There is no end of woes for the Greek shipping firm, Paragon Shipping Inc. (NASDAQ:PRGN), which continues to slip in red.
Steep debt obligations
The company’s investors found themselves panicked after the company failed to honour its $500 million debt payment on senior unsecured notes that are due to expire in 2021. These unsecured notes carry an interest rate as steep as 8.375%. However, the liquidity crunch failed the company’s commitment to honour its obligations. Even after taking a 30-day grace period, the company was unable to make quarterly cash interest payment on the notes, which was originally due on February 16, 2016.
The company recently regained NASDAQ listing compliance within the prescribed timeframe. The company’s stock price hit the minimum closing bid price of $1 in between March 1, 2016, and March 14, 2016, making it eligible to remain listed on the stock exchange.
Strategic alternatives
While the listing complexities might be over for Paragon, it still continues to battle with financial fragility. The company’s revenues over the last four quarters came in at $38 million, reflecting a fall of 24% from its 2013 revenues of $50 million. These numbers look dwarf before the company’s debt obligation of as much as 157 million.
In a bid to address its liquidity concerns, the company has already announced the intention of selling its vessels. Meanwhile, the company is already underway talks with Jiangsu Yangzijiang Shipbuilding Co. regarding the extension of the deliveries of three newbuilding drybulk carriers. The company aims to take the delivery towards the end of the year, provided it does not bear any additional cost.
The company said that the balance to be paid to Yangzijiang against the three vessels is substantially higher than the estimated market value of those carriers. Paragon is set to release its fourth-quarter results later today.
