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Chief officer leaves US partners

Chief officer leaves US partners
AL Bergeron has departed as chief financial officer of troubled Jones Act tanker company US Shipping Partners, taking a $930,000 severance package with him.

AL Bergeron has departed as chief financial officer of troubled Jones Act tanker company US Shipping Partners, taking a $930,000 severance package with him.

AL Bergeron has departed as chief financial officer of troubled Jones Act tanker company US Shipping Partners, taking a $930,000 severance package with him.

Mr Bergeron is to receive a further $465,000 if there is a change of control at US Shipping before the end of December 2009. The $930,000 is to be paid in equal semi-monthly instalments over two years. The severance comes with a two-year non-compete clause.

Mr Bergeron"s departure follows the exit last August of Paul Gridley, US Shipping chief executive, who was replaced by Ronald O"Kelley.

US Shipping Partners floated in November 2004. Mr Gridley and his team in the summer of 2002 led a $200m buyout of the Amerada Hess US-flag tanker division, which was renamed US Shipping. The venture was taken public two years later.

US Shipping ran into trouble in the first quarter of 2008. Declining spot rates, lower demand, tonnage over-supply, higher fuel prices, discontinuation of guaranteed charter business from Hess, and a lofty newbuilding programme that proved hard to afford and market forced the company to put itself up for a possible sale.

Greenhill & Co and Jefferies were retained for exploring alternatives in this connection, including recapitalisation or injection of new equity.

US Shipping saw its cash flows decline in a difficult market

Simultaneously, US Shipping saw its cash flows decline in a difficult market. As the company had previously warned the market, it ended up defaulting on its amended credit facility as at September 30 last year.

According to the quarterly report filed with US securities regulators in November, the senior lenders on the credit facility waived this non-compliance through to the months ending January 31 this year.

?However, after January 31, 2009, absent an additional waiver from the senior lenders or an amendment of the senior credit agreement, we will be in default of these financial covenants [again],? the document has warned.

?The October 2008 amendment to the senior credit agreement requires us to have a specified minimum cumulative earnings before interest, tax, depreciation and amortisation on the last day of October, November and December 2008 and January 2009, and there can be no assurance that we will meet this requirement.?

Alongside the announcement of Mr Bergeron"s departure, US Shipping also announced that it had waived the trading "blackout" on officers and directors of 15 days before the end of the fiscal year and ending three business days after publication of the Partnership"s financial results for the 2008 fiscal year.

This is designed to allow continuing officers, including respected Hess veteran Joe Gehegan, ?to sell prior to the end of the year certain of their common units for tax-planning purposes to offset gains they expect to recognize in respect of their subordinated units?.

US Shipping Partners owns six integrated tug barge units, three chemical tankers, one product tanker and two articulated tug barges. One additional ATB remains under construction as part of a slimmer fleet portfolio, with delivery scheduled in November 2009.

The company has suspended dividends as it tries to find its way out of its current fiscal darkness.

www.TurkishMaritime.com.tr

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