FreeSeas Announces Acquisition of Handysize Vessel for $11 Million; Expected to be Immediately Accretive to Earnings
PIRAEUS, Greece, Aug 18, 2009 (GlobeNewswire via COMTEX) -- FreeSeas Inc. (Nasdaq:FREE) (Nasdaq:FREEW) (Nasdaq:FREEZ) ("FreeSeas" or the "Company"), a transporter of dry bulk cargoes through the ownership and operation of a fleet of Handysize and Handymax vessels, today announced that it has agreed to purchase a Handysize vessel from an unaffiliated third party for approximately US$11 million. FreeSeas intends to finance the acquisition using cash on hand which was recently raised as part of its follow on equity offering in July of this year. With the acquisition of the new vessel, to be named the Free Neptune, the Company's fleet increases from nine to ten.
The vessel is a 30,800 dwt Handysize vessel built in 1996 in Japan, and is expected to be delivered to FreeSeas before the end of August.
Mr. Ion Varouxakis, President and Chief Executive Officer, stated, "We are very pleased to have quickly deployed the capital raised in our recent equity offering through our agreement to acquire a quality second-hand vessel through a distressed asset sale process. As we have expressed to the market, we believe that the disruption in the global shipping markets will present very attractive acquisition opportunities for companies like FreeSeas who are able to access capital and deploy it in an efficient manner. As an example, the prompt delivery of this vessel in a favorable chartering position is expected to be immediately accretive to earnings and to generate revenues and income within the current quarter. As a result of FreeSeas' streamlined operating infrastructure and fixed costs, this vessel acquisition is also expected to lower our per vessel break-even cost. Furthermore, the Free Neptune lowers the average age of our fleet, and will be the Company's third largest vessel in terms of tonnage."
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