Performance Shipping Inc. (NASDAQ:DCIX), (the “Company”), today announced that it has agreed to acquire two entities, which have signed contracts to purchase two 2011-built Aframax tanker vessels from an unaffiliated third party seller for a total purchase price of US$60.0 million. The transaction was unanimously approved by the disinterested members of the board of directors of the Company.
The Company will acquire the two entities affiliated with the Company’s Chairman and Chief Executive Officer, Mr. Symeon Palios, for an aggregate purchase price of US$10.0 million, which will be paid in common shares of the Company at a per share price of US$1.05, which is equal to the undiscounted closing price of the common stock on the NASDAQ stock exchange on June 7, 2019. The US$10.0 million purchase price of the two entities is equal to the deposit previously paid to the vessels’ seller by the affiliates of the Company’s Chairman. The balance of the purchase price payable under the contracts is expected to be funded through cash on hand and bank financing. The first vessel delivery is expected in the third quarter of this year and the second in the fourth quarter.
Commenting on the transaction, the Company’s Chairman and Chief Executive Officer stated:
“I am excited to be able to offer this attractive opportunity to purchase high-specification Aframax tankers to the Company at what I believe is a favourable time in the tanker industry cycle. The acquisition of these vessels represents an important step in the Company’s diversification from the container industry into other areas of the shipping sector. The sale of these contracts for common shares of the Company reflects my view that now is an attractive time to invest in the Company as it starts to rebuild its fleet.”
Following the closing of this transaction, the Company will have 36,277,660 common shares and another 2,000 Series B-2 Preferred Shares issued and outstanding. Upon completion of the above-mentioned entities’ acquisition, the Company will own 4 unencumbered containerships, 2 contracts to purchase 2 Aframax tanker vessels, for which US$10.0 million have been paid as deposit, plus approximately US$17.0 million of cash.