US Shipping bows from battle

US Shipping Partners has relented in its fight with private equity firm Blackstone over the two parties’ joint venture to build five product tankers at NASSCO.

Speaking to Fairplay late Monday, USSP chief executive Ron O’Kelley confirmed that an agreement was reached in mediation whereby USSP will no longer serve as the vessel manager of the Golden State, delivered in January, nor the Pelican State, to be delivered 15 June. USSP will continue to serve as the construction manager for the final three vessels in the series, but not their vessel manager. USSP will also step down as managing member of the JV. USSP, which is in the midst of a Chapter XI restructuring, will lose its equity interest in the JV, to which it contributed $70M. The mediation agreement will be confirmed by the court in the next few weeks and contractual changes will take effect 60 days later.

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