Posted on Monday, April 12 2010
ATHENS, Greece, April 12, 2010 - Paragon Shipping Inc. (the "Company") (NYSE: PRGN), a global shipping transportation company specializing in drybulk cargoes, announced today that it has agreed to acquire a 2009 built Panamax bulk carrier, to be named "Dream Seas" with a carrying capacity of 75,151 dwt. The vessel was built at the Hudong Zhonghua Shipyard, Shanghai and acquired for $41 million. "Dream Seas" will be financed through a combination of cash and debt and is expected to be delievered to Paragon within June and July 2010. The Company also announced that it has entered the "Dream Seas" into a period time charter agreement with Intermare Transport GMBH, a leading German based commodities trading house, for a minimum 35 months and maximum 37 months at a gross daily time charter rate of $20,000.
Commenting on the acquisition, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated,
In the context of our fleet expansion and renewal strategy, the acquisition of the "Dream Seas" generates significant benefits to Paragon. It expands our Panamax fleet to eight vessels and our total fleet to 12 dry bulk carriers. It will also reduce the average age of our overall fleet to 7.5 years and our Panamax vessels to 6.7 years, well below the industry average. Furthermore, the period charter agreement with Intermare, is expected to generate gross revenues of $21 million for the three year employment of the vessel, enabling us to realize a significant portion of our investment in a short period of time.
Following the addition of "Dream Seas" to our fleet, our revenue days fixed under time charter employment will be 100% for 2010, 91% for 2011, 49% for 2012 and 27% for 2013, representing an average fleet wide term of 2.5 years, thus providing our shareholders with strong cash flow visibility and enhancing our ability to sustain an attractive quarterly dividend.
Mr. Bodouroglou concluded, We expect "Dream Seas" to be the first of a number of ships to be added to the Paragon fleet over the next two years. With sufficient liquidity to double the size of our fleet, we continue to explore the market for other high quality second hand and newbuilding vessels that we expect to enhance cash flow and growth to our Company and provide long term shareholder value.