ATHENS - OceanPal Inc. (NASDAQ:OP), a global shipping company, has announced the purchase of an MR2 tanker vessel, the m/t Zeze Start, for $27.0 million. The transaction, involving a company director's entity, received unanimous approval from OceanPal's Board of Directors.
The deal, part of OceanPal's strategy to diversify its fleet and capitalize on the product tanker sector, involves $18.9 million in cash and the remainder in Series D Preferred Stock. The vessel, built in 2009 with a 49,999 dwt capacity, is slated for delivery during the third quarter of 2024.
CEO Robert Perri commented on the strategic move, highlighting the company's entry into the product tanker space as a significant development. The purchase price, based on independent third-party broker valuations, includes a seller's credit of $10.9 million payable post-delivery by November 26, 2024, with a 5.0% annual interest rate.
Following the sale of m/v Baltimore, OceanPal's fleet will consist of four dry bulk vessels. The company's vessels are expected to be primarily employed on short-term charters after their current employments.
The information in this article is based on a press release statement by OceanPal Inc.
In other recent news, global shipping entity, OceanPal Inc., has reported securing a higher rate for its Capesize dry bulk vessel, the m/v Baltimore, in a new time charter contract with Richland Bulk Pte. Ltd. The contract, due to commence in mid-May, boasts a gross charter rate of $22,000 per day, marking a considerable increase from the existing rate of $13,500 per day. This new agreement is expected to yield approximately $2.64 million in gross revenue for the specified period.
In a related development, OceanPal Inc. also revealed the signing of a Memorandum of Agreement for the sale of the Baltimore. The vessel is slated for delivery to an undisclosed third party by November 20, 2024, at a sale price of $18.25 million before commissions.
Following the sale, OceanPal Inc.'s fleet will consist of four dry bulk vessels, one Capesize and three Panamax vessels. These developments are part of recent news and are based on a press release statement.
InvestingPro Insights
OceanPal Inc. (NASDAQ:OP) appears to be navigating through choppy financial waters as they expand their fleet. With a market capitalization of just $14.61 million, the company's financial position reflects some challenges.
Notably, OceanPal does not pay a dividend to shareholders, which could be a consideration for income-focused investors. This aligns with an InvestingPro Tip that highlights the company's lack of profitability over the last twelve months, a potential red flag for those seeking stable returns.
Despite these concerns, there are a few bright spots in the company's financials. OceanPal's Price / Book multiple as of the last twelve months ending Q1 2024 is quite low at 0.16, suggesting that the stock may be undervalued relative to the company's net asset value. Moreover, the company's revenue growth for the same period stands at 7.58%, indicating some level of business expansion.
Yet, the company's stock price has fallen significantly over the last three months, with a total return of -22.83%, and it has taken a big hit over the last six months, with a total return of -27.41%. These figures suggest that investors may have concerns about the company's future prospects, despite its recent strategic moves.
For those interested in a deeper dive into OceanPal's financial health and future outlook, InvestingPro offers additional insights and tips. Currently, there are 11 additional InvestingPro Tips available for investors to consider, which can be accessed at https://www.investing.com/pro/OP. Moreover, users can take advantage of the exclusive promo code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, potentially unlocking valuable information to inform their investment decisions.
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