Euroseas Ltd. Announces the Acquisition of a Drybulk Vessel and Short-term Loan Facility
MAROUSSI, ATHENS, GREECE--(Marketwired - Nov 23, 2016) - Euroseas Ltd. (NASDAQ: ESEA), an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced today 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.
Forward Looking Statement: This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels and container ships, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
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