U.S. Shipping Partners L.P. Provides Update
June 11 2008 - 11:16AM
Marketwired
EDISON, NJ today announced that while it experienced increased
demand for its Integrated Tug Barges ("ITBs") and increased
utilization of its chemical fleet since the filing last month of
its Quarterly Report on Form 10-Q for the first quarter of 2008,
business conditions remain challenging due to high crude oil prices
and reduced demand in the Jones Act market. There can be no
assurance that this improved performance will continue in future
months. In addition, despite improved market conditions since the
filing of the Form 10-Q, utilization and spot market rates remain
lower than in the comparable period in 2007.
As previously announced, the Partnership has retained Greenhill
& Co. LLC and Jefferies & Company to assist it in exploring
strategic alternatives, which could include, among other things, a
sale or recapitalization of the Partnership, the sale of new equity
or other methods of enhancing the capitalization and liquidity of
the Partnership. In order to give the Partnership adequate time to
pursue strategic alternatives, the Partnership has, based on
discussions with the agent bank for its lenders, determined to
enter into negotiations with its lenders to amend certain financial
ratio covenants under its senior credit facility.
As previously announced, due to market conditions, the
Partnership may fall out of compliance with these covenants as
measured at the end of the second or third quarter. There can be no
assurance that the negotiations to amend these covenants will be
successful. If the Partnership is not in compliance with its
financial covenants, the lenders will have a number of remedies,
including preventing the Partnership from making additional
borrowings under its revolving credit facility and not permitting
the Partnership to make distributions on its common units until the
Partnership is again in compliance. The Partnership expects that
any amendment to its financial covenants will require the payment
of fees and a higher rate of interest, which would negatively
impact the Partnership's results of operations, and will likely
require the suspension of the Partnership's common unit
distribution.
About U.S. Shipping Partners L.P.
U.S. Shipping Partners L.P. is a leading provider of long-haul
marine transportation services, principally for refined petroleum
products, petrochemical and commodity chemical products, in the
U.S. domestic "coastwise" trade. The Partnership's existing fleet
consists of eleven tank vessels: six integrated tug barge units;
one product tanker; three chemical parcel tankers and one ATB that
was delivered in June 2007 and entered service in July 2007. The
Partnership has embarked on a capital construction program to build
additional ATBs and, through a joint venture, additional tank
vessels that upon completion will result in the Partnership having
one of the most modern fleets in service. For additional
information about U.S. Shipping Partners L.P., please visit
www.usslp.com.
This press release may include "forward-looking statements" as
defined by the Securities and Exchange Commission. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that the
Partnership expects, believes or anticipates will or may occur in
the future are forward-looking statements. These statements are
based on certain assumptions made by the Partnership based on its
experience and perception of historical trends, current conditions,
expected future developments and other factors it believes are
appropriate in the circumstances. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are
beyond the control of the Partnership, which may cause our actual
results to differ materially from those implied or expressed by the
forward-looking statements. Such assumptions, risks and
uncertainties are discussed in detail in the Partnership's filings
with the SEC and include, among other things, the willingness of
our lenders to amend our credit agreement on commercially
acceptable terms, increased financing costs, future charter rates,
demand in the spot market for vessels and timely and on-budget
delivery in the second half of 2008 of two ATBs currently under
construction.
Contact Information: Albert Bergeron Chief Financial Officer
U.S. Shipping Partners L.P. 1-866-467-2400
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