Diana Shipping Assumes Contracts for Purchase
Diana Shipping Inc., announced that it has assumed shipbuilding contracts from two unaffiliated parties for the construction of two Capesize dry bulk carriers of approximately 175,000 dwt each for a price of $60.4 million each. The vessels will be constructed by Shanghai Waigaoqiao Shipbuilding Co., Ltd. and Diana Shipping Inc. expects to take delivery of the vessels during the second quarter of 2010. The Company also announced that it has accepted a Commitment Letter from Fortis Bank for a secured term loan of $62 million which the Company will use to pay the pre-delivery installments of these two newbuilding dry bulk carriers. An affiliate of Fortis Bank is a shareholder of the Company.There will be no principal payments on this loan before delivery of the ships, at which time this loan may be refinanced. Interest on this facility during the construction period of the ships will be capitalized and included in the construction cost of the ships being acquired. As such, this interest will not affect the Company's calculation of the quarterly dividend per share.