ATHENS, Greece, June 19, 2008 (PRIME NEWSWIRE) -- Paragon Shipping Inc. (Nasdaq:PRGN), a global shipping transportation company specializing in drybulk cargoes, announced today that it has entered into an agreement with an unaffiliated third party to acquire a 2008-built Supramax drybulk carrier.
The vessel, to be named the Friendly Seas, has a capacity of 58,779 dwt and will be purchased with a timecharter attached at $55,000 per day for a period of 10 to 12 months to Irika Shipping, who, in turn, have chartered the vessel to Cargill on identical terms. Immediately following the expiration of this charter, the vessel has been fixed to Dieulemar at $33,750 per day for a period of 58 to 62 months. The vessel is expected to be delivered to Paragon between July 1, 2008 and September 1, 2008.
The purchase price of the vessel is $79.25 million. The Company intends to finance 50% of the acquisition with bank debt under its existing credit facilities, and the balance with available cash on hand.
With the addition of this vessel, the Company's fleet will consist of seven Panamax drybulk carriers, three Handymax drybulk carriers and two Supramax drybulk carriers, with an aggregate capacity of approximately 765,137 dwt.
Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon, commented, "This acquisition is fully in line with our strategic aim of acquiring modern vessels that are accretive to earnings and cash flow. In this case, we have taken advantage of the current favorable charter market to secure fixed employment for the next six years with reputable charterers. We expect that the two charters will generate $70 million in revenue in the aggregate, representing a solid return on this investment over the time period and providing additional visibility into our revenues and cash flows going forward. Going forward, we intend to continue to build a modern, versatile fleet through opportunistic vessel purchases."
About Paragon Shipping Inc.
Paragon Shipping Inc. is an Athens, Greece-based international shipping company specializing in the transportation of drybulk cargoes. The Company's current fleet consists of eleven vessels with a total carrying capacity of 706,358 dwt. For further information, please visit the Company's website at www.paragonship.com.
Cautionary Statement Regarding Forward-Looking Statement
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" "pending and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk shipping capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.