Forth Tankers reveals share buyback plans

SHIPPING group Forth Tankers is planning a formal offer to buy shares from investors after ruling out winding up the company.

The Edinburgh-based firm has already offered to buy back shares from individual shareholders on the Plus market, where they are traded, after saying it was unable to find opportunities to invest its cash.

Forth Tankers – headed by former Forth Ports chairman Bill Thomson – disposed of most of its shipping investments to take advantage of high prices in the market.

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Its main vessel, the Forth Bridge, which had been on charter in the Caribbean, was sold in April 2008 for $7 million (4.6m).

Although the group said its strategy to exit the market had "proved to be a good decision" as ship values had since plunged, it admitted it had proved difficult to find suitable investments.

Although there are ships for sale – and often at relatively low prices – the difficulty was finding long-term charters able to generate satisfactory returns.

The company said the current state of the shipping market also meant it could not be confident that some potential clients "will still be around if the hard times persist".

Forth Tankers has been looking at returning capital to shareholders but, in a letter sent to shareholders yesterday, Thomson said a voluntary winding up of the company had been ruled out because of long-standing potential liabilities.

"Instead we intend to make a tender offer to buy back shares at a price that reflects the net asset value of the company having made allowance for the expected cost of running off the contingent liabilities," said Thomson

Once accounts for the financial year to 31 March have been finalised, a formal offer document will be prepared. In the meantime, Thomson said the company was still in a position to buy back shares.

Forth Tankers, along with sister company Celtic Tankers, which is also exploring options for capital return, are thought to have some 5m in assets between them.

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Thomson left Forth Ports as chair in 2000. He had earlier been linked with a possible 750p-a-share offer for the company.