Euroseas Ltd., owner and operator of drybulk carriers and container vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced today, that it signed a memorandum of agreement to purchase a Panamax drybulk carrier of 74,020 dwt, built in 2000 in Japan, for approximately $27.5 million. The vessel comes with a time charter back to the seller until January 2010 at a gross daily rate of $25,200 per day and is expected to be delivered to the Company between July 1, 2009 and August 5, 2009.
Following the delivery of the vessel, approximately 74% of Euroseas' total fleet days remaining in 2009 and approximately 40% in 2010 will be fixed under time charters, FFA contracts, already concluded spot charters, or otherwise protected from market fluctuations.
Aristides Pittas, Chairman and CEO of Euroseas commented: "We are delighted to announce the acquisition of a 9-year old Japanese built Panamax drybulk carrier as part of our fleet expansion program. The accompanying time charter until January 2010 to a solid counterparty improves and provides further visibility to our 2009 earnings.
During 2008, we avoided investing in the drybulk market, acquiring only one containership with a 3-year charter. However, the drop in vessel prices at the end of last year has made fleet renewal and expansion economically attractive again. The current purchase marks our third dry bulk acquisition during this year for approximately the same total cost as it would have cost us to buy just one such vessel before September 2008. As with the previous two acquisitions, we believe that we will be able to finance about 50% of the acquisition price with bank debt.
While we maintain our cautious short term outlook for both the drybulk and container markets due to the high vessel orderbooks and the uncertain global economy we are evaluating signs of a possible market recovery in both sectors which have been demonstrated by improved drybulk earnings and a reduction in the number of containerships laid-up. We are confident that the strength of our balance sheet and the low cost structure of our operations will enable us to navigate through this challenging period and grow the fleet further at attractive low prices."