June 10, 2014 zoom Aker Philadelphia Shipyard ASA (AKPS) today announced the planned establishment of Philly Tankers AS, a Norwegian limited liability company, and its wholly-owned subsidiary, Philly Tankers LLC, a Delaware limited liability company (Philly Tankers).Philly Tankers has successfully secured equity commitments necessary to finance the purchase of two product tankers from AKPS with deliveries in 2016 and 2017, and will have a post- money market capitalization of $127.5 million. Together with best-in-class partners, Philly Tankers will operate and charter the vessels in the Jones Act market.“There are two key trends currently shaping the Jones Act market – the tight oil revolution, which has increased demand for product tankers, and a surge in containership orders, which has constrained shipyard capacity. Philly Tankers is well positioned to benefit from the effects of these trends by offering customers modern tonnage in a supply constrained market, as well as reliable operations and substantially improved fuel-efficiency versus the existing fleet,” says Kristian Rokke, Chairman of AKPS.As part of the transaction, AKPS will invest $58.5 million for 54% of the shares, which AKPS expects to fund through existing cash and proceeds from operations. The remaining sponsors (American Shipping Company, funds managed by affiliates of Apollo Global Management, LLC and other U.S. institutional investors) will invest $59.0 million for 46% of the shares at a subscription price of USD 1,000.00 per share.AKPS and Philly Tankers, through their U.S. subsidiaries, will enter into binding shipbuilding contracts for the first two product tankers, designated as AKPS Hulls 025-026. The total contract value is approximately $250 million, excluding construction period financing, initial owner expenses, G&A, and transaction costs.The anticipated profitability of the shipbuilding project for AKPS is in-line with previous guidance for AKPS Hulls 021-030. An option agreement will also be signed for two identical product tankers with deliveries in 2017, designated as AKPS Hulls 027-028, on substantially the same terms and conditions as AKPS Hulls 025-026.The vessels will be 50,000 dwt product tankers based on a proven Hyundai Mipo Dockyards (HMD) design that incorporates numerous fuel efficiency features, flexible cargo capability, and the latest regulatory requirements. The vessels will be constructed with consideration for the use of LNG for propulsion in the future. The vessels will be identical to the vessels currently under construction at AKPS that will be included in the AKPS-Crowley joint venture.It is expected that the Transaction will be closed in mid-July 2014.