Euroseas Ltd. (NASDAQ:ESEA) has signed a memorandum agreement that paves the way for it to complete the acquisition of dry bulk vessel, M/V Capetan Tassos. The operator of dry bulk and container carrier vessels is to pay approximately $4.4 million for the Panamax carrier, built in 2000 in Japan.
Bolstering Fleet
The proposed purchase of the carrier comes at a time of increased activity in the shipping industry stocks having been on an impressive run in the wake of Donald Trump winning the U.S election. Euroseas is one of the stocks that has been powering higher in the market having rallied by more than 40% on confirming its proposed acquisition.
The acquisition of M/V Capetan Tasso should go a long way in bolstering the carrier’s fleet that currently consists of 13 vessels. Chief executive officer, Aristides Pittas, reaffirming emerging growth opportunities in the overall industry has all but gone to ramp investor interest in the dry bulk carrier.
“We are very pleased to announce the acquisition of M/V Capetan Tassos as we believe the sector is approaching a turning point after a long period of depressed rates,” said Mr. Pittas.
Disappointing Earnings
Euroseas has also confirmed that it has reached an agreement with one of the company’s associated with the CEO, for the drawing of a $2 million loan financing. Part of the amount is to be used for the purchase of the Panamax carrier with the remaining being used as working capital.
The acquisition of the new vessel, however, comes on the heels of a disappointing third quarter where the company posted a 36.1% decrease in revenues to lows of $7.2 million. The same led to a net loss of $4.6 million, more than triple a net loss of $1.4 million posted the same quarter last year. For the nine months, ending September the company posted a net loss of $26.6 million on net revenues of $21.1 million.
Given the magnitude of the third quarter and nine month’s net loss, Euroseas Ltd. (NASDAQ:ESEA) says it will shift attention towards managing solid liquidity levels.
