FREE plots expansion

Greek operator FreeSeas appears to be gearing up for a campaign to expand its fleet of bulkers after further reducing its debt load.

In a statement the Nasdaq-listed company’s chief executive, Ion Varouxakis, noted the initiative comes at a time when there are “unique opportunities” at this point in the cycle.

“After persistent efforts, the company has successfully managed to position itself on ever healthier financial grounds, affording it the necessary financial flexibility to expand its fleet of controlled vessels, at a time of unique opportunity in the dry-bulk sector,” he said.

While FreeSeas did not identify targets or shed light on a time frame market sources tell TradeWinds that the owner will likely set its sights on tonnage tied to its core markets and say they wouldn’t be surprised to see it sell some of its eldest ships as well.

Today, the Athens-based operator pointed out that a large portion of the proceeds from a recent Wall Street fundraiser was used to settle $37.6m worth of debt owed to Credit Suisse, which was forced to take a haircut but released mortgages tied to vessels that served as collateral.

“The company is expected to recognize a non-cash gain on debt extinguishment of approximately $15m as a result of the foregoing debt cancellation, which reduces our outstanding bank debt from $59.7m to $23.2m,” the owner added.

Today, FreeSeas oversees five handysize bulkers and one handymax. According to the fleet is worth roughly $47.1m in the second-hand market and would likely fetch $18.5m in total if sold for demolition.