Freeseas Enters Agreement for the Financing of Vessel Acquisition
May 26 2015 - 9:00AM
Greece, May 26, 2015 -
FreeSeas Inc.
(
Nasdaq CM: FREE) ("
FreeSeas" or
the "
Company"), a transporter of dry-bulk cargoes
through the ownership and operation of a fleet of Handysize
vessels, announced today that it has entered into an agreement with
a group of Norwegian based investors for the financing of the
acquisition of assets valued up to US$15 million. Upon the vessel
acquisition by the investors, their ship-owning entities will enter
into long-term bareboat charter agreement(s) with the Company's
subsidiaries including a number of purchase options in the
Company's favour, on a profit-sharing basis with the investors. The
Company shall identify suitable acquisition candidates within a
six-month period. The investors shall be responsible for providing
suitable bank financing of approximately up to 50% to 60% to enable
the completion of the transaction. Depending on the final leverage
and acquisition price, a charter hire rate of up to $5,600 per day
shall be payable after the commencement of the charter.
Concurrently with the transaction, the Company
has agreed to place a mortgage on the M/V "Free Maverick" as
security. The Company has the option to replace the vessel with
cash security at any time. If however, the vessel is not replaced
by cash security, $1,400 per day shall be payable upon the
commencement of the bareboat charter of the acquisition vessel.
In addition, the M/V "Free Hero" and M/V "Free
Goddess" have been sold for consideration as part of the security
package, and the Company's subsidiaries have entered into long-term
bareboat agreements for such vessels with purchase options at a
daily hire rate of $1,100 per vessel.
The total agreed security provided by the
Company amounts to US$9 million, with a cash release of up to US$2
million in stages.
Mr. Ion G. Varouxakis Chairman President and
Chief Executive Officer of the Company, commented: "We are pleased
to enter into these agreements, which enable the Company to
leverage its balance sheet for fleet expansion at an opportune time
for counter-cyclical investments in the dry-bulk market. Being
positioned as a buyer in a falling asset prices environment we
believe is the best possible strategy. The demonstrated ability of
the Company to raise capital even in difficult environments is a
testament to the dedication and determination of management and the
board to succeed in its goal to turn around the Company to
profitability."
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 SEC, 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 Information:
At the Company
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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