Euroseas Ltd. Announces Time Charter for its Older Containership, M/V Aegean Express, and Spin-off of its Older Three Vessels into a Separate Company

Core Viewpoint - Euroseas Ltd. has announced the extension of the charter for its older containership, M/V Aegean Express, and plans to spin off three older vessels into a new entity, Euroholdings Ltd., which aims to maximize shareholder value and create new opportunities in the shipping sector [1][2][4]. Company Announcements - The charter for M/V Aegean Express has been extended for a minimum of ten months and a maximum of twelve months at a daily rate of $16,700 [1]. - Euroseas intends to spin off three older vessels, M/V Aegean Express, M/V Diamantis P, and M/V Joanna, into Euroholdings Ltd., which has applied for listing on the NASDAQ Capital Market [2][3]. Spin-off Details - The spin-off will involve Euroseas contributing the three vessels to Euroholdings in exchange for 100% of its shares, which will then be distributed to Euroseas shareholders [3]. - A conference call is scheduled for January 7, 2025, to discuss the spin-off in detail [3][8]. Management Commentary - Aristides Pittas, Chairman and CEO, expressed satisfaction with the charter extension and the spin-off plan, emphasizing the potential to maximize the value of older vessels and enhance shareholder returns [4]. - The spin-off is expected to have minimal impact on Euroseas' overall strategy, as Euroholdings shares represent only about 5% of Euroseas' net asset value (NAV) [5]. Fleet and Operational Strategy - Euroseas plans to continue modernizing its fleet, having placed orders for 11 newbuilding vessels, with seven already delivered in 2023 and 2024 [5]. - The company believes that maintaining older vessels can generate higher returns compared to selling them, especially as the three vessels in Euroholdings are currently unlevered and under time charter employment [6]. Valuation and Market Position - Euroholdings is expected to trade at better valuation levels with smaller or no discounts to NAV compared to sector peers, providing distinct investment options for shareholders [7]. - The clean balance sheet of Euroholdings can serve as a consolidating vehicle in the shipping sector, particularly for vintage vessels, potentially creating additional long-term value for shareholders [7]. Fleet Profiles - After the spin-off, Euroholdings will operate three older vessels with a total deadweight tonnage (DWT) of 71,242 and a total capacity of 5,179 TEU [12]. - Euroseas will retain a fleet of 20 vessels with a total DWT of 774,930 and a total capacity of 61,894 TEU, along with four vessels under construction [13][14]. Company Background - Euroseas Ltd. was established in 2005 and operates in the container shipping market, managing a fleet of 23 vessels with a cargo capacity of 67,073 TEU [15][17].