Aker Shipyard owner explores strategies, including a U.S. stock listing

The majority owner of Aker Philadelphia Shipyard and American Shipping Co. is exploring "strategic initiatives" for the companies that might include a U.S. listing of stock, a merger or acquisition, or a financial restructuring.

Converto Capital Fund, an investment fund owned by the Norwegian parent company Aker ASA, has a 57 percent stake in Aker Philadelphia Shipyard and a 20 percent stake in American Shipping Co.

"These two companies have performed well, and Converto is always looking to create values," said Atle Kigen, Aker ASA spokesman. "A number of things are being investigated, including a U.S. listing, merger and acquisition, and even stronger corporate structures in the U.S. Jones Act market, but there is no clear path yet."

Aker Shipyard, which employs more than 1,000 at the Navy Yard in South Philadelphia, has orders to build ships through 2018 in compliance with the U.S. Jones Act, which requires all vessels shipping cargo between U.S. ports to be U.S.-built.

"The North American shale oil revolution has created a structural change in the demand for oil transportation and refining in the United States," Converto said. "This has resulted in the creation of numerous jobs and significant tailwinds for the Jones Act market."

American Shipping and Aker Shipyard assets are "uniquely positioned to benefit" from the supply-and-demand dynamics "driven by increased shale oil production, longer shipping distances, stricter vessels requirements and limited new building capacity," Converto said. "American Shipping Company and Aker Philadelphia Shipyard are at a crossroad of opportunities."

Last week, Converto said it had received expressions of interest from several parties about "strategic opportunities" for the two firms "on a stand-alone or combined basis. This could include M&A and financial restructuring . . . as well as investigating potential joint strategic alternatives."

Kristian Rokke stepped down as president and CEO of Aker shipyard in April to become executive chairman of the board of directors.

Rokke, 31, whose father, Kjell Inge Rokke, is chairman of Aker ASA, said in a letter to shareholders that he would stay in Philadelphia through 2014 and continue as chairman of the board after he leaves Philadelphia "to assume another position within the Aker Group." His successor as CEO has not been named.

A public company listed on the Oslo stock exchange, Aker is now building four vessels here, and plans to build six more through the end of 2018.

It has taken a financial interest in the ships after they are sold, "which on an international basis is an atypical thing for a shipyard to do," said lawyer Charlie Papavizas, chair of the maritime and admiralty practice at Winston & Strawn in Washington. "They build the ships and earn something from the operation of the ships over time."

Aker has handled the investments in "three different ways," Papavizas said: a lease-finance structure; a co-venture for some vessels with Crowley Maritime, and, most recently, through Philly Tankers, which it set up to build some ships and find buyers before completion.

"Aker has done a good job with their situation and has been creative in finding ways to own vessels, and keep an interest in vessels over time, which has proven successful," he said.

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