U.S. Shipping Partners may be looking to merge; board downsizes in effort to save cash

By Angela McDaniels

Tacoma, Wash., Oct. 24 - U.S. Shipping Partners LP looks to be in the market for a merger, according to an 8-K filing with the Securities and Exchange Commission.

The company agreed to pay additional interest under its senior credit facility beginning Jan. 31 unless it has executed a definitive agreement for a merger or other consolidation in which it will be the surviving entity but a change of control will occur.

The agreement was made in connection with the lenders granting a waiver of potential defaults under the financial covenants for the third and fourth quarters. The waiver was granted on Oct. 23 and is good through Jan. 31.

Directors resignations

In the same filing, the company said it is "right sizing" its operations in order to conserve cash. As a result, directors M. William Macey Jr. and Douglas Newhouse and chairman Paul Gridley resigned from the board.

Macey and Newhouse were the representatives of Sterling Investment Partners, LP, and Gridley is U.S. Shipping Partners' former chief executive officer.

The company estimated that its revenue for September was reduced by about $1.1 million and that it incurred about $300,000 of additional fuel costs due to the closure of Gulf Coast ports because of Hurricanes Hannah and Ike and due to its decision to keep its vessels at sea to avoid these hurricanes.

U.S. Shipping is an Edison, N.J.-based provider of long-haul marine transportation services.

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