Ardmore Shipping Corporation (NYSE: ASC) (“Ardmore” or the “Company”) today announced an additional debt refinancing which brings the total amount of debt refinanced since the start of 2016 to $408 million.
This refinancing further strengthens the Company’s financial flexibility by extending and aligning debt maturities to 2022, providing additional borrowing capacity to support accretive growth, and lowering the Company’s cost of debt.
Ardmore has received senior secured term loan commitments of $64 million from Credit Agricole Corporate and Investment Bank, comprising $39 million to refinance two existing vessels, plus a $25 million commitment for additional financing. The covenants and other conditions of the facility are consistent with those of the other new facilities. Together with the facilities completed in mid-January, Ardmore’s successful refinancing efforts have now decreased its interest expense by approximately $2.2 million in 2016 and improved the Company’s surplus cash flow by approximately $6.7 million over the same period.
Anthony Gurnee, Ardmore’s Chief Executive Officer, commented:
“We are pleased to have secured this financing commitment from Credit Agricole, further highlighting Ardmore’s strong banking relationships and our ability to build value by identifying opportunities to strengthen our balance sheet and reduce costs. This completes the current phase of refinancing and positions the Company for continued growth by increasing our financing capacity, while at the same time decreasing our cost of capital. We appreciate the continued support of Credit Agricole and all of our relationship banks.
“We are firmly committed to both building and returning value to our shareholders. As a central component of that approach, we pay out 60% of earnings from continuing operations each quarter in the form of a dividend. By linking the dividend directly to our earnings, we have increased our fourth quarter dividend by 30%, and increased our total dividend payment by 120% since introducing the policy in third quarter 2015. This dividend policy enables investors to participate directly in our earnings as we capitalize on our fully delivered 24-vessel fleet and benefit from an MR market that we expect to remain strong in 2016 and beyond. Consistent with this focus on returning capital to shareholders, we also intend to look for opportunities to utilize our existing share repurchase program to take advantage of the highly attractive price of our shares.”