Seanergy Maritime Holdings expects to boost yearly cash flow by nearly $5m by making early cash payments on some of its debt.
The Stamatis Tsantanis-led owner of 12 capesize bulkers will pay off $21.6m remaining on a secured loan with Entrust Capital that is due to mature in June 2023.
The 2018 credit facility, which has a 10% coupon rate, is backed by the 179,701-dwt Lordship (built 2010).
New York-listed Seanergy has also put $12m toward $43.6m in junior unsecured loans with interest rates at 5.5%.
As a result, Seanergy expects to lower annual Entrust debt payments by $2.8m and save $2.1m combined in interest payments to Entrust and the junior unsecured loans for 2021 and 2022, chief executive Stamatis Tsantanis said.
Banking on the paper market
"Seanergy has a significant liquidity position (cash at hand and certain debt-free ships), as well as a significant profitability margin at the current forward rate expectations," he told TradeWinds in an email.
Future rates for capesizes weighted along five routes are expected to reach $22,350 per day by the third quarter of this year but then cool off to $11,616 per day by the second quarter of 2022, according to the Baltic Exchange.
He said Seanergy's remaining debt installments for 2021 are expected to be about $13m over its entire fleet.
The company's remaining senior debt stands at approximately $130m, he said.
Stamatis said the additional $4.9m in liquidity will not be put toward buying more ships.
"Our debt reduction actions will not affect our fleet expansion plans," he said.
"We are actively seeking additional cape acquisition opportunities."
