NAT - Nordic American Tankers: Already Low On Cash Amid Fresh Questions About Long-Term Solvency

• Nordic American Tankers has seen a rough start to 2021 with negative operating cash flow leading to a $20m cash burn during the first quarter.
• Despite being less than ideal, it was already expected and whilst management thought there would be a recovery approximately two months ago, independent market analysis begs to differ.
• Sadly, they appear to be low on cash since their debt covenant requires them to hold at least $30m, which is only just beneath their current balance of $38m.
• When looking ahead into their medium to long-term future, they might one day find it increasingly difficult to access debt funding and thus raises fresh questions about their long-term solvency.
• Whilst their share price could surge following any recovery, the downside risks have only increased following the first quarter of 2021 and thus, I still believe a neutral rating to be appropriate.

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