Bulk Shipping Group In Switch To Container Vessels

GREECE – Paragon Shipping, traditionally a bulk carrier who only ordered a new Panamax vessel in April following their end of year figures in February, indicated a change of tack, or at least a wider base of investment yesterday, when they announced the sale of one of their new build bulkers and purchase of two newly constructed 3,400 TEU container ships.

The vessel sold is a Kamsarmax carrier, basically a 82,000 dwt Panamax with an increased length overall approaching 230 metres and able at that size to be the largest vessel able to load bauxite at Port Kamsar in Equatorial Guinea. The increase in size becomes worthwhile because of the extra cargo the ship is capable of carrying. The fluctuations lately in the Baltic Dry Index are causing many dyed in the wool bulkers to consider alternatives as a hedge against possible future problems.

The two new container vessels were built by Howardtwerke-Deutsche Werft GmbH, Germany at a price approaching $50 million each and are scheduled for delivery to Paragon in the next two months. Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping said of the sale and purchases:

“We were able to sell the Kamsarmax contract at a one time cash profit to the Company and we believe the acquisition of the container vessels were made at attractive prices at an advantageous point in the container cycle.

“Diversification into the container market at this point of time will strengthen the Company’s prospects and its ability to enhance shareholder value. It is our view that the container market is currently at the early stages of its rebound with asset prices at attractive levels enabling us to maximize investment returns over time as freight rates recover. We are seeking employment for these vessels and we shall continue to focus on fixed rate period charter employment, a strategy that has been profitable for Paragon and its shareholders.

“The sale of the Kamsarmax contract will partially reduce our capital expenditure requirements while producing a cash profit to the Company. Upon completion of these acquisitions and our newbuilding programme Paragon will have a fleet of 21 vessels operating in five segments of the drybulk market and the container sector. We intend to continue seeking accretive acquisitions in the container and drybulk sectors. Aiming to maximize shareholder value, we will explore all options for our drybulk and container fleet.”