Performance Shipping has restructured a loan from chairperson Aliki Paliou that will both sweep away a looming debt maturity and help the New York-listed tanker owner carry out moves to keep its listing on the Nasdaq stock exchange.
How will tackling a $5m relayed-party loan help the Greek outfit deal with shares that has fallen below the $1 minimum price?
Performance has agreed to issue Series C preferred shares to Paliou’s Mango Shipping, which has forgiven $4.9m in loan debt and turned in its Series B preferred shares.
Unlike the Series B, those new Series C shares come with “superior voting rights” compared to the Greek company’s common shares, according to a security filing.
Chief executive Andreas Michalopoulos said the deal not only helps the company retire a loan that was coming due soon with minimal cash expenses; it also helps Performance ensure there’s a quorum, or minimum attendance, at an upcoming shareholders meeting.
That meeting has one agenda item: empowering the board of directors to approve a reverse stock split — converting multiple shares into one so each individual share is more valuable.
“We are committed to maintaining our Nasdaq listing for the benefit of our shareholders and ensuring that the shareholders meeting does not need to be adjourned or postponed due to lack of a quorum is very important to the company, especially given recent volatility in the markets,” Michalopoulos said.
Performance’s shares are worth just $0.29 each, and the company has been put on notice that it had until January to bring the share price back above $1 or face delisting.
Securities filings show Paliou, the daughter of Performance founder Simeon Palios and wife of Michalopoulos, exchanged her 2.25m common shares in January for about 657,000 Series B shares.
She provided a $5m unsecured loan to Performance, which bears annual interest of 9%, in March 2022. It was to mature in March of next year.
Paliou already had the right to to convert her Series B shares into Series C early next year, and had told the company that she intended to do so. Performance said the restructuring deal, approved by a special committee of the board’s independent directors, only changes the timing of that transaction.
In February, all of Performance’s Series B shares can be swapped to two Series C shares at a conversion price of $7.50, and the company said the remaining balance of Paliou’s loan is equal to the conversion price she would have had to pay.
The Series C shares can be converted into common shares in April 2023.
