Performance Shipping Inc. Announces Agreement to Acquire Fifth Aframax Tanker
ATHENS, GREECE, November 11, 2020 – Performance Shipping Inc. (NASDAQ: PSHG), (the “Company”), a global shipping company specializing in the ownership of tankers, today announced that it has signed, through a separate wholly-owned subsidiary, a Memorandum of Agreement to purchase the M/T Kalamas, a 105,400 dwt Aframax tanker vessel built in 2011 by Sumitomo Heavy Industries Marine & Engineering Co. Ltd, Japan, from an unaffiliated third party seller for a total purchase price of US$22.0 million. The vessel, the Company’s fifth Aframax tanker, is expected to be delivered between November 15 and December 22, 2020, and will be renamed M/T P. Yanbu.
Upon delivery of the M/T Kalamas, the cargo-carrying capacity of the Company’s fleet will have increased by 23.9% to approximately 546,094 deadweight tons (dwt). The M/T Kalamas was built to high specification and has been retrofitted with a ballast water treatment system (BWTS), in compliance with the Ballast Water Management (BWM) Convention. The vessel completed its docking survey in July 2020 and its special survey in October 2020. As a result, the Company does not expect to incur any capital expenditures on the vessel until January 2026.
The aforementioned acquisition will be financed with US$13.2 million cash on hand and US$8.8 million from the recently announced term loan facility with Piraeus Bank S.A.
Following the incurrence of the US$8.8 million loan in connection with this acquisition and the partial refinancing of the Nordea facility, total debt at year end 2020 will be US$58.1 million. Quarterly principal installments for total debt starting in 2021 will be approximately US$2.1 million.
Commenting on the agreement, Mr. Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“The acquisition of our fifth Aframax tanker is an important milestone for our Company; it marks the completion of the first internally financed growth phase, consistent with our corporate strategy and policies announced a mere three weeks ago. The acquisition will, among other things, reduce our indicative estimated daily cashflow breakeven rate by about US$3,000 to about US$16,000 per vessel per day, thereby meaningfully enhancing our ability to pay dividends to our shareholders pursuant to our variable dividend policy. It also marks our commitment to become a premier tanker vessel owning company. Following the delivery of the vessel and starting in 2021, we look forward to patiently and consistently executing our commercial and financial strategy for the benefit of our shareholders.”