Euroseas Ltd. announced yesterday that it sold and delivered to their new owners the two oldest vessels in its fleet, M/V Gregos and M/V Artemis.
Euroseas Ltd., an owner and operator of container carrier and drybulk vessels, announced yesterday that it sold and delivered to their new owners the two oldest vessels in its fleet, M/V Gregos and M/V Artemis. M/V Gregos, a 38,691 dwt geared drybulk carrier built in 1984, was sold for further trading for approximately $7.9 million. M/V Artemis, a 2,098 TEU gearless containership built in 1987, was sold for scrap for $282/lwt, or approximately $3.2 million; the M/V Artemis had been laid-up and was sold "as is". The Company will take a book loss of approximately $8.7 million as a result of such sales.
The Company also announced that it has entered into a non-binding Letter of Intent with Eton Park Capital Management, L.P. on behalf of one or more funds managed by it ("Eton Park") and Rhône Capital III L.P. ("Rhône") to form a joint venture to pursue investment opportunities in shipping. The Company is expected to invest up to $25 million while Eton Park and Rhone are each expected to invest up to $75 million. Management of acquired vessels will be performed by the Company and its affiliates. The arrangement also is expected to include the option by Eton Park and Rhone, exercisable at any time after the two year anniversary of the formation of the joint venture, to exchange all or part of their interest in the joint venture for equity of the Company at a price to be based on the comparable values of the joint venture and the Company at the time of exercise. In addition, the arrangement contemplates that the Company will grant the joint venture certain rights of first refusal in respect of vessel acquisition opportunities presented to the Company. The agreement is subject to the execution of definitive documentation and customary closing conditions and is expected to close by the end of February 2010. During this time the Company has agreed to negotiate exclusively with Eton Park and Rhône with respect to this or any similar transaction.
Aristides Pittas, Chairman and CEO of Euroseas commented: "As we have repeatedly said in the past, we expect that our core markets will provide us with significant investment opportunities over the next couple of years. During 2009, we disposed of our three 25- year old bulkers and replaced them with three vessels with an average age of 10 years. We have also sold the 22-year old containership, M/V Artemis. As a result of these transactions, the average age of our fleet decreased to approximately 16 years. We have a strong balance sheet which we intend to use to exploit investments opportunities in our market sectors."
Mr. Pittas continued "At the same time, we are pleased to announce our non-binding agreement with Eton Park and Rhône. Not only does this venture represent a vote of confidence for our company and its management, but we also firmly believe that it will benefit our shareholders in a number of ways. First, we will get access to a greater number and larger size of opportunities by co-investing alongside these well reputed and successful joint venture partners than we would have had on our own; second, our investment will be spread over a more diversified portfolio of vessels; and third, we expect to achieve overhead and operating costs savings and to have the opportunity to earn incremental returns if our joint investments perform well. We are very excited about these developments and look forward to producing superior returns for our shareholders."
Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 136 years. Euroseas trades on the NASDAQ Global Select Market under the ticker ESEA.
Euroseas operates in the dry cargo, drybulk and container shipping markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2000 certified affiliated ship management company, which is responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements.
The Company has a fleet of 15 vessels, including 4 Panamax drybulk carriers and 1 Handymax drybulk carrier, 2 Intermediate containership, 5 Handysize containerships, 2 Feeder containerships and a multipurpose dry cargo vessel. Euroseas` 5 drybulk carriers have a total cargo capacity of 331,808 dwt, its 9 containerships have a cargo capacity of 15,779 teu and its multipurpose vessel has a cargo capacity of 22,568 dwt or 950 teu.