---

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

---

Form 6-K

 

---

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934

For the month of November 2017

Commission File Number 001-32640

 

DHT HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Clarendon House
2 Church Street, Hamilton HM 11
Bermuda

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☑

Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____

 

 

---

 

 

 

 

 

 

EXHIBIT LIST

Exhibit		Description
99.1		Press Release dated November 13, 2017

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

	DHT Holdings, Inc.
	(Registrant)
Date:  November 14, 2017	By:	/s/ Eirik Ubøe
		Name:  Eirik Ubøe
		Title:    Chief Financial Officer

 

DHT Holdings, Inc. Third Quarter 2017 Results

 

HAMILTON, BERMUDA, November 13, 2017 - DHT Holdings, Inc. (NYSE:DHT) (“DHT” or the “Company”) today announced:

 

FINANCIAL AND OPERATIONAL HIGHLIGHTS:

 

USD mill. (except per share)	Q3 2017	Q2 2017	Q1 2017	Q4 2016	Q3 2016	2016	2015
Adjusted Net Revenue1 Adjusted EBITDA Net Income/(Loss) EPS - basic EPS - diluted3	54.8 31.4 (5.1) (0.04) (0.04)	59.6 36.7 4.8 0.04 0.04	70.7 50.6 14.32 0.15 0.15	67.0 46.7 17.8 0.19 0.18	50.3 29.5 (75.7)2 (0.81) (0.81)	290.7 209.4 9.32 0.10 0.10	296.3 214.8 105.42 1.13 1.04
Interest Bearing Debt Cash Dividend5	826.0 86.5 0.02	841.1 104.0 0.02	674.6 72.2 0.08	701.5 109.34 0.08	684.9 71.5 0.02	701.5 109.34 0.58	662.5 166.84 0.69
Spot Exposure6 Unscheduled off hire6 Scheduled off hire6	67.9% 0.3% 2.7%	63.5% 0.2% 2.8%	58.1% 0.2% 2.4%	57.3% 5.5% 0.9%	59.9% 0.8% 5.1%	57.8% 1.8% 1.7%	50.5% 0.2% 0.5%

 

 

HIGHLIGHTS OF THE QUARTER:

 

●	Adjusted EBITDA for the quarter of $31.4 million. Net loss for the quarter of $5.1 million or loss of $0.04 per basic share.
●	The Company’s VLCCs achieved time charter equivalent earnings of $22,500 per day in the third quarter of 2017 of which the Company’s VLCCs on time-charter earned $35,600 per day and the Company’s VLCCs operating in the spot market achieved $17,500 per day. For the first nine months of 2017 the Company’s VLCCs achieved time charter equivalent earnings of $29,100 per day of which the Company’s VLCCs on time-charter earned $37,100 per day and the Company’s VLCCs operating in the spot market achieved $25,600 per day.
●	For the third quarter of 2017, the Company will return $2.8 million to shareholders in the form of a cash dividend of $0.02 per share, payable on December 6, 2017 for shareholders of record as of November 28, 2017.
●	During the quarter the Company extended time-charters for three of its VLCCs to oil majors. The vessels DHT Amazon, DHT Europe and BW Peony have been extended for one year commencing during the October 2017 to January 2018 period.  The time-charters have been extended with fixed base rates that are above DHT’s cash break even levels.  Additional earnings are based on market index above these fixed base rates and divided into two tranches with the first fully paid to DHT and the second shared 50/50 between the customer and DHT.
●	DHT has a fleet of 30 VLCCs, 26 in the water and four under construction scheduled for delivery in 2018, as well as two Aframaxes. The total dwt of the fleet is 9,502,995.  The average age of the VLCC fleet is 7.1 years. Seven of the VLCCs and the two Aframaxes are on fixed rate time charters. For more details on the fleet, please refer to our web site: http://dhtankers.com/index.php?name=About_DHT%2FFleet.html.

 

1Net of voyage expenses.

2Q1 2017 includes an impairment charge of $7.5 million related to the sale of DHT Ann and DHT Phoenix. Q3 2016 includes an impairment charge of $76.6 million. 2016 includes total impairment charges of $84.7 million. 2015 includes a loss of $0.8 million related to the sale of the DHT Trader.

3Diluted shares include the dilutive effect of the convertible senior notes and restricted shares granted to management and members of the board of directors.

4The cash balance as of December 31, 2016 includes $48.7 million relating to the financing for DHT Tiger which was drawn in 2016 in advance of the delivery of the DHT Tiger on January 16, 2017. The cash balance as of December 31, 2015 includes $50.0 million relating to the financing for DHT Leopard which was drawn on December 29, 2015 in advance of the delivery of the DHT Leopard on January 4, 2016.

5Per common share.

6As % of total operating days in period.

 

 

 

USD in thousands except per share	Q3 2017	Q2 2017	Q1 2017	Q4 2016	Q3 2016	2016	2015
Reconciliation of Adjusted Net Revenue
Shipping revenues	84,374	86,335	92,100	84,891	64,826	356,010	365,114
Voyage expenses	(29,594)	(26,701)	(21,387)	(17,928)	(14,532)	(65,349)	(68,864)
Adjusted Net Revenue	54,780	59,634	70,712	66,962	50,294	290,661	296,250
Reconciliation of Adjusted EBITDA
Net income/(loss) after tax	(5,067)	4,836	14,346	17,830	(75,697)	9,260	105,302
Income tax expense	55	39	40	48	46	95	128
Other financial income/(expenses)	81	(460)	(318)	(43)	(54)	40	487
Fair value gain/(loss) on derivative financial instruments	(478)	(521)	(719)	(1,219)	(1,394)	(3,235)	(3,603)
Interest expense	10,586	9,902	8,956	9,169	8,483	35,070	33,637
Interest income	(28)	(36)	(35)	(18)	(14)	(66)	(141)
Share of profit from associated companies	(235)	(208)	(187)	(169)	(174)	(649)	(467)
Profit /( loss), sale of vessel	-	228	55	-	-	(138)	807
Impairment charge	-	-	7,487	-	76,600	84,700	-
Depreciation and amortization	26,468	22,940	20,933	21,067	21,723	84,340	78,698
Adjusted EBITDA	31,382	36,720	50,559	46,665	29,520	209,415	214,848

 

 

EARNINGS CONFERENCE CALL AND WEBCAST INFORMATION

The Company will host a conference call and webcast which will include a slide presentation at 8:00 a.m. EDT/14:00 CET on Tuesday November 14, 2017 to discuss the results for the quarter.

 

All shareholders and other interested parties are invited to join the conference call, which may be accessed by calling 1 718 354 1359 within the United States, 23500486 within Norway and +44 203 427 1917 for international callers. The passcode is “DHT” or “5865866”.

 

The webcast which will include a slide presentation will be available on the following link: https://edge.media-server.com/m6/p/yqs4ceq7 and can also be accessed in the Investor Relations section on DHT’s website at http://www.dhtankers.com.

 

An audio replay of the conference call will be available through November 20, 2017.  To access the replay, dial 1 888 203 1112 within the United States, 80019672 within Norway or +44 808 101 1153 for international callers and enter 5865866 as the pass code.

 

 

ABOUT DHT HOLDINGS, INC.

DHT is an independent crude oil tanker company. Our fleet trades internationally and consists of crude oil tankers in the VLCC and Aframax segments. We operate through our integrated management companies in Oslo, Norway and Singapore. You shall recognize us by our business approach with an experienced organization with focus on first rate operations and customer service, quality ships built at quality shipyards, prudent capital structure with robust cash break even levels to accommodate staying power through the business cycles, a combination of market exposure and fixed income contracts for our fleet and a transparent corporate structure maintaining a high level of integrity and good governance.  For further information: www.dhtankers.com.

 

FORWARD LOOKING STATEMENTS

 

This press release contains certain forward-looking statements and information relating to the Company that are based on beliefs of the Company’s management as well as assumptions, expectations, projections, intentions and beliefs about future events, in particular regarding dividends (including our dividend plans, timing and the amount and growth of any dividends), daily charter rates, vessel utilization, the future number of newbuilding deliveries, oil prices and seasonal fluctuations in vessel supply and demand. When used in this document, words such as “believe,” “intend,” “anticipate,” “estimate,” “project,” “forecast,” “plan,” “potential,” “will,” “may,” “should” and “expect” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  These statements reflect the Company’s current views with respect to future events and are based on assumptions and subject to risks and uncertainties.  Given these uncertainties, you should not place undue reliance on these forward-looking statements.  These forward-looking statements represent the Company’s estimates and assumptions only as of the date of this press release and are not intended to give any assurance as to future results.  For a detailed discussion of the risk factors that might cause future results to differ, please refer to the Company’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission on March 23, 2017.

 

The Company undertakes no obligation to publicly update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, except as required by law.  In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur, and the Company’s actual results could differ materially from those anticipated in these forward-looking statements.

 

CONTACT:

Eirik Uboe, CFO

Phone: +1 441 299 4912 and +47 412 92 712

E-mail: eu@dhtankers.com

---

 

 

 

DHT HOLDINGS, INC.

 

 

 

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2017

 

 

 

 

 

($ in thousands)

 

	Note		September 30, 2017		December 31, 2016
ASSETS
Current assets
Cash and cash equivalents		$	86,549		109,295
Accounts receivable and accrued revenues	8		29,084		34,461
Prepaid expenses			3,821		3,627
Bunkers, lube oils and consumables			20,899		7,906
Asset held for sale	5		–		23,216
Total current assets		$	140,353		178,505
Non-current assets
Vessels and time charter contracts	5	$	1,540,398		1,177,521
Advances for vessels under construction	5		97,508		43,638
Other property, plant and equipment			655		661
Investment in associated company			4,182		3,412
Total non-current assets		$	1,642,743		1,225,232
TOTAL ASSETS		$	1,783,096		1,403,737
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses		$	19,394		12,378
Derivative financial liabilities			981		2,257
Current portion long term debt	4		63,741		57,521
Deferred shipping revenues			829		2,154
Total current liabilities		$	84,944		74,310
Non-current liabilities
Long term debt	4		762,252		643,974
Derivative financial liabilities			–		442
Other non-current liabilities		$	255		–
Total non-current liabilities		$	762,507		644,416
TOTAL LIABILITIES		$	847,451		718,726
Stockholders' equity
Stock	6, 7	$	1,423		934
Additional paid-in capital	6, 7		1,140,604		881,097
Accumulated deficit			(211,560)		(205,195)
Translation differences			33		(108)
Other reserves			5,145		8,283
Total stockholders equity		$	935,645		685,011
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,783,096		1,403,737

 

---

 

($ in thousands except per share amounts)

 

			3Q 2017	3Q 2016		9 months 2017	9 months 2016
	Note		Jul. 1 - Sept. 30 2017	Jul. 1 - Sept. 30 2016		Jan. 1 - Sep. 30, 2017	Jan. 1 - Sep. 30, 2016
Shipping revenues		$	84,374	64,826	$	262,808	271,119
Operating expenses
Voyage expenses			(29,594)	(14,532)		(77,682)	(47,421)
Vessel operating  expenses			(19,544)	(16,500)		(50,952)	(45,867)
Depreciation and amortization	5		(26,468)	(21,723)		(70,341)	(63,273)
Impairment charge	5		-	(76,600)		(7,487)	(84,700)
Profit /( loss), sale of vessel	5		-	-		(283)	138
General and administrative expense			(3,853)	(4,274)		(15,512)	(15,082)
Total operating expenses		$	(79,460)	(133,630)	$	(222,259)	(256,204)
Operating income/(loss)		$	4,914	(68,804)	$	40,550	14,916
Share of profit from associated companies			235	174		630	480
Interest income			28	14		99	48
Interest expense			(10,586)	(8,483)		(29,445)	(25,901)
Fair value gain/(loss) on derivative financial instruments			478	1,394		1,718	2,016
Other financial income/(expenses)			(81)	54		697	(83)
Profit/(loss) before tax		$	(5,012)	(75,651)	$	14,248	(8,523)
Income tax expense			(55)	(46)		(133)	(47)
Net income/(loss) after tax		$	(5,067)	(75,697)	$	14,115	(8,570)
Attributable to the owners of parent		$	(5,067)	(75,697)	$	14,115	(8,570)
Basic net income/(loss) per share			(0.04)	(0.81)		0.12	(0.09)
Diluted net income/(loss) per share			(0.04)	(0.81)		0.12	(0.09)
Weighted average number of shares (basic)			142,347,298	93,366,062		118,530,772	93,385,642
Weighted average number of shares (diluted)			142,347,298	93,366,062		118,530,772	93,385,642
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit/(loss) for the period		$	(5,067)	(75,697)	$	14,115	(8,570)
Other comprehensive income:
Items that will not be reclassified to income statement:
Remeasurement of defined benefit obligation (loss)			-	-		-	-
Total		$	-	-	$	-	-
Items that may be reclassified to income statement:
Exchange gain (loss) on translation of foreign currency
denominated associate and subsidiary			38	22		141	(56)
Total		$	38	22	$	141	(56)
Other comprehensive income		$	38	22	$	141	(56)
Total comprehensive income for the period		$	(5,028)	(75,675)	$	14,256	(8,626)
Attributable to the owners of parent		$	(5,028)	(75,675)	$	14,256	(8,626)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED)

($ in thousands)

 

		Q3 2017	Q3 2016	9 months 2017	9 months 2016
	Note	Jul. 1 - Sept. 30, 2017	Jul. 1 - Sept. 30, 2016	Jan. 1 - Sep. 30, 2017	Jan. 1 - Sep. 30, 2016
CASH FLOW FROM OPERATING ACTIVITIES
Net income / (loss)		(5,067)	(75,697)	14,115	(8,570)
Items included in net income not affecting cash flows:
Depreciation	5	26,468	21,723	70,341	63,273
Impairment charge	5	-	76,600	7,487	84,700
Amortization of debt issuance costs		1,773	1,748	5,415	6,035
(Profit) / loss, sale of vessel	5	-	-	283	(138)
Fair value (gain) / loss on derivative financial instruments		(478)	(1,394)	(1,718)	(2,016)
Compensation related to options and restricted stock		904	1,349	4,047	6,019
(Gain) / loss purchase of convertible bond		-	-	(1,035)	-
Share of profit in associated companies		(235)	(174)	(630)	(480)
Unrealized currency translation losses / (gains)		-	3	-	(205)
Income adjusted for non-cash items		23,365	24,160	98,305	148,617
Changes in operating assets and liabilities:
Accounts receivable and accrued revenues	8	(701)	28,171	3,259	15,375
Prepaid expenses		298	626	(194)	(951)
Accounts payable and accrued expenses		(2,966)	9,451	7,366	4,284
Deferred shipping revenues		435	(1,383)	(1,325)	(1,422)
Bunkers, lube oils and consumables		(2,878)	(1,212)	(12,993)	(794)
Net cash provided by operating activities		17,553	59,812	94,418	165,109
CASH FLOW FROM INVESTING ACTIVITIES
Investment in vessels		(5,864)	(7,701)	(390,792)	(11,611)
Investment in vessels under construction	5	(9,372)	(94,112)	(145,205)	(220,215)
Sale of vessels		-	-	66,669	22,233
Investment in property, plant and equipment		(47)	(9)	(181)	(24)
Net cash used in investing activities		(15,282)	(101,822)	(469,509)	(209,617)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of stock	6, 7	-	-	255,024	-
Cash dividends paid	7	(2,847)	(21,474)	(20,481)	(64,498)
Issuance of long term debt	4	(79)	125,149	200,457	170,766
Purchase of treasury shares	7	-	-	-	(2,031)
Purchase of convertible bonds	6	-	-	(17,104)	(4,019)
Repayment of long-term debt	4	(16,801)	(55,170)	(65,552)	(150,942)
Net cash provided by/(used in) financing activities		(19,727)	48,504	352,344	(50,724)
Net increase/(decrease) in cash and cash equivalents		(17,456)	6,493	(22,747)	(95,232)
Cash and cash equivalents at beginning of period		104,005	65,049	109,295	166,775
Cash and cash equivalents at end of period		86,549	71,542	86,549	71,542
Specification of items included in operating activities:
Interest paid		9,227	4,262	24,315	17,948
Interest received		28	14	99	48

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

 

($ in thousands except shares)

 

					Paid-in
					Additional		Retained		Translation		Other		Total
	Shares		Stock		Capital		Earnings		Differences		Reserves		Equity
Balance at January 1, 2016	92,909,936	$	929	$	878,236	$	(147,945)	$	(232)	$	6,904	$	737,893
Net income/(loss) after tax							(8,570)						(8,570)
Other comprehensive income							(95)		40				(56)
Total comprehensive income							(8,665)		40				(8,626)
Cash dividends declared and paid							(64,498)						(64,498)
Purchase of treasury shares	(359,831)		(4)		(2,027)								(2,031)
Purchase of convertible bonds					(558)								(558)
Compensation related to options and restricted stock	815,957		8		5,858						153		6,019
Balance at September 30, 2016	93,366,062	$	934	$	881,509	$	(221,109)	$	(192)	$	7,057	$	668,199
					Paid-in
					Additional		Retained		Translation		Other		Total
	Shares		Stock		Capital		Earnings		Differences		Reserves		Equity
Balance at January 1, 2017	93,433,804	$	934	$	881,097	$	(205,195)	$	(108)	$	8,283	$	685,011
Net income/(loss) after tax							14,115						14,115
Other comprehensive income									141				141
Total comprehensive income							14,115		141				14,256
Cash dividends declared and paid							(20,481)						(20,481)
Issuance of stock	47,724,395		477		254,546								255,024
Purchase of convertible bonds					(2,213)								(2,213)
Compensation related to options and restricted stock	1,189,099		12		7,173						(3,138)		4,047
Balance at September 30, 2017	142,347,298	$	1,423	$	1,140,604	$	(211,560)	$	33	$	5,145	$	935,645

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

 

 

Note 1 – General information

DHT Holdings, Inc. (“DHT” or the “Company”) is a company incorporated under the laws of the Marshall Islands whose shares are listed on the New York Stock Exchange. The Company’s principal executive office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The Company is engaged in the ownership and operation of a fleet of crude oil carriers.

The financial statements were approved by the Company’s Board of Directors (the “Board”) on November 10, 2017 and authorized for issue on November 13, 2017.

Note 2 – General accounting principles

The condensed consolidated interim financial statements do not include all information and disclosure required in the annual financial statements and should be read in conjunction with DHT’s audited consolidated financial statements included in its Annual Report on Form 20-F for 2016. Our interim results are not necessarily indicative of our results for the entire year or for any future periods.

The condensed financial statements have been prepared in accordance with IAS 34 “Interim Financial Reporting” as issued by the International Accounting Standards Board (“IASB”).

The condensed financial statements have been prepared on a historical cost basis, except for derivative financial instruments that have been measured at fair value. The accounting policies that have been followed in these condensed financial statements are the same as presented in the 2016 audited consolidated financial statements.

Vessels are classified separately as held for sale as part of current assets in the statement of financial position when their carrying amount will be recovered through a sale transaction rather than continuing use. This condition is regarded as met only when the sale is highly probable, the asset is available for immediate sale in its present condition, and management is committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Vessels classified as held for sale are measured at the lower of their carrying amount and fair value less cost to sell.

These interim financial statements have been prepared on a going concern basis.

New and amended standards, and interpretations mandatory for the first time for the financial year beginning January 1, 2017 but not currently relevant to DHT (although they may affect the accounting for future transactions and events). The adoption did not have any effect on the financial statements:

Amendments to IFRS 10, IFRS 12 and IAS 28 Investments Entities	Applying the Consolidation Exception
Amendments to IFRS 11	Accounting for Acquisitions of Interests in Joint Operations
Amendments to IAS 1	Disclosure Initiative
Annual Improvements to IFRSs 2012-2014 Cycle

---

 

Note 3 – Segment reporting

Since DHT’s business is limited to operating a fleet of crude oil tankers, management has organized the entity as one segment based upon the service provided. Consequently, the Company has one operating segment as defined in IFRS 8, Operating Segments.

As of September 30, 2017, the Company had 28 vessels in operation; 9 vessels were on fixed rate time charters and 19 vessels operating in the spot market.

For the period from July 1, 2017 to September 30, 2017 five customers represented $11.3 million, $10.9 million, $9.8 million, $7.3 million and $7.2 million, respectively, of the Company’s revenues.

For the period from July 1, 2016 to September 30, 2016 five customers represented $14.8 million, $10.3 million, $9.0 million, $8.3 million and $5.9 million, respectively, of the Company’s revenues.

Note 4 – Interest bearing debt

As of September 30, 2017, DHT had interest bearing debt totaling $826.0 million (including the $105.8 million convertible senior notes).

Scheduled debt repayments (USD million) and margin above Libor

	Q4   2017	2018		2019		2020		Thereafter			Total		Margin Above Libor
$141 mill. - Lion/Panther/Puma*	2.3	7.9		7.9		7.9		97.6			123.6		2.60 %
$302 mill. - 8 vessels	5.8	23.1		213.5							242.4		2.50 %
$90 mill. - Scandinavia/Tiger	1.6	6.6		6.6		6.6		49.5			71.0		2.19 %
$49.9 mill.  – Jaguar	1.3	2.6		2.6		39.0					45.5		2.25 %
$88.75 mill. – Leopard	0.6	2.5		2.5		40.0					45.6		2.25 %
$88.75 mill. - Cathy/Sophie	0.4	1.7		8.3							10.4		2.75 %
$300 mill. - 11 vessels BW acquisition	5.4	21.6		21.6		21.6		128.4			198.6		2.40 %
$50 mill. revolving credit facility**													2.50 %
Convertible Note				105.8							105.8
Total	17.5	66.1		368.7		115.1		275.5			842.9
Unamortized upfront fees bank loans											(8.3)
Difference amortized cost/notional amount convertible note											(8.6)
Total interest bearing debt											826.0

 

*In addition to the scheduled installments under the ABN Amro/Nordea/DVB credit facility we are, through the first quarter 2020, required to pay quarterly installments equal to free cash flow during the preceding quarter, capped at $0.3 million per borrower per quarter. Free cash flow is defined as an amount calculated as of the last day of each quarter equal to the positive difference, if any, between (a) the sum of the earnings of the vessels during the quarter and (b) the sum of ship operating expenses, voyage expenses, estimated capital expenses for the following two quarters, general & administrative expenses, interest expenses and change in working capital.

**$46.0 mill. available as of September 30, 2017.  Quarterly reduction of $1.3 million.

In July 2014 we entered into a credit facility with ABN Amro, Nordea and DVB as lenders and DHT Holdings, Inc. as guarantor for the financing of three VLCC newbuildings.  Borrowings bear interest at a rate equal to Libor + 2.60% and the loan is repayable in quarterly installments of $2.0 million through Q3 2021 and a final payment of $92.4 with the last installment. In addition to the scheduled instalments, each borrower shall the first three years make additional repayments of a variable amount equal to free cash flow in the prior quarter capped at $0.3 million per quarter to be applied against the balloon. Free cash flow is defined as an amount calculated as of the last day of each quarter equal to the positive difference, if any, between (a) the sum of the earnings of the vessels during the quarter and (b) the sum of ship operating expenses, voyage expenses, estimated capital expenses for the following two quarters, general & administrative expenses, interest expenses and change in working capital.

 

 

The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·	Value adjusted* tangible net worth of $300 million

·	Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·	Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

The credit facility is guaranteed by DHT Holdings, Inc., borrowings bear interest at a rate equal to Libor + 2.50% and are repayable in quarterly installments of $5.8 million with a final payment of $190.4 in December 2019. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·	Value adjusted* tangible net worth of $300 million

·	Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·	Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

In June 2015 Samco Gamma Ltd and DHT Tiger Limited entered into a credit agreement with Credit Agricole for the financing of the Samco Scandinavia and the newbuilding DHT Tiger that was delivered in January 2017.  In June 2016 we made a voluntary prepayment of $5.0 million and the financing of the Samco Scandinavia is repayable with 30 quarterly installments of $0.97 million each. The $48.7million financing of DHT Tiger was drawn in 2016 in advance of the delivery of the DHT Tiger which took place in January 2017 and is repayable in quarterly installments of $0.7 million with a final payment of $29.7 in December 2023.  The loan bears interest at Libor plus a margin of 2.1875% and includes a covenant that the charter-free value of the vessel shall be at least 135%.  The credit agreement is guaranteed by DHT and contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·	Value adjusted* tangible net worth of $200 million

·	Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·	Unencumbered consolidated cash of at least the higher of (i) $20 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

In November 2014 we entered into a credit facility totaling $49.4 million with Danish Ship Finance (“DSF”) as lender and DHT Holdings, Inc. as guarantor for the financing of the VLCC newbuilding DHT Jaguar delivered in Q4 2015.  The full amount of the credit facility was drawn in November 2015.  Borrowings bear interest at a rate equal to Libor + 2.25% and are repayable in 10 semiannual installments of $1.3 million each from May 2016 to November 2020 and a final payment of $36.4 million in November 2020. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessel that secure the credit facility be no less than 130% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·	Value adjusted* tangible net worth of $300 million

·	Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·	Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

---

 

In October 2015 we entered into a credit facility totaling $50.0 million with Nordea and DNB as lenders and DHT Holdings, Inc. as guarantor for the financing of the VLCC newbuilding DHT Leopard delivered in Q1 2016.  The full amount of the credit facility was drawn on December 29, 2015 in advance of the delivery of the DHT Leopard on January 4, 2016.  Borrowings bear interest at a rate equal to Libor + 2.25% and are repayable in 20 quarterly installments of $0.625 million from March 2016 to December 2020 and a final payment of $37.5 million in December 2020. In September 2016, the four vessels financed by RBS (DHT Ann, DHT Chris, DHT Cathy and DHT Sophie) were included in the credit facility as a separate tranche totaling $40.0 million.  Borrowings under the $40.0 million tranche bear interest at a rate equal to Libor + 2.75% and are repayable in 11 quarterly installments of $2.1 million from December 2016 to June 2019 and a final payment of $17.3 million in August 2019. Subsequent to the sale of DHT Chris which was delivered to the buyers in January 2017 and the sale of the DHT Ann which was delivered to the buyers in May 2017, the credit facility is repayable in quarterly installments of $1.0 million. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·	Value adjusted* tangible net worth of $300 million

·	Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·	Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

$204 million of the $300 million credit facility was borrowed during the second quarter of 2017 in connection with delivery of the nine vessels in water from BW.  The final $96 million is expected to be borrowed in connection with the delivery of the two VLCC newbuildings from DSME in the second quarter of 2018.  The credit facility is guaranteed by DHT Holdings, Inc., borrowings bear interest at a rate equal to Libor + 2.40% and the current outstanding of $204 million is repayable in quarterly installments of $5.4 million.  When the facility is fully drawn, the quarterly installments will be $6.6 million. The facility has final maturity in August 2023. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·	Value adjusted* tangible net worth of $300 million

·	Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·	Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

In February 2016 we repurchased $3.0 million of the convertible senior notes in the open market at a price of 99% of par and in April 2016 we repurchased $1.0 million of the convertible senior notes in the open market at a price of 99% of par.  During the fourth quarter of 2016 we repurchased $23.0 million of the convertible senior notes in the open market at an average price of 90.4% of par.  During the first quarter of 2017 we repurchased $5.0 million of the convertible senior notes in the open market at a price of 100.4% of par. During the second quarter of 2017 we repurchased $12.2 million of the convertible senior notes in the open market at a price of 98.4% of par.

As of the date of our most recent compliance certificates submitted to the banks, we are in compliance with our financial covenants.

As of September 30, 2017, DHT has four interest rate swaps totaling $98.5 million with maturity ranging from the fourth quarter of 2017 to the second quarter of 2018.  The fixed interest rates range from 2.86% to 3.57%.  As of September 30, 2017, the fair value of the derivative financial liability related to the swaps amounted to $1.0 million.

---

 

In November 2016, we entered into a secured five year revolving credit facility with ABN Amro totaling $50.0 million to be used for general corporate purposes, including security repurchases and the acquisition of ships. The financing bears interest at a rate equal to Libor + 2.50%.  Availability under the facility is reduced by $1.3 million quarterly. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·	Value adjusted* tangible net worth of $300 million

·	Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·	Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

*Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

Note 5 – Vessels

The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of constructing new vessels. Historically, both charter rates and vessel values have been cyclical. The carrying amounts of vessels held and used by us are reviewed for potential impairment or reversal of prior impairment charges whenever events or changes in circumstances indicate that the carrying amount of a particular vessel may not accurately reflect the recoverable amount of a particular vessel. The Company is of the view that there were no events or changes in circumstances indicating that the carrying amount of a particular vessel may not accurately reflect the recoverable amount of a particular vessel as of September 30, 2017.

*Accumulated numbers

**Relates to completed depreciation of drydocking for DHT China, DHT Europe and DHT Hawk and the sale of DHT Ann and DHT Phoenix.

We have entered into agreements with HHI for the construction of two VLCCs with a contract price of $82.4 million each (including scrubbers). As of September 30, 2017 we have paid pre-delivery installments totaling $16.5 million for the two newbuildings to be delivered in 2018. Borrowing costs are capitalized as part of vessels under construction.

In connection with the acquisition of BW Group’s VLCC fleet, DHT novated the agreement with the shipbuilder Daewoo Shipbuilding & Marine Engineering Co., Ltd for the construction of two VLCCs. First and second installments was already paid by BW Group and the agreed purchase price was $29.9 each. As of September 30, 2017 we have paid pre-delivery installments totaling $17.4 million for the two newbuildings to be delivered in 2018. Borrowing costs are capitalized as part of vessels under construction.

---

Note 6 – Equity and Convertible Bond Offerings

On September 16, 2014 we completed a private placement of $150 million aggregate principal amount of convertible senior notes due 2019 (the “Notes”). DHT will pay interest at a fixed rate of 4.5% per annum, payable semiannually in arrears. Net proceeds to DHT were approximately $145.9 million after the payment of placement agent fees. The value of the conversion right has been estimated to $21.8 million; hence $21.8 million of the aggregate principal amount of $150.0 million was classified as equity. The Notes will be convertible into common stock of DHT at any time after placement until one business day prior to their maturity. The initial conversion price was $8.125 per share of common stock (equivalent to 18,461,538 shares of common stock), and is subject to customary anti-dilution adjustments. As a result of the cumulative effect of previously announced cash dividends, the conversion price was adjusted to $6.3942 effective May 18, 2017. Based on the adjusted conversion price and after adjusting for the repurchase of $44.2 million of the convertible senior notes in the open market at an average price of 94.5% of par, the total number of shares to be issued would be 16,550,311.

We have concluded that the adjustment of the conversion rate upon the payment of cash dividends does not result in an accounting entry as the liability and equity components of the instrument are not re-measured as a result of the cash dividend. This is based on the fact that we have determined that the Notes are non-derivative financial instruments that contain both liability and equity components. The financial liability is the contractual obligation to make interest and principal payments and the equity component is the right of the holders of the Notes to convert the Notes into a fixed number of the Company’s common shares. In accordance with IAS 32, the liability component was measured first and is recorded at its amortized cost over the life of the instrument. The equity component was assigned the residual amount after deducting the amount separately determined for the liability component. The equity component was recorded as part of additional paid-in capital and is never re-measured.

The determination that the conversion feature is an equity instrument (rather than a derivative liability accounted for under IAS 39) was made on the basis that there is no variability in the number of equity instruments delivered upon conversion (i.e. the exchange meets the “fixed for fixed” requirements set forth under IAS 32). In making the determination, the Company considered that the Notes contain a mechanism whereby the conversion rate of the Notes is adjusted for cash dividends paid by the Company. Although this adjustment results in variability in the number of common shares delivered, the fact that this variability serves to maintain the relative economic rights of the holders of the Notes results in no violation of the “fixed for fixed” requirement.

Note 7 – Stockholders equity and dividend payment

   *assuming the maximum Fundamental Change conversion rate.

---

 

Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders.

In the first quarter 2017, the board established two series of preferred stock: Series C Preferred Stock and Series D Preferred Stock, the terms of which are detailed in Current Reports on Form 6-K dated January 30, 2017 and March 24, 2017, respectively.  As of September 30, 2017, no shares of Series C Preferred Stock or Series D Preferred Stock were outstanding.   Terms and rights of any other preferred shares will be established by the board when or if such shares would be issued.  

Dividend payment as of September 30, 2017:

Dividend payment as of December 31, 2016:

Note 8 – Accounts receivable and accrued revenues

Accounts receivable and accrued revenues totaling $29.1 million as of September 30, 2017 consists mainly of accounts receivable with no material amounts overdue.

Note 9 - Financial risk management, objectives and policies

Note 9 in the 2016 annual report on Form 20-F provides for details of financial risk management objectives and policies.

The Company’s principal financial liability consists of long-term debt with the main purpose being to partly finance the Company’s assets and operations. The Company’s financial assets mainly comprise cash. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks.

Note 10 – Subsequent Events

On November 10, 2017 the Board approved a dividend of $0.02 per common share related to the third quarter 2017 to be paid on December 6, 2017 for shareholders of record as of November 28, 2017.