Euroseas, Poseidon explore merger of container fleets

Greek drybulk and container operator Euroseas Ltd. (ESEA) announced that it has signed a non-binding letter of intent with Poseidon Container Holdings Group, an owner and operator of container vessels, to consider a possible combination of their respective containership fleets.

Poseidon owns and operates a fleet of sixteen container carrier vessels, including four feeder containerships, two panamax and four post-panamax containerships, as well as six post-panamax container carrier vessels of new wide beam / high reefer capacity design with an average teu-adjusted age of 8.7 years and a total capacity of 86,322.

The possible combination may include a spinoff of Euroseas’ container assets into a standalone company or take the form of a different structure. The company expects that any combination with Poseidon would be done on a net asset value (NAV) to NAV basis. NAV is typically calculated as the difference of the market value of a company’s assets net of the market value of its liabilities.

    “Euroseas’ strategy is to use its operating expertise and public company status to provide a platform of consolidation for similar assets in the drybulk and containership sectors. This strategy may be implemented by separating Euroseas’ drybulk and containership fleets into two public companies, if the Board of Directors determines that such a split would benefit Euroseas’ shareholders, particularly if it may also facilitate Euroseas’ consolidation strategy,” the company said.

However, discussions are still at early stage and it can not be sure that an agreement will be reached.

Further, Euroseas took delivery of M/V EM Athens, a feeder containership of 2,506 TEU, built in 2000, from its subsidiary Euromar LLC. The vessel was acquired along with EM Oinousses, a feeder size containership also of 2,506 TEU, built in 2000.

In addition, the company informed that it exercised its option to purchase from Euromar two additional container vessels, the M/V EM Corfu, a feeder size containership vessel of 2,556 TEU built in 2001, and the M/V Akinada Bridge, a post-panamax size container vessel of 5,600 TEU built in 2001. The Company has secured financing for the acquisitions of the four vessels with a combination of debt and equity. The three ships are expected to be delivered within 2017.