FreeSeas Announces Closing of $25.0 Million Offering of Preferred Stock and Warrants Approximately $22 Million of Proceeds to...
May 28 2014 - 12:30PM
Athens, Greece, May 28, 2014 --
FreeSeas Inc. (Nasdaq CM:
FREE) ("FreeSeas'' or the "Company''), a transporter of
dry-bulk cargoes through the ownership and operation of a fleet of
five Handysize and one Handymax vessels, announced today the
closing of its previously announced $25 million offering of Series
D Convertible Preferred Stock and Series C Warrants pursuant to a
placement agent agreement with Dawson James Securities, Inc.
entered into on May 21, 2014. The securities were sold in 250,000
units, at a purchase price of $100 per unit, with each unit
consisting of one share of the Company's Series D Convertible
Preferred Stock and 184 Series C Warrants, exercisable for
five years at an initial price of $1.42 per share.
Each share of Series D Preferred Stock has
a stated value of $100 and is initially convertible into a number
of shares of common stock equal to $100 divided by $1.09.
FreeSeas will shortly enter into an agreement to
pay approximately $22 million of the offering proceeds to Credit
Suisse, which will eliminate all of its debt obligations owed to
Credit Suisse, which are approximately $37 million. Upon
Credit Suisse's receipt of such $22 million, Credit Suisse will
also cancel all the remaining debt owed by FreeSeas and its
subsidiaries, which is approximately $15 million. Following such
payment and cancellation, FreeSeas will no longer owe any amounts
to Credit Suisse, Credit Suisse will release any and all liens it
has on the assets of the Company and its subsidiaries and Credit
Suisse will release all corporate guarantees received from the
Company's subsidiaries. The Company also expects to be
required to recognize a non-cash gain on debt extinguishment of
approximately $15 million as a result of the foregoing debt
cancellation.
The remaining offering proceeds will be used for
general corporate purposes.
Dawson James Securities, Inc. acted as the
exclusive placement agent on a best efforts basis in connection
with this offering.
Mr. Ion Varouxakis, the Company's CEO made the
following statement: "We are delighted to close on this transaction
which represents yet another important milestone for the Company.
With the $25 million equity raised we expect to be able to reduce
our outstanding bank debt from $59.7 million to $23.2 million. In
the space of just over seven months, our bank debt will have been
reduced from approximately $90 million to approximately $23 million
while achieving bank debt reductions of approximately $35 million.
Our balance sheet will be completely transformed, and we shall be
optimally positioned at a very interesting time in our industry,
with sufficient financial flexibility to allow us to enlarge our
fleet and build shareholder value."
The securities described above were offered by
FreeSeas pursuant to a registration statement on Form F-1
previously filed by FreeSeas with the Securities and Exchange
Commission and declared effective on May 21, 2014. A final
prospectus relating to the offering has been filed with the SEC and
is available on the SEC's website at www.sec.gov. Copies of
the final prospectus may also be obtained from Dawson James
Securities, Inc., 1 North Federal Highway, Boca Raton, Florida
33432, (561) 391-5555.
This press release shall not constitute an offer
to sell, or the solicitation of an offer to buy, these securities,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to their registration or qualification under the
securities laws of any such state or jurisdiction.
About FreeSeas Inc.
FreeSeas Inc. is a Marshall Islands corporation
with principal offices in Athens, Greece. FreeSeas is engaged in
the transportation of drybulk cargoes through the ownership and
operation of drybulk carriers. Currently, it has a fleet of
Handysize and Handymax vessels. FreeSeas' common stock trades on
the NASDAQ Capital Market under the symbol FREE. 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, www.freeseas.gr.
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. 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.
CONTACT: FreeSeas Inc.
Dimitris Papadopoulos, Chief Financial Officer
011-30-210-45-28-770
Fax: 011-30-210-429-10-10
dp@freeseas.gr
www.freeseas.gr
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