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Paragon comes out fighting, sues TradeWinds for defamation

Paragon Shipping has delayed delivery of three bulk carrier newbuildings and is still suffering from poor liquidity – but one thing is certain: the NYSE-listed shipping company has definitely not filed for bankruptcy.

Paragon and its executive team have filed a defamation lawsuit with the Criminal Court of Athens against shipping paper TradeWinds, which reported in February that the shipping company had obtained board approval for filing for bankruptcy under Chapter 11.

The Michael Bodouroglou-led company maintains the report was “totally untrue” and believes the article had “a negative impact on the company, its reputation and stock price”.

Nevertheless, Paragon says it does not have sufficient liquidity to make the upcoming interest payment due on its issued and outstanding senior unsecured notes due 2021, which bear interest at a rate of 8.375% per year. The payment is due on May 15.

Paragon sold off its fleet of six bulk carriers in March in order to raise liquidity levels. It signed an agreement with the Bank of Ireland in January to use the $2.2m net proceeds from the sale of Kind Seas (72,500 dwt, built 1999) to prepay its loan facility with the bank.

This left the loan with a balance of $2.2m plus interest, which was converted into an unsecured payment-in-kind (PIK) note, repayable at par value at the end of December 2020. Paragon said the bank cancelled the note on April 11, releasing the shipping company from its obligations under the facility.

Meanwhile, Paragon has delayed delivery of three kamsarmaxes it has on order at China’s Jiangsu Yangzijiang Shipbuilding. Bright Seas, World Seas and Inspiring Seas (all 82,000 dwt) were originally scheduled for delivery in May, but will now be delivered in September, October and November respectively.


Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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