Castor Maritime Inc. Announces the Sales of the M/V Magic Nova and the M/V Magic Horizon for an Aggregate Price of $31.9 Million with an Aggregate Expected Net Gain of $9.0 Million

Rhea-AI Summary

Castor Maritime Inc. announces the sale of two Panamax bulk carrier vessels, M/V Magic Nova and M/V Magic Horizon, for a total of $31.9 million. The company expects to record a net gain of approximately $9 million from the sales during the first quarter of 2024. The transactions were negotiated and approved by a special committee of disinterested and independent directors.

Insights

Financial Analyst

The sale of the M/V Magic Nova and M/V Magic Horizon vessels by Castor Maritime Inc. represents a strategic divestiture that can have several financial implications for the company. The disclosed net gains of approximately $4.4 million and $4.6 million, respectively, are significant figures that will likely impact the company's financial statements positively in the short term. This influx of cash can potentially be used for debt reduction, reinvestment in the fleet, or other corporate activities that may enhance shareholder value.

It is also worth noting that the transactions were negotiated with entities related to a family member of the company's Chairman and CEO, which raises questions about the fairness of the deal. However, the approval by a special committee of independent directors suggests that due diligence was performed to ensure the transactions were conducted at arm's length, mitigating potential concerns about conflicts of interest.

From an investment perspective, the market's reaction to such news will depend on the perceived strategic rationale behind the sales and the company's plans for the proceeds. Investors will be interested in whether these divestitures are part of a broader strategy to optimize the fleet and focus on more profitable segments or merely one-off transactions.

Maritime Industry Analyst

In the context of the maritime shipping industry, the sale of Panamax bulk carrier vessels such as the M/V Magic Nova and M/V Magic Horizon could be indicative of a strategic shift or an operational optimization. The Panamax class, with its specific size and cargo capacity, is designed to transit the Panama Canal. The age of the vessels, being built in 2010, suggests that they may have reached a point in their lifecycle where selling them becomes more financially beneficial than continuing to operate them, especially when considering maintenance costs and potential technological obsolescence.

The prices at which these vessels were sold, $16.1 million and $15.8 million, also provide insights into the current market valuation for such assets. Comparing these figures to industry benchmarks and recent transactions can offer a gauge for assessing the health of the secondary market for maritime vessels. Stakeholders in the shipping industry, including competitors and potential investors, will be monitoring such transactions to understand pricing trends and to evaluate their own asset management strategies.

LIMASSOL, Cyprus, Jan. 29, 2024 (GLOBE NEWSWIRE) -- Castor Maritime Inc. (NASDAQ: CTRM), (“Castor” or the “Company”), a diversified global shipping company, announces that on January 19, 2024, the Company entered into separate agreements with entities beneficially owned by a family member of our Chairman, Chief Executive Officer and Chief Financial Officer for the sale of (i) the M/V Magic Nova, a 2010-built Panamax bulk carrier vessel, for a price of $16.1 million and (ii) the M/V Magic Horizon, a 2010-built Panamax bulk carrier vessel, for a price of $15.8 million. The terms of the transactions were negotiated and approved by a special committee of our disinterested and independent directors. Both vessels are expected to be delivered to their new owners by the end of the first quarter of 2024.

The Company expects to record during the first quarter of 2024 (i) a net gain of approximately $4.4 million from the sale of the M/V Magic Nova, excluding any transaction-related costs and (ii) a net gain of $4.6 million from the sale of M/V Magic Horizon, excluding any transaction related costs.

About Castor Maritime Inc.

Castor Maritime Inc. is an international provider of shipping transportation services through its ownership of oceangoing cargo vessels.

Castor owns a fleet of 16 vessels, with an aggregate capacity of 1.3 million dwt, currently consisting of the Capesize vessel M/V Magic Orion which the company agreed to sell on December 7, 2023, five Kamsarmax vessels including the M/V Magic Venus which the Company agreed to sell on December 21, 2023, eight Panamax dry bulk vessels, including the M/V Magic Nova and the M/V Magic Horizon, and two 2,700 TEU containership vessels.

For more information, please visit the Company’s website at www.castormaritime.com. Information on our website does not constitute a part of this press release.

Cautionary Statement Regarding Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. We are including this cautionary statement in connection with this safe harbor legislation. The words “believe”, “anticipate”, “intend”, “estimate”, “forecast”, “project”, “plan”, “potential”, “will”, “may”, “should”, “expect”, “pending” and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of current or historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these forward-looking statements, including these expectations, beliefs or projections. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward‐looking statements include factors and uncertainties related to the Company’s and its counterparty’s ability to consummate the transactions discussed herein or the occurrence of any event, change or other circumstance that could cause us to record a different net gain or loss than expected on the sales of the M/V Magic Orion, the M/V Magic Venus, the M/V Magic Nova and the M/V Magic Horizon, factors and uncertainties in connection with the effects of the Company’s spin-off transaction or any similar transaction, our business strategy, dry bulk and containership market conditions and trends, the rapid growth of our fleet, the consummation of any sale of any of our vessels, our relationships with our current and future service providers and customers, our ability to borrow under existing or future debt agreements or to refinance our debt on favorable terms and our ability to comply with the covenants contained therein, our continued ability to enter into time or voyage charters with existing and new customers and to re-charter our vessels upon the expiry of the existing charters, changes in our operating and capitalized expenses, our ability to fund future capital expenditures and investments in the acquisition and refurbishment of our vessels, instances of off-hire, future sales of our securities in the public market and our ability to maintain compliance with applicable listing standards, volatility in our share price, potential conflicts of interest involving members of our board of directors, senior management and certain of our service providers that are related parties, general domestic and international political conditions or events (including armed conflicts, “trade wars”, global public health threats and major outbreaks of disease), existing or future disputes, proceedings or litigation, including the outcome or costs associated with the Company’s previously announced efforts to recover compensation and damages in relation to the terminated prior sale of the M/V Magic Moon, changes in seaborne and other transportation, changes in governmental rules and regulations or actions taken by regulatory authorities, and the impact of adverse weather and natural disasters. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. The information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward‐looking statements as a result of developments occurring after the date of this communication.

CONTACT DETAILS

For further information please contact:

Petros Panagiotidis
Castor Maritime Inc.
Email: ir@castormaritime.com

Media Contact:
Kevin Karlis
Capital Link
Email: castormaritime@capitallink.com

FAQ

What vessels did Castor Maritime Inc. sell?

Castor Maritime Inc. sold the M/V Magic Nova and M/V Magic Horizon.

What is the price of the vessels sold by Castor Maritime Inc.?

The M/V Magic Nova was sold for $16.1 million and the M/V Magic Horizon was sold for $15.8 million.

What is the expected net gain from the sale of the vessels?

The company expects to record a net gain of approximately $9 million from the sales during the first quarter of 2024.