PIRAEUS, Greece, March 24, 2009 (GLOBE NEWSWIRE) -- FreeSeas Inc. (Nasdaq:FREE) (Nasdaq:FREEW) (Nasdaq:FREEZ) ("FreeSeas" or the "Company"), a transporter of dry-bulk cargoes through the ownership and operation of a fleet of seven Handysize vessels and two Handymax vessels, announced today that it has obtained covenant waiver agreements from each of its bank lenders and has refinanced the existing credit facility for the Free Maverick.
Mr. Ion Varouxakis, President and CEO of FreeSeas, stated, "These modifications to our loan agreements, coupled with recent charter announcements, have provided FreeSeas with a greater level of operational and financial flexibility. We closely worked with our commercial lenders in negotiating these waivers, and the process involved extensive due diligence on their part. We feel that their willingness to work with us reflects the quality of FreeSeas' fleet and charter agreements, the outlook for our business model, and the positive changes in the dry bulk market over the past few weeks. To a lesser extent, we believe these waivers position us for growth as we see unprecedented opportunities for acquisitions at current market prices."
Summary of Covenant Waivers / Refinancing
* Credit Suisse: $79.3 million outstanding on the reducing revolving
credit facility. Credit Suisse has agreed to waive any potential
breach of the market value-to-loan covenants from October 1, 2008
until March 31, 2010. A partial prepayment of the outstanding loan
in the amount of $5.0 million will be made by the Company by
July 31, 2009.
* First Business Bank S.A. of Greece ("FBB"): $24.0 million
outstanding term loan. FBB has agreed to waive any potential breach
of market value-to-loan covenants from December 31, 2008 until
January 1, 2010.
* Hollandsche Bank - Unie N.V. ("HBU"): $49.6 million total
facilities outstanding. The Company has reached an agreement with
HBU to refinance a balloon payment of $27.1 million due on August 1,
2009 on the loan for the Free Maverick. The balloon payment will be
replaced by a new 3.5 year facility, which is payable through 13
quarterly installments of $600,000 beginning on August 1, 2009 and
one installment of $19.3 million payable on November 1, 2012. HBU
also agreed to waive any potential breach of its market
value-to-loan ratio on all its facilities, from October 1, 2008
until July 1, 2010, and amend such ratio to 100% on July 1, 2010,
110% on July 1, 2011, 120% on July 1, 2012 and 125% on December 31,
2012.
To facilitate investors' understanding of its debt obligations after the above modifications, FreeSeas has included the following table outlining its annual repayment schedule, as modified, of its long term debt at December 31, 2008:
Year Amount 2009 Obligations by Quarter
---- (in 000s) (in 000s)
--------- ---------
2009 $26,700 Q1* $7,500
2010 $16,400 Q2 $6,000
2011 $16,400 Q3 $9,100
2012 $35,100 Q4 $4,100
2013 $14,000 ---------
2014 $14,000 $26,700
2015 $24,475 =========
2016 $13,275
---------
Total $160,350
=========
* Company has already effected payment as of date of release
About FreeSeas Inc.
FreeSeas Inc. is a Marshall Islands corporation with principal offices in Piraeus, Greece. FreeSeas is engaged in the transportation of dry bulk cargoes through the ownership and operation of dry bulk carriers. Currently, it has a fleet of seven Handysize vessels and two Handymax vessels. FreeSeas' common stock and warrants trade on the NASDAQ Global Market under the symbols FREE, FREEW and FREEZ, respectively. Risks and uncertainties are described in reports filed by FreeSeas Inc. with the U.S. Securities and Exchange Commission, which can be obtained free of charge on the SEC's website at http://www.sec.gov. For more information about FreeSeas Inc., please visit the corporate website, http://www.freeseas.gr.
The FreeSeas Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5981
Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy, including expected vessel acquisitions. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the demand for dry bulk vessels; competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.