Paragon Shipping cancels one boxship, adds two bulkers

The shipowner said it will transfer the deposit to the remaining vessel and to reduce its contract price from the original $57.5m to $55m.

This will leave Paragon Shipping with one 4,800 teu boxship on order with $23m, or approximately 42% of the purchase price, already funded and the remainder of the contract price due upon delivery in the second quarter of 2014.

“The cancellation and reduction in price of the containership newbuilding improves the company's equity position, and gives Paragon greater flexibility as it can now take delivery of the one containership with little or no additional equity,” said Michael Bodouroglou, chairman and ceo of Paragon Shipping.

The final installment due on delivery will be financed through the company's loan facility with China Development Bank. Paragon Shipping has granted Box Ships Inc. an option to acquire the containership newbuilding.

Paragon Shipping also announced the acquisition of two additional eco-design ultramax newbuilding bulkers from an affiliated entity with scheduled deliveries in the second quarter of 2015.

The two ultramax newbuildings are being built in Yangzhou Dayang Shipbuilding, a member of the Sinopacific Shipbuilding Group, and will have a carrying capacity of 63,500 dwt each. The total consideration for these two ultramax newbuildings is $56.5m.

“By acquiring the two additional eco-design ultramax newbuildings, our newbuilding program has grown to six vessels, including the one containership, to be delivered starting December 2013 through to the middle of 2015. We now have 13 vessels on the water and we believe this recent positive event will result in additional long-term growth for the company,” Bodouroglou said.