Greek owner Euroseas has signed an MOU to acquire four feeder containerships from the Pittas family and its chairman Aristides Pittas.
Euroseas will pay $15m cash and issue around 22.5m shares, representing 64.3% of Euroseas’ outstanding common shares to the sellers of the four vessels EM Hydra, EM Spetses, EM Kea and Diamantis P.
The company intends to finance the cash portion with bank debt which will be used to repay the existing indebtedness of the vessels.
Following the acquisition, Euroseas fleet will consist of 15 container vessels.
In the meantime, Euroseas agreed to refinance two of its vessels in a transaction that freed up about $8m of cash which together with approximately $3.7m of its available cash will be used to redeem around $11.7m of its series B preferred shares.
After the refinancing, all of Euroseas’ existing vessels are financed by the same bank, which as part of the arrangement agreed to reduce the loan margin of the overall loan facility by 0.5%.
“Following these transactions, Euroseas becomes a larger, better capitalized company with a younger fleet. As mentioned in our earnings release last week, we remain optimistic about the prospects of the feeder containership markets due to favorable supply developments that would allow trade demand growth to get translated to better market rates, especially, when trade uncertainties related to the US-China trade tensions are resolved,” said Aristides Pittas, chairman and CEO of Euroseas.