Diversified shipowner Performance Shipping has spent around $400,000 on repurchasing the last of its preferred and convertible shares from Kalani Investments.
TradeWinds understands that the transaction is part of a concerted effort by Performance to improve the transparency of its share capital structure.
The Nasdaq-listed company, previously known as Diana Containerships, has bought back the remaining 400 issued and outstanding Series B-2 shares and now has no preferred shares outstanding.
The Series B-2 shares were purchased at their stated value of $1,000 each from the British Virgin Islands-registered investment company and have been cancelled.
Andreas Michalopoulos, Performance’s deputy chief executive, said the company was pleased to have completed the cancellations.
"The issuance of these preferred shares in 2017 facilitated the raising of capital at that time and helped the company achieve the strong balance sheet that is has today and marks another step in the company’s renewal efforts," he explained.
Performance no longer has any preferred shares outstanding, having repurchased and cancelled all its Series C preferred shares in late March.
The securities, which conveyed 250,000 votes per share, were bought back for $1.5m from Performance's sister company, bulker owner Diana Shipping.
The Series C Shares were originally issued to Diana Shipping under a then existing credit facility, in exchange for lowering its debt by $3m.
Wiping the slate clean
TradeWinds understands that Performance wants to be as transparent as possible as it transitions to being a pureplay aframax tanker company and wishes to give investors a clear view of what kind of shares have been issued and in what number.
The preferred shares date back to March 2017, when Diana Containerships aimed to raise around $150m through the sale of newly designated securities to Kalani Investments, which is controlled by Toronto-based financier Marc Bistricer and his hedge fund, Murchison Ltd.
In the transaction, Kalani purchased 3,000 series B-1 convertible preferred shares; preferred warrants to purchase 6,500 series B-1 convertible preferred shares and preferred warrants to purchase 140,500 series B-2 convertible preferred shares.
But in 2019 Diana Containerships was sued in New York by its shareholders, who claimed the Kalani deal was part of a scheme to decimate the value of the company's shares.
Lawyers for Diana Containerships have dismissed the lawsuit, which is still ongoing, as "silly and absurd".
A judge in New York last week threw out a lawsuit filed by Top Ships shareholders following a similar deal with Kalani, on the basis that the claim had no merit.
Performance, which has a fleet of four aframax tankers and one boxship, in March changed its stock ticker to PSHG.
The change marked its transition towards being a pure-play tanker company, having previously been listed under the DCIX, which it inherited from Diana Containerships.