Greece-based Paragon Shipping Inc. (NYSE: PRGN), a global shipping transportation company specializing in drybulk cargoes, revealed plans Wednesday to delay the delivery of four newbuilds with Zhejiang Ouhua Shipbuilding Co. in an effort to conserve cash after posting a third quarter loss.
In a release highlighting its third quarter and nine month results ending September 30, 2012, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated:
“For the third quarter of 2012, we reported Adjusted EBITDA of $6.4 million and Adjusted Net Loss of $0.1 million, or $0.02 per share. On average, we operated 12.0 vessels, with our utilization rate being more than 99%. Unfortunately, our results continue to be negatively impacted by the defaults of KLC and Deiulemar, along with the renewals of some of our legacy time charters at prevailing charter rates that are below breakeven levels, a situation that we expect to continue through 2014. However, in an effort to cushion ourselves from the full impact of this downturn, we have been proactive in fixing employment for our vessels and currently have 79% and 55% of our revenue days fixed for the remainder of 2012 and for 2013, respectively.”
Mr. Bodouroglou continued,
“In order to conserve cash and avoid taking delivery of our remaining four newbuilding vessels in the midst of this market downturn, we have agreed with the shipyard to reschedule the deliveries of the two remaining Handysize drybulk carriers and the two 4,800 TEU Containerships. As a result, we expect to take delivery of the two Handysize vessels in the first and fourth quarters of 2013, and the two Containerships in the second quarter of 2014. We are also in close discussions with our lenders to obtain waivers of certain covenants in our loan agreements and, in some cases, reduce our repayment profiles and ensure that we continue to remain current on all our obligations during the prevailing negative market conditions.”
Mr. Bodouroglou concluded,
“We are optimistic that our proactive approach to addressing the consequences of this severe and protracted market downturn should allow us to address all actual and potential challenges and enable our Company to emerge stronger when the market turns, which it inevitably will.”
On Monday, Paragon Shipping’s previously announced one-for-ten reverse stock split became effective after the close of trading.
Paragon Shipping Inc. provides ocean transportation of dry bulk cargoes, including commodities, such as iron ore, coal, grain, and other materials. As of June 19, 2012, the company’s fleet consisted of 12 dry bulk vessels with a total carrying capacity of 779,270 dwt. Paragon Shipping Inc. was founded in 2006 and is based in Voula, Greece.
Paragon’s full Third Quarter and Nine Months Ended Sept. 30 report can be downloaded HERE.