Company also sells and will buy back preferreds to CEO in placement
By Devika Patel
Knoxville, Tenn., June 12 - Box Ships Inc. said it plans a $21 million public sale of 9.75% series B cumulative redeemable perpetual preferred stock. Chairman, president and chief executive officer Michael Bodouroglou also bought $40 million of the preferreds in a private placement.
The company is selling the preferreds at $30.00 apiece. It sold 1,333,333 preferreds in the placement and will sell 700,000 in the public offering.
Dahlman Rose & Co. is the agent for the public sale.
Each preferred is accompanied by a five-year warrant. The exercise price of the warrants was set at $7.74 per share, which is identical to the closing stock price on June 12.
Proceeds from the placement will be used to acquire two 5,344 TEU post-Panamax container vessels. Proceeds from the public sale will be used to redeem some of the preferreds and warrants sold to Bodouroglou in the placement.
"We are pleased to announce the acquisition of the OOCL vessels, which is consistent with our stated strategy to grow the size of our fleet and our cash flow and provides evidence of the emergence of Box Ships as a reputable and reliable containership operator," Bodouroglou said in a press release. "The vessels are in a size segment that we believe will continue to be critical in the global container seaborne transportation logistical chain and facilitate the commencement of our working relationship with OOCL, a major global container liner company. The three-year charters extend the average term of our charter portfolio (from 23 months to 26 months), further stagger the maturities of our contracts and further diversify our sources of revenue. In addition, the cash flow generated from the OOCL charters after servicing both the $25 million credit facility and paying dividends to the series B preferred shares will provide additional funds available to support our stated dividends to our common shareholders.
"My investment in the series B preferred shares was necessitated by the very challenging capital markets conditions and the need to consummate the acquisition within a certain period of time. It is also a testament of my belief in this acquisition, the prospects of Box Ships and the containership sector in general. The series B preferred shares including the warrants are redeemable at the option of the Company at the liquidation preference until Sept. 1, and the company intends to offer up to $21 million of these same series B preferred shares to investors, the proceeds of which will be used to retire an amount of the series B preferred shares I invested in."
The shipping company is based in Athens.
| Issuer: | Box Ships Inc.
|
| Issue: | Series B cumulative redeemable perpetual preferred shares
|
| Amount: | $61 million
|
| Price: | $30.00
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| Dividends: | 9.75%
|
| Warrants: | One per preferred
|
| Warrant strike price: | $7.74
|
| Announcement date: | June 12
|
| Stock symbol: | NYSE: TEU
|
| Stock price: | $7.74 at close June 11
|
| Market capitalization: | $124.73 million
|
|
|
| Public offer
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| Amount: | $21 million
|
| Shares: | 700,000
|
| Warrant expiration: | Five years
|
| Agent: | Dahlman Rose & Co.
|
|
|
| Private placement
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| Amount: | $40 million
|
| Preferreds: | 1,333,333
|
| Warrant expiration: | June 30, 2017
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| Investor: | Michael Bodouroglou
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