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Debt
 9 Months Ended
Sep. 30, 2024
Debt  
Debt

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3. Debt

As of September 30, 2024, the Company had three loan facilities, which it has used primarily to finance vessel acquisitions or vessels under construction and also for working capital. The Company’s applicable ship-owning subsidiaries have granted first-priority mortgages against the relevant vessels in favor of the lenders as security for the Company’s obligations under the loan facilities, which totaled 19 vessels as of September 30, 2024. ASC and its subsidiary Ardmore Shipping LLC have provided guarantees in respect of the loan facilities and ASC has granted a guarantee over its trade receivables in respect of the ABN AMRO Revolving Facility (as defined below). These guarantees can be called upon following a payment default. The outstanding principal balances on each loan facility as of September 30, 2024 and December 31, 2023 were as follows:

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As of

In thousands of U.S. Dollars

    

September 30, 2024

    

December 31, 2023

Nordea/SEB Revolving Facility

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20,000

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—

ABN/CACIB Joint Bank Facility

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—

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45,872

ABN/CACIB Revolving Facility

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—

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—

ABN AMRO Revolving Facility

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2,517

 

932

Total debt

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22,517

 

46,804

Deferred finance fees

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—

 

(778)

Net total debt

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22,517

 

46,026

Current portion of long-term debt

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2,517

 

6,713

Current portion of deferred finance fees

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—

 

(277)

Total current portion of long-term debt

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2,517

 

6,436

Non-current portion of long-term debt

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20,000

 

39,590

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Future minimum scheduled repayments under the Company’s loan facilities for each year are as follows:

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As of

In thousands of U.S. Dollars

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September 30, 2024

2024(1)

 

—

2025

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2,517

2026

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—

2027

 

20,000

2028

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—

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22,517

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(1) Three-month period ending December 31, 2024

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Nordea / SEB Revolving Facility

On August 5, 2022, 12 of ASC’s subsidiaries entered into a $185 million sustainability-linked revolving credit facility with Nordea Bank AB (publ) (“Nordea”) and Skandinaviska Enskilda Banken AB (publ) (“SEB”) (the “Nordea / SEB Revolving Facility”), the proceeds of which were used to refinance 12 vessels, including six vessels financed under lease arrangements. Interest is calculated at a rate of SOFR plus 2.5%. The revolving facility may be drawn down or repaid with five days’ notice. The revolving credit facility matures in June 2027. As of September 30, 2024, $20.0 million of the revolving credit facility was drawn down with $126.7 million undrawn.

3.      Debt (continued)

ABN/CACIB Joint Bank Term Loan and Revolving Credit Facility

On August 5, 2022, seven of ASC’s subsidiaries entered into a $108 million sustainability-linked long-term loan facility with ABN AMRO Bank N.V (“ABN AMRO”) and Credit Agricole Corporate and Investment Bank (“CACIB”) (the “ABN/CACIB Joint Bank Facility”), the proceeds of which were used to finance seven vessels, including three vessels financed under lease arrangements. Interest is calculated at SOFR plus 2.5%. Principal repayments on the term loans are made on a quarterly basis, with a balloon payment payable with the final installment. On June 15, 2023, the credit facility was amended to convert 50% of the outstanding balance under the facility into a revolving credit facility with the remaining 50% of the outstanding balance, or $49.2 million, continuing as a term loan facility. On March 14, 2024, the credit facility was further amended to convert the entire term loan outstanding balance under the facility into the revolving credit facility. The revolving credit facility matures in August 2027. As of September 30, 2024, none of the revolving credit facility was drawn down with $81.7 million undrawn.

ABN AMRO Revolving Facility

On August 9, 2022, the Company entered into a new sustainability-linked $15 million revolving credit facility with ABN AMRO (the “ABN AMRO Revolving Facility”) to fund working capital. Interest under this facility is calculated at a rate of SOFR plus 3.9%. Interest payments are payable on a quarterly basis. The facility matures in August 2025 with further options for extension. As of September 30, 2024, $2.5 million of the revolving credit facility was drawn down, with $12.5 million undrawn.

Long-term debt financial covenants

The Company’s existing long-term debt facilities described above include certain covenants. The financial covenants require that the Company:

●maintain minimum solvency of not less than 30%;
●maintain minimum cash and cash equivalents (of which at least 60% of such minimum amount is held in cash. The remaining 40% can include cash and cash equivalents undrawn under the revolving facilities), based on the

number of vessels owned and chartered-in and 5% of outstanding debt; the required minimum cash and cash equivalents as of September 30, 2024 was $18.8 million;

●ensure that the aggregate fair market value of the applicable vessels plus any additional collateral is, depending on the facility, no less than 130% of the debt outstanding for the applicable facility;
●maintain an adjusted net worth of not less than $200 million; and
●maintain positive working capital, excluding current portion of debt and leases, balloon repayments and amounts outstanding under the ABN AMRO Revolving Facility, provided that the facility has a remaining maturity of more than three months.

The Company was in compliance with all of its long-term debt financial covenants as of September 30, 2024 and December 31, 2023.