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Euroseas Buys Containership Quartet

Euroseas Buys Containership Quartet
Greek ship owner and operator Euroseas has entered into agreements to acquire four secondhand 4,253 TEU containerships.

As informed, the vessels will be bought from companies controlled by Synergy Holdings Limited for about USD 40 million.

According to Euroseas, the acquisition will be financed by bank debt, existing funds of the company and USD 6 million raised in private placements. As a result of the private placements, the company will have issued approximately 8.45 million new common shares at a price of USD 0.71 per share representing about 19% of the Euroseas’ ownership after the acquisition.

Built in South Korea, the ships in question are the 2009-built Synergy Busan, the 2008-built Synergy Antwerp, the 2009-built Synergy Oakland and the 2009-built Synergy Keelung. The company will also assume the charters the vessels are currently under.

As part of the transaction, the company has agreed to acquire certain management services of Synergy Marine Limited for the next three years. Andreas Papathomas, Chairman of Synergy Holdings Limited, has joined the Board of Directors of Euroseas.

Euroseas has also agreed to issue an additional USD 0.5 million in shares of its common stock to Synergy Holdings Limited if certain conditions are fulfilled in one year.

One of the vessels was handed over to Euroseas on November 18 while the remaining three are expected to be delivered within a week subject to certain closing conditions being met.

“Euroseas believes that the addition of the four vessels will add in excess of USD 5 million to the company’s EBITDA over the next twelve months and reduce the average age of its fleet by approximately 2 years,” the company said.

Following the completion of the ship quartet acquisition, Euroseas’ fleet will reach 19 units which are all, except one, feeder and intermediate containerships.

“We are very pleased to announce again today another transformative transaction for Euroseas following the four vessels we acquired in August 2019. This time, we have agreed to acquire four additional vessels of average age of about 11 years, not only expanding our fleet but also renewing it by reducing its average age by about 2 years,” Aristides Pittas, Chairman and CEO of Euroseas, commented.

“This is a significant transaction for the company as it takes a meaningful presence in the Panamax markets. The transaction validates our strategy to become the only publicly listed platform to consolidate feeder and intermediate containerships.”

“We remain optimistic about the prospects of the feeder and intermediate containership markets due to favorable supply developments provided that trade demand growth does not falter because of current trade uncertainties related to the US-China trade tensions,” he added.

In parallel with the vessel acquisition, Euroseas announced that its 5,600 TEU Akinada Bridge, which has been drydocked in connection with its special survey, faced delays in completing the needed work resulting in the loss of the previously secured charter. The company has replaced the charter with another charter of similar rate and duration of three to five months which is expected to commence in early December 2019 when the remaining work on the vessel is expected to be completed.

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