Financial Developments
As of June 30, 2012 the Company's subsidiary, Maritime Capital Shipping Limited ("MCS"), did not comply with the covenant relating to the market value of the fleet (Security Value to Security Requirement covenant) under the DVB facility. The Company is in discussions with the bank to request waiver for the breach or amendment of the facility. The Company expects that the waiver/amendment will be granted by the bank, thus the presentation of the DVB long term debt in the attached unaudited condensed consolidated financial statements assumes that the waiver will be granted and accordingly the Company's long term debt continues to be classified as non-current as of June 30, 2012. If the waiver is not granted, then the full amount drawn under the facility will be classified as current, reflecting the lenders' ability to call the debt at any time at their option.
The Company continues to classify the Citibank syndicate long term debt as non-current as of June 30, 2012. If the Company is not in compliance with the minimum Liquidity Funds requirement, minimum Equity Ratio and/or Security Value to Security Requirement covenants after January 1, 2013, and the Company has not extended the existing waiver, the Citibank syndicate will be re-classified as a current liability in full.
Together with the Company's appointed advisors, we have engaged in a constructive dialogue with our lenders aimed at developing and implementing a realistic plan for improving the Company's liquidity and operating flexibility. This plan is focused on developing a capital structure that allows us to manage today's difficult market conditions and prosper in the long term.
The Company is seeking waivers from its lenders related to various restrictive covenants, amendment of debt profile and maturities and an agreement that they will forbear from exercising remedies under their respective debt arrangements.
Although the Company is optimistic that it will reach an agreement with its lenders on the short-term waivers of defaults and on the terms of the restructuring of the Company's indebtedness, no assurances can be provided that these agreements will be concluded, in which case the Lenders could exercise their remedies.
Sale of the BET Fighter
On July 16, 2012 Seanergy sold the BET Fighter, a 173,149 DWT Capesize vessel built in 1992. Gross proceeds amounted to $9.1 million and were used to repay debt. No gain or loss resulted from the sale.
Fleet Data:
---------------------------------------------------------------------------- Three Months Three Months Six Months Six Months Ended June 30, Ended June 30, Ended June 30, Ended June 30, 2012 2011 2012 2011----------------------------------------------------------------------------Fleet Data----------------------------------------------------------------------------Average number of vessels (1) 18.8 20.0 19.1 20.0----------------------------------------------------------------------------Ownership days (2) 1,711 1,820 3,481 3,620----------------------------------------------------------------------------Available days (3) 1,685 1,792 3,442 3,516----------------------------------------------------------------------------Operating days (4) 1,614 1,741 3,240 3,419----------------------------------------------------------------------------Fleet utilization (5) 94.3% 95.7% 93.1% 94.4%----------------------------------------------------------------------------Fleet utilization excludingdrydoc king off-hire days (6) 95.8% 97.2% 94.1% 97.2%----------------------------------------------------------------------------Average Daily Results----------------------------------------------------------------------------TCE rate (7) $ 8,763 $ 15,404 $ 9,156 $ 14,991----------------------------------------------------------------------------Vessel operating expenses (8) $ 4,065 $ 4,557 $ 4,389 $ 4,666----------------------------------------------------------------------------Management fee (9) $ 336 $ 446 $ 336 $ 435----------------------------------------------------------------------------Total vessel operating expenses (10) $ 4,401 $ 5,003 $ 4,725 $ 5,101----------------------------------------------------------------------------
