PRGN plummets

Paragon Shipping was dealt another blow as a leading equity analyst downgraded the Greek bulker owner’s shares in response to the collapse of a lucrative contract with Italy’s Deiulemar Compagnia di Navigazione.

Michael Bodouroglou.

In a note to investors, the analyst described the development as “a major negative” for the company as the vessel is unlikely to secure employment at levels seen in the previous deal, which was sealed at $33,750 per day for another 27 months.

“As can be seen, the charter for the 'Friendly Seas' made up a substantial portion of the company's earnings and cash flow for the next couple years,” Boyden told clients before lowering her price target from $1.00 to $0.30.

In today’s spot market, supramaxes like the Friendly Seas are fetching day rates of around $7,000 though one-year contracts have been inked at around $10,000, analysts say.

Shares of Paragon, which is headquartered in Athens and led by chief executive Michael Bodouroglou, plummeted 9.22% to $0.58 in the hours following Cantor’s downgrade.

As TradeWinds has reported, the company expects to take legal action against Deiulemar Compagnia di Navigazione but cannot guarantee that cash will be recovered.

Printable version Newsletter sign up