Euroseas Ltd. (ESEA) Acquires Drybulk Vessel, Enters $2M Short-Term Loan Facility
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Euroseas Ltd. (Nasdaq: ESEA) announced that it signed a memorandum of agreement to purchase the M/V Capetan Tassos, a Panamax size drybulk carrier of 75,100 dwt built in 2000 in Japan for approximately £4.4 million. The vessel is expected to be delivered to the Company in January 2017.
The Company also announced that it reached an agreement with a company affiliated with its CEO to draw a £2 million loan to finance working capital needs. Interest on the loan is payable quarterly, and there are no principal repayments until January 2018 when the loan matures. The Company may elect to add the interest to the outstanding principal amount.
Under certain limited circumstances, the Company can pay principal and interest in equity, and the loan is convertible in common stock of the Company at the option of the lender at certain times. The agreement was negotiated on an arms-length basis with market terms and is subject to customary legal documentation. Aristides Pittas, Chairman and CEO of Euroseas commented: “We are very pleased to announce the acquisition of M/V Capetan Tassos as we believe the sector is approaching a turning point after a long period of depressed rates.
Furthermore, to facilitate the acquisition and provide additional working capital, we arranged for a short term loan with an affiliated party; the loan was negotiated by an independent committee of our Board of Directors and carries what we believe to be better-than market terms.” After the acquisition of M/V Capetan Tassos, the Company’s fleet will consist of 13 vessels, including four Panamax drybulk carriers, one Handymax drybulk carrier, one Kamsarmax drybulk carrier, and seven Feeder containerships. About Euroseas Ltd.: Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 140 years.
Euroseas trades on the NASDAQ Capital Market under the ticker ESEA since January 31, 2007. Euroseas operates in the dry cargo, drybulk and container shipping markets. Euroseas’ operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company and Eurobulk (FE) Ltd.
Inc., also an affiliated ship management company, which are responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements. Including M/V Capetan Tassos, the Company has a fleet of 13 vessels, including 4 Panamax drybulk carriers, 1 Handymax drybulk carrier, 1 Kamsarmax drybulk carrier, and 7 Feeder containerships.
Euroseas 6 drybulk carriers have a total cargo capacity of 426,372 dwt, its 7 containerships have a cargo capacity of 11,525 teu.
The Company has also signed contracts for the construction of one Kamsarmax (82,000 dwt) fuel efficient drybulk carrier.
Including the new-building, the total cargo capacity of the Company’s drybulk vessels will be 508,372 dwt.