Performance Shipping Inc. Announces Agreement to Acquire Sixth Aframax Tanker
Performance Shipping (NASDAQ: PSHG) has signed a Memorandum of Agreement to acquire the M/T Maran Sagitta, a 105,071 dwt Aframax tanker built in 2009, for $27.58 million. The delivery is expected around July 5, 2022. This acquisition will be financed through cash raised from a recent equity offering and a new senior secured debt facility. CEO Andreas Michalopoulos stated that the addition of this vessel will enhance operational leverage and positively impact cash flow, with strong fundamentals in the tanker market anticipated to support high charter rates ahead.
- Acquisition of M/T Maran Sagitta enhances fleet capacity.
- Anticipated positive cash flow from operations upon delivery.
- Strong fundamentals in the tanker market may lead to high charter rates.
- Financing acquisition through debt may increase financial strain.
ATHENS, Greece, June 21, 2022 (GLOBE NEWSWIRE) -- Performance Shipping Inc. (NASDAQ: PSHG), ("we" or the “Company”), a global shipping company specializing in the ownership of tanker vessels, today announced that it has signed, through a separate wholly-owned subsidiary, a Memorandum of Agreement to purchase a 105,071 dwt Aframax tanker, the M/T Maran Sagitta, to be renamed M/T P. Sophia, built in 2009 by Hyundai Heavy Industries Co., Ltd. - Ulsan, South Korea, from an unaffiliated third party for a gross purchase price of US
The Company expects to finance the acquisition cost with cash-on-hand raised from its recent equity offering and the incurrence of debt through a new senior secured facility that it anticipates it will enter into prior to delivery of the vessel.
Commenting on the agreement, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“We are pleased to announce the acquisition of our sixth Aframax tanker. The addition of the M/T P. Sophia, a vessel with high specifications and in very good condition, will further enhance our operating leverage as a pure tanker company. The prompt delivery of the vessel into a strong tanker charter market will immediately contribute positively to our cashflow from operations. We believe that the fundamentals of our sector are the strongest they have been in a very long time, which bodes well for continuing high charter rates in the foreseeable future.”
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of Aframax tankers. The Company’s current fleet is employed on spot voyages and through pool arrangements.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessel we have agreed to acquire.
The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “targets,” “likely,” “would,” “could,” “seeks,” “continue,” “possible,” “might,” “pending” and similar expressions, terms or phrases may 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 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 expectations, beliefs, or projections.
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, but are not limited to: the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker shipping industry, changes in the supply of vessels, changes in worldwide oil production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs, our future operating or financial results, availability of financing and refinancing including with respect to the vessel we have agreed to acquire, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, the length and severity of epidemics and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of products, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions or events, including “trade wars”, armed conflicts including the war in Ukraine, the imposition of new international sanctions, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events, vessel breakdowns and instances of off-hires and other important factors. Please see our filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
FAQ
What tanker is Performance Shipping acquiring?
What is the purchase price for the M/T Maran Sagitta?
When is the delivery of the M/T P. Sophia expected?
How will Performance Shipping finance the tanker acquisition?
What impact is the acquisition expected to have on cash flow?
