Overseas Shipholding entities get OK for $94 million military contract

By Jim Witters

Wilmington, Del., April 26 - Overseas Shipholding Group, Inc. received approval for Mykonos Tanker LLC and Santorini Tanker LLC to continue to perform under a $94 million U.S. government contract for the use of ships and commercial vessels, according to an April 24 filing with the U.S. Bankruptcy Court for the District of Delaware.

The debtors will assume the maritime security agreements between the U.S. government and Mykonos and Santorini as part of the U.S. Defense Department's Maritime Security Program.

Under the program, the government provides financial assistance to private ship owners and operators in exchange for assurance that their "militarily useful U.S. flag vessels and other resources will be made available to the Department of Defense in times of war or national emergency."

The program pays contractors an annual fee per vessel through 2025.

Mykonos and Santorini each have one vessel in the program.

Overseas Shipholding, a New York-based tanker company, filed for bankruptcy on Nov. 14. The Chapter 11 case number is 12-20000.

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