Euroseas Ltd. (NASDAQ: ESEA) (Euroseas), an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced yesterday that it took delivery of M/V EM Athens, a feeder containership of 2,506 teu built in 2000 that the Company agreed to acquire last month from Euromar LLC (Euromar), a wholly-owned subsidiary of the Company that previously was partially owned by the Company. M/V EM Athens was acquired along with EM Oinousses, a feeder size containership also of 2,506 teu built in 2000.
The Company also announced yesterday that it exercised its option to purchase from Euromar two additional container vessels, the M/V EM Corfu, a feeder size containership vessel of 2,556 teu built in 2001, and the M/V Akinada Bridge, a post-Panamax size container vessel of 5,600 teu built in 2001. The Company has secured financing for the acquisitions of the four vessels with a combination of debt and equity. The M/V EM Oinousses, M/V EM Corfu and M/V Akinada Bridge are expected to be delivered to the Company within 2017.
Furthermore, the Company announced that it has signed a non-binding letter of intent with Poseidon Container Holdings Group (Poseidon), an owner and operator container carrier vessels, to consider a possible combination of their respective containership fleets under certain circumstances. Poseidon owns and operates a fleet of sixteen container carrier vessels including four feeder containerships, two
Poseidon owns and operates a fleet of sixteen container carrier vessels including four feeder containerships, two Panamax and four post-Panamax containerships as well as six post-Panamax container carrier vessels of new wide beam / high reefer capacity design with an average teu-adjusted age of 8.7 years and a total capacity of 86,322. The possible combination may include a spinoff of Euroseas' container assets into a standalone company or take the form of a different structure. The Company expects that any combination with Poseidon would be done on a net asset value (NAV) to NAV basis. NAV is typically calculated as the difference of the market value of a company's assets net of the market value of its liabilities.
Euroseas' strategy is to use its operating expertise and public company status to provide a platform of consolidation for similar assets in the drybulk and containership sectors. This strategy may be implemented by separating Euroseas' drybulk and containership fleets into two public companies, if the Board of Directors determines that such a split would benefit Euroseas' shareholders, particularly if it may also facilitate Euroseas' consolidation strategy.
Euroseas evaluates acquisition and/or combination opportunities continuously and in that context memorialized its recent discussions with Poseidon as described above. Euroseas reminds its shareholders and investors that these discussions are at an early stage, that the letter of intent is non-binding, and that there can be no assurance that an agreement will be reached with Poseidon or any other party.