Greek shipowner Euroseas will acquire the four feeder vessels for a consideration that includes a cash payment of $15m and issuance of approximately 22.5m shares to the sellers. The vessels are owned by affiliates of the Pittas family, controlled by Euroseas ceo Aristides Pittas.
The vessels include the 2005-built, 1,700-teu EM Hydra, the 2007-built, 1,700-teu EM Spetses, the 2007-built, 3,100-teu EM Kea, and the 1998-built, 2,008-teu Diamantis.
“The acquisition of the four vessels not only did it expand our fleet but also reduced its average age by 1.5 years,” Pittas said.
After the vessel acquisition, Euroseas fleet will consist of 15 container vessels with all the vessels except for one being feeder containerships.
Euroseas has also refinanced two vessels to free up about $8m in cash, which together with approximately $3.7m of its available cash will be used to redeem approximately $11.7m of its Series B Preferred Shares.
After the agreed upon redemption of $11.7m out of an aggregate value of about $19.7m as of 31 March 2019, there will be $8m of Series B Preferred Shares outstanding.
“The vessel refinancing and preferred stock redemption transactions achieve significant cost reductions for Euroseas. These developments alone are expected to reduce our interest and preferred dividend expense by more than $1.4m per year,” Pittas said.
Tasos Aslidis, cfo of Euroseas, pointed out: “It should be also noted that the redemption of the preferred equity, the reduction of its dividend rate until January 2021 and the reduction of our main bank’s margin along with the increase of the number of vessels in our fleet result in shaving about $450 per vessel per day from our daily cash flow breakeven level which is further reduced by about another $150 per vessel per day as our general and administrative expenses are spread over a larger number of vessels as well.”