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Paragon sells panamax bulk carrier to repay loan

NASDAQ-listed Paragon Shipping has sold its panamax bulker Kind Seas for $3.5m in cash to an unnamed buyer.

The net proceeds from the Japan-built bulker’s sale will be used to make an immediate prepayment of Paragon’s loan facility with the Bank of Ireland, which was secured in 2009.

Following the prepayment, the Athens-based shipping company still has $4.4m left to pay under the loan, of which $2.2m is to be written-off and another $2.2m (plus interest) has been converted into an unsecured paid-in-kind (PIK) note.

The PIK Note will be non-amortizing and will mature on December 31, 2020, at which time it will be repaid at par, the company said.

Paragon has the option to convert the PIK note into its Class A common shares at any time before the maturity date, based on the 20-day average closing price of Paragon’s shares immediately prior to the conversion date.

“We are pleased to announce the above transaction that improves considerably our cash flow. Also, the ability to write-off a portion of the loan improves further the overall leverage of the company,” Michael Bodouroglou, Paragon’s chairman, president and CEO, said in a release today.

“We remain committed to take any appropriate actions that preserve our liquidity in these extremely adverse market conditions.”

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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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