Paragon Shipping Acquires Ultramax Newbuilds

crown63 ultramax sinopacific shipbuilding
Sinopacific Shipbuilding’s Crown63 Ultramax bulker

Paragon Shipping Inc. (NASDAQ: PRGN), an Athens-based dry bulk shipper has announced an acquisition worth approximately $53.0 million for two 63,500 dwt Ultramax bulk carriers currently under construction at Yangzhou Dayang Shipbuilding, a Sinopacific Shipbuilding subsidiary.

The news follows their announcement last week of the completion of their public offering of 6,000,000 common shares.

Commenting on the acquisition, Paragon Chairman and CEO, Michael Bodouroglou stated, “We are very pleased to announce the acquisition of the two Ultramax newbuildings, which underlines our commitment to our strategy of conservative growth and maintaining a modern fleet. Both vessels are of eco-design and we expect them to have a competitive advantage in the marketplace.”

The ships have a scheduled delivery of May 31, 2014 and July 31, 2014, respectively and are likely linked to a 4-ship, $100 million Ultramax order placed in June by Marine Capital.

Coincidentally, these ships are of the same size ordered by Scorpio last month which mark the start of their new bulk shipping fleet, Scorpio Bulkers.  Three shipyards in China – ChengXi, Dalian COSCO KHI Ship Engineering, and Nantong COSCO KHI Ship Engineering will collectively build at least 11, perhaps up to 14, Ultramax dry bulk carriers for Scorpio at a price of approximately $27 million each.

Paragon Shipping’s current fleet consists of thirteen dry bulk vessels with a total carrying capacity of 816,472 dwt. In addition to the above acquisition, Paragon Shipping’s current newbuilding program consists of one Handysize drybulk carrier scheduled to be delivered in the fourth quarter of 2013 as well as two 4,800 TEU containerships that are scheduled to be delivered in 2014.