Nasdaq-listed Paragon Shipping has agreed with its banks to sell off its entire fleet, made up of six dry bulk vessels, in exchange for full and final settlement of its outstanding debt.
The six vessels to be sold consist of two panamaxes (Coral Seas and Golden Seas) and four handysizes (Precious Seas, Priceless Seas, Prosperous Seas and Proud Seas).
The move follows the sale of panamax bulker Kind Seas in January, and Diamond Seas, Pearl Seas, Sapphire Seas, Deep Seas and Calm Seas all sold off in December to repay loans. Despite the sales, Paragon was unable to pay an interest payment of $0.5 million due on February 16 because of a lack of liquidity.
Paragon is now in discussions with Jiangsu Yangzijiang Shipbuilding to extend the deliveries of its three kamsarmax newbuildings until the end of 2016 at no extra cost to the company. Worryingly, the balance due on delivery of the vessels is currently higher than their estimated market value.
Lastly, the company also revealed that it did not take delivery of an ultramax newbuilding from Yangzhou Dayang Shipbuilding in China, cancelling the contract for the vessel scheduled for delivery in the fourth quarter of 2015. Dayang has rejected the cancellation and the two parties are now in arbitration in London over the matter.