FreeSeas Inc (NASDAQ:FREE) announced that it had decided to settle total debt worth $37.6 million with a debt forgiveness of as much as $15 million. As per the reports, it paid $22.6 million to settle the debt of $37.6 million that it owed to Credit Suisse.
Insights of The Funding
Reports claim that it arranged these funds from the $25 million proceeds that it arranged by selling Series C Warrants and Series D Convertible Preferred Stock. As soon as the company made this much of payment, Credit Suisse decided to wave off the remaining $15 million debt owed by FreeSeas and its subsidiaries. Soon after the payment, Credit Suisse delivered the Deed of Release and Waiver of Debt. With this, all the general assignments of collaterals and preferred mortgages related to M/V Free Goddess, M/V Free Hero, and M/V Free Jupiter were also released.
Road Ahead
After getting this waiver from Credit Suisse, FreeSeas is likely to enjoy a non-cash gain on debt extinguishment of around $15 million, which will further reduce the overall outstanding bank debt from $59.7 million to $23.2 million.
The senior management of the company was pleased to make this announcement and hoped that it would pave the way for further growth for FreeSeas in the future. According to Mr. Ion Varouxakis, CEO, FreeSeas Inc (NASDAQ:FREE), the company has successfully paid the debt of $37.6 million owed to Credit Suisse after getting a waiver of $15 million. It’s part of a series of initiatives that FreeSeas has decided to take to transform itself into a profit-making entity.
As a result, of this repayment, four of total six vessels of the company are fully debt-free. The total outstanding amount to bank in company’s balance sheet has dramatically come down from a whopping $90 million to $23.2 million in a few months time. Going forward, it will continue to take such steps to strengthen financial health.
