Seanergy looks to expand fleet

seanergy-maritime

Seanergy Maritime Holdings Corp. announced its financial results for the third quarter and nine months ended September 30, 2016.

For the third quarter and nine months ended September 30, 2016, the Company generated net revenues of $8.6 and $23.8 million, respectively. As of September 30, 2016, total stockholders’ equity of the Company was $19.2 million and the Company had cash and restricted cash of $4.0 million.

Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:

“During the third quarter of 2016, our efforts were focused on strengthening our financial position in order to expand our fleet through vessel acquisitions. The first half of 2016 was the weakest on record for dry bulk daily rates but we have started to see steady gains in rates since the first half of this year. For instance, Capesize rates for the first half of 2016 averaged approximately $3,500 per day vs. current Capesize daily rates of approximately $14,500. We expect volatility in the current rate environment to continue but believe the worst is behind us. As such, we view this year’s weakness in the dry bulk market as an opportunity to acquire quality vessels at favorable prices.

“With this aim in sight, we completed two registered direct offerings of common shares to unaffiliated institutional investors in August 2016 and November 2016.

“In terms of vessel acquisitions, we have already taken delivery of the first of two 2010-built Capesize vessels that we agreed to acquire and the second delivery is expected to take place during December 2016 bringing our cargo carrying capacity to 1.5 million DWT. We believe that the agreed purchase price compares favorably to current market values for similar vessels. We are confident in the long run prospects of the Capesize market and our ability to expand in this market segment due to our existing financing arrangements in place, established commercial expertise, and operational efficiency.”

Third Quarter Developments:

2016 Annual Meeting of Shareholders

On September 28, 2016, the Company held its 2016 Annual Meeting of Shareholders, or the Meeting, in Athens, Greece pursuant to a Notice of Annual Meeting of Shareholders dated August 17, 2016. At the Meeting, each of the following proposals, which was set forth in more detail in the Notice of Annual Meeting of Shareholders and the Company’s Proxy Statement sent to shareholders on or around August 17, 2016, were approved and adopted: (i) the election of two Class A Directors, Stamatis Tsantanis and Elias Culucundis, to serve until the 2019 Annual Meeting of Shareholders and (ii) the approval of the appointment of Ernst & Young (Hellas) Certified Auditors – Accountants S.A. to serve as the Company’s independent auditors for the fiscal year ending December 31, 2016.

Acquisition of two 2010 built Capesize Vessels

On September 26, 2016, the Company entered into separate agreements with an unaffiliated third party for the purchase of two secondhand Capesize vessels for an aggregate gross purchase price of $41.5 million. One vessel, the M/V Lordship, was delivered to the Company from its previous owners on November 30, 2016 while the second vessel is expected to be delivered to the Company during December 2016, subject to the satisfaction of certain customary closing conditions.

Completion of Registered Direct Offering

In an offering that was completed on August 10, 2016, the Company sold 1,180,000 shares of common stock to an unaffiliated institutional investor at a purchase price of $4.15 per share, for aggregate gross proceeds of $4.9 million. The net proceeds from the sale of the securities, after deducting placement agent fees and related offering expenses, were approximately $4.1 million. The securities were offered pursuant to a shelf registration statement on Form F-3 previously filed and declared effective by the United States Securities and Exchange Commission (“SEC”). A prospectus supplement relating to the offering was filed by the Company with the SEC on August 9, 2016.

Supplemental Letter to the UniCredit Bank AG Loan Facility

On July 29, 2016, the Company entered into a supplemental letter to its senior secured loan facility with UniCredit Bank AG, dated September 11, 2015. Among other things, pursuant to the supplemental letter the effective date of a certain covenant is deferred to July 01, 2017.

Supplemental Agreements to the Alpha Bank A.E. Loan Facilities

On July 28, 2016, the Company entered into a second supplemental agreement related to its senior secured loan facility with Alpha Bank A.E., dated March 6, 2015. Among other things, pursuant to the second supplement agreement the next four repayment installments were reduced to $100,000 each, amounting to an aggregate reduction of $600,000 that will be added to the balloon payment. In addition, the effective date of certain covenants is deferred to July 01, 2017.

On July 28, 2016, the Company entered into a supplemental agreement related to its senior secured loan facility with Alpha Bank A.E., dated November 4, 2015. Among other things, pursuant to the supplement agreement the effective date of certain covenants is deferred to July 01, 2017.

Subsequent Developments:

Delivery of M/V Lordship

On November 30, 2016, the Company took delivery of the M/V Lordship, a 178,838 dwt Capesize dry bulk vessel, built in 2010 by Hyundai Heavy Industries in South Korea. The vessel is the first of two vessels that the Company agreed to acquire in September 2016.

Loan Facility with Northern Shipping Fund III LP

On November 28, 2016, the Company entered into a $32 million loan facility with Northern Shipping Fund III LP, or NSF, to fund part of the acquisition cost of the two vessels that the Company agreed to acquire in September 2016. As of the date of this press release, the Company has drawn down $7.5 million that was used to partially fund the acquisition of M/V Lordship.

Completion of Registered Direct Offering

In an offering that was completed on November 23, 2016, the Company sold 1,305,000 shares of common stock to three unaffiliated institutional investors at a purchase price of $2.75 per share, for aggregate gross proceeds of $3.6 million. The net proceeds from the sale of the securities, after deducting placement agent fees and related offering expenses, are approximately $3.2 million. The securities were offered pursuant to a shelf registration statement on Form F-3 previously filed and declared effective by the SEC. A prospectus supplement relating to the offering was filed by the Company with the SEC on November 22, 2016.

Loan Facility with Jelco Delta Holding Corp.

On October 4, 2016, we entered into a $4.2 million loan facility, or the Loan Facility, with Jelco Delta Holding Corp., or Jelco, an entity affiliated with the Company’s principal shareholder, to fund the initial deposits for the two vessels that the Company agreed to acquire in September 2016. On November 17, 2016, the Company entered into Amendment No. 1 to the Loan Facility, which changed the maturity date to December 31, 2016. On November 28, 2016, the Company entered into an amended and restated agreement pursuant to which the amount of the facility was increased to a total of $12.8 million. Furthermore, the maturity date was extended to the earlier of (i) February 28, 2018 and (ii) the date falling 14 months from the final drawdown date. Under certain circumstances the maturity date may be extended to the earlier of (i) February 28, 2019 and (ii) the date falling 26 months from the final drawdown date.

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