Paragon Shipping Deeper in Red

April 2, 2015

Greek dry bulk shipping company Paragon Shipping Inc. reported a net loss of $51.8 million for the year ended December 31, 2014 widening the gap from the preceding year’s net loss of $17 million.

Net revenue, net of voyage expenses amounted to $11.6 million in the fourth quarter of 2014, falling from $13.9 million reported in 2013.

“During the fourth quarter of 2014 charter rates remained at historically low levels, a trend that has continued in 2015,” said Michael Bodouroglou, Chairman, Chief Executive Officer and Interim Chief Financial Officer of Paragon Shipping.

The company has been busy with execution of its fleet growth strategy by increasing its fleet size to 16 vessels in four size classes.

“Our further fleet growth is secured with our newbuilding program of five ecodesign Ultramax and Kamsarmax drybulk vessels with expected deliveries in 2015. The company has currently secured debt financing of up to $78.0 million, in the aggregate, for four of its five newbuilding drybulk carriers. While expanding our fleet size, our aim is to maintain a cost effective structure,” he added.

The company is currently in negotiations with several of its lenders to improve its repayment profile and cure any potential breaches in the event that the current market conditions persist or worsen.

Paragon has agreed to certain arrangements with another two lenders, in addition to the preliminary agreement with Commerzbank AG. However, although management believes that the lenders will continue to support the company, Paragon said that there can be no assurance that the outcome of these negotiations will be successful.

“In order to withstand the current challenging conditions, our main focus is on improving the company’s cash liquidity and cash flow breakeven levels. To do so, we are currently exploring several alternatives to effectively manage our working capital requirements and other commitments,” notes Bodouroglou. “We remain committed to take all the necessary steps to emerge stronger from this downturn,” he concluded.