Euroseas announces refinancing of two vessels, acquisition of four vessels
Euroseas announced its entry into three material transactions: the refinancing of two of its vessels with simultaneous interest rate reduction for all other existing loans; the redemption of approximately 60% of its outstanding Series B Preferred Shares with simultaneous reduction of the dividend rate for the preferred shares remaining outstanding; and, the signing of memoranda of agreement to acquire four vessels for a combination of cash and common shares. Euroseas believes that the combined effect of these transactions will be to reduce its interest and preferred dividend expenses by approximately $1.4M per year as well as its overall leverage of combined debt and preferred equity. Euroseas agreed to refinance two of its vessels in a transaction that freed up about $8M of cash which together with approximately $3.7M of its available cash will be used to redeem approximately $11.7M of its series B Preferred Shares as described below. Following this refinancing, all of Euroseas' existing vessels are financed by the same bank, which as part of the arrangement agreed to reduce the loan margin of the overall loan facility by 0.5%. Euroseas also announced that it signed memoranda of agreement to acquire four feeder containerships for a consideration that includes a cash payment of $15M and issuance of approximately 22.5 million shares of common stock to the sellers. Euroseas intends to finance the cash portion of the acquisition price with bank debt which will be used to repay the existing indebtedness of the vessels with the sellers receiving only payment in Euroseas common shares. The common shares to be issued to the sellers will represent approximately 64.3% of Euroseas' outstanding common shares. The vessels are owned by affiliates of the Pittas family, controlled by the Company's CEO. As a result, the transactions have been evaluated and approved by a special committee of independent members of the Euroseas Board of Directors. The newly acquired vessels will be delivered to the Company within the next two months.