MAROUSSI, ATHENS, GREECE--(Marketwired - Sep 7, 2016) - Euroseas Ltd. (NASDAQ: ESEA), an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced today that its Ultramax drybulk vessel, Hull Number DY 161, under construction at Dayang yard and previously scheduled for delivery at the end of August 2016, was cancelled due to excessive construction delays. The Company has demanded the return of its progress payments and other expenses as specified in the newbuilding contract and secured by refund guaranties. The parties have referred the matter to arbitration. In June 2016, the Company cancelled another newbuilding contract for a similar Ultramax vessel, Hull Number DY 160, with the same yard also due to excessive construction delays.
Furthermore, as previously announced regarding the Company's remaining newbuilding contract with YJZ yard for the construction of Kamsarmax vessel, Hull Number YZJ 1153, scheduled to be delivered during the first quarter of 2018, the Company has acquired the option until December 31, 2016 to decide whether to build the vessel, or build a vessel of different type, or credit the payment already made as part of the original contract ($2.77m) to acquire a different vessel from the yard at a mutually agreed price, or decide to cancel the shipbuilding contract without any additional cost.
Aristides Pittas, Chairman and CEO of Euroseas, commented: "After the cancellation of our newbuilding program with the Dayang yard, we are looking forward to receiving our progress shipbuilding payments of about $18 million for the two Ultramax vessels which we demanded and expect to be refunded. Additionally, the optionality we introduced in our remaining newbuilding contract for a Kamsarmax vessel allows us to be in full control of our capital expenditures. The above newbuilding developments along with a debt refinancing and several loan restructurings that we have completed or agreed and are in the process of completing during 2016 will permit us to use a significant part of the newbuilding contract payments to be refunded for investments in other vessels as part of our continuing effort to take advantage of market opportunities, especially, in the current depressed market environment."
About Euroseas Ltd.
Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over more than 135 years. Euroseas trades on the NASDAQ Capital Market under the ticker ESEA.
Euroseas operates in the dry cargo, drybulk and container shipping markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2008 certified affiliated ship management company and Eurobulk (Far East) Ltd. Inc. which are responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements.
Including a vessel agreed to be purchased, M/V AEGEAN EXPRESS, a 1,439 teu 1997-built containership expected to be delivered to the Company by October 2016, the Company has a fleet of 12 vessels, including 3 Panamax drybulk carriers, 1 Handymax drybulk carrier and 1 Kamsarmax drybulk carrier, 2 Intermediate containerships, 3 Handysize containerships, and 2 Feeder containerships. Euroseas 5 drybulk carriers have a total cargo capacity of 351,272 dwt, its 7 containerships have a cargo capacity of 11,525 teu. The Company has also signed a contract for the construction of one Kamsarmax (82,000 dwt) fuel efficient drybulk carrier. Including the Kamsarmax new-building, the total cargo capacity of the Company's drybulk vessels will be 433,272 dwt.
Forward Looking Statement
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels and container ships, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
Visit the Company's website www.euroseas.gr