Paragon spin-off targets containerships

Paragon spin-off targets containerships    Athens-based dry bulk ship owner Paragon Shipping Inc. is spinning off its wholly owned subsidiary, Box Ships Inc., into a new public company.
   Box Ships filed a registration statement with the U.S. Securities and Exchange Commission Monday for an initial public offering.
   Box Ships said it estimates it will receive $147.8 million in net proceeds from the offering of 10 million shares, assuming an IPO price of $16 per share, the midpoint of the $15-$17 price range set forth in the prospectus, and deducting estimated discounts, commissions and expenses.
   Box Ships plans to use the funds for acquisition of an initial fleet of six ships and working capital.
   The initial fleet will be:
   * Two 3,400-TEU, 2010-built containerships that Paragon Shipping owns and operates and will sell to Box Ships at the close of the offering.
   * Two 5,100-TEU, 2007-built containerships that Paragon Shipping and Proplous Navigation, a company owned by its Chief Executive Officer Michael Bodouroglou, have agreed to acquire from third parties and then sell to Box Ships.
   * A 4,500-TEU, 2006-built containership and a 6,500-TEU, 2010-built containership, which another company controlled by Bodouroglou, the ship manager Allseas, has agreed to acquire from unaffiliated third parties and assign to Box Ships.
   After the deals are completed Paragon will own 22.7 percent of Box Ships common stock and Bodouroglou 11 percent.
   Three of the ships are chartered to CSAV, two to CMA CGM and one to Maersk.
   Describing its strategy, Box Ships said, “despite the improvement following the downturn in global trade that began with the financial crisis in the fall of 2008 and related developments in the seaborne transportation industry, there are significant opportunities, particularly in the container sector, to acquire vessels at relatively low prices and employ them in a manner that will provide attractive returns on capital.
   “Asset values in the container-shipping industry are currently below their 10-year historical averages and the charter market for containerships has shown improvement during 2010 and 2011 year to date. As a newly formed company, we are not burdened with legacy issues related to vessels that were purchased at values significantly above historical averages and commitments for newbuilds at costs significantly above current market values.”
   The company said it intends to maintain a moderate amount of leverage that it said would provide it with financial flexibility to borrow additional capital, if needed to take advantage of attractive vessel acquisition opportunities.
   The company said it intends to focus on containerships ranging in capacity from 1,700 TEUs to 7,000 TEUs “as we believe this vessel size class provides attractive risk-return characteristics, but may evaluate other classes of containerships for potential vessel acquisitions as we seek to strategically diversify our fleet to serve various customers, trade routes and ports.” ' Chris Dupin