Castor Maritime Inc., a global shipping company specializing in the ownership of dry bulk vessels, announced that it has successfully entered into two agreements: (i) a secured term loan financing agreement and (ii) a non-brokered private placement of unsecured convertible debentures. The secured term loan facility and the convertible debentures are subject to normal closing conditions.
On January 23, 2020, the Company entered into a $4.5 million secured term loan facility with a financial institution, through one of its ship-owning subsidiaries (“the M/V Magic Sun Financing”). The loan is expected to be drawn down on January 31, 2020, will have a tenure of five years from the drawdown date and will bear interest at a margin plus LIBOR per annum.
Further, on January 27, 2020, the Company entered into a securities purchase agreement with an institutional investor, pursuant to which the Company will sell and the Investor will purchase up to three convertible debentures for a maximum aggregate price of $5.0 million. The debentures will mature twelve months from their issuance and are convertible into common shares of the Company. The sale of the first convertible debenture in the original principal amount of $2.0 million also closed today. The other two debentures will be issued in the original principal amount of $1.5 million each upon the fulfilment of certain conditions relating to registration rights. The Company also entered into a registration rights agreement relating to the common shares underlying the convertible debentures.
Castor intends to use the net proceeds from both financing transactions for working capital and other general corporate purposes, including growing the Company’s fleet.
Petros Panagiotidis, Chief Executive Officer and Chief Financial Officer of Castor commented: “We are pleased to have successfully completed these two financing agreements. We believe that the inflow of gross proceeds of $9.5 million to our working capital reserves, at this point in the dry bulk market cycle, will allow us to take advantage of attractive growth opportunities potentially presented to us in the near future.”