The U.S. Maritime Administration has denied an application by American Petroleum Tankers (APT) for a Title XI loan guarantee for five 49,000-deadweight-ton petroleum tankers that were built at the General Dynamics NASSCO shipyard in San Diego between 2006 and 2010 for the U.S. coastal trade.
A letter from Maritime Administrator David Matsuda dated Aug. 1 said APT’s project was found to be economically unsound, did not warrant priority, and would exhaust MarAd’s limited resources for Title XI shipbuilding guarantees.
Matsuda said, however, he would consider revisions to the application that were given to the agency in July, if APT wished. APT had revised down the amount of money it was seeking from from $470 million originally to $340 million.
Robert Kurz, chief executive officer of APT, said the company was considering its options following receipt of the letter from MarAd on Wednesday.
Matsuda said “MarAd’s analysis found APT’s financial figures troubling,” adding the company operated at a net loss in 2010, 2011, and the first quarter of 2012. He noted that an analysis from MarAd’s financial advisor Scully Capital Services found that even if APT benefited from a lower interest rate from the Title XI guarantee, “APT would have difficulty repaying its loan obligations.” – Chris Dupin
MarAd denies Title XI guarantee to APT
