New York-listed Castor Maritime, best known for issuing massive amounts of equity to fund its staggering growth, is now adding a significant debt facility to its quiver.
The Petros Panagiotidis-led owner of bulkers and tankers said it had forged the $40.75m, five-year term loan with an existing lender, which it identified only as a European bank.
The facility carries a margin of 310 basis points over Libor, and is secured by four Castor bulkers: the 83,300-dwt Magic Thunder and 74,900-dwt Magic Eclipse (both built 2011) and the 80,200-dwt Magic Twilight and Magic Nebula (both built 2010).
According to its most recent annual report, European lenders on the Castor roster included Alpha Bank of Greece and Hamburg Commercial Bank.
"We believe that by increasing our low leverage position, we are improving our capital structure and enhancing our ability to fund our growth plans," Panagiotidis said in a statement.
Castor indeed has been carrying relatively little debt. It held only $33.2m at 31 March, including a $5m related-party lending from Panagiotidis family interests. This had increased from just $18.5m total debt at 31 December.
The new lending is thus by itself larger than all debt previously on the books.
Castor has acquired 15 bulkers and eight tankers on the secondhand market since last July, spending about $340m in the process.
As recently as September 2019, its fleet included a single bulker.
The capacity of its 26-ship fleet is now 2.2m dwt.
Panagiotidis has described the first five months of 2021 as "transformational" for the company, which raised $252.5m of equity during the period.
The fleet will consist of 18 bulkers and eight tankers when all are delivered.
While Castor has not turned to heavy debt, it has resorted to huge sales of shares and warrants that have resulted in dilution to previous holders of the stock.
According to public filings, Castor issued 918,000 shares in 2019, 128m in 2020 and 576m so far in 2021.
Castor has about 90m shares outstanding, but that was after conducting a 1-for-10 reverse stock split on 28 May to boost its stock price above the $1 minimum required by the Nasdaq exchange for continued trading.
In contrast, Star Bulk Carriers, the largest public bulker owner with 128 vessels, has about 102m shares outstanding. Goliath product tanker owner Scorpio Tankers, with about 130 owned or controlled units, has some 58m shares outstanding.
Castor has been selling more shares through an "at the market" (ATM) programme, which it updated in the recent filing.
Castor said it had sold about 3.6m shares under the programme, raising $9.7m, with no sales happening in July.
Castor's share price was around $2.17 on Thursday, up more than 1% on the day. This is down from about $3.28 after its reverse split in May.
The company's technical management is provided by Pavimar, founded by Panagiotidis' sister, Ismini Panagiotidis. They are both children of Gabriel "Villy" Panayotides.
