Pyxis Tankers Announces Closing of Modern Dry Bulk Vessel Joint Venture

Rhea-AI Summary

Pyxis Tankers (NASDAQ: PXS) has finalized a joint venture to acquire the 'Konkar Venture', an 82,099 dwt dry bulk carrier built in 2015. The company invested $7.3 million and issued 267,857 restricted common shares for a 60% ownership stake. The vessel will continue its current time charter at a daily rate of $18,000 until mid-August 2024. Post-acquisition, Pyxis Tankers' total cash is estimated at $43 million, including $2.2 million in restricted cash, with total funded debt reaching approximately $89 million.

Positive

• Pyxis Tankers invested $7.3 million and issued 267,857 restricted common shares for a 60% stake in the joint venture.
• The 'Konkar Venture' will continue its time charter at a gross daily rate of $18,000 until mid-August 2024.
• Post-acquisition, Pyxis Tankers' total cash is estimated at $43 million.

Negative

• Total funded debt for Pyxis Tankers is approximately $89 million post-acquisition.

Insights

Financial Analyst

Pyxis Tankers' recent investment in a new joint venture for the Kamsarmax carrier signals a strategic move into the dry bulk vessel segment. The investment of $7.3 million and issuance of 267,857 restricted common shares for a 60% ownership stake is noteworthy. This implies a significant commitment and confidence in the venture's potential profitability.

From a financial standpoint, the company's consolidated total cash post-acquisition is estimated to be $43.0 million, while the total funded debt stands at approximately $89.0 million. This debt level raises some concerns, as it is relatively high compared to their cash reserves. However, the vessel's current time charter, generating a gross daily rate of $18,000 through mid-August 2024, provides a steady revenue stream in the short term.

Investors should monitor the company's ability to manage this debt and generate sufficient revenue from the new venture to cover costs and provide returns.

Shipping Industry Analyst

The addition of the 'Konkar Venture' to Pyxis Tankers' fleet aligns with their strategy to modernize and expand their operations. Kamsarmax carriers are known for their eco-efficiency and versatility in shipping dry bulk commodities, which is a growing sector.

The vessel's current employment under an existing time charter indicates immediate revenue generation, a positive aspect for short-term financial health. However, the long-term success will depend on market conditions in the dry bulk sector, which can be volatile due to fluctuating demand and supply.

Pyxis Tankers' move to diversify into dry bulk shipping, away from its primary focus on tankers, reflects adaptability but also brings exposure to different market dynamics. Thus, understanding these dynamics will be important for investors considering long-term positions.

Maroussi, Greece – June 28, 2024 – Pyxis Tankers Inc. (NASDAQ Cap Mkts: PXS) (the “Company”), an international shipping company, announced today that it has closed its previously announced dry bulk vessel joint venture with an entity related to its Chairman and Chief Executive Officer, that was newly formed to acquire, own and operate, the “Konkar Venture”, a 2015 built 82,099 dwt Kamsarmax carrier. The Company invested $7.3 million in cash and will issue 267,857 restricted common shares for a 60% ownership interest in the joint venture.  The Konkar Venture, which is a sister ship to the Company’s eco-efficient “Konkar Asteri”, is continuing its employment under the existing time charter through mid-August, 2024 at a gross daily rate of $18,000.  After the acquisition of the vessel, including payment of transaction fees and expenses and application of vessel working capital, the Company’s consolidated total cash is estimated to be approximately $43.0 million, inclusive of restricted cash of $2.2 million, with total funded debt of approximately $89.0 million. 

About Pyxis Tankers Inc.

The Company currently owns a modern fleet of six mid-sized vessels consisting of three MR2 product tankers engaged in seaborne transportation of refined petroleum products and other bulk liquids as well as controlling interests in two dry bulk joint ventures that each own a Kamsarmax and Ultramax vessel, respectively, and a 100% owned Kamsarmax carrier, which transport a broad range of dry-bulk commodities. The Company is positioned to opportunistically expand and maximize its fleet of eco-efficient vessels due to significant capital resources, competitive cost structure, strong customer relationships and an experienced management team whose interests are aligned with those of its shareholders. For more information, visit: http://www.pyxistankers.com. The information on the Company’s website is not incorporated into and does not form a part of this release.

Forward Looking Statements

This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 in order to encourage companies to provide prospective information about their business. These statements include statements about our plans, strategies, goals financial performance, prospects or future events or performance and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expects,” “seeks,” “predict,” “schedule,” “projects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “targets,” “continue,” “contemplate,” “possible,” “likely,” “might,” “will, “should,” “would,” “potential,” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. All statements that are not statements of either historical or current facts, including among other things, our expected financial performance, expectations or objectives regarding future and market charter rate expectations and, in particular, the effects of the war in the Ukraine and the Red Sea conflict, on our financial condition and operations as well as the nature of the product tanker and dry bulk industries, in general, are forward-looking statements. Such forward-looking statements are necessarily based upon estimates and assumptions. Although the Company believes 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 the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. The Company’s actual results may differ, possibly materially, from those anticipated in these forward-looking statements as a result of certain factors, including changes in the Company’s financial resources and operational capabilities and as a result of certain other factors listed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. The Company is reliant on certain independent and affiliated managers for its operations, including most recently an affiliated private company, Konkar Shipping Agencies, S.A., for the management of its dry bulk vessels. For more information about risks and uncertainties associated with our business, please refer to our filings with the U.S. Securities and Exchange Commission, including without limitation, under the caption “Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023.  The Company cautions you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. The Company undertakes no obligation to update publicly any in information in this press release, including forward-looking statements, to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws.
  

Company
Pyxis Tankers Inc.
59 K. Karamanli Street
Maroussi, 15125 Greece
info@pyxistankers.com

Visit our website at www.pyxistankers.com

Company Contact
Henry Williams
Chief Financial Officer
Tel: +30 (210) 638 0200 / +1 (516) 455-0106
Email: hwilliams@pyxistankers.com

Source: Pyxis Tankers Inc.

FAQ

What did Pyxis Tankers announce on June 28, 2024?

Pyxis Tankers announced the closing of a joint venture to acquire the 'Konkar Venture', an 82,099 dwt dry bulk carrier built in 2015.

How much did Pyxis Tankers invest in the joint venture for the 'Konkar Venture'?

Pyxis Tankers invested $7.3 million in cash and issued 267,857 restricted common shares for a 60% ownership interest.

What is the current employment status of the 'Konkar Venture'?

The 'Konkar Venture' will continue under its existing time charter at a gross daily rate of $18,000 until mid-August 2024.

What is the estimated total cash of Pyxis Tankers after the acquisition?

Post-acquisition, Pyxis Tankers' estimated total cash is approximately $43 million, including $2.2 million in restricted cash.

What is the total funded debt of Pyxis Tankers after acquiring the 'Konkar Venture'?

The total funded debt of Pyxis Tankers is approximately $89 million post-acquisition.