Performance Shipping Inc. Announces Agreement to Acquire Fifth Aframax Tanker
November 11 2020 - 8:52AM
Performance Shipping Inc. (NASDAQ: DCIX), (the “Company”), a global
shipping company specializing in the ownership of tankers, today
announced that it has signed, through a separate wholly-owned
subsidiary, a Memorandum of Agreement to purchase the M/T Kalamas,
a 105,400 dwt Aframax tanker vessel built in 2011 by Sumitomo Heavy
Industries Marine & Engineering Co. Ltd, Japan, from an
unaffiliated third party seller for a total purchase price of
US$22.0 million. The vessel, the Company’s fifth Aframax tanker, is
expected to be delivered between November 15 and December 22, 2020,
and will be renamed M/T P. Yanbu.
Upon delivery of the M/T Kalamas, the
cargo-carrying capacity of the Company’s fleet will have increased
by 23.9% to approximately 546,094 deadweight tons (dwt). The M/T
Kalamas was built to high specification and has been retrofitted
with a ballast water treatment system (BWTS), in compliance with
the Ballast Water Management (BWM) Convention. The vessel completed
its docking survey in July 2020 and its special survey in October
2020. As a result, the Company does not expect to incur any capital
expenditures on the vessel until January 2026.
The aforementioned acquisition will be financed
with US$13.2 million cash on hand and US$8.8 million from the
recently announced term loan facility with Piraeus Bank S.A.
Following the incurrence of the US$8.8 million
loan in connection with this acquisition and the partial
refinancing of the Nordea facility, total debt at year end 2020
will be US$58.1 million. Quarterly principal installments for total
debt starting in 2021 will be approximately US$2.1 million.
Commenting on the agreement, Mr. Andreas
Michalopoulos, the Company’s Chief Executive Officer, stated:
“The acquisition of our fifth Aframax tanker is
an important milestone for our Company; it marks the completion of
the first internally financed growth phase, consistent with our
corporate strategy and policies announced a mere three weeks ago.
The acquisition will, among other things, reduce our indicative
estimated daily cashflow breakeven rate by about US$3,000 to about
US$16,000 per vessel per day, thereby meaningfully enhancing our
ability to pay dividends to our shareholders pursuant to our
variable dividend policy. It also marks our commitment to become a
premier tanker vessel owning company. Following the delivery of the
vessel and starting in 2021, we look forward to patiently and
consistently executing our commercial and financial strategy for
the benefit of our shareholders.”
About the Company
Performance Shipping Inc. is a global provider
of shipping transportation services through its ownership of
Aframax tankers. The Company's current fleet is employed primarily
on short to medium term charters with leading energy companies and
traders.
Cautionary Statement Regarding
Forward-Looking Statements
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," "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 our vessels, changes in
our operating expenses, including bunker prices, dry-docking 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, the length and severity of the
novel coronavirus (COVID-19) pandemic and its impact on the demand
for seaborne transportation of petroleum and other types of
products, potential disruption of shipping routes due to accidents
or political events, vessel breakdowns and instances of off-hires
and other factors. Please see our filings with the U.S. Securities
and Exchange Commission for a more complete discussion of these and
other risks and uncertainties.
Corporate Contact:
Andreas Michalopoulos
Chief Executive Officer, Director and Secretary
Telephone: +30-216-600-2400
Email: amichalopoulos@pshipping.com
Website: www.pshipping.com
Investor and Media Relations:
Edward Nebb
Comm-Counsellors, LLC
Telephone: + 1-203-972-8350
Email: enebb@optonline.net
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