Overseas Shipholding Group, Inc. yesterday announced that it intends to outsource the technical management of its International Flag shipping business to V.Ships, a leading third-party ship manager. The outsourcing contract with V.Ships is subject to the approval of the Bankruptcy Court, which will be sought today and will be heard on February 3, 2014. The Company's U.S. Flag business will continue with its current strategy and will continue to be headquartered in Tampa, FL. Customers, employees, vendors and others involved with OSG's U.S. Flag business will see few, if any, changes.

Pursuant to a newly focused strategy, the outsourcing of technical management will provide the Company's International Flag business with a competitive cost structure, consistent with industry best practice, that will enable it to take advantage of future market opportunities. This new strategy will include the use of a world-class third-party ship management company, V.Ships, to provide technical management services to OSG's International Flag conventional tanker fleet. The International Flag business, which has a strong history of pool participation, will now utilize pools as the principal commercial strategy for all of its vessels, and OSG intends to participate in independently managed tanker pools.

"The simplification of our International business will allow us to rely upon the economies of scale, systems, and expertise of leading third parties," said OSG's chief executive officer, Capt. Bob Johnston. "By outsourcing technical management and pursuing a pool strategy for all our international vessels, we will position our international business to emerge successfully from Chapter 11 with a smaller, more-concentrated fleet without the need for costly systems, multiple offices and the associated expense. Outsourcing will allow our international management team to focus on the strategic direction of the business as the market recovers by retaining key operational and commercial oversight.

"As we make this transition, we are committed to providing the same high level of service to our customers and maintaining our focus on safety, quality and environmental compliance. Customers will continue to be served by the same highly trained OSG crews as before, but under management by V.Ships, a larger organization with an established track record of incorporating industry best practices system-wide. For vendors, suppliers and others involved with our International Flag business, there will be a seamless transition as V.Ships assumes various functions. As we continue our restructuring process and emerge from Chapter 11 as a stronger, more-focused business, we are confident that we will be well positioned to succeed," concluded Capt. Johnston.