Diana Shipping Amends Loan Agreement to Diana Containerships
Diana Shipping Inc. has amended its existing loan agreement to a wholly-owned subsidiary of Diana Containerships to defer some payments under a new schedule.
Diana Containerships Inc. is a former wholly-owned subsidiary of the Company, of which the Company currently owns approximately 25.7% of the issued and outstanding common shares.
The amendment to the Loan was unanimously approved by the independent directors of the Company. Pursuant to the terms of the amendment, the repayment of all outstanding principal amounts shall be deferred until the later of (i) the repayment or prepayment in full by Diana Containerships Inc. of the principal amount of US$8,851,000 (designated as the Deferred Tranche) under its US$148 million loan agreement with The Royal Bank of Scotland plc dated September 10, 2015, whose repayment is scheduled to commence on March 15, 2019 and be completed not later than June 15, 2021, and (ii) September 15, 2018.
The amendment will also change the borrower under the Loan to another wholly-owned subsidiary of Diana Containerships Inc., and provide for an increase of the interest rate for the period between September 12, 2016 and December 31, 2018 to 3.35% per annum over USD LIBOR.
Commenting on the amendment to the Loan, the Company’s Chairman and Chief Executive Officer, Simeon Palios, stated that “the Company’s agreement to amend this Loan allows Diana Containerships Inc. to restructure its secured loan facility with The Royal Bank of Scotland plc on favorable terms that are expected to result in significant improvements to Diana Containerships Inc.’s liquidity and current cash flows in this challenging market for the container sector."
He added: "The Company believes that the enhanced financial position of Diana Containerships Inc. resulting from the restructuring of The Royal Bank of Scotland plc loan facility represents an important step in protecting both the Company’s equity and debt investment in Diana Containerships Inc.”
