-parties. We pay SSM an annual fee of $156,000 per vessel for the AHTS vessels and an annual fee of $43,800 per vessel for the crew boats plus additional amounts for certain itemized services per vessel to provide technical management services for each of our AHTS vessels and crew boats. Termination of management agreement with Nordic American Tankers On May 1, 2019, the Company tendered notice to NAT that it shall terminate the management agreement with NAT upon the expiration of 180 days from the date of such notice, or October 28, 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of Accounting | Basis of Accounting: |
Principles of Consolidation | Principles of Consolidation: |
Use of Estimates | Use of Estimates: |
Foreign Currency Translation | Foreign Currency Translation: |
Revenue Recognition | Revenue Recognition: For the year ended December 31, 2018, the Company has entered into two longer term time charter contracts for two of its vessels with commitments through 2020. Expected time charter revenues for these contracts is $7.2 million in 2019 and $3.7 million in 2020. The aggregate cost of these vessels was $82.7 million and the aggregate accumulated depreciation (including impairment charges) and carrying value as of December 31, 2018 was $47.9 million and $34.8 million, respectively. There are no long-term time charter contracts that extend beyond 2020. As of December 31, 2017 and 2016, there were no longer term time charter contracts. |
Vessel Operating Costs | Vessel Operating Costs: |
Cash and Cash equivalents | Cash and Cash equivalents: |
Accounts Receivable | Accounts Receivable: |
Inventories | Inventories: |
Vessels, net | Vessels, net: Certain subsequent expenditures for conversions and major improvements are also capitalized if it is determined that they appreciably extend the life, increase the earnings capacity or improve the efficiency or safety of the vessel. Repairs and maintenance are expensed as incurred. The vessels’ estimated residual values and useful life are reviewed when there has been a change in circumstances that indicate the original estimate may no longer be appropriate. Residual values are estimated at $1.5 million for each vessel in the fleet at December 31, 2018 and 2017. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: |
Drydocking and engine overhaul | Drydocking and engine overhaul: The Company’s vessels are required to be drydocked approximately every 30 - 60 months (depending on vessel age), and to have engines overhauled after 10,000 – 11,000 running hours. The Company will capitalize a substantial portion of the costs incurred during drydocking and overhaul, and amortize those costs on a straight line basis from the completion of a drydocking, intermediate survey or overhaul to the estimated completion of the next drydocking or overhaul. Consistent with prior periods, drydocking costs include a variety of costs incurred while vessels are placed within drydock, including expenses related to the dock preparation and port expenses at the drydock shipyard, general shipyard expenses, expenses related to hull, external surfaces and decks, expenses related to machinery and engines of the vessel, as well as expenses related to the testing and correction of findings related to safety equipment on board. The Company includes in capitalized drydocking those costs incurred as part of the drydock to meet classification and regulatory requirements. The Company expenses costs related to routine repairs and maintenance performed during drydocking, and for annual class survey costs. The capitalized and unamortized drydocking costs are included in the book value of the vessels. Amortization expense of the drydocking costs is included in depreciation expense. For the PSVs acquired an estimate of $500,000 and $250,000 for drydock cost and overhaul costs respectively has been allocated from the purchase price. Drydocking is depreciated over five years, and engine overhauls are depreciated based on the number of running hours within the reporting period according to the built-in overhaul method. |
Geographical segments | Geographical segments: The Company has not presented segment information as it considers it operates as one reportable segment, the offshore support vessel market, where the majority of our vessels operated in the North Sea during the years ended December 31, 2018, 2017 and 2016. The Company had one vessel operating in West Africa during 2018, on a three-month term contract. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate carrying value because of the short-term nature of these instruments. |
Termination Fee | Termination Fee: In 2015 the Company received $3.9 million related to a termination of a charter contract for one of its vessels. The termination fee received was subject to future conditions, and was deferred and recognized in future periods when these conditions have been met. $0.4 million and $1.2 million of the termination fee were recognized as charter revenue for the years ended December 31, 2018 and December 31, 2017, respectively. There were no Deferred termination fees as of December 31, 2018. As of December 31, 2017, $0.4 million and $0 were recorded as Accrued Liabilities and Other Non-Current Liabilities. |
Income Taxes | Income Taxes: The Company is incorporated in Bermuda. Under current Bermuda law, the Company is not subject to corporate income taxes. The statutory applicable rate to consolidated corporate earnings is 0%. On March 10, 2014 the Company’s vessels were accepted into the UK Tonnage Tax regime. The Company no longer qualifies for inclusion in the UK Tonnage Tax regime and made an exit as of February 2017, and subsequent to this the Company was subject to the regular tax regime in the UK. No deferred tax asset in respect of losses incurred was recognized at the end of 2017 as the UK operations ceased and so the losses cannot be utilized to offset future UK or other taxable income. On April 1, 2018 eight vessels operated by NAO UK and related bareboat charter agreements were transferred to NAO Norway AS that was established on January 26, 2018 to provide commercial services. On September 28, 2018 the Company NAO UK was placed into members’ voluntary liquidation and on March 19, 2019 the final pre-liquidation tax returns were submitted. The liquidation of NAO UK will be concluded in May 2019. NAO Norway AS is subject to income tax in Norway for the year ended December 31, 2018 at a rate of 23% of its taxable result. NAO Norway AS recorded a taxable loss of $15.3 million and the income tax expense was $0 for the year ended December 31, 2018. The Company recorded a deferred tax asset of $3.5 million from its net operating loss in Norway and a corresponding full valuation allowance of $3.5 million for the year ended December 31, 2018. A full valuation allowance has been recognized due to the uncertainty related to the utilization of any carry forward tax losses. The Norwegian net operating losses may be carried forward for an indefinite period according to Norwegian tax law. There are no other permanent or temporary differences in NAO Norway AS |
Concentration of Credit Risk | Concentration of Credit Risk: For the year ended December 31, 2018, two charterers accounted for 25% of the total revenues, with 13% and 12% respectively. For the year ended December 31, 2017, three charterers accounted for 44% of the total revenues with 21%, 13%, and 10%, respectively. For the year ended December 31, 2016, three charterers accounted for 36% of the total revenues, with 14%, 11%, and 11%, respectively. For the year ended December 31, 2018, three charterers accounted for 76% of the outstanding accounts receivable, with 32%, 30%, and 14% respectively. For the year ended December 31, 2017, three charterers accounted for 66% of the outstanding accounts receivable, with 28%, 19%, and 19%, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. It also offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. Further, the FASB issued ASU 2018-11, Leases (Topic 842) in July 2018 related to the optional transition method for implementing ASC 842. The Company will apply the practical expedient to not separate nonlease components from the associated lease component and instead to account for those components as a single component if the nonlease component otherwise would be accounted for under the new revenue guidance (ASC 606); and both of the following are met: (1) the timing and patterns of transfer of the nonlease component and associated lease are the same; and (2) the lease component, if accounted for separately, would be classified as an operating lease. We will adopt ASC 842 using the modified retrospective transition approach. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit losses (ASC 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model known as the current expected credit loss (“CECL”) model that is based on expected losses rather than incurred losses. Under the new guidance, an entity is required to recognize as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. Unlike the incurred loss models under existing standards, the CECL model does not specify a threshold for the recognition of an impairment allowance. Rather, an entity will recognize its estimate of expected credit losses for financial assets as of the end of the reporting period. Credit impairment will be recognized as an allowance or contra-asset rather than as a direct write-down of the amortized cost basis of a financial asset. However, the carrying amount of a financial asset that is deemed uncollectible will be written off in a manner consistent with existing standards. The standard will be effective for the first reporting period within annual periods beginning after December 15, 2019 and early adoption is permitted. We are in the process of evaluating financial assets on our balance sheet for potential credit losses under the CECL model. |
Accounting Standards Implemented in 2018 | Accounting standards implemented in 2018: Effective January 1, 2018, the Company adopted Revenue from Contracts with Customers (ASC 606), which superseded nearly all existing revenue recognition guidance under U.S. GAAP, applying the modified retrospective method. It was determined that there was no cumulative effect of applying the new standard and therefore no adjustment to the opening accumulated losses balance was recorded. The Company’s revenues are based on leases or rental agreements with customers which is not addressed in the new standard. As a result, the adoption of the new accounting standard did not have material effect on the Company’s consolidated balance sheet, results of operations or cash flows. |
NATURE OF BUSINESS (Tables)
NATURE OF BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
NATURE OF BUSINESS [Abstract] | |
Current Fleet | As of December 31, 2018, the Company owned and operated Platform Supply Vessels (“PSV”) in the North Sea. This fleet consisted of: Vessel Name Yard Year Built Delivered to NAO NAO Fighter Ulstein 2012 January 2014 NAO Prosper Ulstein 2012 January 2014 NAO Power Ulstein 2013 January 2014 NAO Thunder Ulstein 2013 December 2013 NAO Guardian Ulstein 2013 December 2013 NAO Protector Ulstein 2013 December 2013 NAO Storm Ulstein 2015 January 2015 NAO Viking Ulstein 2015 January 2015 NAO Horizon Vard 2016 April 2016 NAO Galaxy Vard 2016 June 2016 |
VESSELS, NET (Tables)
VESSELS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
VESSELS, NET [Abstract] | |
Vessels, Net | The estimated useful life of a vessel is 25 years from the date the vessel is delivered from the shipyard. All Figures in USD ‘000 2018 2017 Vessels 404,324 404,377 Drydocking 4,379 2,179 Engine Overhaul 5,246 3,737 Total 413,949 410,293 Less Accumulated Depreciation 76,956 59,658 Less impairment of vessels 160,079 - Vessels, Net 176,914 350,635 |
Charter Rates, Company Specified Achieved Rates and Historical Market Rates | The table below indicates the (1) charter rates applied in our impairment assessment, (2) company-specific achieved rates and (3) historical market rates for the North Sea, obtained from an external party. Rates used (1) Achieved rates (2) Market rates (3) $ per day First year Second year Third year Thereafter 2018 2017 2004- 2018 2009- 2018 Rates $ 9,523 $ 9,523 $ 13,067 $ 17,423 $ $12,470 $ 10,784 $ 19,582 $ 14,874 Utilization 62 % 62 % 75 % 84.6 % 60 % 65 % 87 % 82 % |
INTEREST COSTS (Tables)
INTEREST COSTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INTEREST COSTS [Abstract] | |
Interest Costs Incurred | Interest costs consist of interest incurred on the long-term debt, the commitment fee and amortization of the deferred financing cost related to the Credit Facility described in Note 5. All amounts in USD ‘000 2018 2017 2016 Interest Costs, net of capitalized interest 7,574 4,428 2,781 Commitment Fee 98 93 327 Amortization of Deferred Financing Cost 359 359 359 Total interest costs 8,031 4,880 3,467 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
EARNINGS PER SHARE [Abstract] | |
Basic and Diluted Earnings Per Share | Basic earnings per share (“EPS”) is calculated by dividing net (loss) income by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding during the period. For the years ended December 31, 2018, 2017 and 2016, the Company had a net loss, thus any effect of common stock equivalents outstanding would be antidilutive. All figures in USD 2018 2017 2016 Numerator Net Loss (197,294,000 ) (29,326,000 ) (32,151,000 ) Denominator Basic and diluted - Weighted Average Common Shares Outstanding 6,263,094 5,499,561 2,093,926 Loss per Common Share Basic and diluted (31.50 ) (5.33 ) (15.35 ) |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SHAREHOLDERS' EQUITY [Abstract] | |
Authorized, Issued and Outstanding Common Shares | Authorized, issued and outstanding common shares for the years ended December 31, 2016, 2017 and 2018: Authorized common shares Authorized preferred shares Issued Shares Outstanding Shares Balance, January 1, 2016 20,000,000 50,000,000 2,343,136 2,256,053 Common Shares Repurchased under Share Repurchase Program (30,194 ) Common Shares Repurchased in Private Transaction (157,175 ) Balance, December 31, 2016 20,000,000 50,000,000 2,343,136 2,068,684 Common Shares Issued 4,130,000 4,130,000 Balance, December 31, 2017 20,000,000 50,000,000 6,473,136 6,198,684 Authorized share capital 15,000,000 Common Shares Issued, Private Placement 1,175,475 1,175,475 Balance, December 31, 2018 35,000,000 50,000,000 7,648,611 7,374,159 |
FINANCIAL INSTRUMENTS AND OTH_2
FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES [Abstract] | |
Carrying Value and Estimated Fair Value of the Company's Financial Instruments and Other Assets | The carrying value and estimated fair value of the Company’s financial instruments and other assets accounted for under fair value at December 31, 2018 and 2017 are as follows: All figures in USD ‘000 Fair Value Hierarchy Level 2018 Fair Value 2018 Carrying Value 2017 Fair Value 2017 Carrying Value Recurring Cash and Cash Equivalents 1 8,446 8,446 31,506 31,506 Initial Credit Facility 2 (132,900 ) (132,900 ) (137,000 ) (137,000 ) Non-recurring Vessels 2 176,914 176,914 - - |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ACCRUED LIABILITIES [Abstract] | |
Accrued Liabilities | The following table sets forth the components of our accrued liabilities as of December 31, 2018 and December 31, 2017: Accrued Liabilities All figures in USD ‘000 2018 2017 Accrued Interest 1,274 692 Accrued Costs 1,872 684 Deferred Revenues - 388 Total as of December 31, 3,146 1,764 |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) $ / shares in Units, $ in Thousands | Jan. 28, 2019$ / sharesshares | Dec. 12, 2018USD ($)$ / shares | Mar. 31, 2017USD ($)$ / shares | Dec. 31, 2018Vessel$ / shares | Dec. 31, 2017USD ($)$ / shares | Jan. 27, 2019$ / shares | Dec. 11, 2018$ / shares |
History of Business [Abstract] | |||||||
Number of PSVs | Vessel | 10 | ||||||
Common stock issued value | $ | $ 48,336 | $ 48,336 | |||||
Share price (in dollars per share) | $ 12.50 | ||||||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | ||||
Private Placement [Member] | Scorpio Offshore Investment Inc. [Member] | |||||||
History of Business [Abstract] | |||||||
Common stock issued value | $ | $ 5,000 | ||||||
Share price (in dollars per share) | $ 4.20 | $ 4.20 | |||||
Subsequent Event [Member] | |||||||
History of Business [Abstract] | |||||||
Reverse stock split (in shares) | shares | 0.1 | ||||||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.01 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Apr. 01, 2018Vessel | Dec. 31, 2018USD ($)VesselContracthSegmentSubsidiaryCharter | Dec. 31, 2017USD ($)ContractSegmentCharter | Dec. 31, 2016USD ($)ContractSegmentCharter | Dec. 31, 2015USD ($) |
Foreign Currency Translation [Abstract] | |||||
Total exchange loss | $ 600,000 | ||||
Total exchange gains | $ 300,000 | $ 200,000 | |||
Revenue Recognition [Abstract] | |||||
Number of longer term time charter contracts | Contract | 2 | 0 | 0 | ||
Number of vessels committed to time charter contracts | Vessel | 2 | ||||
Expected time charter revenues for 2019 | $ 7,200,000 | ||||
Expected time charter revenues for 2020 | 3,700,000 | ||||
Aggregate cost vessels | 82,700,000 | ||||
Accumulated depreciation | 47,900,000 | ||||
Carrying value of vessels | 34,800,000 | ||||
Asset Impairment Charges [Abstract] | |||||
Impairment loss on Vessels | $ 160,080,000 | $ 0 | $ 0 | ||
Vessels, Net [Abstract] | |||||
Estimate useful life of vessel | 25 years | ||||
Estimated residual value for each vessel | $ 1,500,000 | $ 1,500,000 | |||
Drydocking and Engine Overhaul [Abstract] | |||||
Drydock costs | 500,000 | ||||
Overhaul costs | $ 250,000 | ||||
Geographical Segments [Abstract] | |||||
Number of reportable segments | Segment | 1 | 1 | 1 | ||
Number of vessel operating in west Africa | Vessel | 1 | ||||
Contract term for vessel operating in west Africa | 3 months | ||||
Termination Fee [Abstract] | |||||
Funds received in relation to termination of a contract | $ 3,900,000 | ||||
Charter revenue recognized | $ 400,000 | $ 1,200,000 | |||
Deferred termination fees | 0 | ||||
Deferred revenue, current | $ 0 | 388,000 | |||
Deferred revenue, noncurrent | 0 | ||||
Income Taxes [Abstract] | |||||
Income tax rate | 0.00% | ||||
Number of vessels transferred from NAO UK to NAO Norway AS | Vessel | 8 | ||||
Net loss before income taxes | $ (197,294,000) | (30,323,000) | $ (32,151,000) | ||
Income tax expense | $ 0 | $ (997,000) | $ 0 | ||
Minimum [Member] | |||||
Drydocking and Engine Overhaul [Abstract] | |||||
Period when vessels are required to be drydocked | 30 months | ||||
Estimated running hours until engine overhaul | h | 10,000 | ||||
Maximum [Member] | |||||
Drydocking and Engine Overhaul [Abstract] | |||||
Period when vessels are required to be drydocked | 60 months | ||||
Estimated running hours until engine overhaul | h | 11,000 | ||||
Drydocking [Member] | |||||
Vessels, Net [Abstract] | |||||
Estimate useful life of vessel | 5 years | ||||
Norwegian Tax Administration [Member] | |||||
Income Taxes [Abstract] | |||||
Number of wholly owned subsidiaries | Subsidiary | 1 | ||||
Income tax rate | 23.00% | ||||
Net loss before income taxes | $ (15,300,000) | ||||
Income tax expense | 0 | ||||
Deferred tax asset | 3,500,000 | ||||
Valuation allowance | $ 3,500,000 | ||||
Revenues [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Number of charterers | Charter | 2 | 3 | 3 | ||
Concentration risk percentage | 25.00% | 44.00% | 36.00% | ||
Revenues [Member] | Customer One [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 13.00% | 21.00% | 14.00% | ||
Revenues [Member] | Customer Two [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 12.00% | 13.00% | 11.00% | ||
Revenues [Member] | Customer Three [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 10.00% | 11.00% | |||
Accounts Receivable [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Number of charterers | Charter | 3 | 3 | |||
Concentration risk percentage | 76.00% | 66.00% | |||
Accounts Receivable [Member] | Customer One [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 32.00% | 28.00% | |||
Accounts Receivable [Member] | Customer Two [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 30.00% | 19.00% | |||
Accounts Receivable [Member] | Customer Three [Member] | |||||
Concentration Risk Percentage [Abstract] | |||||
Concentration risk percentage | 14.00% | 19.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | May 01, 2019 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Related Parties [Abstract] | |||||
Stock issued during period (in shares) | 4,130,000 | 4,130,000 | |||
Nordic American Tankers Limited [Member] | |||||
Related Parties [Abstract] | |||||
Stock issued during period (in shares) | 800,000 | ||||
Ownership percentage | 13.55% | 16.12% | |||
Management agreement compensation | $ 100,000 | $ 100,000 | $ 100,000 | ||
Aggregate payment for costs incurred | $ 2,200,000 | $ 2,300,000 | $ 2,200,000 | ||
Nordic American Tankers Limited [Member] | Subsequent Event [Member] | |||||
Related Parties [Abstract] | |||||
Notice period for expiration of management agreement | 180 days | ||||
High Seas AS [Member] | Underwritten Public Follow-on Offering [Member] | |||||
Related Parties [Abstract] | |||||
Stock issued during period (in shares) | 160,000 | ||||
High Seas AS [Member] | Executive Chairman [Member] | |||||
Related Parties [Abstract] | |||||
Stock issued during period (in shares) | 150,000 | 598,101 |
VESSELS, NET (Details)
VESSELS, NET (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)VesselEstimate | Dec. 31, 2017USD ($)Vessel | Dec. 31, 2016USD ($) | |
VESSELS, NET [Abstract] | |||
Number of vessels | Vessel | 10 | 10 | |
Residual value | $ 1,500 | $ 1,500 | |
Estimate useful life of vessel | 25 years | ||
Vessels, Net [Abstract] | |||
Vessels, Gross | $ 413,949 | 410,293 | |
Less Accumulated Depreciation | 76,956 | 59,658 | |
Less impairment of vessels | 160,079 | 0 | |
Vessels, Net | $ 176,914 | 350,635 | |
Impairment Loss on Vessels [Abstract] | |||
Number of PSVs | Vessel | 10 | ||
Impairment loss on vessels | $ 160,080 | 0 | $ 0 |
Number of broker estimates | Estimate | 3 | ||
Period of weighted average analysis for first and second year | 3 years | ||
Weighted average annual growth factor | 2.00% | ||
Third year analysis ramp up period | 1 year | ||
Period of historical average rates | 15 years | ||
Period of average conversion rate | 10 years | ||
Period of average utilization rates in low case scenario | 10 years | ||
Period of average currency rate in base case | 10 years | ||
Period of average currency rate in low case scenario | 3 years | ||
First Year [Member] | |||
Summary of Charter [Abstract] | |||
Rates used | $ 9,523 | ||
Utilization, rates used | 62.00% | ||
Second Year [Member] | |||
Summary of Charter [Abstract] | |||
Rates used | $ 9,523 | ||
Utilization, rates used | 62.00% | ||
Third Year [Member] | |||
Summary of Charter [Abstract] | |||
Rates used | $ 13,067 | ||
Utilization, rates used | 75.00% | ||
Thereafter [Member] | |||
Summary of Charter [Abstract] | |||
Rates used | $ 17,423 | ||
Utilization, rates used | 84.60% | ||
2018 [Member] | |||
Summary of Charter [Abstract] | |||
Achieved rates | $ 12,470 | ||
Utilization, achieved rates | 60.00% | ||
2017 [Member] | |||
Summary of Charter [Abstract] | |||
Achieved rates | $ 10,784 | ||
Utilization, achieved rates | 65.00% | ||
2004-2018 [Member] | |||
Summary of Charter [Abstract] | |||
Market rates | $ 19,582 | ||
Utilization, market rates | 87.00% | ||
2009-2018 [Member] | |||
Summary of Charter [Abstract] | |||
Market rates | $ 14,874 | ||
Utilization, market rates | 82.00% | ||
Minimum [Member] | |||
Impairment Loss on Vessels [Abstract] | |||
Percentage of weighted base case scenario | 30.00% | ||
Period of historical dayrates for PSVs | 4 years | ||
Maximum [Member] | |||
Impairment Loss on Vessels [Abstract] | |||
Percentage of weighted base case scenario | 70.00% | ||
Period of historical dayrates for PSVs | 12 years | ||
Vessels [Member] | |||
Vessels, Net [Abstract] | |||
Vessels, Gross | $ 404,324 | 404,377 | |
Drydocking [Member] | |||
VESSELS, NET [Abstract] | |||
Estimate useful life of vessel | 5 years | ||
Vessels, Net [Abstract] | |||
Vessels, Gross | $ 4,379 | 2,179 | |
Engine Overhaul [Member] | |||
Vessels, Net [Abstract] | |||
Vessels, Gross | $ 5,246 | $ 3,737 |
DEBT (Details)
DEBT (Details) $ / shares in Units, $ in Thousands | Dec. 12, 2018USD ($)$ / shares | Apr. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)Covenant$ / shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2015USD ($) | Dec. 19, 2013USD ($) |
Credit Facility [Abstract] | ||||||||||
Drawn on facility | $ 132,900 | |||||||||
Number of debt covenants | Covenant | 3 | |||||||||
Repayment of credit facility | $ 4,095 | $ 0 | $ 0 | |||||||
Minimum required percentage of vessels fair market value to secure loan | 150.00% | |||||||||
Common stock issued value | $ 48,336 | $ 48,336 | ||||||||
Share price (in dollars per share) | $ / shares | $ 12.50 | |||||||||
Additional equity value amount | 15,000 | |||||||||
Stock issued during period (in shares) | shares | 4,130,000 | 4,130,000 | ||||||||
Proceeds from issuance of equity | $ 4,945 | $ 48,336 | $ 0 | |||||||
Term Loan Facility [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Debt instrument, maturity date | Dec. 6, 2023 | |||||||||
Common Stock Purchase Agreement [Member] | Forecast [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Share price (in dollars per share) | $ / shares | $ 2.78 | |||||||||
Stock issued during period (in shares) | shares | 3,240,418 | |||||||||
Proceeds from issuance of equity | $ 9,000 | |||||||||
Subsequent Event [Member] | Term Loan Facility [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Debt instrument available amount | 132,900 | $ 132,900 | ||||||||
Subsequent Event [Member] | Common Stock Purchase Agreement [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Equity line of credit | $ 20,000 | |||||||||
Common shares multiplier | 0.94 | |||||||||
Trailing period considered for equity line of credit | 30 days | |||||||||
LIBOR [Member] | Term Loan Facility [Member] | Forecast [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Basis spread on variable rate | 3.50% | |||||||||
Private Placement [Member] | Scorpio Offshore Investment Inc. [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Common stock issued value | $ 5,000 | |||||||||
Share price (in dollars per share) | $ / shares | $ 4.20 | $ 4.20 | ||||||||
Payments to covenant breach | $ 1,900 | |||||||||
Liquidity covenant | 5,000 | |||||||||
Increased liquidity covenant | $ 7,500 | |||||||||
2013 Initial Credit Facility [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Credit facility, maturity date | Dec. 31, 2018 | |||||||||
Deferred financing | $ 800 | |||||||||
Maximum borrowing capacity | $ 60,000 | |||||||||
Drawn on facility | $ 132,900 | $ 137,000 | ||||||||
Repayment of credit facility | $ 1,575 | |||||||||
2013 Initial Credit Facility [Member] | LIBOR [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Basis spread on variable rate | 2.00% | |||||||||
Revolving Credit Facility [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Credit facility, maturity date | Mar. 31, 2020 | |||||||||
Deferred financing | $ 1,200 | |||||||||
Maximum borrowing capacity | $ 150,000 | |||||||||
Additional equity value amount | $ 15,000 | |||||||||
Debt instrument available amount | $ 132,900 | |||||||||
Revolving Credit Facility [Member] | LIBOR [Member] | ||||||||||
Credit Facility [Abstract] | ||||||||||
Basis spread on variable rate | 4.00% |
INTEREST COSTS (Details)
INTEREST COSTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
INTEREST COSTS [Abstract] | |||
Interest Costs, net of capitalized interest | $ 7,574 | $ 4,428 | $ 2,781 |
Commitment Fee | 98 | 93 | 327 |
Amortization of Deferred Financing Cost | 359 | 359 | 359 |
Total interest costs | $ 8,031 | $ 4,880 | $ 3,467 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator [Abstract] | |||
Net Loss | $ (197,294) | $ (29,326) | $ (32,151) |
Denominator [Abstract] | |||
Basic and diluted - Weighted Average Common Shares Outstanding (in shares) | 6,263,094 | 5,499,561 | 2,093,926 |
Loss per Common Share [Abstract] | |||
Basic and diluted (in dollars per share) | $ (31.50) | $ (5.33) | $ (15.35) |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) | Dec. 12, 2018 | Dec. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 31, 2017 | Dec. 31, 2018 | Dec. 11, 2018 | Dec. 10, 2018 | Dec. 31, 2017 | May 31, 2015 |
Authorized Common Shares [Roll forward] | |||||||||||||
Balance at beginning of period (in shares) | 35,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||
Authorized share capital (in shares) | 15,000,000 | ||||||||||||
Balance at ending of period (in shares) | 35,000,000 | 35,000,000 | 20,000,000 | 20,000,000 | |||||||||
Authorized Preferred Shares [Roll forward] | |||||||||||||
Balance at beginning of period (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||
Balance at ending of period (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||
Issued Shares [Roll forward] | |||||||||||||
Balance at beginning of period, issued shares (in shares) | 6,473,136 | 2,343,136 | 2,343,136 | ||||||||||
Stock issued during period (in shares) | 4,130,000 | 4,130,000 | |||||||||||
Common shares issued, private placement (in shares) | 1,175,475 | ||||||||||||
Balance at end of period, issued shares (in shares) | 7,648,611 | 7,648,611 | 6,473,136 | 2,343,136 | |||||||||
Outstanding Shares [Roll Forward] | |||||||||||||
Balance at beginning of period, outstanding (in shares) | 6,198,684 | 2,068,684 | 2,256,053 | ||||||||||
Common shares repurchased under share repurchase program (in shares) | (30,194) | ||||||||||||
Common shares repurchased in private transaction (in shares) | (157,175) | ||||||||||||
Stock issued during period (in shares) | 4,130,000 | 4,130,000 | |||||||||||
Common shares issued, private placement (in shares) | 1,175,475 | ||||||||||||
Balance at end of period, outstanding (in shares) | 7,374,159 | 7,374,159 | 6,198,684 | 2,068,684 | |||||||||
Common Stock [Abstract] | |||||||||||||
Common stock shares authorized, value | $ 4,000,000 | $ 2,000,000 | |||||||||||
Common stock shares authorized (in shares) | 35,000,000 | 35,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 35,000,000 | 35,000,000 | 20,000,000 | |||||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | ||||||||||
Common Stock, Value, Outstanding | $ 3,500,000 | ||||||||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||
Preferred Stock, Value, Outstanding | $ 500,000 | ||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||||||||
Common stock price (in dollars per share) | $ 12.50 | ||||||||||||
Common stock issued in public offering (in shares) | 4,130,000 | 4,130,000 | |||||||||||
Exercise of underwriters' shares (in shares) | 130,000 | ||||||||||||
Common stock issued value | $ 48,336,000 | $ 48,336,000 | |||||||||||
Share repurchased program term | 2 years | ||||||||||||
Stock repurchased (in shares) | 117,277 | ||||||||||||
Maturity period of stock repurchase program | 2 years | ||||||||||||
Maximum [Member] | |||||||||||||
Common Stock [Abstract] | |||||||||||||
Share repurchase program, authorized shares (in shares) | 2,500,000 | ||||||||||||
Private Placement [Member] | Scorpio Offshore Investment Inc. [Member] | |||||||||||||
Common Stock [Abstract] | |||||||||||||
Aggregate common shares issued in private placement (in shares) | 1,175,474 | ||||||||||||
Common stock price (in dollars per share) | $ 4.20 | $ 4.20 | |||||||||||
Proceeds from issuance of common stock, value | $ 4,900,000 | ||||||||||||
Proceed were immediately used to cure the covenant non-compliance | $ 1,900,000 | ||||||||||||
Common stock issued value | $ 5,000,000 |
FINANCIAL INSTRUMENTS AND OTH_3
FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Level 1 [Member] | Recurring [Member] | Fair Value [Member] | ||
Financial Assets and Liabilities Fair Value Disclosure [Abstract] | ||
Cash and Cash Equivalents | $ 8,446 | $ 31,506 |
Level 1 [Member] | Recurring [Member] | Carrying Value [Member] | ||
Financial Assets and Liabilities Fair Value Disclosure [Abstract] | ||
Cash and Cash Equivalents | 8,446 | 31,506 |
Level 2 [Member] | Recurring [Member] | Fair Value [Member] | ||
Financial Assets and Liabilities Fair Value Disclosure [Abstract] | ||
Initial Credit Facility | (132,900) | (137,000) |
Level 2 [Member] | Recurring [Member] | Carrying Value [Member] | ||
Financial Assets and Liabilities Fair Value Disclosure [Abstract] | ||
Initial Credit Facility | (132,900) | (137,000) |
Level 2 [Member] | Non-recurring [Member] | Fair Value [Member] | ||
Financial Assets and Liabilities Fair Value Disclosure [Abstract] | ||
Vessels | 176,914 | 0 |
Level 2 [Member] | Non-recurring [Member] | Carrying Value [Member] | ||
Financial Assets and Liabilities Fair Value Disclosure [Abstract] | ||
Vessels | $ 176,914 | $ 0 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ACCRUED LIABILITIES [Abstract] | ||
Accrued Interest | $ 1,274 | $ 692 |
Accrued Costs | 1,872 | 684 |
Deferred Revenues | 0 | 388 |
Total | $ 3,146 | $ 1,764 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Claim | Dec. 31, 2018 | Dec. 31, 2017 |
COMMITMENTS AND CONTINGENCIES [Abstract] | ||
Number of claims filed | 0 | 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | May 01, 2019 | Jan. 28, 2019$ / sharesshares | Apr. 30, 2019USD ($)Vesselt$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Mar. 31, 2019USD ($) | Jan. 27, 2019$ / sharesshares | Dec. 11, 2018$ / shares | Dec. 31, 2015shares |
Subsequent Event [Abstract] | |||||||||||
Common stock, shares outstanding (in shares) | shares | 7,374,159 | 6,198,684 | 2,068,684 | 2,256,053 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 | $ 0.10 | ||||||||
Stock issued during period (in shares) | shares | 4,130,000 | 4,130,000 | |||||||||
Common stock price (in dollars per share) | $ / shares | $ 12.50 | ||||||||||
Net proceeds | $ 4,945,000 | $ 48,336,000 | $ 0 | ||||||||
Aggregate net consideration | $ 48,336,000 | 48,336,000 | |||||||||
Credit facility outstanding | 132,900,000 | ||||||||||
Additional equity value | 15,000,000 | ||||||||||
Cash and Cash Equivalents | $ 8,446,000 | $ 31,506,000 | |||||||||
Nordic American Tankers Limited [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Stock issued during period (in shares) | shares | 800,000 | ||||||||||
Forecast [Member] | Minimum [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Cash and Cash Equivalents | $ 12,500,000 | ||||||||||
Term Loan Facility [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Debt instrument, maturity date | Dec. 6, 2023 | ||||||||||
Line of credit facility, repayment term | Semi-annual | ||||||||||
Term Loan Facility [Member] | Forecast [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Line of credit facility, installment amount | $ 7,500,000 | ||||||||||
Term Loan Facility [Member] | LIBOR [Member] | Forecast [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Basis spread on variable rate | 3.50% | ||||||||||
DVB Credit Facility [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Line of credit facility, repayment term | Quarterly | ||||||||||
DVB Credit Facility [Member] | Forecast [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Credit facility outstanding | $ 9,000,000 | ||||||||||
Line of credit facility, installment amount | $ 200,000 | ||||||||||
Credit facility, maturity date | Sep. 30, 2022 | ||||||||||
DVB Credit Facility [Member] | LIBOR [Member] | Forecast [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Basis spread on variable rate | 2.75% | ||||||||||
Common Stock Purchase Agreement [Member] | Forecast [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Stock issued during period (in shares) | shares | 3,240,418 | ||||||||||
Common stock price (in dollars per share) | $ / shares | $ 2.78 | ||||||||||
Net proceeds | $ 9,000,000 | ||||||||||
Scorpio Offshore Holding Inc. [Member] | Forecast [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Stock issued during period (in shares) | shares | 8,126,219 | ||||||||||
Common stock price (in dollars per share) | $ / shares | $ 2.78 | ||||||||||
Aggregate net consideration | $ 22,600,000 | ||||||||||
Scorpio Ship Management S.A.M. [Member] | Forecast [Member] | Anchor Handling Tug Supply Vessels [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Annual fee per vessel | 156,000 | ||||||||||
Scorpio Ship Management S.A.M. [Member] | Forecast [Member] | Crew Boats [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Annual fee per vessel | $ 43,800 | ||||||||||
Subsequent Event [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Reverse stock split | 0.1 | ||||||||||
Common stock, shares outstanding (in shares) | shares | 7,374,034 | 73,741,595 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.10 | $ 0.01 | |||||||||
Deadweight tonnage of Vessel | t | 2,500 | ||||||||||
Term for excess earnings to be used to repay credit facility | 36 months | ||||||||||
Subsequent Event [Member] | Nordic American Tankers Limited [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Notice period for expiration of management agreement | 180 days | ||||||||||
Subsequent Event [Member] | Minimum [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Cash and cash equivalents per vessel above 2500 DWT | $ 750,000 | ||||||||||
Debt to capitalization ratio | 0.60 | ||||||||||
Subsequent Event [Member] | Term Loan Facility [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Debt instrument available amount | $ 132,900,000 | $ 132,900,000 | |||||||||
Number of PSVs collateralized | Vessel | 10 | ||||||||||
Subsequent Event [Member] | DVB Credit Facility [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Minimum liquidity amount | $ 800,000 | ||||||||||
Drydock reserve account limit | $ 3,600,000 | ||||||||||
Term in which the credit facility can be repaid | 39 months | ||||||||||
Subsequent Event [Member] | Common Stock Purchase Agreement [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Equity line of credit | $ 20,000,000 | ||||||||||
Common shares multiplier | 0.94 | ||||||||||
Trailing period considered for equity line of credit | 30 days | ||||||||||
Subsequent Event [Member] | Scorpio Offshore Holding Inc. [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Number of vessels acquired | Vessel | 13 | ||||||||||
Outstanding Indebtedness | $ 9,000,000 | ||||||||||
Percentage of debt to capitalization ratio | 28.00% | ||||||||||
Subsequent Event [Member] | Scorpio Offshore Holding Inc. [Member] | Anchor Handling Tug Supply Vessels [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Number of vessels acquired | Vessel | 2 | ||||||||||
Subsequent Event [Member] | Scorpio Offshore Holding Inc. [Member] | Crew Boats [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Number of vessels acquired | Vessel | 11 | ||||||||||
Subsequent Event [Member] | Scorpio Offshore Holding Inc. [Member] | DVB Credit Facility [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Number of vessels related to outstanding indebtedness | Vessel | 2 | ||||||||||
Subsequent Event [Member] | Scorpio Commercial Management S.A.M. [Member] | |||||||||||
Subsequent Event [Abstract] | |||||||||||
Notice period for termination of master agreement | 12 months | ||||||||||
Notice period for sale of one or more vessels | 3 months | ||||||||||
Management fees period for sale of one or more vessels | 3 months | ||||||||||
Management fees period for sale of all vessels | 12 months | ||||||||||
Percentage of gross revenue paid as management fee | 1.25% |