EMEA News
Tough Times Sees Dry Bulk Player Sell Entire Operating Fleet
Paragon Shipping Inc. (Paragon) has announced that it was selling off its entire operating fleet as a way of settling outstanding loan obligations.
According to a Wednesday statement, the company agreed with the banks in the loan syndicate to sell the mortgaged vessels, the M/V Coral Seas, the M/V Golden Seas, the M/V Prosperous Seas, the M/V Precious Seas, the M/V Priceless Seas and the M/V Proud Seas, to "unaffiliated third parties in exchange for the full and final settlement of the outstanding amount of the respective facility."
Having sold off ten other vessels last year, the sale represents the remainder of the operating fleet.
Paragon said it is also currently in discussions with Jiangsu Yangzijiang Shipbuilding Co., (Yangzijiang), to extend deliveries of its three Kamsarmax newbuilding drybulk carriers towards the end of 2016 at "no extra cost to the company."
The release noted that the balance due to Yangzijiang for the delivery of the three vessels is currently higher than the estimated market value of these ships.
The company also announced that it did not take delivery of an Ultramax newbuild drybulk carrier from Yangzhou Dayang Shipbuilding Co. Ltd., (Dayang), that was scheduled to be delivered before the end of December 2015.
Paragon noted that it sent a cancellation notice to Dayang, but this had been rejected, and that "the case is currently under arbitration proceedings in London."
Also stated was the fact it had missed an interest payment of $500,000 that was due on February 16, 2016 due to lack of liquidity, and that it will still lack the liquidity to make the payment at the end of a 30-day grace period ending March 17, 2016; the company noted it will still lack the liquidity to make the payment at the end of the period.
Paragon is one of many dry bulk players struggling in what has been called the sector's worst crisis in living memory.
Last month Khalid Hashim, CEO of Precious Shipping Public Company Limited (PSL) warned that there could be a wave of bankruptcies in the dry bulk sector as a result.
