American Shipping Company ASA (OTCMKTS:ASCJF) Stock Moves Up a But After Consolidation

Shares of American Shipping Company ASA (OTCMKTS:ASCJF) ended higher on Friday after moving within  a narrow range

Market Reaction

On Friday, ASCJF stock ended up by 5% to $3.81 with 300 shares, compared to its average volume of 575 shares. The stock has moved within a range of $3.7400 – 3.8100 after opening trade at $3.74.

American Shipping Company ASA Provides Updates about Charter Extensions

American Shipping Company ASA (OTCMKTS:ASCJF) made an announcement on December 10, 2021, about Overseas Shipholding Group (OSG) declaring its options to extend bareboat charter agreements for two vessels. They are presently under charter from AMSC to OSG by a year, which moves the new bareboat expiry date to December 2023.

However, OSG has provided notice regarding not extending bareboat agreements for three vessels. As of now, these vessels remain contracted with associated cash flows from OSG until the present charters expire in December 2022. Deferred payment obligations related to these three contracts of approximately USD 12 million will be due upon charter expirations and vessel redeliveries. They will become payable by OSG to AMSC right away.

AMSC is current on all financial covenants and other loan terms, which won’t be affected due to OSGs decision of not extending those three bareboat contracts. Cash flow profile of AMSC remains unchanged for the next 12 months as management looks toward re-chartering or developing other business opportunities for the three vessels.

AMSC CEO Pl Lothe Magnussen stated they are eager to build on new business avenues for the three vessels that will be returned to the company in December 2022. The Jones Act tanker market looks promising with a boost in chartering activity, while long-term fundamentals remain lucrative with negative fleet growth and no newbuilds likely to enter the market for quite a few years.

Traders Review

ASCJF stock is trading above the 20-Day and 50-Day Moving averages of $3.75 and $3.74 respectively. Moreover, the stock is trading below the 200-Day moving average of $3.67.


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