Castor Maritime Inc. Announces Vessel Acquisition
Castor Maritime Inc., a diversified global shipping company, announces that it entered, through a separate wholly-owned subsidiary, into an agreement to purchase a 2010 Korean-built Kamsarmax dry bulk carrier from an unaffiliated third-party for a purchase price of $14.8 million.
The acquisition is expected to be consummated by taking delivery of the vessel sometime in the end of the first quarter or beginning of the second quarter of this year and is subject to the satisfaction of certain customary closing conditions.
Petros Panagiotidis, Chief Executive Officer of Castor, commented: “We are very happy to announce the acquisition of our third Kamsarmax dry bulk vessel and remain committed to our plan of steadily deploying capital and growing our fleet. Upon completion of all our recently announced acquisitions, our fleet will consist of twelve vessels, doubling in size since the beginning of 2021. We are working diligently in identifying and taking advantage of attractive opportunities presented to us across vessel sizes and segments.”
Castor Maritime: Εξαγορά πλοίου και διπλασιασμός του στόλου της
Στην εξαγορά του 12ου πλοίου του στόλου της προχώρησε η ναυτιλιακή Castor Maritime, συμφερόντων του εφοπλιστή Πέτρου Παναγιωτίδη.
Πρόκειται για ένα φορτηγό πλοίο τύπου kamsarmax, το οποίο κατασκευάστηκε το 2010 σε κορεάτικο ναυπηγείο, έναντι 14,8 εκατ. δολαρίων. και η παράδοση του οποίου αναμένεται στο τέλος του τρέχοντος τριμήνου ή στις αρχές του επόμενου.
Η ναυτιλιακή κατά το δίμηνο Ιανουαρίου-Φεβρουαρίου πρόσθεσε στον στόλο της έξι πλοία και πλέον με την αγορά και του 12ου πλοίου διπλασιάζει τον στόλο της, ο οποίος αποτελείται από ένα capesize, 3 Kamsarmax και 6 Panamax φορτηγά πλοία, αλλά και δύο Aframax τάνκερ.
Ο Πέτρος Παναγιωτίδης, CEO της εταιρείας σχολίασε σχετικά: «Είμαστε πολύ χαρούμενοι που ανακοινώνουμε την απόκτηση του τρίτου πλοίου ξηρού φορτίου Kamsarmax και παραμένουμε πιστοί στο σχέδιό μας για σταθερή αξιοποίηση των κεφαλαίων μας και ανάπτυξη του στόλου μας. Με την ολοκλήρωση όλων των πρόσφατων εξαγορών μας, ο στόλος μας θα αποτελείται από δώδεκα πλοία, διπλάσια σε αριθμό από τις αρχές του 2021. Εστιάζουμε στον εντοπισμό και την αξιοποίηση ευκαιριών που μας παρουσιάζονται, σε διάφορα μεγέθη αλλά και κατηγορίες πλοίων».
Castor Maritime Inc. Announces $15.3 Million Debt Financing
Castor Maritime Inc., a global shipping company specializing in the ownership of dry bulk vessels, announces the closing, through two of its ship-owning subsidiaries, of a $15.3 million senior term loan facility with a reputable European financial institution (“the $15.3 Million Financing”), secured by two of its vessels. The loan is expected to be drawn down before the end of this month. The Company intends to use the net proceeds from the $15.3 Million Financing to support the Company’s growth plans.
The $15.3 Million Financing will have a tenor of four years from the drawdown date and will bear interest at 3.30% plus LIBOR per annum.
Petros Panagiotidis, Chief Executive Officer of Castor, commented:
“We are very pleased that this financing opportunity came to a successful completion. This new debt financing, our largest to date, with its attractive cost of funds, will provide additional liquidity enabling us to continue pursuing our strategic goals of expanding our fleet and delivering long-term profitability to our shareholders.”
Castor Maritime Inc. is an international provider of shipping transportation services through its ownership of dry bulk vessels. The Company’s vessels are employed primarily on short to medium-term charters and transport a range of dry bulk cargoes, including such commodities as coal, grain and other materials along worldwide shipping routes.
The Company’s fleet currently consists of six Panamax dry bulk carriers and, upon completion of the previously announced acquisition of its first Capesize bulk carrier, the Company’s fleet will consist of seven dry bulk carriers.
Castor Maritime Inc. Announces Pricing of $18.0 Million Registered Direct Offering
Castor Maritime Inc. announces today that it has entered into a securities purchase agreement with certain unaffiliated institutional investors to issue approximately 94.8 million of its common shares and warrants to purchase up to an aggregate of 94.8 million common shares at a purchase price of $0.19 per common share and accompanying warrant in a registered direct offering. The warrants will have an exercise price of $0.19 per share, are exercisable immediately and will expire five years following the date of issuance.
Maxim Group LLC is acting as sole placement agent for the offering.
The gross proceeds to the Company from the offering are estimated to be approximately $18.0 million before deducting the placement agent’s fees and other estimated offering expenses. The offering is expected to close on or around January 5, 2021, subject to the satisfaction of customary closing conditions.
The securities described above are being sold pursuant to the shelf registration statement on Form F-3 (File No. 333-232052), previously filed with the Securities and Exchange Commission (the “SEC”) on June 10, 2019 and declared effective on June 21, 2019. Such securities are being offered only by means of a prospectus. A prospectus supplement and the accompanying prospectus relating to and describing the terms of the registered direct offering will be filed with the SEC. When available, copies of the prospectus supplement and the accompanying prospectus relating to the registered direct offering may be obtained at the SEC’s website at www.sec.gov or by contacting Maxim Group LLC, 405 Lexington Avenue, 2nd Floor, New York, NY 10174, at 212-895-3745.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification of these securities under the securities laws of any such state or jurisdiction.
Castor Maritime Inc. Doubles Revenues Despite Challenging Market Conditions
Castor Maritime Inc., a global shipping company specializing in the ownership of dry bulk vessels, announced its results for the three months and six months ended June 30, 2020.
Highlights of the Three Months Ended June 30, 2020:
Revenues, net: $2.6 million for the three months ended June 30, 2020, as compared to $1.0 million for the three months ended June 30, 2019, or a 160% period to period increase;
Net (loss)/income: Net loss of $144,600 for the three months ended June 30, 2020, as compared to net income of $260,603 for the three months ended June 30, 2019;
Loss per share: $0.01 loss per share for the three months ended June 30, 2020, as compared to a loss per share of $0.47 for the three months ended June 30, 2019;
EBITDA(1): $1.0 million for the three months ended June 30, 2020, as compared to $0.4 million for the three months ended June 30, 2019, or a 150% period to period increase;
Average fleet time charter equivalent (“TCE”)(1) of $9,090 per day for the three months ended June 30, 2020, as compared to $10,339 for the three months ended June 30, 2019, or a 12% period to period decrease;
On June 26, 2020, successfully concluded an underwritten public offering raising gross proceeds of $20.7 million;
Cash and restricted cash of $31.3 million as of June 30, 2020, or a 514% increase since December 31, 2019; and
On June 30, 2020, announced the acquisition of the M/V Magic Rainbow, a 2007 Chinese-built Panamax dry bulk carrier for a purchase price of $7.85 million from an unaffiliated third-party seller. The M/V Magic Rainbow was delivered to us on August 8, 2020.
Earnings Highlights of the Six Months Ended June 30, 2020:
Revenues, net: $5.3 million for the six months ended June 30, 2020, as compared to $1.9 million for the six months ended June 30, 2019, or a 179% period to period increase;
Net (loss)/income: Net loss of $404,468 for the six months ended June 30, 2020, as compared to net income of $316,572 for the six months ended June 30, 2019;
Loss per share: $0.05 loss per share for the six months ended June 30, 2020, as compared to a loss per share of $0.56 for the six months ended June 30, 2019;
EBITDA(1): $1.9 million for the six months ended June 30, 2020, as compared to $0.6 million for the six months ended June 30, 2019, or a 217% period to period increase; and
Average fleet TCE(1) of $10,372 per day for the six months ended June 30, 2020, as compared to $10,071 for the six months ended June 30, 2019, or a 3% period to period increase.
(1) EBITDA and TCE rates are not recognized measures under United States generally accepted accounting principles (“U.S. GAAP”). Please refer to Appendix B of this press release for the definition and reconciliation of these measures to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
Recent Business/Financial Highlights:
On July 15, 2020, we successfully concluded a registered direct offering of common shares and a concurrent private placement of warrants to purchase common shares (the “July Equity Offering”), resulting in gross proceeds of $17.3 million; and
On July 28, 2020, we entered, though a wholly-owned subsidiary, into an agreement to purchase a 2010 Japan-built Panamax dry bulk carrier (to be renamed M/V Magic Horizon), for a purchase price of $12.75 million from an unaffiliated third-party seller, which we expect to take delivery of either at the end of the third quarter or the beginning of the fourth quarter of 2020.
Earnings Commentary:Second Quarter ended June 30, 2020 and 2019 Results
Time charter revenues, net of charterers’ commissions, for the three months ended June 30, 2020, increased to $2.6 million from $1.0 million in the same period of 2019, or a 160.0% increase. This increase reflects the addition of both the M/V Magic Sun and the M/V Magic Moon to our fleet on September 5, 2019 and October 20, 2019, respectively. These additions correspondingly increased our Available Days from 91 in 2019 to 273 in 2020, thus generating incremental revenues in the latter period. The daily TCE of our fleet for the second quarter of 2020 stood at $9,090, as compared to a daily TCE of $10,339 earned during the same period ended June 30, 2019, or a 12.1% decrease, reflecting primarily the lower daily net revenues earned by the M/V Magic P and the M/V Magic Sun in the three months ended June 30, 2020 compared to those generated by the M/V Magic P in the same period of 2019 given their exposure (when faced with charter renewal) to a charter market adversely affected by the COVID-19 pandemic.
The increase in operating expenses by $810,523, from $404,743 in the second quarter of 2019 to $1,215,266 in the second quarter of 2020 as well as the increase depreciation and amortization costs by $190,737, from $169,959 in the second quarter of 2019 to $360,696 in the second quarter of 2020 reflect, as discussed above, the addition to our fleet of the M/V Magic Sun and the M/V Magic Moon that correspondingly increased our Ownership days from 91 in 2019 to 273 in 2020.
Management fees in the second quarter of 2020 amounted to $136,500, whereas, in the same period of 2019, management fees totaled $29,120. The increase by $107,380, or 368.8%, in management fees is due to i) the addition to our fleet of the M/V Magic Sun and the M/V Magic Moon that correspondingly increased our Ownership days from 91 in 2019 to 273 in 2020 and ii) a lesser extent, the increase in the management fee of the M/V Magic P to $500 from $320 effective January 1, 2020, in order to be aligned with that of the remaining fleet.
Daily company administration expenses were $400 in the quarter ended June 30, 2020, compared to $973 in the corresponding period of 2019, with the daily decrease of $573, or 58.9%, stemming from the allocation of company administration expenses to a larger pool of vessels in the second quarter of 2020 versus the corresponding quarter of 2019. During the second quarter of 2020, we incurred interest costs in connection with our outstanding debt amounting to $805,066, which also included the non-cash recurring amortization expenses and the non-cash accelerated amortization expenses related to deferred financing costs and to a beneficial conversion feature recognized in connection with our $5.0 million senior unsecured convertible debentures, or our $5.0 Million Convertible Debentures, aggregating to an amount of $524,366, as further discussed below. We had no outstanding indebtedness in the corresponding period of 2019.
EBITDA for the three months ended June 30, 2020 was $1.0 million compared to $0.4 million in the same period of 2019, with the increase mainly attributable to the above discussed period-to-period increase in our operating revenues.
Recent Business and Financial Developments Commentary:
Impact of COVID-19
The COVID-19 pandemic has had and continues to have a significant negative impact on the global economy and the demand for shipping regionally as well as globally.
We believe the COVID-19 pandemic has resulted in lower dry bulk rates since March 2020 than those that could have been achieved in the absence of the virus, given the lower demand for some of the cargoes that we and our peers carry. As a result of this disruption, global economies have grounded to a halt which consequently adversely affected the derived demand for shipping transportation. As a result, two of our vessels which came up for charter renewal in the first and second quarters of 2020 were employed at comparably less favorable charter rates than those achieved during 2019 and those expected before the COVID-19 pandemic. However, from June 2020 onwards, we have seen a rebound in charter rates for the asset class we own and operate and we have been able to recharter vessels that were open for renewal at improved charter rates compared to those prevailing in the first quarter of 2020 and up to May 2020.
Our crews are also adversely affected by the COVID-19 pandemic. Due to quarantine restrictions placed on embarking and disembarking crew members as well as additional procedures required when using commercial aviation and other forms of public transportation, our crews have had difficulty embarking and disembarking on our ships. Although the restrictions have, in certain cases, delayed crew embarking and disembarking on our ships, they have not materially functionally affected our ability to crew out our vessels. Despite the fact that our ability to crew out our vessels may present operational risks that we cannot predict, we continue to monitor the situation with utmost care for the health and safety of our crew, while maximizing our efforts to ensure uninterrupted operations for our customers.
Given the uncertain nature of the socioeconomic and political circumstances arising from the COVID-19 pandemic, the duration of any business disruptions as well as any related financial impact cannot be further assessed at this point in time, but could further affect, at a lesser or more significant extent, our business, results of operations and financial condition.
Update on $5.0 Million Convertible Debentures
As previously announced, on January 27, 2020, February 10, 2020 and February 19, 2020, we issued three convertible debentures (each, a “Convertible Debenture”) to an institutional investor (the “Investor”) in original principal amounts of $2.0 million, $1.5 million and $1.5 million each. As of June 8, 2020, the Investor converted an aggregate $5.1 million of principal and interest under the $5.0 Million Convertible Debentures (which comprised of the full $5.0 million principal amount and $0.1 million of interest) for 8,042,078 common shares (the “Conversion Shares”). As a result, as of the date of this press release, the $5.0 Million Convertible Debentures have been settled in their entirety.
June Equity Offering
On June 23, 2020, we entered into an agreement with Maxim Group LLC, or Maxim, acting as underwriter pursuant to which we offered 59,110,000 units, each unit consisting of (i) one common share or a pre-funded warrant to purchase one common share at an exercise price equal to $0.01 per common share (a “Pre-Funded Warrant”), and (ii) one Class A Warrant to purchase one common share (a “Class A Warrant”), for $0.35 per unit (or $0.34 per unit including a pre-funded warrant), or the June Equity Offering. The June Equity Offering, which was completed on June 26, 2020, resulted in the issuance of 59,082,686 common shares (the “June Equity Offering Shares”) and 59,110,000 Class A Warrants with an exercise price of $0.35 per common share. We raised gross and net cash proceeds from this transaction of $20.7 million and $18.6 million, respectively. Between June 26, 2020 and September 8, 2020, there were subsequent exercises of 3,019,500 Class A Warrants which resulted in the issuance of an equivalent number of common shares (the “Class A Warrant Shares”) and proceeds of approximately $1.1 million.
Acquisition of the M/V Magic Rainbow
On June 30, 2020, we entered into an agreement to acquire the M/V Magic Rainbow, a 2007 Chinese-built Panamax dry bulk carrier, for a gross purchase price of $7.85 million from an unaffiliated third-party seller. On August 8, 2020, we took delivery of the M/V Magic Rainbow and, on August 12, 2020, the M/V Magic Rainbow commenced employment under a period time charter with an expected term of minimum three months and up to a maximum of five months at a gross daily charter hire rate of $10,300.
July Equity Offering
On July 12, 2020, we entered into a securities purchase agreement with certain unaffiliated institutional investors for the issuance and sale of an aggregate of 57,750,000 of our common shares (the “July Equity Offering Shares”) in a registered direct offering, while, in a concurrent private placement we issued and sold warrants to purchase up to 57,750,000 of our common shares at an exercise price of $0.35 per common share. The July Equity Offering was completed on July 15, 2020 and resulted in gross proceeds of approximately $17.3 million. We intend to use part of the net proceeds from the July Equity Offering and the June Equity Offering discussed above to finance the acquisitions of the M/V Magic Rainbow and the M/V Magic Horizon, and any other potential vessel acquisitions as relevant opportunities may arise. If we are unable to complete any vessel acquisition apart from that of the M/V Magic Rainbow and the M/V Magic Horizon, we plan to use the net proceeds of the July Equity Offering and the June Equity Offering for capital expenditures, working capital or for other general investment purposes, or a combination thereof.
Following the issuance of the Conversion Shares, the June Equity Offering Shares, the Class A Warrant Shares and the July Equity Offering Shares, we have, as of the date of this press release, 131,212,376 common shares issued and outstanding.
Acquisition of new Panamax vessel (to be renamed M/V Magic Horizon)
On July 28, 2020, we entered into an agreement to acquire a 2010 Japanese-built Panamax dry bulk carrier for a gross purchase price of $12.75 million from an unaffiliated third-party seller. The acquisition is expected to be consummated by taking delivery of the vessel either at the end of the third quarter or the beginning of the fourth quarter of 2020.
Following delivery of this vessel, the number of the vessels in our fleet shall increase to five (5) Panamax dry bulk carriers and the size of our fleet shall have been increased by 500% since June 30, 2019.
Management Commentary:
Mr. Petros Panagiotidis, Chief Executive Officer and Chief Financial Officer of Castor commented:
“Despite the operational challenges the industry is facing with respect to the COVID-19 pandemic, we are very satisfied with our Q2 2020 performance, as we have been able to more than double our revenues compared to the same quarter last year, mainly attributed to our fleet growth. Amidst these unprecedented times, we have been able to raise substantial capital which we have partly utilised for the further expansion of our fleet, remaining committed to our growth plan. In parallel, our strong liquidity position provides us with a cushion to withstand a potentially prolonged weaker market due to the COVID-19 pandemic but also allows us to take advantage of further growth opportunities.”
Liquidity / Financing / Cash Flow Commentary:
As of June 30, 2020, total cash amounted to $31.3 million, which included $0.5 million of non-legally restricted cash required under the $11.0 million secured term loan financing that we concluded in November 2019. The significant improvement of our consolidated cash position as of June 30, 2020, by approximately $26.2 million, in relation to our cash position as of December 31, 2019, was mainly the result of us concluding the June Equity Offering which resulted in net cash proceeds of $18.6 million, as discussed above, as well as entering into certain financing arrangements within the first quarter of 2020, as further discussed below.
As of June 30, 2020, pursuant to the issuance within the first quarter of 2020 of one commercial secured credit facility amounting to $4.5 million, our total debt (including $5.0 million of related party debt which matures in March 2021, gross of unamortized deferred loan fees) was $19.6 million of which $7.2 million was repayable within one year, as compared to $16.0 million of debt having been incurred as of December 31, 2019. During the first quarter of 2020, we also issued the $5.0 Million Convertible Debentures, which, as of June 8, 2020, were all converted into our common shares, and thus, did not require any cash outlay from us.
During the three months ended June 30, 2020, we used cash in operating activities in the amount of $0.4 million as compared to $0.01 million used in the corresponding period of 2019, which represents an increase in cash used in operating activities of $0.4 million consisting of net income after noncash items of $0.6 million and $0.4 million respectively plus a decrease in working capital of $1.0 in the second quarter of 2020 versus a decrease of $0.4 million of working capital in the corresponding quarter of 2019. As of June 30, 2020, we reported a working capital surplus of $24.4 million (December 31, 2019: $3.2 million).