The Company is very well placed to take advantage of strong shipping markets, which due to our spot strategy, can be expected to be reflected in increased dividend payouts immediately.
The establishment of the Orion Tanker Pool has resulted in a closer relationship with customers and a stronger position in the market place. The previously announced commercial frame agreement with a subsidiary of a major oil company is the result of a more active marketing policy. We do business with some of the largest oil companies in the world on a regular basis. They demand quality both at sea and onshore. As of January 1, 2013, NAT has agreed to acquire the remaining 50% of the Orion Tanker Pool which will continue to produce improved penetration of the market.
Prices for newbuildings and second hand tankers continue to be low by historical standards. NAT is in a good position to buy additional vessels or order new vessels at advantageous prices when the time is right. Such acquisitions would increase the dividend capacity of the Company. It is a prerequisite for any expansion of the fleet that our dividend and earnings capacity per share increase. During 2012 we have inspected several vessels for possible acquisition purposes. We are in no rush and we continue to exercise caution in this regard.
In the 4th quarter 2012, NAT agreed to acquire Scandic American Shipping Ltd. which was previously owned by the Chairman and CEO for $25m, of which $17m was paid in stock. The transaction was completed in January 2013. The main rationale underpinning the acquisition of Scandic American Shipping Ltd. is above all related to the fact that NAT has gained full control of all aspects of its operations. Among other things this relates to technical and commercial management and alignment of interests.
Our primary objective is to enhance total return for our shareholders, including maximizing our quarterly dividend.
As of December 31, 2012, the Company has net debt of about $7.8m per vessel. The Company has in place a new non-amortizing credit facility of $430m, of which $250m has been drawn at this time. Cash on hand is about $56m.
The credit facility, which matures in November of 2017, is not subject to reduction by the lenders and there is no obligation to repay principal during the term of the facility. The Company pays interest only on drawn amounts and a commitment fee for undrawn amounts.
Our cash breakeven rate is about $12,000 per day per vessel which is a very low level in the tanker industry.
The tightened terms of commercial bank financing and higher margins on shipping loans are challenging for shipping companies that are highly leveraged. By having little net debt, NAT is better positioned to navigate the financial seas, and we believe this is in the best interests of our shareholders.
For further details on our financial position for 4Q2012, 3Q2012 and 4Q2011, please see later in this release.
The Company has a fleet of 20 homogenous Suezmax vessels at the time of this report. By way of comparison, in the autumn of 2004, the Company had three vessels. Please see the fleet list below. We expect that the expansion process will continue over time and that more vessels can be expected to be added to our fleet. Our vessels are employed in the spot market. The average age of our fleet is 11.6 years. Our vessels are in excellent technical condition - a priority for us.
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