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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
 
20549
FORM
20-F
(Mark One)
 
☐
OR
☑
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended
December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report:
Not applicable
 
For the transition period from ___________________________
 
to ___________________________
 
Commission file number
001-32458
DIANA SHIPPING INC.
____________________________________________________________________________________________________________________________________________________________________________________________________________
 
 
(
Exact name of Registrant as specified in its charter)
Diana Shipping Inc.
____________________________________________________________________________________________________________________________________________________________________________________________________________
 
(Translation of Registrant’s
 
name into English)
 
Republic of the Marshall Islands
____________________________________________________________________________________________________________________________________________________________________________________________________________
 
 
(Jurisdiction of incorporation or organization)
Pendelis 16
,
175 64 Palaio Faliro
,
Athens
,
Greece
 
____________________________________________________________________________________________________________________________________________________________________________________________________________
 
 
(Address of principal executive offices)
Ms Maria Dede
Pendelis 16
,
175 64 Palaio Faliro
,
Athens
,
Greece
 
Tel:
 
+
30
-
210
-
9470-100
, Fax: +
30-210-9470-101
E-mail:
mdede@dianashippinginc.com
____________________________________________________________________________________________________________________________________________________________________________________________________________
 
 
(Name, Telephone, E-mail and/or
 
Facsimile number and Address of Company Contact Person)
 
Securities registered or to be
 
registered pursuant
 
to Section 12(b) of the Act.
 
 
 
 
 
 
 
 
 
 
 
 
 
Title of each class
Trading
Symbol(s)
Name of each exchange on which
registered
Common Stock, $0.01 par value including the Preferred Stock Purchase Rights
DSX
New York Stock Exchange
8.875% Series B Cumulative Redeemable Perpetual Preferred Shares, $0.01 par value
DSXPRB
New York Stock Exchange
Warrants to Purchase Common Stock, Expiring on or about December 14, 2026
DSX WS
New York Stock Exchange
 
Securities registered or to be registered pursuant
 
to Section 12(g) of the Act.
 
None
____________________________________________________________________________________________________________________________________________________________________________________________________________
 
 
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section
 
15(d) of the Act.
 
None
____________________________________________________________________________________________________________________________________________________________________________________________________________
 
 
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock
 
as of the close of the period covered by
the annual report.
 
As of December 31, 2024, there were
125,203,405
 
shares of the registrant’s
 
common stock outstanding
Indicate by check mark if the registrant is a well-known seasoned issuer,
 
as defined in Rule 405 of the Securities Act.
☐
 
Yes
☑
No
If this report is an annual or transition report, indicate by check mark if the registrant
 
is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934.
☐
 
Yes
☑
No
 
Note – Checking the box above will not relieve any registrant
 
required to file reports pursuant to Section 13 or
 
15(d) of the Securities
Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required
 
to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
 
to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
 
☑
Yes
☐
 
No
 
Indicate by check mark whether the registrant has submitted electronically
 
every Interactive Data File required to
 
be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
 
was
required to submit such files).
☑
Yes
☐
 
No
Indicate by check mark whether the registrant is a large accelerated
 
filer, an accelerated filer,
 
a non-accelerated filer,
 
or an emerging
growth company.
 
See definition of “large accelerated filer”,
 
“accelerated filer” and "emerging growth company" in Rule 12b-2 of the
Exchange Act.
 
Large accelerated filer
☐
Accelerated filer
☑
 
Non-accelerated filer
☐
 
 
Emerging growth company
☐
 
If an emerging growth company that prepares its financial statements
 
in accordance with U.S. GAAP,
 
indicate by check mark if the
registrant has elected not to use the extended transition period for
 
complying with any new or revised financial accounting standards†
provided pursuant to Section 13(a) of the Exchange Act. □
 
† The term “new or revised financial accounting standard” refers
 
to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
 
Indicate by check mark whether the registrant has filed a report on and attestation
 
to its management’s assessment of the
effectiveness of its internal control
 
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report.
☑
If securities are registered pursuant to Section 12(b) of the Act, indicate
 
by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to
 
previously issued financial statements.
 
☐
Indicate by check mark whether any of those error corrections are restatements
 
that required a recovery analysis of incentive-
based compensation received by any of the registrant’s
 
executive officers during the relevant recovery
 
period pursuant to §240.10D-
1(b).
 
☐
Indicate by check mark which basis of accounting the registrant has used to
 
prepare the financial statements included in this
filing:
 
U.S. GAAP
 
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by the International Accounting Standards Board □
 
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement
 
item the registrant has
elected to follow.
☐
 
Item 17
☐
 
Item 18
 
If this is an annual report, indicate by check mark whether the registrant is a shell company
 
(as defined in Rule 12b-2 of the Exchange Act).
☐
 
Yes
☑
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(APPLICABLE ONLY TO
 
ISSUERS INVOLVED IN BANKRUPTCY
 
PROCEEDINGS DURING THE PAST FIVE YEARS)
 
Indicate by check mark whether the registrant has filed all documents and reports required
 
to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
☐
 
Yes
☐
 
No
 
 
 
4
TABLE OF CONTENTS
5
7
7
7
42
68
69
85
93
98
99
100
109
110
111
111
111
Item 16A.
Audit Committee Financial Expert
112
112
112
113
113
113
114
115
115
115
116
119
119
119
5
FORWARD-LOOKING STATEMENTS
 
Matters
 
discussed
 
in
 
this
 
annual
 
report
 
and
 
the
 
documents
 
incorporated
 
by
 
reference
 
may
 
constitute
forward-looking
 
statements.
 
The
 
Private
 
Securities
 
Litigation
 
Reform
 
Act
 
of
 
1995
 
provides
 
safe
 
harbor
protections
 
for
 
forward-looking
 
statements
 
in
 
order
 
to
 
encourage
 
companies
 
to
 
provide
 
prospective
information about
 
their business.
 
Forward-looking statements
 
include, but
 
are not
 
limited to,
 
statements
concerning plans, objectives, goals,
 
strategies, future events or
 
performance, underlying assumptions
 
and
other statements, which are other than statements of historical facts.
Diana Shipping
 
Inc., or
 
the Company, desires
 
to take
 
advantage of
 
the safe
 
harbor provisions
 
of the
 
Private
Securities Litigation Reform Act of
 
1995 and is including this
 
cautionary statement in connection with this
safe harbor legislation.
 
This document and any other written or oral statements made by the Company or
on its behalf may include forward-looking statements, which reflect its current views with respect to future
events and financial performance, and
 
are not intended to
 
give any assurance as to
 
future results. When
used in this document, the words “believe”,
 
“anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,”
“potential,”
 
“will,”
 
“may,”
 
“should,”
 
“expect,”
 
“targets,”
 
“likely,”
 
“would,”
 
“could,”
 
“seeks,”
 
“continue,”
“possible,”
 
“might,”
 
“pending,”
 
and
 
similar
 
expressions,
 
terms
 
or
 
phrases
 
may
 
identify
 
forward-looking
statements.
Please note in this annual report, “we”,
 
“us”, “our” and “the Company” all refer to Diana
 
Shipping Inc. and
its subsidiaries, unless otherwise indicated.
The forward-looking statements in
 
this document are based
 
upon various assumptions,
 
many of which are
based,
 
in
 
turn,
 
upon
 
further
 
assumptions,
 
including
 
without
 
limitation,
 
management’s
 
examination
 
of
historical
 
operating
 
trends,
 
data
 
contained
 
in
 
its
 
records
 
and
 
other
 
data
 
available
 
from
 
third
parties.
 
Although the
 
Company believes that
 
these assumptions
 
were reasonable when
 
made, because
these assumptions are inherently
 
subject to significant uncertainties and
 
contingencies which are difficult
or impossible to predict and are beyond its control, the
 
Company cannot assure you that it will achieve or
accomplish these expectations, beliefs or projections.
Such
 
statements
 
reflect
 
the
 
Company’s
 
current
 
views
 
with
 
respect
 
to
 
future
 
events
 
and
 
are
 
subject
 
to
certain risks,
 
uncertainties and
 
assumptions. Should
 
one or
 
more of
 
these risks
 
or uncertainties
 
materialize,
or should underlying assumptions prove
 
incorrect, actual results may vary
 
materially from those described
herein as anticipated, believed,
 
estimated, expected or
 
intended. The Company
 
is making investors
 
aware
that such forward-looking
 
statements, because they
 
relate to future
 
events, are by
 
their very nature
 
subject
to many important factors that could cause actual results to differ materially from those
 
contemplated.
In addition
 
to these important
 
factors and
 
matters discussed
 
elsewhere herein,
 
including under
 
the heading
"Item
 
3.
 
Key
 
Information—D.
 
Risk
 
Factors,"
 
and
 
in
 
the
 
documents
 
incorporated
 
by
 
reference
 
herein,
important factors that, in
 
its view, could cause actual results
 
to differ materially from
 
those discussed in
 
the
forward-looking statements include, but are not limited to:
 
●
the strength of world economies;
●
fluctuations in currencies,
 
interest rates, and inflationary pressures;
●
general market conditions, including fluctuations in charter hire rates and
 
vessel values;
●
changes in demand in the dry-bulk shipping industry;
●
changes
 
in
 
the
 
supply
 
of
 
vessels,
 
including
 
when
 
caused
 
by
 
new
 
newbuilding
 
vessel
 
orders
 
or
changes to or terminations of existing orders, and vessel scrapping
 
levels;
6
●
changes
 
in
 
the
 
Company's operating
 
expenses, including
 
bunker
 
prices, crew
 
costs,
 
drydocking
and insurance costs;
●
the Company’s future operating or financial results;
●
availability
 
of
 
financing
 
and
 
refinancing
 
and
 
changes
 
to
 
the
 
Company’s
 
financial
 
condition
 
and
liquidity, including the Company’s ability
 
to pay amounts
 
that it owes
 
and obtain additional
 
financing
to fund capital expenditures,
 
acquisitions and other
 
general corporate activities
 
and the Company’s
ability to
 
obtain financing
 
and comply
 
with the
 
restrictions and
 
other covenants in
 
the Company’s
financing arrangements;
●
changes in governmental rules and regulations or actions taken by
 
regulatory authorities;
●
potential liability from pending or future litigation;
●
compliance with governmental, tax, environmental and safety regulation, any non-compliance with
the U.S.
 
Foreign Corrupt Practices
 
Act of
 
1977 (FCPA)
 
or other
 
applicable regulations relating
 
to
bribery;
●
the failure of counter-parties to fully perform their contracts with the Company;
●
the Company’s dependence on key personnel;
●
adequacy of insurance coverage;
●
the volatility of the price of the Company’s common shares;
●
the Company’s incorporation under the
 
laws of the Marshall
 
Islands and the different rights
 
to relief
that may be available compared to other countries, including the United
 
States;
●
general domestic and international political conditions or labor disruptions;
●
the impact of port or canal congestion or disruptions;
●
global or regional pandemics and its impact in the dry-bulk shipping industry;
●
potential physical
 
disruption of
 
shipping routes
 
due to
 
accidents, climate-related
 
reasons (acute
 
and
chronic), political events, public health threats, international
 
hostilities and instability, piracy or acts
by terrorists; and
●
other
 
important factors
 
described from
 
time to
 
time
 
in the
 
reports filed
 
by the
 
Company with
 
the
Securities and
 
Exchange Commission,
 
or the
 
SEC, including
 
those factors
 
discussed in
 
“Item 3.
Key
 
Information-
 
D.
 
Risk
 
Factors” in
 
this
 
Annual Report
 
on
 
Form
 
20-F
 
and
 
the
 
New
 
York
 
Stock
Exchange, or the NYSE.
This report may
 
contain assumptions,
 
expectations, projections,
 
intentions and
 
beliefs about future
 
events.
These statements are intended as forward-looking statements.
 
The Company may also from time
 
to time
make forward-
 
looking statements
 
in other
 
documents and
 
reports that
 
are filed
 
with or
 
submitted to
 
the
Commission, in
 
other information sent
 
to the
 
Company’s security
 
holders, and in
 
other written
 
materials.
The Company
 
also cautions
 
that assumptions,
 
expectations, projections,
 
intentions and
 
beliefs about
 
future
events
 
may
 
and
 
often
 
do
 
vary
 
from
 
actual
 
results
 
and
 
the
 
differences
 
can
 
be
 
material.
 
The
 
Company
undertakes no
 
obligation to
 
publicly update
 
or revise
 
any forward-looking
 
statement contained
 
in this
 
report,
whether as a result of new information, future events or otherwise, except
 
as required by law.
7
PART I
Item 1.
 
Identity of Directors, Senior Management and Advisers
 
Not Applicable.
Item 2.
 
Offer Statistics and Expected Timetable
Not Applicable.
Item 3.
 
Key Information
A.
 
[Reserved]
 
B.
 
Capitalization and Indebtedness
 
Not Applicable.
 
C.
 
Reasons for the Offer and Use of Proceeds
 
Not Applicable.
D.
 
Risk Factors
Summary of Risk Factors
The bullets below summarize the principal risk factors related
 
to an investment in our Company.
 
Industry Specific Risk Factors
●
Charter hire
 
rates for
 
dry bulk
 
vessels are
 
volatile and
 
have fluctuated
 
significantly in
 
the
past
 
years,
 
which
 
may
 
adversely
 
affect
 
our
 
earnings,
 
revenues
 
and
 
profitability
 
and
 
our
ability to comply with our loan covenants.
●
The current
 
state of
 
the global
 
financial markets
 
and economic
 
conditions may
 
adversely
impact
 
our
 
ability
 
to
 
obtain
 
additional
 
financing
 
on
 
acceptable
 
terms
 
and
 
otherwise
negatively impact our business.
●
Our operating results may be affected by seasonal fluctuations.
●
An increase in the price of fuel, or bunkers, may adversely affect our
 
profits.
●
We are
 
subject to
 
complex laws
 
and regulations, including
 
environmental regulations that
can adversely affect the cost, manner or feasibility of doing business.
8
●
If our
 
vessels call
 
on ports
 
located in
 
countries or
 
territories that
 
are the
 
subject of
 
sanctions
or embargoes imposed
 
by the U.S.
 
government, the United
 
Kingdom, the European Union,
the United Nations, or other governmental
 
authorities, or engage in other
 
such transactions
or dealings
 
that would
 
be violative
 
of applicable
 
sanctions laws, it
 
could lead
 
to monetary
fines or penalties and
 
may adversely affect our reputation
 
and the market for our
 
securities.
●
We conduct business
 
in China, where
 
the legal system
 
has inherent uncertainties
 
that could
limit the legal protections available to us.
Company Specific Risk Factors
●
We charter
 
some of our
 
vessels on short-term time
 
charters in a
 
volatile shipping industry
and a
 
decline in
 
charter hire
 
rates could
 
affect our
 
results of
 
operations and
 
our ability
 
to
pay dividends.
●
A cyber-attack could materially disrupt our business.
●
Increasing
 
scrutiny
 
and
 
changing
 
expectations
 
from
 
investors,
 
lenders
 
and
 
other
 
market
participants with respect to our ESG policies may impose additional costs on us or expose
us to additional risks.
●
Our
 
earnings may
 
be adversely
 
affected if
 
we are
 
not able
 
to take
 
advantage of
 
favorable
charter rates.
●
We
 
cannot
 
assure
 
you
 
that
 
we
 
will
 
be
 
able
 
to
 
borrow
 
amounts
 
under
 
loan
 
facilities
 
and
restrictive covenants in our loan facilities impose financial and
 
other restrictions on us.
●
In the highly competitive
 
international shipping industry, we may
 
not be able to
 
compete for
charters with
 
new entrants
 
or established
 
companies with
 
greater resources,
 
and as
 
a result,
we may be unable to employ our vessels profitably.
●
Technological innovation and
 
quality and
 
efficiency requirements
 
from our
 
customers could
reduce our charter hire income and affect the demand and the value
 
of our vessels.
●
We
 
are a
 
holding company,
 
and we
 
depend on
 
the ability
 
of our
 
subsidiaries to
 
distribute
funds to us in order to satisfy our financial obligations.
●
Because we are organized
 
under the laws
 
of the Marshall
 
Islands, it may be
 
difficult to serve
us with legal process or enforce judgments against us, our directors
 
or our management.
Risks Relating to Our Common Stock
●
We
 
cannot
 
assure
 
you
 
that
 
our
 
board
 
of
 
directors
 
will
 
continue
 
to
 
declare
 
dividends
 
on
shares of our common stock in the future.
●
The market prices
 
and trading volume
 
of our shares
 
of common stock
 
may experience rapid
and substantial price
 
volatility, which could
 
cause purchasers
 
of our common
 
stock to incur
substantial losses.
●
Since we
 
are incorporated
 
in
 
the
 
Marshall Islands,
 
which
 
does not
 
have
 
a well-developed
body
 
of
 
corporate
 
law,
 
you
 
may
 
have
 
more
 
difficulty
 
protecting
 
your
 
interests
 
than
shareholders of a U.S. corporation.
9
●
As a Marshall Islands corporation and
 
with some of our subsidiaries being
 
Marshall Islands
entities and also having subsidiaries in other offshore jurisdictions, our operations may be
subject to economic substance requirements, which could impact
 
our business.
●
Certain
 
existing
 
shareholders
 
will
 
be
 
able
 
to
 
exert
 
considerable
 
control
 
over
 
matters
 
on
which our shareholders are entitled to vote.
 
●
Our Series B Preferred Shares are senior obligations of ours and rank prior to our common
shares with respect to dividends,
 
distributions and payments upon
 
liquidation, which could
have an adverse effect on the value of our common shares.
Risks Relating to Our Series B Preferred Stock
●
We may not
 
have sufficient cash from
 
our operations to enable us
 
to pay dividends on
 
our
Series B Preferred Shares following the payment of expenses and the establishment of any
reserves.
●
Our Series
 
B Preferred
 
Shares are
 
subordinate to
 
our indebtedness,
 
and your
 
interests could
be
 
diluted
 
by
 
the
 
issuance
 
of
 
additional
 
preferred
 
shares,
 
including
 
additional
 
Series
 
B
Preferred Shares, and by other transactions.
●
We
 
may
 
redeem
 
the
 
Series
 
B
 
Preferred
 
Shares,
 
and
 
you
 
may
 
not
 
be
 
able
 
to
 
reinvest
 
the
redemption price you receive in a similar security.
Risks Relating to Our Outstanding Warrants
 
●
The
 
issuance
 
of
 
our
 
common
 
stock
 
upon
 
the
 
exercise
 
of
 
our
 
Warrants
 
may
 
depress
 
our
stock price.
Some
 
of
 
the
 
following
 
risks
 
relate
 
principally
 
to
 
the
 
industry
 
in
 
which
 
we
 
operate
 
and
 
our
 
business
 
in
general. Other
 
risks relate
 
principally to
 
the securities
 
market and ownership
 
of our securities,
 
including our
common
 
stock, outstanding
 
warrants and
 
our
 
Series B
 
Preferred Shares.
 
The occurrence
 
of
 
any of
 
the
events described in this section
 
could significantly and negatively affect
 
our business, financial condition,
operating
 
results,
 
cash
 
available
 
for
 
the
 
payment
 
of
 
dividends
 
on
 
our
 
shares
 
and
 
interest
 
on
 
our
 
loan
facilities and bond, or the trading price of our securities.
Industry Specific Risk Factors
Charter
 
hire
 
rates
 
for
 
dry
 
bulk
 
vessels
 
are
 
volatile
 
and
 
have
 
fluctuated
 
significantly
 
in
 
the
 
past
years, which
 
may adversely
 
affect our earnings,
 
revenues and
 
profitability and
 
our ability
 
to comply
with our loan covenants.
Substantially all of our revenues
 
are derived from a single
 
market, the dry bulk segment,
 
and therefore our
financial results
 
are subject
 
to
 
cyclicality of
 
the
 
dry bulk
 
shipping industry
 
and any
 
attendant volatility
 
in
charter hire
 
rates and profitability. The
 
degree of
 
charter hire
 
rate volatility
 
among different types
 
of dry
 
bulk
vessels has
 
varied widely,
 
and time
 
charter and
 
spot market
 
rates for
 
dry bulk
 
vessels have
 
in the
 
past
declined below the
 
operating costs of
 
vessels. When we
 
charter our
 
vessels pursuant to
 
short-term time
charters, we
 
are exposed
 
to changes
 
in short-term
 
charter rates
 
for dry
 
bulk carriers
 
and such
 
changes
may affect our earnings. Fluctuations in charter rates result
 
from changes in the supply of and demand
 
for
vessel
 
capacity
 
and
 
changes
 
in
 
the
 
supply
 
of
 
and
 
demand
 
for
 
the
 
major
 
commodities
 
carried
 
by
 
water
internationally.
 
Because
 
the
 
factors
 
affecting
 
the
 
supply
 
of
 
and
 
demand
 
for
 
vessels
 
are
 
outside
 
of
 
our
control and
 
are unpredictable,
 
the nature,
 
timing, direction
 
and degree
 
of changes
 
in industry
 
conditions
are also
 
unpredictable. We
 
cannot assure
 
you that
 
we will
 
be able
 
to successfully
 
charter our
 
vessels in
10
the
 
future
 
or
 
renew
 
existing
 
charters
 
at
 
rates
 
sufficient
 
to
 
allow
 
us
 
to
 
meet
 
our
 
obligations
 
or
 
pay
 
any
dividends in the future. A significant decrease
 
in charter rates would adversely affect our profitability, cash
flows
 
and may
 
cause vessel
 
values to
 
decline, and,
 
as
 
a result,
 
we may
 
have
 
to
 
record an
 
impairment
charge in our consolidated financial statements which could adversely
 
affect our financial results.
In 2024, the
 
dry bulk
 
shipping market
 
experienced significant
 
volatility, especially in
 
the Capesize segment,
with fluctuating demand
 
and a notable
 
drop in rates
 
during the fourth
 
quarter.
 
Geopolitical tensions, stricter
environmental
 
regulations,
 
including
 
EU
 
fuel
 
rules,
 
and
 
disruptions
 
in
 
the
 
Panama
 
and
 
Suez
 
Canals
impacted
 
market
 
dynamics.
 
Infrastructure
 
projects
 
and
 
agricultural
 
exports
 
supported
 
demand,
 
keeping
freight rates for
 
Panamax and Ultramax segments relatively
 
stable, with an exception
 
towards the end
 
of
2024.
 
Freight rate
 
volatility stemmed
 
from seasonal
 
demand shifts,
 
with recovery
 
periods driven
 
by key
commodity
 
demand,
 
such
 
as
 
China’s
 
demand
 
for
 
coal
 
and
 
iron
 
ore
 
which
 
remained
 
crucial,
 
while
 
also
limited fleet
 
growth provided
 
partial support.
 
The introduction
 
of stricter
 
environmental
 
regulations, including
IMO 2030
 
and EU
 
fuel mandates,
 
is expected
 
to raise
 
operational costs,
 
potentially affecting
 
shipping rates.
The
 
Russia-Ukraine
 
war
 
and
 
tensions
 
in
 
Israel
 
disrupted
 
supply
 
chains
 
and
 
shipping
 
routes,
 
causing
unpredictable shifts in dry bulk demand. Despite these challenges, the market outlook remains cautiously
optimistic,
 
though
 
subject
 
to
 
shifts
 
in
 
global
 
trade
 
patterns,
 
economic
 
conditions,
 
and
 
geopolitical
developments.
Factors that influence demand for dry bulk vessel capacity include:
●
 
supply
 
of
 
and
 
demand
 
for
 
energy
 
resources,
 
commodities,
 
and
 
semi-finished
 
and
 
finished
consumer and industrial products;
●
 
changes in the exploration or production of energy
 
resources, commodities, and semi-finished and
finished consumer and industrial products;
●
 
the location of regional and global exploration, production and manufacturing
 
facilities;
●
 
the
 
location
 
of
 
consuming
 
regions
 
for
 
energy
 
resources,
 
commodities,
 
and
 
semi-finished
 
and
finished consumer and industrial products;
●
 
the globalization of production and manufacturing;
●
 
global
 
and
 
regional
 
economic
 
and
 
political
 
conditions,
 
armed
 
conflicts,
 
including
 
the
 
ongoing
conflicts
 
between
 
Russia
 
and
 
Ukraine
 
and
 
Israel
 
and
 
Hamas,
 
and
 
fluctuations
 
in
 
industrial
 
and
agricultural production;
●
 
disruptions and developments in international trade;
●
 
changes in seaborne and other transportation patterns,
 
including the distance cargo is transported
by
 
sea
 
for
 
reasons
 
including
 
but
 
not
 
limited
 
to
 
reductions
 
in
 
canal
 
capacities
 
and
 
geopolitical
conflicts and military responses;
●
 
international
 
sanctions,
 
embargoes,
 
import
 
and
 
export
 
restrictions,
 
nationalizations,
 
piracy,
 
and
terrorist attacks;
●
 
legal
 
and
 
regulatory
 
changes
 
including
 
regulations
 
adopted
 
by
 
supranational
 
authorities
 
and/or
industry bodies, such as safety and environmental regulations and
 
requirements;
●
 
weather and acts of God and natural disasters;
11
●
 
environmental and other regulatory developments;
●
 
currency exchange rates, specifically versus USD; and
●
 
economic slowdowns caused by public health pandemics.
Demand for
 
our dry
 
bulk oceangoing
 
vessels is
 
dependent upon
 
economic
 
growth in
 
the world’s
 
economies,
seasonal and regional changes in
 
demand and changes to the
 
capacity of the global dry
 
bulk fleet and the
sources and supply for dry bulk cargo transported by sea. Continued adverse economic, political
 
or social
conditions
 
or
 
other
 
developments
 
could
 
negatively
 
impact
 
charter
 
rates
 
and
 
therefore
 
have
 
a
 
material
adverse effect on our business results, results of operations and ability to pay dividends.
Factors that influence the supply of dry bulk vessel capacity include:
●
 
the number of newbuilding orders and deliveries, including slippage
 
in deliveries;
●
 
the number of shipyards and ability of shipyards to deliver vessels;
●
 
port or canal congestion;
●
 
potential
 
disruption,
 
including
 
supply
 
chain
 
disruptions,
 
of
 
shipping
 
routes
 
due
 
to
 
accidents
 
or
political events;
●
 
speed of vessel operation;
●
 
vessel casualties;
●
 
technological advances in vessel design and capacity;
●
 
the degree of
 
scrapping or recycling
 
of older vessels,
 
depending, among other
 
things, on scrapping
or recycling rates and international scrapping or recycling regulations;
●
 
the price of steel and vessel equipment;
●
 
product imbalances (affecting level of trading activity) and developments in international
 
trade;
●
 
the number
 
of vessels
 
that are
 
out of
 
service, namely those
 
that are
 
laid-up, drydocked, awaiting
repairs or otherwise not available for hire;
 
●
 
availability of financing for new vessels and shipping activity;
●
 
changes in international regulations
 
that may effectively
 
cause reductions in the
 
carrying capacity
of vessels or early obsolescence of tonnage; and
●
 
changes in environmental and other regulations that may limit the useful lives and trading patterns
of vessels.
In
 
addition
 
to
 
the
 
prevailing
 
and
 
anticipated
 
freight
 
rates,
 
factors
 
that
 
affect
 
the
 
rate
 
of
 
newbuilding,
scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices,
costs of
 
bunkers and
 
other operating
 
costs, costs
 
associated with
 
classification society
 
surveys, normal
12
maintenance and insurance coverage
 
costs, the efficiency
 
and age profile of
 
the existing dry bulk
 
fleet in
the
 
market
 
and
 
government
 
and
 
industry
 
regulation
 
of
 
maritime
 
transportation
 
practices,
 
particularly
environmental
 
protection
 
laws
 
and regulations.
 
These factors
 
influencing the
 
supply
 
of
 
and
 
demand
 
for
shipping capacity are outside of our
 
control, and we may not be able
 
to correctly assess the nature, timing
and degree of changes in industry conditions.
We anticipate that the future demand for our dry bulk carriers will be dependent upon economic growth in
the world’s economies, including China and India, seasonal and regional changes in demand, changes in
the capacity of the global
 
dry bulk carrier fleet
 
and the sources and
 
supply of dry bulk
 
cargo transported by
sea. While there has been a general decrease in new dry bulk carrier ordering
 
since 2014, the capacity of
the global dry
 
bulk carrier fleet
 
could increase, and
 
economic growth may
 
not resume in
 
areas that have
experienced
 
a
 
recession
 
or
 
continue
 
in
 
other
 
areas.
 
Adverse
 
economic,
 
political,
 
social
 
or
 
other
developments could have a material adverse effect on our business and operating
 
results.
In
 
addition,
 
the
 
conflict
 
between
 
Israel
 
and
 
Hamas,
 
which
 
began
 
in
 
October
 
2023,
 
has
 
resulted
 
in
 
an
increased
 
number
 
of
 
vessel
 
attacks
 
in
 
the
 
Red
 
Sea.
 
Various
 
shipping
 
companies
 
and/or
 
commercial
managers have indicated that their vessels would
 
avoid crossing the Red Sea and consequently
 
the Suez
Canal,
 
and
 
for
 
the
 
time
 
being
 
divert
 
vessels
 
around
 
southern
 
Africa’s
 
Cape
 
of
 
Good
 
Hope,
 
which
occasionally adds substantial
 
time and cost
 
to East-West voyages.
 
While we are
 
unable to ascertain
 
the
immediate impact of this conflict,
 
any further attacks or piracy attempts,
 
or continued diversion of vessels
from the Suez Canal, may affect our business, financial condition, and results of operations.
The current
 
state of
 
the global
 
financial markets
 
and economic
 
conditions may
 
adversely impact
our ability to obtain additional financing on acceptable terms and otherwise negatively impact our
business.
Global
 
financial
 
markets
 
can
 
be
 
volatile
 
and
 
contraction
 
in
 
available
 
credit
 
may
 
occur
 
as
 
economic
conditions change.
 
In recent
 
years, operating
 
businesses in
 
the global
 
economy have
 
faced
 
weakening
demand for
 
goods and
 
services, deteriorating
 
international liquidity
 
conditions, and
 
declining markets
 
which
lead
 
to
 
a
 
general
 
decline
 
in
 
the
 
willingness
 
of
 
banks
 
and
 
other
 
financial
 
institutions
 
to
 
extend
 
credit,
particularly in
 
the shipping industry. As
 
the shipping industry
 
is highly dependent
 
on the availability
 
of credit
to finance and expand operations, it may be negatively affected by such
 
changes and volatility.
We face risks attendant to changes in economic environments, changes in
 
interest rates, and instability in
the
 
banking
 
and
 
securities
 
markets
 
around
 
the
 
world,
 
among
 
other
 
factors
 
which
 
may
 
have
 
a
 
material
adverse effect on our results
 
of operations and financial
 
condition and may cause
 
the price of our
 
common
shares to decline.
Global economic conditions may negatively impact the drybulk shipping
 
industry.
Economic
 
growth
 
is
 
expected
 
to
 
remain
 
resilient
 
in
 
2025
 
and
 
2026,
 
despite
 
significant
 
challenges,
 
as
inflation is
 
expected to
 
ease further
 
compared to
 
2024. However,
 
major market
 
disruptions and
 
adverse
changes in market conditions and regulatory climate in China,
 
the United States, the European Union and
worldwide may adversely affect our business or impair our ability to borrow amounts under credit facilities
or any future financial arrangements.
Chinese dry bulk imports have accounted
 
for the majority of global dry bulk
 
transportation growth annually
over the
 
last decade.
 
Accordingly,
 
our financial
 
condition and results
 
of operations,
 
as well
 
as our
 
future
prospects,
 
would
 
likely
 
be
 
hindered
 
by
 
an
 
economic
 
downturn
 
in
 
any
 
of
 
these
 
countries
 
or
 
geographic
regions. In recent years
 
China and India have
 
been among the
 
world’s fastest growing economies
 
in terms
of gross
 
domestic product.
 
Although China
 
met its
 
official growth
 
target of
 
5% in
 
2024, the
 
growth of
 
China’s
economy is projected to slow
 
in 2025, as there is a
 
continuous threat of a Chinese
 
financial crisis resulting
13
from deteriorating real estate property values, excessive personal and corporate indebtedness and “trade
wars”. An economic slowdown in
 
China, the Asia-Pacific region, or in
 
India may adversely affect
 
demand
for seaborne
 
transportation of
 
our products
 
and our
 
results of
 
operations. Moreover,
 
any deterioration in
the economy of the
 
United States or the
 
European Union, may
 
further adversely affect economic
 
growth in
Asia.
In
 
recent
 
years,
 
China
 
and
 
the
 
United
 
States
 
have
 
implemented
 
certain
 
increasingly
 
protective
 
trade
measures
 
with
 
continuing
 
tensions
 
that
 
started
 
as
 
tariffs
 
and
 
now
 
include
 
technology
 
restrictions
 
and
additional export controls. Moreover, the impact that the
 
new U.S. presidential administration will have on
these tensions remains in flux. Geopolitical tensions in 2025
 
may intensify and impact trade flows, military
conflicts, and dry
 
bulk transportation
 
in the
 
future, and
 
U.S.-China trade
 
tensions, including
 
the introduction
by the U.S.
 
government of
 
tariffs affecting certain
 
goods imported
 
by China, may
 
provoke further
 
retaliatory
trade actions.
 
Additionally,
 
new tariffs
 
have recently
 
been imposed
 
by the
 
U.S. on
 
imports from
 
Canada
and Mexico,
 
among other
 
countries, on
 
goods including
 
steel and
 
aluminum, and
 
the U.S.
 
has also
 
signaled
that it may
 
impose “reciprocal” tariffs
 
on foreign imports in
 
the coming weeks.
 
It is unknown
 
whether and
to
 
what
 
extent
 
such
 
tariffs
 
(or
 
other
 
new
 
laws
 
or
 
regulations)
 
will
 
be
 
retained,
 
expanded
 
or
 
otherwise
modified by the U.S.,
 
or the effect that
 
any such actions
 
will have on us
 
or our industry, but such measures
could have an adverse effect on our business, financial condition, and results of operations.
The dry bulk
 
carrier charter market remains
 
significantly below its
 
high in 2008,
 
which may affect
our revenues, earnings and profitability, and our ability to comply with our loan covenants.
The abrupt and
 
dramatic downturn in the
 
dry bulk charter
 
market until the
 
beginning of 2021,
 
from which
we
 
derive
 
substantially
 
all
 
of
 
our
 
revenues,
 
severely
 
affected
 
the
 
dry
 
bulk
 
shipping
 
industry
 
and
 
our
business. The
 
Baltic Dry
 
Index, or
 
the BDI,
 
a daily
 
average of
 
charter rates
 
for key
 
dry bulk
 
routes published
by the Baltic Exchange Limited, has long been viewed as the main benchmark to monitor the movements
of the dry bulk vessel charter market and the performance of the entire dry bulk shipping market. The BDI
declined
 
94%
 
in
 
2008
 
from
 
a
 
peak
 
of
 
11,793
 
in
 
May
 
2008
 
to
 
a
 
low
 
of
 
663
 
in
 
December 2008
 
and
 
has
remained volatile since then,
 
reaching a record low of
 
290 in February 2016.
 
In 2024, the BDI ranged
 
from
a low of
 
976 to a
 
high of 2,419
 
and closed at
 
1,635 on March
 
20, 2025. There
 
can be no
 
assurance that
the
 
dry
 
bulk
 
charter
 
market
 
will
 
not
 
decline
 
further.
 
The
 
decline
 
and
 
volatility
 
in
 
charter
 
rates
 
is
 
due
 
to
various factors, including the
 
oversupply of vessels, easing
 
of port congestion, slower
 
demand growth and
economic and
 
geopolitical factors.
 
The decline
 
and volatility
 
in charter
 
rates in
 
the
 
dry bulk
 
market also
affects the value of our dry bulk vessels, which follows the trends of dry bulk charter
 
rates.
Any
 
decline
 
in
 
the
 
dry
 
bulk
 
carrier
 
charter
 
market
 
may
 
have
 
additional
 
adverse
 
consequences
 
for
 
our
industry,
 
including
 
an
 
absence
 
of
 
financing
 
for
 
vessels,
 
no
 
active
 
secondhand
 
market
 
for
 
the
 
sale
 
of
vessels,
 
charterers
 
seeking
 
to
 
renegotiate
 
the
 
rates
 
for
 
existing
 
time
 
charters,
 
and
 
widespread
 
loan
covenant defaults in the dry bulk shipping
 
industry. Accordingly, the value of our common shares could be
substantially reduced or eliminated.
Worldwide inflationary
 
pressures could
 
negatively impact
 
our results
 
of operations
 
and cash
 
flows.
The
 
previous
 
year
 
worldwide
 
economies
 
experienced
 
inflationary
 
pressures,
 
with
 
price
 
increases
 
seen
across
 
many
 
sectors
 
globally.
 
For
 
example,
 
the
 
U.S.
 
consumer
 
price
 
index,
 
an
 
inflation
 
gauge
 
that
measures costs
 
across dozens
 
of items
 
rose 3.4%
 
and 2.9%
 
in December 2023
 
and 2024,
 
respectively,
compared to the prior year. It remains to be seen whether
 
inflationary pressures will increase again
 
and to
what degree. In the
 
event that inflation
 
becomes a significant
 
factor in the global
 
economy generally and
 
in
the shipping industry more specifically,
 
inflationary pressures would result in increased operating, voyage
and administrative
 
costs. Furthermore, the
 
effects of
 
inflation on
 
the supply
 
and demand
 
of the
 
products
we
 
transport
 
could
 
alter
 
demand
 
for
 
our
 
services.
 
Interventions
 
in
 
the
 
economy
 
by
 
central
 
banks
 
in
response
 
to
 
inflationary
 
pressures
 
may
 
slow
 
down
 
economic
 
activity,
 
including
 
by
 
altering
 
consumer
14
purchasing habits
 
and reducing
 
demand for
 
the commodities
 
and products
 
we carry, and cause
 
a reduction
in trade. As a result,
 
the volumes of goods we
 
deliver and/or charter rates
 
for our vessels may be
 
affected.
Any
 
of
 
these
 
factors
 
could
 
have
 
an
 
adverse effect
 
on
 
our
 
business, financial
 
condition,
 
cash
 
flows
 
and
operating results.
Our operations
 
expose us
 
to global
 
risks, such
 
as political
 
instability, terrorist
 
or other
 
attacks, war,
international
 
hostilities
 
and
 
economic
 
sanctions
 
restrictions
 
which
 
may
 
affect
 
the
 
seaborne
transportation industry and adversely affect our business.
We are an international
 
shipping company and
 
primarily conduct most
 
of our operations
 
outside the United
States, and our business,
 
results of operations, cash
 
flows, financial condition
 
and ability to pay dividends,
if
 
any,
 
may
 
be
 
adversely
 
affected
 
by
 
changing
 
economic,
 
political
 
and
 
government
 
conditions
 
in
 
the
countries and regions where our vessels are employed or registered. Moreover, we operate
 
in a sector of
the economy that is
 
likely to be adversely
 
impacted by the effects
 
of political conflicts,
 
including the current
political instability in the
 
Middle East (including in
 
Israel and Gaza), Ukraine, the
 
South China Sea region
and other geographic
 
countries and
 
areas, geopolitical
 
events, terrorist
 
or other attacks,
 
war (or
 
threatened
war) and international hostilities. The response of the United States and others to terrorist
 
attacks, as well
as
 
the
 
threat
 
of
 
future
 
terrorist
 
attacks
 
around
 
the
 
world,
 
continues
 
to
 
cause
 
uncertainty
 
in
 
the
 
world’s
financial
 
markets
 
and
 
may
 
affect
 
our
 
business,
 
operating
 
results,
 
and
 
financial
 
condition.
 
Continuing
conflicts and
 
recent developments
 
in Ukraine
 
and the
 
Middle East,
 
and increased
 
tensions between
 
the
U.S. and China,
 
Russia, Iran and
 
certain terrorist organizations, as
 
well as the
 
presence of U.S.
 
or other
armed forces in various
 
other regions, may lead
 
to additional acts of
 
terrorism and armed conflict
 
around
the world, which
 
may contribute to
 
further economic instability in
 
the global financial markets.
 
As a result
of the above, insurers have increased premiums and reduced or restricted coverage for losses caused by
terrorist
 
acts
 
generally.
 
These
 
uncertainties
 
could
 
also
 
adversely
 
affect
 
our
 
ability
 
to
 
obtain
 
additional
financing
 
on
 
terms
 
acceptable to
 
us
 
or
 
at
 
all.
 
Any
 
of
 
these
 
occurrences could
 
have
 
a material
 
adverse
impact on our
 
operating results,
 
revenues and
 
costs. Additionally, events in
 
other jurisdictions could
 
impact
global
 
markets,
 
including
 
foreign
 
exchange
 
and
 
securities
 
markets;
 
any
 
resulting
 
changes
 
in
 
currency
exchange rates, tariffs,
 
treaties and other
 
regulatory matters could
 
in turn adversely
 
impact our business
and operations.
Currently, the world economy faces a number of challenges, including trade tensions between the
United States and China,
 
stabilizing growth in China, continuing threat
 
of terrorist attacks around
the world,
 
continuing instability and
 
conflicts and other
 
ongoing occurrences in
 
the Middle
 
East,
Ukraine, and in other geographic areas and countries, economic
 
sanctions restrictions.
 
In the
 
past, political
 
instability has
 
also resulted
 
in attacks
 
on vessels,
 
mining of
 
waterways and
 
other efforts
to disrupt international shipping,
 
particularly in the Arabian
 
Gulf region, in the Black
 
Sea in connection with
the conflict
 
between Russia and
 
Ukraine,
 
and in
 
and around
 
the Red
 
Sea in
 
connection with the
 
conflict
between Israel and Hamas.
 
Acts of terrorism
 
and piracy have also
 
affected vessels trading in
 
regions such
as
 
the
 
South
 
China
 
Sea
 
and
 
the
 
Gulf
 
of
 
Aden
 
off
 
the
 
coast
 
of
 
Somalia,
 
among
 
others.
 
Any
 
of
 
these
occurrences could have
 
a material
 
adverse impact on
 
our future
 
performance, results of
 
operation, cash
flows and financial position.
Beginning in
 
February of
 
2022, the
 
United States,
 
the United
 
Kingdom and
 
the European
 
Union, among
other countries,
 
European leaders
 
announced various
 
economic sanctions
 
against Russia
 
in connection
with the
 
aforementioned conflicts
 
in the
 
Ukraine region,
 
which may
 
adversely impact
 
our
 
business. The
ongoing conflict
 
could result
 
in the
 
imposition of
 
further economic
 
sanctions or
 
new categories
 
of export
restrictions
 
against
 
persons
 
in
 
or
 
connected
 
to
 
Russia.
 
While
 
in
 
general
 
much
 
uncertainty
 
remains
regarding the
 
global impact
 
of the
 
conflict in Ukraine,
 
it is possible
 
that such
 
tensions could
 
adversely affect
the Company’s business, financial condition, results of operation and cash flows.
15
The United States
 
has issued several
 
Executive Orders
 
that prohibit certain
 
transactions related to
 
Russia,
including
 
the
 
importation
 
of
 
certain
 
energy
 
products
 
of
 
Russian
 
Federation
 
origin
 
(including
 
crude
 
oil,
petroleum, petroleum fuels,
 
oils, liquefied natural
 
gas and coal), and
 
all new investments
 
in Russia by
 
U.S.
persons,
 
among
 
other
 
prohibitions
 
and
 
export
 
controls,
 
and
 
has
 
issued
 
numerous
 
determinations
authorizing the
 
imposition of
 
sanctions on
 
persons who
 
operate or
 
have operated
 
in the
 
energy,
 
metals
and mining, and marine sectors of
 
the Russian Federation economy, among others. Increased restrictions
on
 
these
 
sectors,
 
or
 
the
 
expansion
 
of
 
sanctions
 
to
 
new
 
sectors,
 
may
 
pose
 
additional
 
risks
 
that
 
could
adversely affect our business and operations.
Our business could be adversely impacted by trade tariffs,
 
trade embargoes or other economic sanctions
that limit trading
 
activities between the United
 
States or other countries
 
and countries in the
 
Middle East,
Asia or elsewhere as
 
a result of
 
terrorist attacks, hostilities
 
or diplomatic or
 
political pressures, including
 
as
a result of
 
the ongoing tensions
 
involving Russia, Iran,
 
and China and
 
the current conflicts
 
between Russia
and Ukraine and in the Middle East.
An increase in
 
trade protectionism,
 
the unravelling of
 
multilateral trade
 
agreements and
 
a decrease
in the level
 
of China’s export
 
of goods and
 
import of raw
 
materials could have a
 
material adverse
impact
 
on
 
our
 
charterers’
 
business
 
and,
 
in
 
turn,
 
could
 
cause
 
a
 
material
 
adverse
 
impact
 
on
 
our
results of operations, financial condition and cash flows.
Our operations expose
 
us to the
 
risk that increased
 
trade protectionism
 
may adversely affect
 
our business.
Recently,
 
government leaders
 
have declared
 
that their
 
countries may
 
turn to
 
trade barriers
 
to protect
 
or
revive their domestic industries
 
in the face of
 
foreign imports, thereby
 
depressing the demand
 
for shipping.
The U.S.
 
government has
 
made statements
 
and taken
 
actions that
 
may impact
 
U.S. and
 
international trade
policies, including tariffs
 
affecting certain Chinese
 
industries. Additionally,
 
new tariffs may
 
be imposed by
the Trump
 
administration on imports
 
from Canada,
 
Mexico and
 
China as
 
well as
 
on imports of
 
steel and
aluminum. It is unknown
 
whether and to what
 
extent new tariffs (or
 
other new laws or
 
regulations) will be
adopted, or the effect that any such actions would
 
have on us or our industry. If any new tariffs, legislation
and/or regulations are implemented,
 
or if existing trade
 
agreements are renegotiated
 
or, in particular, if the
U.S. government
 
takes retaliatory
 
trade actions
 
due to
 
the ongoing
 
U.S.-China trade
 
tension, such
 
changes
could have an adverse effect on our business, results of operations and
 
financial condition.
Additionally,
 
the
 
U.S.
 
trade
 
war
 
with
 
China
 
may
 
escalate
 
beyond
 
tariffs
 
with
 
a
 
proposal
 
by
 
the
 
Trump
administration to impose significant fees on any
 
vessel entering a U.S. port where that
 
vessel is owned by
a
 
Chinese
 
shipping
 
company
 
or
 
by
 
a
 
vessel
 
operator
 
whose
 
fleet
 
includes
 
one
 
or
 
more
 
Chinese-built
vessels or
 
that has
 
newbuilding
 
orders at
 
a Chinese
 
shipyard. The
 
proposal of
 
the U.S.
 
trade representative
(USTR), if
 
adopted as
 
proposed, would
 
require Chinese
 
shipping company’s-to
 
pay up
 
to $1
 
million per
port
 
call
 
and
 
those
 
operating
 
Chinese-built
 
vessels
 
to
 
be
 
charged
 
up
 
to
 
$1.5
 
million
 
per
 
U.S.
 
port
 
call,
depending on the percentage of vessels in their fleet
 
built at Chinese shipyard or newbuilding orders with
Chinese shipyards.
 
It is
 
unknown whether
 
and to
 
what extent
 
these new
 
port fees
 
on Chinese
 
shipping
companies and vessels will be adopted, or the effect that they would
 
have on us or our industry generally.
Furthermore, the government of China has
 
implemented economic policies aimed at increasing domestic
consumption of Chinese-made goods. This may have the effect of reducing the supply of goods available
for export
 
and may,
 
in turn,
 
result in
 
a decrease of
 
demand for
 
container shipping. Many
 
of the
 
reforms,
particularly
 
some limited
 
price reforms
 
that
 
result
 
in the
 
prices for
 
certain commodities
 
being
 
principally
determined by market forces, are unprecedented or experimental and may be subject to revision, change
or abolition.
Restrictions
 
on
 
imports, including
 
in
 
the
 
form
 
of
 
tariffs,
 
could
 
have
 
a
 
major
 
impact
 
on
 
global
 
trade
 
and
demand for shipping. Specifically,
 
increasing trade protectionism in the markets
 
that our charterers serve
may cause
 
an increase
 
in (i)
 
the cost
 
of goods
 
exported from
 
exporting countries,
 
(ii) the
 
length of
 
time
16
required
 
to
 
deliver
 
goods
 
from
 
exporting
 
countries,
 
(iii)
 
the
 
costs
 
of
 
such
 
delivery
 
and
 
(iv)
 
the
 
risks
associated with
 
exporting goods.
 
These factors
 
may result
 
in a
 
decrease in
 
the quantity
 
of goods
 
to be
shipped, shipping time
 
schedules, voyage costs and
 
other associated costs.
 
Protectionist developments,
or the perception they may occur, may have a material adverse effect on global economic conditions, and
may
 
significantly
 
reduce
 
global
 
trade,
 
including
 
trade
 
between
 
the
 
United
 
States
 
and
 
China.
 
These
developments
 
would
 
also
 
have
 
an
 
adverse
 
impact
 
on
 
our
 
charterers’
 
business,
 
operating
 
results
 
and
financial condition which could,
 
in turn, affect
 
our charterers’ ability to
 
make timely charter
 
hire payments
to us
 
and impair
 
our ability
 
to renew
 
charters and
 
grow our
 
business. Any
 
of these
 
developments could
have a material
 
adverse effect on
 
our business, results
 
of operations and
 
financial condition,
 
as well as
 
our
cash flows, including cash available for dividends to our stockholders.
Outbreaks
 
of
 
epidemic
 
and
 
pandemic
 
diseases
 
and
 
governmental
 
responses
 
thereto
 
could
adversely affect our business.
Our operations are subject to risks related to pandemics, epidemics or other infectious disease outbreaks
and government responses thereto.
The
 
extent
 
to
 
which
 
our
 
business,
 
the
 
global
 
economy
 
and
 
dry
 
bulk
 
transportation
 
industry
 
may
 
be
negatively
 
affected
 
by
 
future
 
pandemics,
 
epidemics
 
or
 
other
 
outbreaks
 
of
 
infectious
 
diseases
 
is
 
highly
uncertain and will
 
depend on numerous evolving
 
factors that we
 
cannot predict, including, but
 
not limited
to (i) the duration and
 
severity of the infectious disease
 
outbreak; (ii) the imposition
 
of restrictive measures
to combat the outbreak and slow disease transmission; (iii) the introduction of financial support measures
to reduce the impact
 
of the outbreak on the
 
economy; (iv) volatility in the
 
demand for and price
 
of oil and
gas; (v) shortages or reductions in the supply of
 
essential goods, services or labor; (vi) the effect such
 
an
outbreak would have on the
 
global business environment and
 
the demand for the goods we
 
transport; (vii)
governmental
 
responses;
 
and
 
(viii)
 
fluctuations
 
in
 
general
 
economic
 
or
 
financial
 
conditions
 
tied
 
to
 
the
outbreak, such
 
as a
 
sharp increase
 
in
 
interest rates
 
or reduction
 
in the
 
availability of
 
credit. We
 
cannot
predict
 
the
 
effect
 
that
 
any
 
future
 
infectious
 
disease
 
outbreak,
 
pandemic
 
or
 
epidemic
 
may
 
have
 
on
 
our
business, results of operations and financial condition, which could be
 
material and adverse.
Our operating results may be affected by seasonal fluctuations.
We operate our vessels in markets that have
 
historically exhibited seasonal variations in demand and, as
a result,
 
in charter
 
hire rates.
 
This seasonality
 
may result
 
in quarter-to-quarter
 
volatility in
 
our operating
results.
 
The
 
dry
 
bulk
 
carrier
 
market
 
is
 
typically
 
stronger
 
in
 
the
 
fall
 
and
 
winter
 
months
 
in
 
anticipation
 
of
increased
 
consumption
 
of
 
coal
 
and
 
other
 
raw
 
materials
 
in
 
the
 
northern
 
hemisphere
 
during
 
the
 
winter
months. In addition, unpredictable
 
weather patterns in these
 
months tend to disrupt vessel
 
scheduling and
supplies of certain
 
commodities. As a
 
result, our revenues
 
may be weaker
 
during the
 
fiscal quarters ending
June 30
 
and
 
September 30,
 
and,
 
conversely,
 
our
 
revenues
 
may
 
be
 
stronger
 
in
 
fiscal
 
quarters
 
ending
December 31 and March 31.
 
While this seasonality
 
does not directly
 
affect our operating
 
results, it could
materially
 
affect
 
our
 
operating results
 
to
 
the
 
extent
 
our
 
vessels
 
are
 
employed
 
in
 
the
 
spot
 
market
 
in
 
the
future.
An increase in the price of fuel, or bunkers, may adversely affect our
 
profits.
While we generally will not bear the cost
 
of fuel or bunkers for vessels
 
operating on time charters, fuel is
 
a
significant
 
factor
 
in
 
negotiating
 
charter
 
rates.
 
As
 
a
 
result,
 
an
 
increase
 
in
 
the
 
price
 
of
 
fuel
 
beyond
 
our
expectations
 
may
 
adversely
 
affect
 
our
 
profitability
 
at
 
the
 
time
 
of
 
charter
 
negotiation.
 
Fuel
 
is
 
also
 
a
significant, if not
 
the largest, expense
 
in shipping when
 
vessels are under
 
voyage charter.
 
The price and
supply of
 
fuel is
 
unpredictable and
 
fluctuates based
 
on events
 
outside our
 
control, including
 
geopolitical
developments, such as the ongoing conflict between Russia and Ukraine and between
 
Israel and Hamas,
supply
 
and
 
demand for
 
oil
 
and
 
gas,
 
actions
 
by
 
the
 
Organization
 
of
 
Petroleum Exporting
 
Countries
 
(the
17
"OPEC"), and other oil and gas producers, war and unrest in
 
oil producing countries and regions, regional
production patterns
 
and environmental
 
concerns. Any
 
future increase
 
in the
 
cost of
 
fuel may
 
reduce the
profitability and competitiveness of our business.
We
 
are
 
subject
 
to
 
complex
 
laws
 
and
 
regulations,
 
including
 
environmental
 
regulations
 
that
 
can
adversely affect the cost, manner or feasibility of doing business.
Our business and the operations of our vessels
 
are materially affected by environmental regulation in the
form of international conventions, national, state
 
and local laws and regulations in force in the
 
jurisdictions
in which
 
our vessels
 
operate, as
 
well as
 
in the
 
country or
 
countries of
 
their registration,
 
including those
governing the
 
management and
 
disposal of
 
hazardous substances
 
and wastes,
 
the cleanup
 
of oil
 
spills
and other contamination, air emissions (including greenhouse gases), water discharges and ballast water
management. These regulations include, but
 
are not limited
 
to, European Union
 
regulations, the U.S.
 
Oil
Pollution
 
Act
 
of
 
1990,
 
requirements
 
of
 
the
 
U.S.
 
Coast
 
Guard,
 
or
 
USCG
 
and
 
the
 
U.S.
 
Environmental
Protection Agency, the U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), the U.S.
Clean Water
 
Act, and the U.S.
 
Maritime Transportation Security
 
Act of 2002, and
 
regulations of the IMO,
including the International Convention on Civil Liability for Oil Pollution
 
Damage of 1969, the International
Convention
 
for
 
the
 
Prevention
 
of
 
Pollution
 
from
 
Ships
 
of
 
1973,
 
as
 
modified
 
by
 
the
 
Protocol
 
of
 
1978,
collectively referred to as MARPOL 73/78 or MARPOL, including designations of Emission Control Areas,
thereunder, SOLAS,
 
the International Convention on
 
Load Lines of 1966,
 
the International Convention of
Civil Liability for
 
Bunker Oil Pollution
 
Damage, and the
 
ISM Code. Because such
 
conventions, laws, and
regulations are often revised, we
 
cannot predict the ultimate cost
 
of complying with such requirements or
the impact
 
thereof on the
 
re-sale price
 
or useful life
 
of any
 
vessel that
 
we own
 
or will
 
acquire. Additional
conventions, laws
 
and regulations
 
may be
 
adopted that
 
could limit
 
our ability
 
to do
 
business or
 
increase
the
 
cost
 
of
 
our
 
doing
 
business
 
and
 
which
 
may
 
materially
 
adversely
 
affect
 
our
 
operations.
 
Government
regulation
 
of
 
vessels,
 
particularly
 
in
 
the
 
areas
 
of
 
safety
 
and
 
environmental
 
requirements,
 
continue
 
to
change, requiring us
 
to incur significant
 
capital expenditures on
 
our vessels to
 
keep them in
 
compliance,
or even
 
to scrap
 
or sell
 
certain vessels
 
altogether.
 
In addition,
 
we may
 
incur significant
 
costs in
 
meeting
new
 
maintenance
 
and
 
inspection
 
requirements,
 
in
 
developing
 
contingency
 
arrangements
 
for
 
potential
environmental violations and in obtaining insurance coverage.
In addition,
 
we are required
 
by various
 
governmental and quasi-governmental agencies
 
to obtain
 
certain
permits,
 
licenses,
 
certificates,
 
approvals
 
and
 
financial
 
assurances
 
with
 
respect
 
to
 
our
 
operations.
 
Our
failure to
 
maintain necessary
 
permits, licenses,
 
certificates, approvals
 
or financial
 
assurances could
 
require
us to incur substantial costs or temporarily suspend operation of one or more of the vessels in our fleet or
lead to the invalidation or reduction of our insurance coverage.
Environmental
 
requirements
 
can
 
also
 
affect
 
the
 
resale
 
value
 
or
 
useful
 
lives
 
of
 
our
 
vessels,
 
require
 
a
reduction in
 
cargo capacity,
 
ship modifications
 
or operational
 
changes or
 
restrictions, lead
 
to decreased
availability
 
of
 
insurance
 
coverage
 
for
 
environmental
 
matters
 
or
 
result
 
in
 
the
 
denial
 
of
 
access
 
to
 
certain
jurisdictional waters or
 
ports, or detention
 
in certain ports.
 
Under local, national and
 
foreign laws, as
 
well
as international treaties
 
and conventions, we
 
could incur material
 
liabilities, including cleanup
 
obligations
and natural resource damages, in the event that there is a release of petroleum or hazardous substances
from our vessels
 
or otherwise
 
in connection
 
with our
 
operations. We
 
could also
 
become subject
 
to personal
injury
 
or
 
property
 
damage
 
claims
 
relating
 
to
 
the
 
release
 
of
 
hazardous
 
substances
 
associated
 
with
 
our
existing or
 
historic operations. Violations
 
of, or
 
liabilities under,
 
environmental requirements can
 
result in
substantial penalties, fines and other sanctions,
 
including in certain instances, seizure or
 
detention of our
vessels.
18
Increased inspection procedures, tighter import and export controls and new security regulations
could increase costs and disrupt our business.
International
 
shipping
 
is
 
subject
 
to
 
various
 
security
 
and
 
customs
 
inspection
 
and
 
related
 
procedures
 
in
countries of origin,
 
destination and trans-shipment
 
points. Under the
 
U.S. Maritime Transportation Security
Act
 
of
 
2002 (“MTSA”),
 
the
 
U.S.
 
Coast Guard
 
issued regulations
 
requiring
 
the
 
implementation of
 
certain
security requirements
 
aboard vessels
 
operating in
 
waters subject
 
to the
 
jurisdiction of
 
the United
 
States
and
 
at
 
certain ports
 
and facilities.
 
These security
 
procedures may
 
result
 
in
 
cargo seizure,
 
delays in
 
the
loading, offloading,
 
trans-shipment or delivery
 
and the
 
levying of customs
 
duties, fines or
 
other penalties
against us. It is possible
 
that changes to inspection procedures
 
could impose additional financial
 
and legal
obligations on us.
 
Changes to inspection
 
procedures could also
 
impose additional
 
costs and obligations
 
on
our customers and
 
may,
 
in certain cases,
 
render the shipment
 
of certain types
 
of cargo uneconomical or
impractical.
 
Any
 
such
 
changes
 
or
 
developments
 
may
 
have
 
a
 
material
 
adverse
 
effect
 
on
 
our
 
business,
customer relations, financial condition and earnings.
In
 
addition,
 
international
 
shipping
 
is
 
subject
 
to
 
various
 
security
 
and
 
customs
 
inspection
 
and
 
related
procedures
 
in
 
countries of
 
origin
 
and
 
destination and
 
trans-shipment points.
 
Inspection
 
procedures can
result in
 
the seizure of
 
the cargo and/or
 
our vessels, delays
 
in the
 
loading, offloading or
 
delivery and the
levying
 
of
 
customs
 
duties,
 
fines
 
or
 
other
 
penalties
 
against
 
us.
 
It
 
is
 
possible
 
that
 
changes
 
to
 
inspection
procedures
 
could
 
impose
 
additional
 
financial
 
and
 
legal
 
obligations
 
on
 
us.
 
Furthermore,
 
changes
 
to
inspection procedures
 
could also
 
impose additional
 
costs and
 
obligations on
 
our customers
 
and may,
 
in
certain
 
cases,
 
render
 
the
 
shipment
 
of
 
certain
 
types
 
of
 
cargo
 
uneconomical
 
or
 
impractical.
 
Any
 
such
changes or developments may
 
have a material adverse
 
effect on our business, results
 
of operations, cash
flows, financial condition and available cash.
Operational risks and damage to our vessels could adversely impact
 
our performance.
 
The operation of an ocean-going vessel carries inherent
 
risks. Our vessels and their cargoes are
 
at risk of
being damaged or
 
lost because of
 
events such as
 
marine disasters, environmental
 
accidents, bad
 
weather
and natural disasters
 
or other disasters
 
outside our control
 
and other acts
 
of God, business
 
interruptions
caused
 
by
 
mechanical
 
failures,
 
grounding,
 
fire,
 
explosions
 
and
 
collisions,
 
human
 
error,
 
war,
 
terrorism,
piracy, robbery,
 
labor strikes, boycotts and other
 
circumstances or events.
 
Changing economic, regulatory
and political conditions
 
in some countries, including
 
political and military conflicts,
 
have from time to
 
time
resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. Damage
to the environment could also result from our operations, particularly through spillage of fuel, lubricants or
other chemicals
 
and substances used
 
in operations, or
 
extensive uncontrolled fires.
 
These hazards may
result in death or
 
injury to persons, loss of
 
revenues or property,
 
the payment of ransoms, environmental
damage, higher
 
insurance rates,
 
damage to
 
our customer relationships
 
and market
 
disruptions, delay or
rerouting, any of which may
 
reduce our revenue or increase
 
our expenses and also
 
subject us to litigation.
As a
 
result, we
 
could be
 
exposed to
 
substantial liabilities not
 
recoverable under our
 
insurances. Further,
the
 
involvement
 
of
 
our
 
vessels
 
in
 
a
 
serious
 
accident
 
or
 
the
 
loss
 
of
 
any
 
of
 
our
 
vessels
 
could
 
harm
 
our
reputation as a
 
safe and
 
reliable vessel
 
operator and
 
lead to a
 
loss of
 
business. Epidemics
 
and other
 
public
health incidents may also lead to crew member
 
illness, which can disrupt the operations
 
of our vessels, or
to public health measures,
 
which may prevent our
 
vessels from calling on
 
ports or discharging cargo
 
in the
affected areas or in other locations after having visited the affected areas.
If our vessels suffer
 
damage, they may need
 
to be repaired at
 
a drydocking facility.
 
The costs of drydock
repairs are unpredictable
 
and may be
 
substantial. We
 
may have to
 
pay drydocking
 
costs that
 
our insurance
does not
 
cover at
 
all or
 
in full.
 
The loss
 
of revenues
 
while these
 
vessels are
 
being repaired
 
and repositioned,
as well as the actual cost
 
of these repairs not covered by
 
our insurance, would decrease our
 
earnings and
available
 
cash
 
and
 
may
 
adversely
 
affect
 
our
 
business
 
and
 
financial
 
condition.
 
In
 
addition,
 
space
 
at
drydocking facilities is
 
sometimes limited
 
and not
 
all drydocking facilities
 
are conveniently located.
 
We may
19
be
 
unable
 
to
 
find
 
space
 
at
 
a
 
suitable
 
drydocking
 
facility
 
or
 
our
 
vessels
 
may
 
be
 
forced
 
to
 
travel
 
to
 
a
drydocking facility
 
that is
 
not conveniently
 
located relative to
 
our vessels' positions.
 
The loss
 
of earnings
while
 
these
 
vessels
 
are
 
forced
 
to
 
wait
 
for
 
space
 
or
 
to
 
travel
 
to
 
more
 
distant
 
drydocking
 
facilities
 
may
adversely affect our business and financial condition.
The operation
 
of dry
 
bulk vessels has
 
certain unique operational
 
risks. With
 
a dry
 
bulk vessel, the
 
cargo
itself and its interaction
 
with the ship can
 
be a risk
 
factor. By their nature, dry
 
bulk cargoes are
 
often heavy,
dense
 
and
 
easily
 
shifted,
 
and
 
react
 
badly
 
to
 
water
 
exposure.
 
In
 
addition,
 
dry
 
bulk
 
vessels
 
are
 
often
subjected to
 
battering treatment
 
during unloading
 
operations with
 
grabs, jackhammers
 
(to pry
 
encrusted
cargoes out of the
 
hold), and small bulldozers. This
 
treatment may cause damage to
 
the dry bulk vessel.
Dry bulk
 
vessels damaged
 
due to
 
treatment during
 
unloading procedures
 
may be
 
more susceptible
 
to a
breach at sea. Hull breaches in
 
dry bulk vessels may lead to the
 
flooding of their holds. If flooding occurs
in the forward holds, the bulk
 
cargo may become so waterlogged that
 
the vessel's bulkheads may buckle
under the resulting
 
pressure leading
 
to the loss of
 
the dry bulk vessel.
 
These risks may
 
also impact the
 
risk
of loss of life or harm to our crew.
If
 
we
 
are
 
unable to
 
adequately maintain
 
or
 
safeguard
 
our
 
vessels,
 
we may
 
be
 
unable
 
to
 
prevent these
events. Any of these circumstances or events could negatively impact our business, financial condition or
results of operations.
If our
 
vessels call
 
on ports
 
located in
 
countries or
 
territories that
 
are the
 
subject of
 
sanctions or
embargoes imposed by the U.S. government,
 
the United Kingdom, the European
 
Union, the United
Nations, or other
 
governmental authorities, or engage
 
in other such
 
transactions or dealings that
would be
 
violative of
 
applicable sanctions
 
laws, it
 
could lead
 
to monetary
 
fines or
 
penalties and
may adversely affect our reputation and the market for our securities.
Our
 
contracts
 
with
 
our
 
charterers
 
prohibit
 
them
 
from
 
causing
 
our
 
vessels
 
to
 
call
 
on
 
ports
 
located
 
in
sanctioned countries or
 
territories or carrying
 
cargo for entities or
 
from countries and territories
 
that are the
subject of
 
sanctions. Although our
 
charterers may,
 
in certain cases,
 
control the operation
 
of our vessels,
we have monitoring processes in place to ensure our compliance with applicable
 
economic sanctions and
embargo
 
laws. Nevertheless,
 
it
 
remains possible
 
that
 
our
 
charterers may
 
cause
 
our
 
vessels to
 
trade
 
in
violation of
 
sanctions
 
provisions without
 
our
 
consent. If
 
such
 
activities result
 
in
 
a
 
violation of
 
applicable
sanctions or embargo laws, we
 
could be subject to monetary
 
fines, penalties, or other sanctions, and our
reputation and the market for our common shares could be adversely
 
affected.
The applicable sanctions
 
and embargo laws
 
and regulations vary
 
in their application,
 
and by jurisdiction,
and do
 
not all
 
apply to
 
the same
 
covered persons
 
or proscribe
 
the same
 
activities. In
 
addition, the
 
sanctions
and
 
embargo
 
laws
 
and
 
regulations
 
of
 
each
 
jurisdiction
 
may
 
be
 
amended
 
to
 
increase
 
or
 
reduce
 
the
restrictions they impose over
 
time, and the lists
 
of persons and entities
 
designated under these laws and
regulations
 
are
 
amended
 
frequently.
 
Moreover,
 
most
 
sanctions
 
regimes
 
provide
 
that
 
entities
 
owned
 
or
controlled by the persons or entities designated in such
 
lists are also subject to sanctions. The U.S.,
 
U.K.
and EU have
 
enacted new sanctions programs
 
in recent years. Additional countries
 
or territories, as well
as additional
 
persons or
 
entities within
 
or affiliated with
 
those countries
 
or territories,
 
have, and
 
in the
 
future
will,
 
become
 
the
 
target
 
of
 
sanctions.
 
These
 
require
 
us
 
to
 
be
 
diligent
 
in
 
ensuring
 
our
 
compliance
 
with
sanctions
 
laws.
 
Further,
 
the
 
U.S.
 
has
 
increased
 
its
 
focus
 
on
 
sanctions enforcement
 
with
 
respect to
 
the
shipping sector. Current or
 
future counterparties of ours may be affiliated
 
with persons or entities that are
or may
 
be in
 
the future
 
the subject
 
of sanctions
 
or embargoes
 
imposed by
 
the United
 
States, U.K.,
 
EU,
and/or other
 
international bodies. If
 
we determine
 
that such
 
sanctions require
 
us to
 
terminate existing
 
or
future
 
contracts to
 
which we,
 
or
 
our
 
subsidiaries, are
 
party or
 
if
 
we
 
are
 
found to
 
be
 
in
 
violation of
 
such
applicable sanctions,
 
our results
 
of operations
 
may be
 
adversely affected,
 
or we
 
may suffer
 
reputational
harm.
20
As a result
 
of Russia’s actions
 
in Ukraine, the
 
U.S., EU and
 
United Kingdom,
 
together with numerous
 
other
countries, have imposed
 
significant sanctions on
 
persons and entities
 
associated with Russia
 
and Belarus,
as
 
well
 
as
 
comprehensive
 
sanctions
 
on
 
certain
 
areas
 
within
 
the
 
Donbas
 
region
 
of
 
Ukraine,
 
and
 
such
sanctions apply
 
to entities
 
owned or
 
controlled by
 
such designated
 
persons or
 
entities. These
 
sanctions
adversely affect our ability to operate in the region and also restrict parties
 
whose cargo we may carry.
Although we believe that we
 
have been in compliance with all
 
applicable sanctions and embargo
 
laws and
regulations in 2024 and
 
up to the date of this
 
annual report, and intend
 
to maintain such compliance,
 
there
can be no assurance that we
 
or our charterers will be
 
in compliance in the future, particularly
 
as the scope
of certain
 
laws may be
 
unclear and may
 
be subject to
 
changing interpretations. Any
 
such violation could
result
 
in
 
fines,
 
penalties or
 
other
 
sanctions that
 
could severely
 
impact
 
our
 
ability to
 
access
 
U.S.
 
capital
markets and conduct our business and could result in
 
our reputation and the markets for our securities to
be adversely affected
 
and/or in some
 
investors deciding, or being
 
required, to divest
 
their interest, or
 
not
to invest, in us. In
 
addition, certain institutional investors may have investment policies
 
or restrictions that
prevent them
 
from holding
 
securities of
 
companies that
 
have contracts
 
with countries
 
or territories
 
identified
by the U.S. government as state sponsors of terrorism. The determination
 
by these investors not to invest
in, or
 
to divest
 
from, our shares
 
may adversely
 
affect the
 
price at
 
which our
 
shares trade. Moreover,
 
our
charterers may violate applicable sanctions
 
and embargo laws and
 
regulations as a result
 
of actions that
do not involve
 
us or our
 
vessels, and those
 
violations could in
 
turn negatively affect
 
our reputation. Further,
our reputation
 
and the
 
market for
 
our securities
 
may be
 
adversely affected
 
if, for
 
example, we
 
enter into
charters
 
with
 
individuals
 
or
 
entities
 
who,
 
pursuant
 
to
 
contracts
 
with
 
third
 
parties,
 
provide
 
services
 
to
 
or
engage in operations associated with countries or territories that
 
are the subject of certain U.S. sanctions
or embargo laws. Investor perception
 
of the value of our
 
common stock may also
 
be adversely affected by
the
 
consequences of
 
war,
 
the
 
effects
 
of terrorism,
 
civil unrest
 
and governmental
 
actions in
 
countries or
territories that we operate in.
The smuggling
 
of drugs
 
or
 
other contraband
 
onto our
 
vessels may
 
lead to
 
governmental claims
against us.
We
 
expect that
 
our vessels
 
will call
 
in
 
ports in
 
areas where
 
smugglers attempt
 
to
 
hide drugs
 
and other
contraband on
 
vessels, with
 
or
 
without the
 
knowledge of
 
crew members.
To
the
 
extent our
 
vessels are
found with contraband,
 
or stowaways,
 
whether inside
 
or attached to
 
the hull of
 
our vessel and
 
whether with
or without the knowledge of
 
any of our crew,
 
we may face governmental or other
 
regulatory claims which
could have
 
an adverse
 
effect
 
on our
 
business, results
 
of operations,
 
cash flows
 
and financial
 
condition.
Under some jurisdictions, vessels used for
 
the conveyance of illegal drugs could
 
result in forfeiture of the
subject vessel to the government of such jurisdiction.
Maritime claimants
 
could arrest
 
or
 
attach one
 
or
 
more
 
of our
 
vessels, which
 
could interrupt
 
our
business or have a negative effect on our cash flows.
Crew members, suppliers of goods and services to a vessel, shippers of cargo, lenders, and other parties
may
 
be
 
entitled
 
to
 
a
 
maritime
 
lien
 
against
 
a
 
vessel
 
for
 
unsatisfied
 
debts,
 
claims
 
or
 
damages.
 
In
 
many
jurisdictions, a
 
maritime lien
 
holder may
 
enforce its
 
lien by
 
“arresting” or
 
“attaching” a
 
vessel through
 
judicial
or foreclosure proceedings.
 
The arrest or
 
attachment of
 
one or more
 
of our
 
vessels could interrupt
 
the cash
flow of
 
the charterer
 
and/or require
 
us to
 
pay a
 
significant amount
 
of money
 
to have
 
the arrest
 
or attachment
lifted, which would have an adverse effect on our cash flows.
In addition, in some jurisdictions, such
 
as South Africa, under the “sister-ship”
 
theory of liability, a claimant
may arrest
 
both the
 
vessel that
 
is subject
 
to the claimant’s
 
maritime lien
 
and any
 
“associated” vessel,
 
which
is any
 
vessel owned
 
or controlled
 
by the
 
same owner.
 
Claimants could
 
try to
 
assert “sister-ship”
 
liability
against
 
one
 
vessel
 
in
 
our
 
fleet
 
for
 
claims
 
relating
 
to
 
another
 
of
 
our
 
ships.
 
Under
 
some
 
of
 
our
 
present
charters, if the vessel is arrested or detained as a result of a claim against us, we may be in default of our
21
charter
 
and
 
the
 
charterer
 
may
 
suspend
 
the
 
payment
 
of
 
hire
 
under
 
the
 
charter
 
and
 
charge
 
us
 
with
 
any
additional expenses
 
incurred during
 
that period,
 
which may
 
negatively impact
 
our revenues
 
and cash
 
flows.
We conduct business
 
in China, where the
 
legal system has inherent
 
uncertainties that could limit
the legal protections available to us.
Some
 
of
 
our
 
vessels may
 
be
 
chartered to
 
Chinese
 
customers and
 
from
 
time
 
to
 
time
 
on
 
our
 
charterers'
instructions,
 
our
 
vessels
 
may
 
call
 
on
 
Chinese
 
ports.
 
Such
 
charters
 
and
 
voyages
 
may
 
be
 
subject
 
to
regulations in China
 
that may require
 
us to incur
 
new or additional
 
compliance or other
 
administrative costs
and
 
may require
 
that
 
we pay
 
to
 
the
 
Chinese government
 
new taxes
 
or other
 
fees.
 
Applicable laws
 
and
regulations in
 
China may
 
not be well
 
publicized and
 
may not
 
be known
 
to us
 
or to our
 
charterers in
 
advance
of us
 
or our
 
charterers becoming
 
subject to
 
them, and
 
the implementation
 
of such
 
laws and
 
regulations
may be
 
inconsistent. Changes in
 
Chinese laws and
 
regulations, including with
 
regards to
 
tax matters, or
changes
 
in
 
their
 
implementation
 
by
 
local
 
authorities
 
could
 
affect
 
our
 
vessels
 
if
 
chartered
 
to
 
Chinese
customers as well
 
as our vessels
 
calling to Chinese
 
ports and could
 
have a material
 
adverse impact on
 
our
business, financial condition and results of operations.
Governments could
 
requisition our
 
vessels during
 
a period of
 
war or emergency,
 
resulting in
 
a loss
of earnings.
A government could
 
requisition one or
 
more of
 
our vessels for
 
title or
 
for hire.
 
Requisition for title
 
occurs
when
 
a
 
government takes
 
control of
 
a vessel
 
and becomes
 
her
 
owner,
 
while requisition
 
for
 
hire occurs
when
 
a
 
government takes
 
control
 
of
 
a
 
vessel and
 
effectively
 
becomes her
 
charterer
 
at
 
dictated charter
rates. Generally, requisitions occur
 
during periods of war or emergency,
 
although governments may elect
to requisition vessels in other circumstances. Although we would be entitled to compensation in the event
of
 
a
 
requisition
 
of
 
one
 
or
 
more
 
of
 
our
 
vessels,
 
the
 
amount
 
and
 
timing
 
of
 
payment
 
would
 
be
 
uncertain.
Although
 
none
 
of
 
our
 
vessels
 
have
 
been
 
requisitioned by
 
a
 
government
 
for
 
title
 
or
 
hire,
 
a
 
Government
requisition of
 
one or more
 
of our
 
vessels may negatively
 
impact our revenues
 
and reduce the
 
amount of
cash we
 
may have
 
available for
 
distribution as
 
dividends to
 
our shareholders,
 
if any
 
such dividends
 
are
declared.
Failure
 
to
 
comply
 
with
 
the
 
U.S.
 
Foreign
 
Corrupt
 
Practices
 
Act
 
could
 
result
 
in
 
fines,
 
criminal
penalties and an adverse effect on our business.
We may
 
operate in a
 
number of countries
 
throughout the world,
 
including countries suspected
 
to have
 
a
risk of corruption. We are committed to doing business in accordance with applicable anti-corruption laws
and have adopted measures
 
designed to ensure compliance
 
with the U.S. Foreign
 
Corrupt Practices Act
of 1977, as
 
amended (the “FCPA”).
 
We are
 
subject, however,
 
to the risk
 
that we, our
 
affiliated entities or
their respective officers, directors,
 
employees and agents
 
may take actions
 
determined to be
 
in violation of
such
 
anti-corruption
 
laws,
 
including
 
the
 
FCPA.
 
Any
 
such
 
violation
 
could
 
result
 
in
 
substantial
 
fines,
sanctions,
 
civil
 
and/or
 
criminal
 
penalties,
 
curtailment
 
of
 
operations
 
in
 
certain
 
jurisdictions,
 
and
 
might
adversely affect our business,
 
earnings or financial
 
condition. In addition,
 
actual or alleged violations
 
could
damage
 
our
 
reputation
 
and
 
ability
 
to
 
do
 
business.
 
Furthermore,
 
detecting,
 
investigating,
 
and
 
resolving
actual
 
or
 
alleged
 
violations
 
is
 
expensive
 
and
 
can
 
consume
 
significant
 
time
 
and
 
attention
 
of
 
our
 
senior
management.
Changing laws and
 
evolving reporting requirements
 
could have an
 
adverse effect on
 
our business.
Changing laws,
 
regulations and
 
standards relating
 
to reporting
 
requirements, including
 
the European
 
Union
General Data Protection Regulation, or GDPR, may create additional
 
compliance requirements for us.
22
GDPR broadens the
 
scope of personal
 
privacy laws to
 
protect the rights
 
of European Union
 
citizens and
requires organizations to
 
report data
 
breaches within 72
 
hours and be
 
bound by more
 
stringent rules for
obtaining
 
the
 
consent
 
of
 
individuals
 
on
 
how
 
their
 
data
 
can
 
be
 
used.
 
GDPR
 
applies
 
to
 
all
 
companies
processing and holding the personal
 
data of data subjects residing
 
in the EU, regardless of
 
the company’s
location.
 
GDPR
 
became
 
enforceable
 
on
 
May
 
25,
 
2018
 
and
 
non-compliance
 
may
 
expose
 
entities
 
to
significant fines or
 
other regulatory claims
 
which could have
 
an adverse effect
 
on our
 
business, financial
condition, and operations.
Company Specific Risk Factors
The market values of our vessels could decline,
 
which could limit the amount of funds
 
that we can
borrow and
 
could trigger
 
breaches of
 
certain financial
 
covenants contained
 
in our
 
loan facilities,
which
 
could
 
adversely
 
affect
 
our
 
operating
 
results,
 
and
 
we
 
may
 
incur
 
a
 
loss
 
if
 
we
 
sell
 
vessels
following a decline in their market values.
While the
 
market values
 
of vessels
 
and the
 
freight charter
 
market have
 
a very
 
close relationship
 
as the
charter market
 
moves from
 
trough to
 
peak, the
 
time lag
 
between the
 
effect of
 
charter rates
 
on market
 
values
of ships can vary.
The market
 
values of
 
our vessels
 
have generally
 
experienced high
 
volatility,
 
and you
 
should expect
 
the
market values of our vessels to fluctuate depending on a number of
 
factors including:
●
the prevailing level of charter hire rates;
●
general economic and market conditions affecting the shipping industry;
●
competition from other shipping companies and other modes
 
of transportation;
●
the types, sizes and ages of vessels;
●
the supply of and demand for vessels;
●
scrap values;
●
applicable governmental or other regulations;
●
technological advances;
 
●
the need
 
to upgrade
 
vessels as
 
a result
 
of charterer
 
requirements, technological
 
advances in
 
vessel
design or equipment or otherwise; and
●
the cost of newbuildings.
 
In
 
addition,
 
as
 
vessels
 
grow
 
older,
 
they
 
generally
 
decline
 
in
 
value.
 
If
 
the
 
market
 
values
 
of
 
our
 
vessels
decline, we may
 
not be in
 
compliance with certain
 
covenants contained in our
 
loan facilities and
 
we may
not be able to refinance our
 
debt or obtain additional financing or incur
 
debt on terms that are acceptable
to
 
us
 
or
 
at
 
all.
 
As
 
of
 
December
 
31,
 
2024,
 
we
 
were
 
in
 
compliance
 
with
 
all
 
of
 
the
 
covenants
 
in
 
our
 
loan
facilities. If
 
we are
 
not able
 
to comply
 
with the
 
covenants in
 
our loan
 
facilities or
 
are unable
 
to obtain
 
waivers
or
 
amendments
 
or
 
otherwise
 
remedy
 
the
 
relevant
 
breach,
 
our
 
lenders
 
could
 
accelerate
 
our
 
debt
 
and
foreclose on our vessels.
 
Furthermore, if
 
we sell
 
any of
 
our owned
 
vessels at
 
a time
 
when prices
 
are depressed,
 
our business,
 
results
of operations, cash flow and financial condition
 
could be adversely affected. Moreover,
 
if we sell a vessel
23
at a time when vessel prices have fallen, the sale may be at less than the vessel's carrying amount in our
financial statements, resulting
 
in a
 
loss and
 
a reduction in
 
earnings. In
 
addition, if
 
vessel values decline,
we may have to record an impairment adjustment in our financial statements which could
 
adversely affect
our financial
 
results.
 
Conversely, if vessel
 
values are
 
elevated at
 
a time
 
when we
 
wish to acquire
 
additional
vessels,
 
the
 
cost
 
of
 
acquisition
 
may
 
increase
 
and
 
this
 
could
 
adversely
 
affect
 
our
 
business,
 
results
 
of
operations, cash flow and financial condition.
 
We charter
 
some of
 
our vessels
 
on short-term time
 
charters in
 
a volatile
 
shipping industry and
 
a
decline in charter hire rates could affect our results of operations and our ability to
 
pay dividends.
Although significant exposure to
 
short-term time charters is
 
not unusual in the
 
dry bulk shipping industry,
the short-term
 
time charter
 
market is
 
highly competitive
 
and spot
 
market charter
 
hire rates
 
(which affect
time charter
 
rates) may
 
fluctuate significantly
 
based upon
 
available charters
 
and the
 
supply of,
 
and demand
for,
 
seaborne
 
shipping
 
capacity.
 
While
 
the
 
short-term
 
time
 
charter
 
market
 
may
 
enable
 
us
 
to
 
benefit
 
in
periods
 
of
 
increasing charter
 
hire
 
rates,
 
we
 
must
 
consistently
 
renew
 
our
 
charters
 
and
 
this
 
dependence
makes us
 
vulnerable to
 
declining charter
 
rates. As
 
a result
 
of the
 
volatility in
 
the dry
 
bulk carrier
 
charter
market, we may
 
not be able
 
to employ our
 
vessels upon the
 
termination of their
 
existing charters at their
current charter hire rates
 
or at all.
 
The dry bulk
 
carrier charter market is
 
volatile, and since
 
the beginning
of 2025, short-term time charter and spot market charter rates for some dry bulk carriers have declined at
or
 
below
 
the
 
operating
 
costs
 
of
 
those
 
vessels. We
 
cannot
 
assure you
 
that
 
future
 
charter
 
hire
 
rates
 
will
enable us to operate our vessels profitably, or to pay dividends.
 
Rising crew costs could adversely affect our results of operations.
 
Due to an increase in the size of the global shipping fleet, the limited supply of
 
and increased demand for
crew
 
has
 
created
 
upward
 
pressure
 
on
 
crew
 
costs.
 
Additionally,
 
the
 
return
 
of
 
a
 
number
 
of
 
Ukrainian
seafarers to
 
their homes as
 
a result
 
of the
 
ongoing war in
 
Ukraine has
 
reduced the number
 
of seafarers
globally
 
and
 
thereby
 
increased
 
the
 
pressure
 
on
 
crew
 
wages.
 
Continued
 
higher
 
crew
 
costs
 
or
 
further
increases in crew costs could adversely affect our results of operations.
Our investment in Diana Wilhelmsen Management Limited may expose
 
us to additional risks.
During
 
2015
 
we
 
invested
 
in
 
a
 
50/50
 
joint
 
venture
 
with
 
Wilhelmsen
 
Ship
 
Management
 
which
 
provides
management
 
services
 
to
 
a
 
limited
 
number
 
of
 
vessels
 
in
 
our
 
fleet
 
and
 
to
 
affiliated
 
companies,
 
but
 
our
eventual goal
 
is to
 
provide fleet
 
management services
 
to unaffiliated
 
third-party vessel
 
operators. While
this joint
 
venture may
 
provide us
 
in the
 
future with
 
a potential
 
revenue source,
 
it may
 
also expose
 
us to
risks such
 
as low
 
customer satisfaction, increased
 
operating costs compared
 
to those we
 
would achieve
for our
 
vessels, and
 
inability to
 
adequately staff
 
our vessels
 
with crew
 
that meets
 
our expectations
 
or to
maintain our vessels according to our standards, which would adversely
 
affect our financial condition.
A cyber-attack could materially disrupt our business.
We
 
rely
 
on
 
information
 
technology
 
systems
 
and
 
networks
 
in
 
our
 
operations
 
and
 
administration
 
of
 
our
business, including navigation,
 
provision of services, propulsion,
 
machinery management, power control,
communications and cargo management. We have in
 
place safety and security measures on our
 
vessels
and onshore
 
operations to
 
protect our
 
vessels against
 
cyber-security attacks
 
and any
 
disruption to
 
their
information systems.
 
Information systems are
 
vulnerable to security
 
breaches by computer
 
hackers and
cyber
 
terrorists.
 
We
 
rely
 
on
 
industry
 
accepted
 
security
 
measures
 
and
 
technology
 
to
 
securely
 
maintain
confidential and proprietary
 
information maintained on
 
our information systems.
 
However, these measures
and technology may not
 
adequately prevent security
 
breaches. Our business
 
operations could be
 
targeted
by individuals or groups seeking to sabotage or
 
disrupt our information technology
 
systems and networks,
or to
 
steal data. A
 
successful cyber-attack could materially
 
disrupt our operations,
 
including the safety
 
of
our operations, or
 
lead to unauthorized release
 
of information or
 
alteration of information
 
in our systems.
 
24
Any
 
such
 
attack
 
or
 
other
 
breach
 
of
 
our
 
information
 
technology
 
systems could
 
have
 
a
 
material
 
adverse
effect on our
 
business and results of
 
operations. In addition, the
 
unavailability of the information systems
or the
 
failure of
 
these systems
 
to
 
perform as
 
anticipated for
 
any reason
 
could disrupt
 
our business
 
and
could result in decreased
 
performance and increased
 
operating costs, causing
 
our business and results
 
of
operations to
 
suffer.
 
We
 
do not
 
maintain cyber-liability
 
insurance at
 
this time
 
to
 
cover such
 
losses. Any
significant
 
interruption
 
or
 
failure
 
of
 
our
 
information
 
systems
 
or
 
any
 
significant
 
breach
 
of
 
security
 
could
adversely affect
 
our business
 
and results
 
of operations.
 
We have
 
taken extensive measures
 
to enhance
our
 
security
 
infrastructure,
 
reform
 
network
 
architecture,
 
and
 
implement
 
rigorous
 
security
 
policies,
culminating
 
in
 
ISO
 
27001
 
certification.
 
Key
 
initiatives
 
include
 
establishing
 
security
 
testing,
 
business
continuity,
 
disaster
 
recovery,
 
and
 
incident
 
response
 
programs,
 
as
 
well
 
as
 
developing
 
a
 
robust
 
security
awareness
 
and
 
training
 
program
 
to
 
enhance
 
employee
 
vigilance
 
against
 
cyber
 
threats.
 
Despite
 
these
improvements
 
we
 
cannot
 
assure
 
you
 
that
 
we
 
will
 
be
 
able
 
to
 
successfully
 
thwart
 
all
 
future
 
attacks
 
with
causing material and adverse effect on our business.
Moreover, our risk of cyber-attacks and other sources of security breaches
 
and incidents may be elevated
as
 
a result
 
of the
 
ongoing conflicts
 
between Russia
 
and
 
Ukraine. and
 
the
 
Israel-Hamas conflict.
 
To
 
the
extent
 
such
 
attacks
 
have
 
collateral
 
effects
 
on
 
global
 
critical
 
infrastructure
 
or
 
financial
 
institutions,
 
such
developments could adversely affect our
 
business, operating results and
 
financial condition. At this
 
time, it
is difficult to assess the likelihood of such a threat and any potential impact.
As
 
cyberattacks
 
become
 
increasingly
 
sophisticated,
 
and
 
as
 
tools
 
and
 
resources
 
become
 
more
 
readily
available to
 
malicious third
 
parties, including
 
the risk
 
associated with
 
the use
 
of emerging
 
technologies,
such as
 
artificial intelligence and
 
quantum computing for
 
nefarious purposes, there
 
can be no
 
guarantee
that our actions,
 
security measures
 
and controls
 
designed to
 
prevent, detect
 
or respond
 
to intrusion,
 
to limit
access to data,
 
to prevent destruction
 
or alteration
 
of data or
 
to limit the
 
negative impact
 
from such attacks,
can provide absolute
 
security against compromise. Even
 
without actual breaches of
 
information security,
protection
 
against
 
increasingly
 
sophisticated
 
and
 
prevalent
 
cyberattacks may
 
result
 
in
 
significant
 
future
prevention,
 
detection,
 
response
 
and
 
management
 
costs,
 
or
 
other
 
costs,
 
including
 
the
 
deployment
 
of
additional
 
cybersecurity
 
technologies,
 
engaging
 
third-party
 
experts,
 
deploying
 
additional
 
personnel
 
and
training employees.
 
Further,
 
as cyber
 
threats are
 
continually evolving,
 
our controls
 
and procedures
 
may
become
 
inadequate,
 
and
 
we
 
may
 
be required
 
to
 
devote
 
additional resources
 
to
 
modify
 
or
 
enhance
 
our
systems
 
in
 
the
 
future.
 
Such expenses
 
could
 
have a
 
material adverse
 
effect
 
on
 
our
 
future
 
performance,
results of operations, cash flows and financial position.
Further,
 
in
 
July
 
2023,
 
the
 
SEC
 
adopted
 
amendments
 
to
 
its
 
rules
 
on
 
cybersecurity
 
risk
 
management,
strategy, governance, and
 
incident disclosure.
 
The amendments
 
require us
 
to report
 
material cybersecurity
incidents involving our
 
information systems and
 
periodic reporting regarding our
 
policies and procedures
to identify and manage cybersecurity risks, amongst other disclosures. A
 
failure to disclosure could result
in the
 
imposition of
 
injunctions, fines
 
and other
 
penalties by
 
the
 
SEC. Complying
 
with these
 
obligations
could
 
cause
 
us
 
to
 
incur
 
substantial
 
costs
 
and
 
could
 
increase
 
negative
 
publicity
 
surrounding
 
any
cybersecurity incident.
 
During the
 
year ended
 
December 31,
 
2024, we
 
did not
 
identify any
 
cybersecurity
threats
 
that
 
have
 
materially
 
affected
 
or
 
are
 
reasonably
 
likely
 
to
 
materially
 
affect
 
our
 
business
 
strategy,
results of operations, or financial condition.
For more information on our cybersecurity policies, please see
 
“Item 16K. Cybersecurity.”
Climate
 
change
 
and
 
greenhouse
 
gas
 
restrictions
 
may
 
adversely
 
impact
 
our
 
operations
 
and
markets.
Due to concern over the risk
 
of climate change, a number of
 
countries and the IMO have adopted, or
 
are
considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These regulatory International Maritime Organization’s Marine Environment Protection Committee (“MEPC”) 80 updated the
measures
 
may
 
include,
 
among
 
others,
 
adoption
 
of
 
cap
 
and
 
trade
 
regimes,
 
carbon
 
taxes,
 
increased
efficiency
 
standards
 
and
 
incentives
 
or
 
mandates
 
for
 
renewable
 
energy.
 
In
 
July
 
2023,
 
nations
 
at
 
the
 
 
25
initial strategy
 
to reduce
 
greenhouse gas
 
emissions from
 
ships. The
 
initial strategy
 
identifies ―levels
 
of
ambition to reducing greenhouse gas
 
emissions, including (1) decreasing the
 
carbon intensity from ships
through implementation
 
of further phases
 
of the EEDI
 
for new ships;
 
(2) reducing
 
carbon dioxide
 
emissions
per transport
 
work, as
 
an average
 
across international
 
shipping, by
 
at least
 
20% by
 
2030, compared
 
to
2008 emission
 
levels; and
 
(3) reducing
 
the total
 
annual greenhouse
 
emissions by
 
at least
 
70% by
 
2040
compared to 2008 while pursuing efforts towards phasing them out entirely.
Since January
 
1, 2020,
 
ships have
 
to either
 
remove sulfur
 
from emissions
 
or buy
 
fuel with
 
low sulfur
 
content,
which may lead to
 
increased costs and supplementary investments for
 
ship owners. The interpretation of
"fuel
 
oil used
 
on board"
 
includes use
 
in main
 
engine, auxiliary
 
engines and
 
boilers. We
 
have elected
 
to
comply with this regulation
 
by using 0.5% sulfur fuels
 
on board, which are
 
available around the world but
often at a higher cost
 
and may result in higher
 
costs than other companies
 
that elected to install scrubbers
on their vessels.
In
 
addition,
 
although
 
the
 
emissions
 
of
 
greenhouse
 
gases
 
from
 
international
 
shipping
 
currently
 
are
 
not
subject
 
to
 
the
 
Kyoto
 
Protocol
 
to
 
the
 
United
 
Nations
 
Framework
 
Convention
 
on
 
Climate
 
Change,
 
which
required adopting countries
 
to implement national programs
 
to reduce emissions
 
of certain gases,
 
or the
Paris
 
Agreement
 
(discussed
 
further
 
below),
 
a
 
new
 
treaty
 
may
 
be
 
adopted
 
in
 
the
 
future
 
that
 
includes
restrictions on shipping emissions. Compliance with
 
changes in laws, regulations and
 
obligations relating
to climate
 
change could increase
 
our costs related
 
to operating
 
and maintaining our
 
vessels and require
us
 
to
 
install
 
new
 
emission
 
controls,
 
acquire
 
allowances
 
or
 
pay
 
taxes
 
related
 
to
 
our
 
greenhouse
 
gas
emissions
 
or
 
administer
 
and
 
manage
 
a
 
greenhouse
 
gas
 
emissions
 
program.
 
Revenue
 
generation
 
and
strategic growth opportunities may also be adversely affected.
Increasing
 
scrutiny
 
and
 
changing
 
expectations
 
from
 
investors,
 
lenders
 
and
 
other
 
market
participants with respect
 
to our ESG
 
policies may impose
 
additional costs on
 
us or
 
expose us to
additional risks.
Companies
 
across
 
all
 
industries
 
are
 
facing
 
increasing
 
scrutiny
 
relating
 
to
 
their
 
ESG
 
policies.
 
Investor
advocacy groups,
 
certain institutional
 
investors, investment
 
funds, lenders
 
and other
 
market participants
are increasingly focused on ESG practices and in recent years have placed increasing importance on the
implications and social
 
cost of their
 
investments. Companies
 
which do not
 
adapt to or
 
comply with investor,
lender
 
or
 
other
 
industry
 
shareholder
 
expectations
 
and
 
standards,
 
which
 
are
 
evolving,
 
or
 
which
 
are
perceived
 
to
 
have
 
not
 
responded
 
appropriately
 
to
 
the
 
growing
 
concern
 
for
 
ESG
 
issues,
 
regardless
 
of
whether
 
there
 
is
 
a
 
legal requirement
 
to
 
do
 
so,
 
may
 
suffer
 
from
 
reputational damage
 
and
 
the
 
business,
financial condition, and/or stock price of such a company could
 
be materially and adversely affected.
In
 
February
 
2021,
 
the
 
former
 
Acting
 
Chair
 
of
 
the
 
SEC
 
issued
 
a
 
statement
 
directing
 
the
 
Division
 
of
Corporation Finance
 
to enhance
 
its focus
 
on climate-related
 
disclosure in
 
public company
 
filings and
 
in
March
 
2021
 
the
 
SEC
 
announced
 
the
 
creation
 
of
 
a
 
Climate
 
and
 
ESG
 
Task
 
Force
 
in
 
the
 
Division
 
of
Enforcement (the “Task Force”). The Task Force’s goal is to
 
develop initiatives
 
to proactively identify
 
ESG-
related misconduct consistent with increased investor
 
reliance on climate and ESG-related disclosure
 
and
investment.
To
implement the Task Force’s purpose, the
 
SEC has taken
 
several enforcement actions,
 
with
the first enforcement
 
action taking place
 
in May 2022,
 
and promulgated new
 
rules. On March
 
21, 2022, the
SEC proposed that all
 
public companies are to include
 
extensive climate-related information in their
 
SEC
filings. On
 
May 25,
 
2022, SEC
 
proposed a
 
second set
 
of rules
 
aiming to
 
curb the
 
practice of
 
"greenwashing"
(i.e., making
 
unfounded claims
 
about one's
 
ESG efforts)
 
and would
 
add proposed
 
amendments to
 
rules
and reporting
 
forms that
 
apply to
 
registered investment
 
companies and
 
advisers, advisers
 
exempt from
registration,
 
and
 
business
 
development
 
companies. On
 
March
 
6,
 
2024,
 
the
 
SEC
 
adopted
 
final
 
rules
 
to
require registrants
 
to disclose
 
certain climate-related
 
information in
 
SEC filings
 
of all
 
public companies.
 
The
final rules
 
require companies
 
to disclose,
 
among other
 
things: material
 
climate-related risks;
 
activities to
mitigate or adapt to such risks; information about the registrant's board of directors' oversight of climate-related risks and management’s role in managing material climate-related risks; and information on any
 
26
climate-related
 
targets
 
or
 
goals
 
that
 
are
 
material
 
to
 
the
 
registrant's
 
business,
 
results
 
of
 
operations,
 
or
financial condition.
 
Further, to facilitate
 
investors' assessment
 
of certain
 
climate-related risks,
 
the final
 
rules
require
 
disclosure
 
of
 
Scope
 
1
 
and/or
 
Scope
 
2
 
greenhouse
 
gas
 
(GHG)
 
emissions
 
on
 
a
 
phased-in
 
basis
when those
 
emissions are
 
material; the
 
filing of
 
an attestation
 
report covering
 
the required
 
disclosure of
such
 
registrants’
 
Scope
 
1
 
and/or
 
Scope
 
2
 
emissions,
 
also
 
on
 
a
 
phased-in
 
basis;
 
and
 
disclosure of
 
the
financial statement
 
effects of
 
severe weather
 
events and other
 
natural conditions including,
 
for example,
costs
 
and
 
losses.
 
The
 
final
 
rules
 
include
 
a
 
phased-in
 
compliance
 
period
 
for
 
all
 
registrants,
 
with
 
the
compliance date dependent on the registrant’s filer status and the content
 
of the disclosure.
 
Almost immediately upon release of the
 
rules, multiple lawsuits challenging the rules
 
were filed in federal
court, and the
 
cases were transferred
 
to the
 
Eighth Circuit Court
 
of Appeals.
 
On April
 
4, 2024, the
 
SEC
voluntarily issued a stay of
 
the climate-related disclosure rules
 
pending the completion of
 
judicial review of
the consolidated
 
Eighth Circuit
 
petitions, which
 
is still
 
ongoing.
 
In addition,
 
on June
 
28, 2024,
 
in its
 
decision
of
 
the
 
combined
 
cases
 
of
 
Relentless
 
v.
 
Department
 
of
 
Commerce
 
and
Loper
 
Bright
 
Enterprises
 
v.
Raimondo
, the
 
Supreme Court of the
 
United States narrowed its
 
view of agency
 
authority by overturning
Chevron deference, which required judges to defer to an agency’s interpretation of relevant laws when its
regulations are subject to a legal challenge. This
 
decision will raise the burden for administrative
 
agencies
to prove they have the
 
authority to create a rule and
 
will likely create a hurdle
 
for SEC’s pending climate-
related
 
disclosure rules.
 
The
 
impact
 
of
 
the
 
ongoing litigation
 
with
 
respect
 
to
 
these
 
rules,
 
as
 
well as
 
the
change in administration, is uncertain. Costs
 
of compliance with these new rules
 
and any further climate-
related disclosure rules that are adopted
 
in the future may be significant
 
and may have a material adverse
effect on our future performance, results of operations, cash flows and
 
financial position.
We may
 
face increasing pressures
 
from investors, future
 
lenders and other
 
market participants, who
 
are
increasingly
 
focused
 
on
 
climate
 
change,
 
to
 
prioritize
 
sustainable
 
energy
 
practices,
 
reduce
 
our
 
carbon
footprint and
 
promote sustainability.
 
As a
 
result, we
 
may
 
be required
 
to
 
implement more
 
stringent ESG
procedures or
 
standards so that
 
our existing and
 
future investors
 
and lenders remain
 
invested in us
 
and
make further investments in us.
Additionally,
 
certain
 
investors
 
and
 
lenders
 
may
 
exclude
 
companies,
 
such
 
as
 
us,
 
from
 
their
 
investing
portfolios
 
altogether
 
due
 
to environmental,
 
social and
 
governance
 
factors.
 
These
 
limitations
 
in
 
both
 
the
debt and
 
equity capital
 
markets may
 
affect our
 
ability to
 
grow as
 
our plans
 
for growth
 
may include
 
accessing
the
 
equity
 
and
 
debt
 
capital
 
markets.
 
If
 
those
 
markets
 
are
 
unavailable,
 
or
 
if
 
we
 
are
 
unable
 
to
 
access
alternative means of
 
financing on acceptable
 
terms, or at all,
 
we may be unable
 
to implement our business
strategy,
 
which would have
 
a material
 
adverse effect
 
on our
 
financial condition and
 
results of
 
operations
and impair our ability to service
 
our indebtedness. Further, it is likely that we
 
will incur additional costs and
require
 
additional
 
resources
 
to
 
monitor,
 
report
 
and
 
comply
 
with
 
wide
 
ranging
 
ESG
 
requirements.
 
The
occurrence
 
of
 
any
 
of
 
the
 
foregoing
 
could
 
have
 
a
 
material
 
adverse
 
effect
 
on
 
our
 
business
 
and
 
financial
condition.
 
Moreover,
 
from time to
 
time, in
 
alignment with
 
our sustainability priorities,
 
we may
 
establish and publicly
announce
 
goals
 
and
 
commitments
 
in
 
respect
 
of
 
certain
 
ESG
 
items.
 
While
 
we
 
may
 
create
 
and
 
publish
voluntary disclosures regarding ESG matters from time to time,
 
many of the statements in those voluntary
disclosures are
 
based on
 
hypothetical expectations
 
and assumptions
 
that may
 
or may
 
not be
 
representative
of current or actual risks or events or forecasts of expected risks or events, including
 
the costs associated
therewith.
 
Such
 
expectations and
 
assumptions
 
are
 
necessarily uncertain
 
and
 
may
 
be
 
prone to
 
error
 
or
subject to
 
misinterpretation given
 
the long
 
timelines involved
 
and the
 
lack of
 
an established
 
single approach
to identifying, measuring and reporting on many ESG matters. If we fail to achieve or improperly
 
report on
our progress toward achieving our environmental goals and commitments, the resulting negative publicity
could adversely affect our reputation and/or our access to capital.
27
Our earnings
 
may be
 
adversely affected
 
if we
 
are not
 
able to
 
take advantage of
 
favorable charter
rates.
We
 
charter
 
our
 
dry
 
bulk
 
carriers
 
to
 
customers
 
pursuant
 
to
 
short,
 
medium
 
or
 
long-term
 
time
 
charters.
However,
 
as
 
part
 
of
 
our
 
business
 
strategy,
 
the
 
majority
 
of
 
our
 
vessels
 
are
 
currently
 
fixed
 
on
 
short
 
to
medium-term time charters.
 
We may extend
 
the charter periods
 
for additional
 
vessels in our
 
fleet, including
additional dry bulk
 
carriers that
 
we may purchase
 
in the
 
future, to take
 
advantage of the
 
relatively stable
cash flow and high utilization rates that are associated with long-term time charters. While we believe
 
that
long-term charters provide
 
us with relatively
 
stable cash flows
 
and higher
 
utilization rates than
 
shorter-term
charters, our
 
vessels that
 
are committed
 
to long-term
 
charters may
 
not be
 
available for
 
employment on
short-term charters during periods of increasing short-term charter hire rates when these charters may be
more profitable than long-term charters.
At the expiration of our charters or if
 
a charter terminates early for any
 
reason or when we acquire vessels
charter-free, we
 
will need
 
to charter
 
or recharter
 
our vessels.
 
If an
 
excess of
 
vessels is
 
available on
 
the
spot or short-term
 
market at the
 
time we are
 
seeking to
 
fix new longer-term
 
charters, we
 
may have difficulty
entering into
 
such charters
 
at all
 
or at
 
profitable rates
 
and for
 
any term
 
other than
 
short term
 
and, as
 
a
result,
 
our
 
cash
 
flow may
 
be
 
subject to
 
instability in
 
the
 
mid
 
to
 
long-term. In
 
addition, it
 
would be
 
more
difficult to
 
fix relatively older
 
vessels should there
 
be an
 
oversupply of younger
 
vessels on the
 
market. A
depressed spot
 
market may require
 
us to
 
enter into short-term
 
spot charters
 
based on prevailing
 
market
rates, which could result in a decrease in our cash flow.
We cannot assure
 
you that we will
 
be able to borrow
 
amounts under loan facilities
 
and restrictive
covenants in our loan facilities impose financial and other restrictions
 
on us.
Historically, we have entered into several loan agreements
 
to finance vessel acquisitions,
 
the construction
of
 
newbuildings and
 
working
 
capital.
 
Our
 
ability to
 
borrow
 
amounts under
 
our
 
facilities is
 
subject to
 
the
execution of customary documentation relating to the facility, including security documents, satisfaction of
certain
 
customary
 
conditions precedent
 
and
 
compliance with
 
terms
 
and
 
conditions
 
included
 
in
 
the
 
loan
documents.
 
Prior
 
to
 
each
 
drawdown,
 
we
 
are
 
required,
 
among
 
other
 
things,
 
to
 
provide
 
the
 
lender
 
with
acceptable valuations
 
of the
 
vessels in
 
our fleet
 
confirming that
 
the vessels in
 
our fleet
 
have a
 
minimum
value and that the
 
vessels in our
 
fleet that secure
 
our obligations under
 
the facilities are
 
sufficient to satisfy
minimum security requirements.
 
To the extent that we are not able
 
to satisfy these requirements,
 
including
as a result of a decline
 
in the value of our
 
vessels, we may not be
 
able to draw down
 
the full amount under
the facilities.
 
We will also
 
not be permitted
 
to borrow
 
amounts under
 
the facilities
 
if we experience
 
a change
of control.
The loan facilities
 
also impose operating
 
and financial restrictions
 
on us. These
 
restrictions may limit
 
our
ability to, among other things:
●
pay dividends
 
if there
 
is a
 
default under
 
the loan
 
facilities or
 
if the payment
 
of the
 
dividend would
result in a default or breach of a loan covenants;
●
incur additional indebtedness, including through the issuance of guarantees;
●
change the flag, class or management of our vessels;
●
create liens on our assets;
●
sell our vessels;
●
enter into a
 
time charter
 
or consecutive
 
voyage charters
 
that have a
 
term that
 
exceeds, or
 
which
by virtue of any optional extensions may exceed a certain period;
28
●
merge or consolidate with, or transfer all or substantially all
 
our assets to, another person; and
●
enter into a new line of business.
Therefore, we
 
may need
 
to seek
 
permission from
 
our lenders
 
in order
 
to engage
 
in some
 
corporate actions.
Our lenders’ interests
 
may be different
 
from ours and
 
we cannot guarantee that
 
we will be
 
able to obtain
our
 
lenders'
 
permission when
 
needed.
 
This
 
may
 
limit
 
our
 
ability to
 
finance
 
our
 
future
 
operations, make
acquisitions or pursue business opportunities.
We
 
cannot
 
assure
 
you
 
that
 
we
 
will
 
be
 
able
 
to
 
refinance
 
indebtedness
 
incurred
 
under
 
our
 
loan
facilities and bond.
We cannot assure
 
you that we
 
will be able
 
to refinance our
 
indebtedness with
 
equity offerings or
 
otherwise,
on
 
terms that
 
are
 
acceptable to
 
us or
 
at
 
all. If
 
we
 
are
 
not able
 
to
 
refinance these
 
amounts with
 
the
 
net
proceeds of
 
equity offerings
 
or otherwise,
 
on terms
 
acceptable to us
 
or at
 
all, we
 
will have
 
to dedicate
 
a
greater portion of our cash flow from operations to pay the principal and interest
 
of this indebtedness than
if we were able to refinance such amounts. If we are not able to satisfy these obligations, we may have to
undertake alternative financing plans. The
 
actual or perceived credit quality
 
of our charterers, any defaults
by them, and
 
the market value of
 
our fleet, among other
 
things, may materially affect
 
our ability to obtain
alternative financing.
 
In addition,
 
debt service
 
payments under
 
our loan
 
facilities or
 
alternative financing
may limit funds otherwise available for working capital, capital expenditures and other purposes. If we are
unable to
 
meet our
 
debt obligations,
 
or if
 
we otherwise
 
default under
 
our loan
 
facilities or
 
an alternative
financing arrangement, our lenders could declare the
 
debt, together with accrued interest
 
and fees, to be
immediately due
 
and payable
 
and foreclose
 
on our
 
fleet, which
 
could result
 
in the
 
acceleration of
 
other
indebtedness that we
 
may have at
 
such time and
 
the commencement of
 
similar foreclosure proceedings
by other lenders.
Purchasing
 
and
 
operating
 
secondhand
 
vessels
 
may
 
result
 
in
 
increased
 
operating
 
costs
 
and
reduced operating days, which may adversely affect our earnings.
 
As part of our
 
current business
 
strategy to increase
 
our owned fleet,
 
we may acquire
 
new and secondhand
vessels. While we rigorously
 
inspect previously owned
 
or secondhand vessels prior
 
to purchase, this does
not
 
provide us
 
with the
 
same
 
knowledge about
 
their
 
condition and
 
cost of
 
any required
 
(or
 
anticipated)
repairs
 
that
 
we
 
would
 
have
 
had
 
if
 
these
 
vessels
 
had
 
been
 
built
 
for
 
and
 
operated
 
exclusively
 
by
 
us.
Accordingly, we may
 
not discover defects or other problems with secondhand vessels prior to purchasing
or chartering-in. Any such
 
hidden defects or
 
problems may be expensive
 
to repair and
 
may require us to
put a
 
vessel into
 
drydock, which
 
would reduce
 
our fleet
 
utilization and
 
increase our
 
operating costs.
 
If a
hidden defect
 
or problem
 
is not
 
detected, it
 
may result
 
in accidents
 
or other
 
incidents for
 
which we
 
may
become liable to
 
third parties.
 
The market prices
 
of secondhand and
 
newbuilt vessels
 
also tend
 
to fluctuate
with changes in
 
charter rates and,
 
if we sell
 
the vessels, the
 
sales prices may
 
be less than
 
their carrying
values at that time.
In general, the costs to maintain a vessel in
 
good operating condition increase with the age of the vessel.
As
 
of
 
the
 
date
 
of
 
this
 
annual
 
report,
 
our
 
fleet
 
consists
 
of
 
39
 
vessels
 
of
 
which
 
37
 
vessels,
 
owned
 
and
chartered-in, are in operation,
 
having a combined carrying
 
capacity of 4.1 million dead
 
weight tons, or dwt,
and a weighted average age of
 
11.4 years and
 
two vessels are under construction. As our
 
fleet ages, we
will
 
incur
 
increased
 
costs.
 
Older
 
vessels
 
are
 
typically
 
less
 
fuel-efficient
 
than
 
more
 
recently
 
constructed
vessels
 
due
 
to
 
improvements
 
in
 
engine
 
technology.
 
Cargo
 
insurance
 
rates
 
increase
 
with
 
the
 
age
 
of
 
a
vessel, making older vessels less desirable to charterers.
Furthermore, governmental regulations, safety or other equipment
 
standards related to the age of vessels
may
 
require
 
expenditures for
 
alterations, or
 
the addition
 
of
 
new equipment
 
and may
 
restrict the
 
type
 
of
29
activities
 
in which
 
the
 
vessel may
 
engage. As
 
our
 
vessels age,
 
market conditions
 
may
 
not justify
 
those
expenditures or enable us to operate our vessels profitably during the remainder
 
of their useful lives. As a
result, regulations and
 
standards could have
 
a material adverse
 
effect on our business,
 
financial condition,
results of operations, cash flows and ability to pay dividends.
We are subject to certain risks with respect to our counterparties
 
on contracts, and failure of such
counterparties
 
to
 
meet
 
their
 
obligations could
 
cause
 
us
 
to
 
suffer
 
losses
 
or
 
otherwise adversely
affect our business.
We
 
enter
 
into,
 
among
 
other
 
things,
 
charter
 
parties with
 
our
 
customers. Such
 
agreements
 
subject
 
us
 
to
counterparty risks. The
 
ability and willingness
 
of each of
 
our counterparties to
 
perform its obligations
 
under
a contract with us will depend on
 
a number of factors that are beyond
 
our control and may include, among
other things, general
 
economic conditions,
 
the condition of
 
the maritime and
 
offshore industries, the
 
overall
financial condition of the
 
counterparty, charter rates received for specific types of
 
vessels, work stoppages
or other labor disturbances
 
and various expenses. Should
 
a counterparty fail
 
to honor its obligations
 
under
agreements with us,
 
we could sustain
 
significant losses, which
 
could have a
 
material adverse effect
 
on our
business, financial condition, results of operations and cash
 
flows.
In addition, in
 
depressed market conditions, our
 
charterers may no
 
longer need a
 
vessel that is
 
currently
under charter
 
or may
 
be able
 
to obtain
 
a comparable
 
vessel at
 
lower rates.
 
As a
 
result, charterers
 
may
seek to
 
renegotiate the
 
terms of
 
their existing
 
charter agreements
 
or avoid
 
their obligations
 
under those
contracts. Furthermore, it
 
is possible that
 
parties with whom we
 
have charter contracts may
 
be impacted
by events in Russia and Ukraine and in the Middle East, including in the Red Sea area,
 
and any resulting
sanctions.
 
If
 
our
 
charterers
 
fail
 
to
 
meet
 
their
 
obligations
 
to
 
us
 
or
 
attempt
 
to
 
renegotiate
 
our
 
charter
agreements,
 
it
 
may
 
be
 
difficult
 
to
 
secure substitute
 
employment for
 
such vessels,
 
and
 
any
 
new
 
charter
arrangements we
 
secure may
 
be
 
at
 
lower rates.
 
As
 
a result,
 
we
 
could
 
sustain significant
 
losses, which
could have
 
a material
 
adverse effect
 
on our
 
business, financial condition,
 
results of
 
operations and cash
flows.
 
In
 
the
 
highly
 
competitive
 
international
 
shipping
 
industry,
 
we
 
may
 
not
 
be
 
able
 
to
 
compete
 
for
charters with
 
new entrants
 
or established
 
companies with
 
greater resources,
 
and as
 
a result,
 
we
may be unable to employ our vessels profitably.
The
 
operation
 
of
 
dry
 
bulk
 
vessels
 
and
 
transportation
 
of
 
dry
 
bulk
 
cargoes
 
is
 
extremely
 
competitive
 
and
fragmented. Competition
 
for the transportation
 
of dry bulk
 
cargoes by sea
 
is intense and
 
depends on
 
price,
location,
 
size,
 
age,
 
condition
 
and
 
the
 
acceptability
 
of
 
the
 
vessel
 
and
 
its
 
operators
 
to
 
the
 
charterers.
Competition arises
 
primarily from
 
other vessel
 
owners, some
 
of whom
 
have substantially
 
greater resources
than we do. Due in part
 
to the highly fragmented market,
 
competitors with greater resources
 
than us could
enter the
 
dry bulk
 
shipping industry
 
and operate
 
larger fleets
 
through consolidations
 
or acquisitions
 
and
may
 
be able
 
to
 
offer
 
lower
 
charter rates
 
and
 
higher quality
 
vessels than
 
we
 
are
 
able to
 
offer.
 
If we
 
are
unable to successfully compete with other
 
dry bulk shipping companies, our results
 
of operations may be
adversely impacted.
We
 
may
 
be
 
unable to
 
attract
 
and
 
retain
 
key management
 
personnel and
 
other
 
employees in
 
the
shipping industry, which may
 
negatively impact the effectiveness of our
 
management and results
of operations.
Our success depends
 
to a
 
significant extent upon
 
the abilities and
 
efforts of
 
our management team.
 
Our
success
 
will
 
depend
 
upon
 
our
 
ability
 
to
 
retain
 
key
 
members
 
of
 
our
 
management
 
team
 
and
 
to
 
hire
 
new
members as may
 
be necessary.
 
The loss of
 
any of these
 
individuals could adversely affect
 
our business
prospects
 
and
 
financial
 
condition.
 
Difficulty
 
in
 
hiring
 
and
 
retaining
 
replacement
 
personnel
 
could
 
have
 
a
similar effect.
 
We do
 
not currently,
 
nor do
 
we intend
 
to, maintain
 
“key man”
 
life insurance
 
on any
 
of our
officers or other members of our management team.
30
Technological
 
innovation
 
and
 
quality
 
and
 
efficiency
 
requirements
 
from
 
our
 
customers
 
could
reduce our charter hire income and affect the demand and the value
 
of our vessels.
Our customers have a high and increasing focus on quality and compliance standards with their suppliers
across
 
the
 
entire
 
supply
 
chain,
 
including
 
the
 
shipping
 
and
 
transportation
 
segment.
 
Our
 
continued
compliance with these
 
standards and quality
 
requirements is vital
 
for our operations.
 
The charter hire
 
rates
and the value and operational life
 
of a vessel are determined by a number
 
of factors including the vessel’s
efficiency, operational flexibility and physical
 
life. Efficiency includes
 
speed, fuel economy
 
and the ability
 
to
load
 
and
 
discharge
 
cargo quickly.
 
Flexibility includes
 
the
 
ability to
 
enter harbors,
 
utilize related
 
docking
facilities and pass through canals and straits. The length of a vessel’s physical life is
 
related to its original
design and construction, its maintenance and the impact of the stress
 
of operations. We face competition
from
 
companies
 
with
 
more
 
modern
 
vessels
 
having
 
more
 
fuel
 
efficient
 
designs
 
than
 
our
 
vessels, or
 
eco
vessels, and if
 
new dry bulk
 
vessels are built
 
that are
 
more efficient or
 
more flexible or
 
have longer
 
physical
lives
 
than
 
the
 
current
 
vessels,
 
competition
 
from
 
the
 
current
 
eco
 
vessels
 
and
 
any
 
more
 
technologically
advanced vessels could adversely
 
affect the amount
 
of charter hire payments
 
we receive for our
 
vessels
and the resale value of
 
our vessels could significantly decrease. In these circumstances, we may
 
also be
forced to
 
charter our
 
vessels to
 
less creditworthy
 
charterers, either
 
because top
 
tier charters
 
will not
 
charter
older
 
and
 
less
 
technologically
 
advanced
 
vessels
 
or
 
will
 
only
 
charter
 
such
 
vessels
 
at
 
lower
 
contracted
charter
 
rates
 
than
 
we
 
are
 
able
 
to
 
obtain
 
from
 
these
 
less
 
creditworthy,
 
second
 
tier
 
charterers.
 
Similarly,
technologically advanced vessels are needed to
 
comply with environmental laws the
 
investment in which
along with the
 
foregoing could have
 
a material adverse
 
effect on charter
 
hire payments and
 
resale value
of vessels. This could
 
have an adverse effect
 
on our results of
 
operations, cash flows, financial condition
and ability to pay dividends.
 
Developments in technology could also affect global
 
trade flows and supply chains causing disruptions in
the
 
demand
 
for
 
our
 
vessels.
 
Decreasing
 
the
 
cost
 
of
 
labor
 
through
 
automation
 
and
 
digitization
 
and
increasing
 
the
 
consumers
 
power
 
to
 
demand
 
goods,
 
technology
 
is
 
changing
 
the
 
business
 
models
 
and
production of
 
goods in many
 
industries. Consequently,
 
supply chains are
 
being pulled closer
 
to the end-
customer
 
and
 
are
 
required
 
to
 
be
 
more
 
responsive
 
to
 
changing
 
demand
 
patterns.
 
As
 
a
 
result,
 
fewer
intermediate and raw inputs are
 
traded, which could lead to
 
a decrease in shipping activity.
 
If automation
and digitization become more
 
commercially viable and/or production
 
becomes more regional or
 
local, total
dry-bulk
 
volumes would
 
decrease,
 
which would
 
adversely affect
 
demand for
 
our services.
 
Supply chain
disruptions
 
caused
 
by
 
geopolitical
 
events,
 
rising
 
tariff
 
barriers
 
and
 
environmental
 
concerns
 
may
 
also
accelerate these trends.
We may
 
not have adequate
 
insurance to
 
compensate us if
 
we lose
 
our vessels or
 
to compensate
third parties.
We procure
 
insurance for
 
our fleet
 
against risks
 
commonly insured
 
against by
 
vessel owners
 
and operators.
Our
 
current
 
insurance
 
includes
 
hull
 
and
 
machinery
 
insurance,
 
war
 
risks
 
insurance
 
and
 
protection
 
and
indemnity
 
insurance
 
(which
 
includes
 
environmental
 
damage
 
and
 
pollution
 
insurance).
 
We
 
can
 
give
 
no
assurance that we are
 
adequately insured against all risks
 
or that our insurers
 
will pay a particular
 
claim.
Even if
 
our insurance
 
coverage is
 
adequate to
 
cover our
 
losses, we
 
may not
 
be able
 
to timely
 
obtain a
replacement vessel
 
in the event
 
of a loss.
 
Additionally, our insurers may
 
refuse to pay
 
particular claims
 
and
our insurance may
 
be voidable by
 
the insurers if
 
we take, or
 
fail to take,
 
certain action, such
 
as failing to
maintain certification of our vessels with applicable maritime regulatory organizations. Furthermore, in the
future, we
 
may not
 
be able
 
to obtain
 
adequate insurance coverage
 
at reasonable
 
rates for
 
our fleet.
 
We
may also be
 
subject to calls,
 
or premiums, in
 
amounts based not
 
only on our
 
own claim records
 
but also
the
 
claim
 
records
 
of
 
all
 
other
 
members
 
of
 
the
 
protection
 
and
 
indemnity
 
associations
 
through
 
which
 
we
receive
 
indemnity
 
insurance
 
coverage
 
for
 
tort
 
liability.
 
Our
 
insurance
 
policies
 
also
 
contain
 
deductibles,
limitations
 
and
 
exclusions
 
which,
 
although
 
we
 
believe
 
are
 
standard
 
in
 
the
 
shipping
 
industry,
 
may
nevertheless increase
 
our costs. In
 
addition, we
 
do not presently
 
carry loss-of-hire
 
insurance, which
 
covers
31
the
 
loss
 
of
 
revenue
 
during
 
extended
 
vessel
 
off-hire
 
periods,
 
such
 
as
 
those
 
that
 
might
 
occur
 
during
 
an
unscheduled drydocking due to damage to the vessel from a major accident. Accordingly, any vessel that
is off hire
 
for an extended period
 
of time, due to
 
an accident or
 
otherwise, could have a material
 
adverse
effect on our business, results of operations and financial condition.
We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm
results of operations.
We generate
 
all of
 
our revenues
 
in U.S.
 
dollars but incur
 
around half of
 
our operating
 
expenses and our
general and administrative expenses in currencies other than the U.S. dollar, primarily the Euro. Because
a significant portion of
 
our expenses is incurred
 
in currencies other
 
than the U.S. dollar, our expenses
 
may
from time to
 
time increase relative
 
to our revenues
 
as a result
 
of fluctuations in
 
exchange rates, particularly
between the U.S. dollar and the Euro,
 
which could affect the amount of net
 
income that we report in future
periods. While
 
we historically
 
have not
 
mitigated the
 
risk associated
 
with exchange
 
rate fluctuations
 
through
the use of financial derivatives, we
 
may employ such instruments
 
from time to time in the future
 
in order to
minimize this risk. Our use of
 
financial derivatives would involve
 
certain risks, including the risk
 
that losses
on a
 
hedged position
 
could exceed
 
the nominal
 
amount invested
 
in the
 
instrument and
 
the risk
 
that the
counterparty to the derivative transaction
 
may be unable or
 
unwilling to satisfy its
 
contractual obligations,
which could have an adverse effect on our results.
We depend
 
upon a few
 
significant customers for a
 
large part of
 
our revenues and the
 
loss of one
or more of these customers could adversely affect our financial performance.
 
We have historically
 
derived a significant part
 
of our revenues from
 
a small number of
 
charterers. During
2024, 2023, and
 
2022, approximately
 
11%, 13% and 34%,
 
respectively, of our revenues
 
were derived
 
from
one,
 
one
 
and
 
two
 
charterers,
 
respectively.
 
If
 
one
 
or
 
more
 
of
 
our
 
charterers
 
chooses
 
not
 
to
 
charter
 
our
vessels
 
or
 
is
 
unable
 
to
 
perform
 
under
 
one
 
or
 
more
 
charters
 
with
 
us
 
and
 
we
 
are
 
not
 
able
 
to
 
find
 
a
replacement charter, we could suffer
 
a loss of revenues that could adversely affect our financial condition
and results of operations.
We are a holding company, and we
 
depend on the ability of our subsidiaries to distribute funds to
us in order to satisfy our financial obligations.
We are a holding company and our subsidiaries conduct all of our operations and own all of our
 
operating
assets. We
 
have no significant
 
assets other than
 
the equity
 
interests in our
 
subsidiaries. As a
 
result, our
ability to satisfy our financial obligations depends on our subsidiaries and their ability to distribute
 
funds to
us.
 
If
 
we
 
are
 
unable
 
to
 
obtain
 
funds
 
from
 
our
 
subsidiaries,
 
we
 
may
 
not
 
be
 
able
 
to
 
satisfy
 
our
 
financial
obligations.
Certain of our vessels
 
are owned through joint
 
ventures that we have entered
 
into, and our views
about
 
the
 
operations
 
of
 
those
 
vessels
 
may
 
differ
 
from
 
our
 
joint
 
venture
 
partners
 
and
 
adversely
affect our interest in the joint ventures.
We have entered into
 
two joint venture arrangements pursuant to
 
which we own minority interests in
 
four
commissioning service operation
 
vessel newbuilding contracts
 
through Windward
 
Offshore GmbH
 
& Co.
KG
 
and
 
one
 
dry
 
bulk
 
vessel
 
through
 
Bergen
 
Ultra,
 
and
 
we
 
may
 
enter
 
into
 
additional
 
joint
 
venture
arrangement
 
in
 
the
 
future. As
 
a
 
minority
 
interest
 
holder
 
in
 
these
 
joint
 
ventures,
 
we
 
share
 
voting
 
and
operational control of these joint
 
ventures and the operations of
 
these vessels. Our joint venture partners
may have interests that are different from ours which may result in conflicting views as to the operation of
the vessels owned by
 
the joint ventures or
 
the conduct of the
 
business of the joint
 
ventures. We may
 
not
be able
 
to resolve
 
such conflicts
 
in our
 
favor and
 
such conflicts
 
or differing
 
views could
 
have a
 
material
adverse effect on our interest in these joint ventures.
 
32
Because we
 
are organized
 
under the
 
laws of
 
the Marshall
 
Islands, it
 
may be
 
difficult to
 
serve us
with legal process or enforce judgments against us, our directors
 
or our management.
We are
 
organized under
 
the laws
 
of the
 
Marshall Islands,
 
and substantially
 
all of
 
our assets
 
are located
outside of the United States. In addition, the majority of our directors and officers are non-residents of the
United States, and all or a substantial portion of the assets of these non-residents are located outside the
United States.
 
As a
 
result, it
 
may be
 
difficult or
 
impossible for
 
someone to
 
bring an
 
action against
 
us or
against these
 
individuals in
 
the
 
United
 
States if
 
they
 
believe that
 
their
 
rights
 
have been
 
infringed under
securities laws or
 
otherwise. Even if
 
you are successful
 
in bringing an
 
action of this
 
kind, the laws
 
of the
Marshall Islands and of other jurisdictions may prevent or restrict them from enforcing a judgment against
our assets or the assets of our directors or officers.
The international nature of our operations may make
 
the outcome of any bankruptcy proceedings
difficult to predict.
We are incorporated under the laws of the Republic of the
 
Marshall Islands and we conduct operations in
countries
 
around
 
the
 
world.
 
Consequently,
 
in
 
the
 
event
 
of
 
any
 
bankruptcy,
 
insolvency,
 
liquidation,
dissolution, reorganization or
 
similar proceeding involving
 
us or
 
any of
 
our subsidiaries,
 
bankruptcy laws
other
 
than
 
those
 
of
 
the
 
United
 
States
 
could
 
apply.
 
If
 
we
 
become
 
a
 
debtor
 
under
 
U.S.
 
bankruptcy
 
law,
bankruptcy
 
courts
 
in
 
the
 
United
 
States
 
may
 
seek
 
to
 
assert
 
jurisdiction
 
over
 
all
 
of
 
our
 
assets,
 
wherever
located, including
 
property situated
 
in other countries.
 
There can
 
be no assurance,
 
however, that we would
become
 
a
 
debtor
 
in
 
the
 
United
 
States,
 
or
 
that
 
a
 
U.S.
 
bankruptcy
 
court
 
would
 
be
 
entitled
 
to,
 
or
 
accept,
jurisdiction over such a
 
bankruptcy case, or
 
that courts in other
 
countries that have
 
jurisdiction over us
 
and
our operations would recognize a
 
U.S. bankruptcy court’s jurisdiction
 
if any other bankruptcy
 
court would
determine it had jurisdiction.
If we
 
expand our
 
business further,
 
we may
 
need to
 
improve our
 
operating and
 
financial systems
and will need to recruit suitable employees and crew for our vessels.
Our current operating and financial
 
systems may not be adequate
 
if we further expand the size
 
of our fleet
and our attempts to
 
improve those systems may be
 
ineffective. In addition, if we
 
expand our fleet further,
we
 
will
 
need
 
to
 
recruit
 
suitable
 
additional
 
seafarers
 
and
 
shoreside
 
administrative
 
and
 
management
personnel. While we have not
 
experienced any difficulty in recruiting
 
to date, we cannot guarantee
 
that we
will
 
be
 
able
 
to
 
continue
 
to
 
hire
 
suitable
 
employees
 
if
 
we
 
expand
 
our
 
fleet.
 
If
 
we
 
or
 
our
 
crewing
 
agents
encounter business or financial difficulties, we may not be able to adequately
 
staff our vessels..
Any future growth will primarily depend on our ability to:
●
locate and acquire suitable vessels;
●
identify and consummate acquisitions or joint ventures;
●
enhance our customer base;
●
manage our expansion; and
●
obtain required financing on acceptable terms.
Growing
 
any
 
business
 
by
 
acquisition
 
presents
 
numerous
 
risks,
 
such
 
as
 
undisclosed
 
liabilities
 
and
obligations, the
 
possibility that
 
indemnification agreements
 
will be
 
unenforceable or
 
insufficient to
 
cover
potential
 
losses
 
and
 
difficulties
 
associated
 
with
 
imposing
 
common
 
standards,
 
controls,
 
procedures
 
and
policies,
 
obtaining
 
additional
 
qualified
 
personnel,
 
managing
 
relationships with
 
customers,
 
suppliers
 
and
integrating newly acquired assets and operations into existing infrastructure. If we are unable to grow our financial and operating systems or to recruit suitable employees, should we decide to expand our fleet, our
 
 
 
33
financial performance may be
 
adversely affected, among other
 
things. We cannot give any assurance
 
that
we will be
 
successful in executing
 
any future
 
growth plans or
 
that we will
 
not incur significant
 
expenses and
losses in connection with our future growth.
 
We may have to pay tax on U.S. source income, which would reduce
 
our earnings.
Under
 
the
 
U.S.
 
Internal
 
Revenue
 
Code
 
of
 
1986, as
 
amended,
 
or
 
the
 
Code,
 
50%
 
of
 
the
 
gross
 
shipping
income
 
of
 
a
 
vessel-owning
 
or
 
chartering
 
corporation,
 
such
 
as
 
ourselves
 
and
 
our
 
subsidiaries,
 
that
 
is
attributable to
 
transportation that
 
begins or
 
ends, but
 
that does
 
not both
 
begin and
 
end, in
 
the United
 
States
is characterized as
 
U.S. source shipping
 
income and such
 
income is generally
 
subject to a
 
4% U.S. federal
income tax
 
without allowance
 
for deductions,
 
unless that
 
corporation qualifies
 
for exemption
 
from tax
 
under
Section 883 of the Code and the Treasury Regulations promulgated thereunder.
We expect that
 
we and each
 
of our subsidiaries
 
qualify for this
 
statutory tax exemption
 
for the 2024
 
taxable
year and
 
we will take
 
this position
 
for U.S. federal
 
income tax return
 
reporting purposes. However,
 
there
are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption
in future years
 
and thereby
 
become subject
 
to U.S.
 
federal income
 
tax on
 
our U.S. source
 
shipping income.
For example, in
 
certain circumstances we
 
may no longer
 
qualify for exemption
 
under Code Section 883
 
for
a particular taxable year if shareholders, other than “qualified shareholders”, with a five percent or greater
interest in our common shares owned, in the aggregate, 50% or more of our outstanding common shares
for more
 
than half
 
the days
 
during the
 
taxable year.
 
Due to
 
the factual
 
nature of the
 
issues involved, we
can give no assurances on our tax-exempt status or that of any of our subsidiaries.
If we or
 
our subsidiaries are not
 
entitled to this exemption
 
under Section 883 of
 
the Code for any
 
taxable
year, we or our subsidiaries would
 
be subject for those
 
years to a 4%
 
U.S. federal income
 
tax on our gross
U.S.-source shipping income. The imposition of this taxation
 
could have a negative effect on our business
and would
 
result in
 
decreased earnings
 
available for
 
distribution to
 
our shareholders,
 
although, for
 
the 2024
taxable year, we estimate
 
our maximum
 
U.S. federal
 
income tax
 
liability to be
 
immaterial if we
 
were subject
to
 
this
 
U.S.
 
federal
 
income
 
tax.
 
See
 
“Item
 
10.
 
Additional
 
Information—E.
 
Taxation"
 
for
 
a
 
more
comprehensive discussion of U.S. federal income tax considerations.
U.S. federal tax authorities
 
could treat us as
 
a “passive foreign investment
 
company”, which could
have adverse U.S. federal income tax consequences to U.S. shareholders.
A foreign corporation will be treated as a
 
“passive foreign investment company”, or PFIC, for U.S. federal
income tax purposes if
 
either (1) at least 75%
 
of its gross income
 
for any taxable year
 
consists of certain
types of “passive income”
 
or (2) at least 50% of
 
the average value of the
 
corporation's assets produce or
are
 
held
 
for
 
the
 
production
 
of
 
those
 
types
 
of
 
“passive
 
income.”
 
For
 
purposes
 
of
 
these
 
tests,
 
“passive
income” includes
 
dividends, interest,
 
gains from
 
the sale
 
or exchange
 
of investment
 
property,
 
and rents
and royalties
 
other than rents
 
and royalties which
 
are received
 
from unrelated parties
 
in connection with
the
 
active
 
conduct
 
of
 
a
 
trade
 
or
 
business.
 
For
 
purposes
 
of
 
these
 
tests,
 
income
 
derived
 
from
 
the
performance of services does not constitute “passive income.” U.S. shareholders of a PFIC are subject to
a disadvantageous
 
U.S. federal
 
income tax
 
regime with
 
respect to
 
the income
 
derived by
 
the PFIC,
 
the
distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition
of their shares in the PFIC.
Based on
 
our current
 
and proposed
 
method of
 
operation, we
 
do not
 
believe that
 
we will
 
be a
 
PFIC with
respect to any taxable
 
year. In this regard, we intend
 
to treat the gross income
 
we derive or are
 
deemed to
derive from
 
our time
 
chartering activities
 
as services
 
income, rather
 
than rental
 
income. Accordingly,
 
we
believe that
 
our income
 
from our
 
time chartering activities
 
does not
 
constitute “passive
 
income,” and the
assets that we own and operate in connection with
 
the production of that income do not constitute assets
that produce or are held for the production of “passive income”.
 
 
34
There
 
is
 
substantial
 
legal
 
authority
 
supporting
 
this
 
position
 
consisting
 
of
 
case
 
law
 
and
 
U.S.
 
Internal
Revenue Service, or “IRS”, pronouncements concerning the characterization of income derived from time
charters and voyage charters as services income for other
 
tax purposes. However, it should be noted that
there
 
is
 
also
 
authority
 
which
 
characterizes
 
time
 
charter
 
income
 
as
 
rental
 
income
 
rather
 
than
 
services
income for other tax
 
purposes. Accordingly,
 
no assurance can be given
 
that the IRS or a
 
court of law will
accept this position, and there is a risk
 
that the IRS or a court of
 
law could determine that we are a PFIC.
Moreover, no assurance can be
 
given that we
 
would not constitute
 
a PFIC for any
 
future taxable year
 
if the
nature and extent of our operations changed.
If the
 
IRS or
 
a court
 
of law
 
were to
 
find that
 
we are
 
or have
 
been a
 
PFIC for
 
any taxable
 
year,
 
our U.S.
shareholders would
 
face adverse
 
U.S. federal
 
income tax
 
consequences. Under
 
the PFIC
 
rules, unless
those shareholders make
 
an election available
 
under the Code
 
(which election could
 
itself have adverse
consequences for such shareholders),
 
such shareholders would
 
be subject to
 
U.S. federal income
 
tax at
the then
 
prevailing U.S.
 
federal income
 
tax rates
 
on ordinary
 
income plus
 
interest upon
 
excess distributions
and upon any gain
 
from the disposition of
 
our common stock,
 
as if the excess
 
distribution or gain
 
had been
recognized ratably
 
over the
 
shareholder's holding
 
period of
 
our common
 
stock. See
 
“Item 10.
 
Additional
Information—E.
 
Taxation–United
 
States
 
Ta
 
xation
 
of
 
U.S.
 
Holders–PFIC
 
Status
 
and
 
Significant
 
Tax
Consequences" for
 
a more
 
comprehensive discussion
 
of the
 
U.S. federal
 
income tax
 
consequences to
 
U.S.
holders of our common stock if we are or were to be treated as a PFIC.
Changes in tax
 
laws and unanticipated
 
tax liabilities could
 
materially and adversely
 
affect the taxes
we pay, results of operations and financial results.
Our results
 
of operations
 
and financial
 
results may
 
be affected by
 
tax and
 
other initiatives
 
around the
 
world.
For instance, there
 
is a high
 
level of uncertainty
 
in today’s tax
 
environment stemming from
 
global initiatives
put
 
forth
 
by
 
the
 
Organisation
 
for
 
Economic
 
Co-operation
 
and
 
Development’s
 
(“OECD”)
 
two-pillar
 
base
erosion and profit
 
shifting project. In
 
October 2021, members
 
of the OECD
 
put forth two
 
proposals: (i)
 
Pillar
One reallocates profit to the
 
market jurisdictions where sales
 
arise versus physical presence;
 
and (ii) Pillar
Two
 
compels
 
multinational
 
corporations
 
with €750
 
million
 
or
 
more
 
in
 
annual
 
revenue
 
to
 
pay
 
a
 
global
minimum tax of 15%
 
on income received in
 
each country in which they
 
operate. The reforms aim to level
the playing
 
field between
 
countries by
 
discouraging them
 
from reducing
 
their corporate
 
income taxes
 
to
attract foreign business investment. Over 140 countries agreed to
 
enact the two-pillar solution to address
the challenges arising from the digitalization of the economy
 
and, in 2024, these guidelines were declared
effective and must now be enacted by
 
those OECD member countries.
 
It is possible that these guidelines,
including the global minimum corporate tax rate measure of
 
15%, could increase the burden and costs of
our tax
 
compliance, the
 
amount of
 
taxes we
 
incur in
 
those jurisdictions
 
and our
 
global effective
 
tax rate,
which could have a material adverse impact on our results of
 
operations and financial results.
 
Risks Relating to Our Common Stock
We cannot
 
assure you that
 
our board of
 
directors will continue to
 
declare dividends on shares
 
of
our common stock in the future.
In order to position us to take advantage of market opportunities in a then-deteriorating market, our board
of directors, beginning with the fourth quarter of 2008, suspended
 
our common stock dividend. As a result
of improving market conditions in 2021, our
 
board of directors elected to declare quarterly dividends from
the fourth quarter of 2021 until the
 
fourth quarter of 2024 and two
 
special non-cash dividends. The actual
declaration of future
 
cash dividends, and
 
the establishment of
 
record and payment
 
dates, is subject
 
to final
determination
 
by
 
our
 
board
 
of
 
directors
 
each
 
quarter
 
after
 
its
 
review
 
of
 
the
 
company's
 
financial
performance.
 
We
 
cannot
 
assure
 
you
 
that
 
our
 
board
 
of
 
directors
 
will
 
declare
 
and
 
pay
 
dividends
 
going
forward. Our dividend policy
 
is assessed by
 
our board of
 
directors from time to
 
time, based on
 
prevailing
market conditions,
 
available cash, uses of capital, contingent liabilities, the terms of our loan facilities, our
35
growth strategy and other
 
cash needs, the requirements
 
of Marshall Islands law
 
and other factors deemed
relevant
 
to
 
our
 
board
 
of
 
directors.
 
In
 
addition,
 
other
 
external
 
factors,
 
such
 
as
 
our
 
lenders
 
imposing
restrictions on our
 
ability to pay
 
dividends.
 
Under the terms
 
of our agreements,
 
we may not
 
be permitted
to
 
pay
 
dividends
 
that
 
would
 
result
 
in
 
an
 
event
 
of
 
default
 
or
 
if
 
an
 
event
 
of
 
default
 
has
 
occurred
 
and
 
is
continuing.
Our strategy contemplates that we will finance the acquisition of additional vessels through a combination
of debt
 
and equity
 
financing on
 
terms acceptable
 
to us.
 
If financing
 
is not
 
available to
 
us on
 
acceptable
terms, our board
 
of directors
 
may determine to
 
finance or refinance
 
acquisitions with cash
 
from operations,
which could also reduce or even eliminate the amount of cash available
 
for the payment of dividends.
Marshall
 
Islands
 
law
 
generally
 
prohibits
 
the
 
payment
 
of
 
dividends
 
other
 
than
 
from
 
surplus
 
(retained
earnings and
 
the excess
 
of consideration
 
received for
 
the sale
 
of shares
 
above the
 
par value
 
of the
 
shares),
or while
 
a company
 
is insolvent
 
or would
 
be rendered
 
insolvent by
 
the payment
 
of such
 
a dividend.
 
We
may not have sufficient surplus in the future to pay dividends.
 
In
 
addition, our
 
ability to
 
pay dividends
 
to holders
 
of our
 
common shares
 
will be
 
subject to
 
the rights
 
of
holders
 
of
 
our
 
Series
 
B
 
Preferred
 
Shares,
 
which
 
rank
 
senior
 
to
 
our
 
common
 
shares
 
with
 
respect
 
to
dividends,
 
distributions and
 
payments
 
upon
 
liquidation. No
 
cash dividend
 
may
 
be
 
paid
 
on
 
our
 
common
stock unless full cumulative dividends have been or contemporaneously are being paid or provided for on
all outstanding
 
Series B
 
Preferred Shares
 
for all
 
prior and
 
the then-ending
 
dividend periods.
 
Cumulative
dividends
 
on
 
our
 
Series
 
B
 
Preferred
 
Shares
 
accrue
 
at
 
a
 
rate
 
of
 
8.875%
 
per
 
annum
 
per
 
$25.00
 
stated
liquidation preference
 
per Series
 
B Preferred
 
Share, subject
 
to increase
 
upon the
 
occurrence of
 
certain
events, and are payable, as and if
 
declared by our board of directors,
 
on January 15, April 15, July
 
15 and
October 15 of each year, or, if any such dividend payment date otherwise would
 
fall on a date that is not a
business
 
day,
 
the
 
immediately succeeding
 
business
 
day.
 
For
 
additional information
 
about
 
our
 
Series
 
B
Preferred Shares, please see the section entitled "Description of Registrant's Securities to be Registered"
of our
 
registration statement
 
on Form
 
8-A filed
 
with the
 
SEC on
 
February 13,
 
2014 and
 
incorporated by
reference herein.
The
 
market
 
prices
 
and
 
trading
 
volume
 
of
 
our
 
shares
 
of
 
common
 
stock
 
may
 
experience
 
rapid
 
and
substantial price
 
volatility, which
 
could cause
 
purchasers of
 
our common
 
stock to
 
incur substantial
losses.
Our shares of our common stock may experience
 
similar rapid and substantial price volatility unrelated
to our financial
 
performance, which
 
could cause purchasers
 
of our common
 
stock to incur
 
substantial
losses,
 
which
 
may
 
be
 
unpredictable
 
and
 
not
 
bear
 
any
 
relationship
 
to
 
our
 
business
 
and
 
financial
performance. Extreme fluctuations in
 
the market price of
 
our common stock may
 
occur in response to
strong
 
and
 
atypical
 
retail
 
investor
 
interest,
 
including
 
on
 
social
 
media
 
and
 
online
 
forums,
 
the
 
direct
access by retail investors
 
to broadly available trading
 
platforms, the amount and
 
status of short interest
in
 
our
 
common
 
stock
 
and
 
our
 
other
 
securities,
 
access
 
to
 
margin
 
debt,
 
trading
 
in
 
options
 
and
 
other
derivatives on our shares of common
 
stock and any related hedging
 
and other trading factors:
If
 
there
 
is
 
extreme
 
market
 
volatility
 
and
 
trading
 
patterns
 
in
 
our
 
common
 
stock,
 
it
 
may
 
create
 
several
risks for purchasers of
 
our shares, including the following:
●
the market
 
price
 
of our
 
common stock
 
may
 
experience
 
rapid and
 
substantial
 
increases or
decreases
 
unrelated
 
to
 
our
 
operating
 
performance
 
or
 
prospects,
 
or
 
macro
 
or
 
industry
fundamentals;
●
if
 
our
 
future
 
market
 
capitalization
 
reflects
 
trading
 
dynamics
 
unrelated
 
to
 
our
 
financial
performance or
 
prospects, purchasers
 
of our
 
common stock
 
could incur
 
substantial losses
as prices decline once
 
the level of market volatility
 
has abated;
36
●
if the
 
future market
 
price of
 
our common
 
stock declines,
 
purchasers of
 
shares of
 
common
stock in this offering may be unable to
 
resell such shares at or above the price
 
at which they
acquired
 
them.
 
We
 
cannot
 
assure
 
such
 
purchasers
 
that
 
the
 
market
 
of
 
our
 
common
 
stock
will not fluctuate or decline significantly in the
 
future, in which case investors in this offering
could incur substantial losses.
Further, we may
 
incur rapid and
 
substantial increases
 
or decreases
 
in our common
 
stock price in
 
the
foreseeable future
 
that may
 
not coincide
 
in timing
 
with the
 
disclosure of
 
news or
 
developments by
 
or
affecting us.
 
Accordingly, the
 
market price
 
of our
 
common stock
 
may fluctuate
 
dramatically, and
 
may
decline
 
rapidly,
 
regardless
 
of
 
any
 
developments
 
in
 
our
 
business.
 
Overall,
 
there
 
are
 
various
 
factors,
many
 
of
 
which
 
are
 
beyond
 
our
 
control,
 
that
 
could
 
negatively
 
affect
 
the
 
market
 
price
 
of
 
our
 
common
stock or result in
 
fluctuations in the price or trading
 
volume of our common
 
stock, including:
●
actual or anticipated variations in our annual or quarterly
 
results of operations, including our
earnings estimates and whether we
 
meet market expectations with regard
 
to our earnings;
●
our ability to pay dividends or
 
other distributions;
●
publication
 
of
 
research
 
reports
 
by
 
analysts
 
or
 
others
 
about
 
us
 
or
 
the
 
shipping
 
industry
 
in
which we
 
operate which
 
may be
 
unfavorable, inaccurate,
 
inconsistent or
 
not disseminated
on a regular basis;
●
changes in market valuations of similar
 
companies;
●
market reaction
 
to any
 
additional
 
equity, debt
 
or other
 
securities that
 
we may
 
issue in
 
the
future, and which may or
 
may not dilute the holdings
 
of our existing stockholders;
●
additions or departures of key
 
personnel;
●
actions by institutional or
 
significant stockholders;
●
short interest in our
 
common stock or our
 
other securities and the market
 
response to such
short interest;
●
the
 
dramatic
 
increase
 
in
 
the
 
number
 
of
 
individual
 
holders
 
of
 
our
 
common
 
stock
 
and
 
their
participation in social media platforms
 
targeted at speculative investing;
●
speculation in the press or investment community about our company or industries in which
we operate;
●
strategic actions by us or
 
our competitors, such as strategic
 
alliances, acquisitions or other
investments;
●
legislative, administrative, regulatory or
 
other actions affecting our business,
 
our industry;
●
investigations, proceedings, or litigation
 
that involve or affect
 
us;
●
the occurrence of any of the
 
other risk factors included in
 
this annual report; and
●
general state of the securities markets,
 
and general market and
 
economic conditions.
37
Since we are
 
incorporated in the
 
Marshall Islands, which
 
does not have a
 
well-developed body of
corporate law, you
 
may have more difficulty
 
protecting your interests than
 
shareholders of a U.S.
corporation.
Our corporate affairs are governed by our amended and restated articles of incorporation and bylaws and
by
 
the
 
Marshall
 
Islands
 
Business
 
Corporations
 
Act,
 
or
 
the
 
BCA.
 
The
 
provisions
 
of
 
the
 
BCA
 
resemble
provisions of the
 
corporation laws of
 
a number of
 
states in the
 
United States. However,
 
there have been
few judicial cases in the
 
Marshall Islands interpreting the BCA.
 
The rights and fiduciary responsibilities
 
of
directors under the
 
laws of the
 
Marshall Islands are
 
not as clearly
 
established as the
 
rights and fiduciary
responsibilities of
 
directors under statutes
 
or judicial
 
precedent in existence
 
in the United
 
States. The
 
rights
of
 
shareholders
 
of
 
the
 
Marshall
 
Islands
 
may
 
differ
 
from
 
the
 
rights
 
of
 
shareholders
 
of
 
companies
incorporated in the United States. While the BCA
 
provides that it is to be interpreted according to the laws
of the State of Delaware and other states with substantially similar legislative provisions, there have been
few, if any, court
 
cases interpreting
 
the BCA
 
in the
 
Marshall Islands
 
and we
 
cannot predict
 
whether Marshall
Islands courts
 
would reach
 
the same
 
conclusions as
 
U.S. courts.
 
Thus, you
 
may have
 
more difficulty
 
in
protecting your
 
interests in
 
the face
 
of actions
 
by the
 
management, directors
 
or controlling
 
shareholders
than
 
would
 
shareholders
 
of
 
a
 
corporation
 
incorporated
 
in
 
a
 
U.S.
 
jurisdiction
 
which
 
has
 
developed
 
a
relatively more substantial body of case law.
 
We are a
 
“foreign private issuer” under the
 
NYSE rules, and as such we
 
are entitled to exemption
from certain NYSE
 
corporate governance standards,
 
and you may
 
not have the
 
same protections
afforded to
 
shareholders of
 
companies that
 
are subject
 
to all
 
of the
 
NYSE corporate
 
governance
requirements.
We are a “foreign private issuer” under the
 
securities laws of the United States
 
and the rules of the NYSE.
Under the securities laws of
 
the United States, “foreign private
 
issuers” are subject to different
 
disclosure
requirements than U.S. domiciled
 
registrants, as well
 
as different financial
 
reporting requirements. Under
the NYSE rules, a “foreign private
 
issuer” is subject to less stringent corporate
 
governance requirements.
Subject to
 
certain exceptions,
 
the
 
rules of
 
the
 
NYSE permit
 
a “foreign
 
private issuer”
 
to follow
 
its home
country practice in lieu of the listing requirements of the NYSE.
 
Accordingly, you may
 
not have
 
the same
 
protections afforded
 
to shareholders
 
of companies
 
that are
 
subject
to all of the
 
NYSE corporate governance requirements. For a
 
list of the practices followed
 
by us in lieu
 
of
NYSE’s corporate
 
governance rules, we
 
refer you to
 
the section of
 
this annual report
 
entitled "Corporate
Governance" under Item 16G.
As a
 
Marshall Islands
 
corporation and
 
with some
 
of our
 
subsidiaries being
 
Marshall Islands
 
entities
and
 
also
 
having
 
subsidiaries
 
in
 
other
 
offshore
 
jurisdictions,
 
our
 
operations
 
may
 
be
 
subject
 
to
economic substance requirements, which could impact our business.
We
 
are
 
a
 
Marshall
 
Islands
 
corporation
 
and
 
some
 
of
 
our
 
subsidiaries
 
are
 
Marshall
 
Islands
 
entities.
 
The
Marshall Islands has
 
enacted economic substance laws
 
and regulations with which
 
we may be
 
obligated
to
 
comply.
 
We
 
believe
 
that
 
we
 
and
 
our
 
subsidiaries
 
are
 
compliant
 
with
 
the
 
Marshall
 
Islands
 
economic
substance requirements. However, if there were a change in the requirements or interpretation thereof, or
if there were
 
an unexpected
 
change to
 
our operations,
 
any such
 
change could
 
result in
 
noncompliance with
the economic substance legislation and
 
related fines or other
 
penalties, increased monitoring and audits,
and dissolution of the non-compliant entity,
 
which could have an adverse effect on our business, financial
condition or operating results.
EU Finance ministers rate jurisdictions for tax rates and tax transparency,
 
governance and real economic
activity.
 
Countries that are
 
viewed by such
 
finance ministers as
 
not adequately cooperating,
 
including by
not implementing sufficient
 
standards in
 
respect of the
 
foregoing, may be
 
put on a
 
“grey list” or
 
a “blacklist”.
Effective as of October 17, 2023 the Marshall Islands has been designated as a cooperating jurisdiction for tax purposes.
 
 
 
 
38
If the Marshall Islands is added to the list of non-cooperative jurisdictions in the future
and sanctions or other financial, tax or regulatory measures were applied by
 
European Member States to
countries on
 
the list
 
or further
 
economic substance requirements
 
were imposed
 
by the
 
Marshall Islands,
our business could be harmed.
Certain existing
 
shareholders will
 
be able
 
to exert
 
considerable influence
 
over matters
 
on which
our shareholders are entitled to vote.
As
 
of
 
the
 
date
 
of
 
this
 
annual
 
report,
 
Mrs.
 
Semiramis
 
Paliou,
 
our
 
Chief
 
Executive
 
Officer
 
and
 
Director,
beneficially owns 24,719,462 shares, or approximately 20.3% of
 
our outstanding common stock, which is
held indirectly
 
through entities
 
over which
 
she exercises
 
sole voting
 
power.
 
Mrs. Paliou
 
controls 10,675
shares of
 
Series C
 
Preferred Stock,
 
par value
 
$0.01 per
 
share, issued
 
on January
 
31, 2019,
 
and 400
 
shares
of Series D
 
Preferred Stock,
 
issued on
 
June 22,
 
2021. The
 
Series C Preferred
 
Stock vote
 
with our common
shares and
 
each share
 
of the
 
Series C
 
Preferred Stock
 
entitles the
 
holder thereof
 
to 1,000
 
votes on
 
all
matters submitted to a vote of the common stockholders of the Issuer.
 
The Series D Preferred Stock vote
with
 
the
 
common
 
shares of
 
the
 
Company,
 
and
 
each share
 
of
 
the
 
Series D
 
Preferred
 
Stock
 
entitles the
holder thereof
 
to up
 
to 200,000
 
votes, on
 
all matters
 
submitted to
 
a vote
 
of the
 
stockholders of
 
the Company,
provided however, that
 
to the extent the
 
total number of votes one
 
or more holders of Series
 
D Preferred
Stock is entitled
 
to vote (including
 
any voting power
 
of such holders
 
derived from Series
 
D Preferred
 
Stock,
shares of
 
Common Stock
 
or any
 
other voting
 
security of
 
the Company
 
issued and
 
outstanding as
 
of the
date hereof or
 
that may be
 
issued in the
 
future) on any
 
matter submitted to
 
a vote of
 
stockholders of the
Company
 
would
 
exceed
 
36%
 
of
 
the
 
total
 
number
 
of
 
votes
 
eligible
 
to
 
be
 
cast
 
on
 
such
 
matter,
 
the
 
total
number of
 
votes that
 
holders of
 
Series D
 
Preferred Stock
 
may exercise
 
derived from
 
the Series
 
D Preferred
Stock together with
 
Common Shares and
 
any other voting
 
securities of the
 
Company beneficially owned
by such holder,
 
shall be reduced to 36% of
 
the total number of votes entitled to
 
vote on any matter put to
stockholders of the Company.
 
Through her beneficial ownership of common shares
 
and shares of Series
C
 
Preferred
 
Stock
 
and
 
Series
 
D
 
Preferred
 
Stock,
 
Mrs.
 
Paliou
 
controls
 
36%
 
of
 
the
 
vote
 
of
 
any
 
matter
submitted to the vote
 
of the common shareholders.
 
Please see "Item 7.
 
Major Shareholders and Related
Party Transactions—A. Major
 
Shareholders." While Mrs. Paliou and the entities
 
controlled by Mrs. Paliou
have no
 
agreement, arrangement
 
or understanding
 
relating to
 
the voting
 
of their
 
shares of
 
our common
stock, they
 
are able
 
to influence
 
the outcome
 
of matters
 
on which
 
our shareholders
 
are entitled
 
to vote,
including the election of directors and other significant corporate actions. This concentration of ownership
may
 
have
 
the
 
effect
 
of
 
delaying,
 
deferring
 
or
 
preventing
 
a
 
change
 
in
 
control,
 
merger,
 
consolidation,
takeover or other
 
business combination.
 
This concentration of
 
ownership could
 
also discourage a
 
potential
acquirer from
 
making a
 
tender offer or
 
otherwise attempting
 
to obtain
 
control of
 
us, which
 
could in
 
turn have
an adverse effect
 
on the market
 
price of our
 
shares. So long
 
as our
 
Chief Executive Officer
 
continues to
own a significant amount
 
of our equity,
 
even though the amount
 
held by her represents
 
less than 50% of
our voting power,
 
she will continue to
 
be able to exercise
 
considerable influence over our
 
decisions. The
interests of these shareholders may be different from your interests.
Future sales of our common stock could cause the market price
 
of our common stock to decline.
Our amended
 
and restated
 
articles of
 
incorporation authorize
 
us to
 
issue up
 
to 1,000,000,000
 
shares of
common stock, of which, as
 
of December 31, 2024, 125,203,405
 
shares were outstanding. The
 
number of
shares of
 
common stock available
 
for sale
 
in the public
 
market is limited
 
by restrictions applicable
 
under
securities laws
 
and agreements
 
that we
 
and our
 
executive officers,
 
directors and
 
principal shareholders
have entered into.
Sales of a substantial
 
number of shares of our
 
common stock in the public
 
market, or the perception that
these
 
sales
 
could
 
occur,
 
may
 
depress the
 
market
 
price
 
for
 
our
 
common
 
stock.
 
These
 
sales
 
could
 
also
impair our ability to raise additional capital through the sale of our equity
 
securities in the future.
39
Anti-takeover
 
provisions
 
in
 
our
 
organizational
 
documents
 
could
 
make
 
it
 
difficult
 
for
 
our
shareholders to
 
replace or
 
remove our
 
current board
 
of directors
 
or have
 
the effect
 
of discouraging,
delaying or
 
preventing a
 
merger or
 
acquisition, which
 
could adversely
 
affect
 
the market
 
price of
our common stock.
Several provisions of our amended and
 
restated articles of incorporation and
 
bylaws could make it difficult
for our shareholders to change the composition of our board
 
of directors in any one year, preventing them
from changing the composition
 
of management. In
 
addition, the same
 
provisions may discourage,
 
delay or
prevent a merger or acquisition that shareholders may consider
 
favorable.
These provisions include:
●
authorizing
 
our board
 
of directors
 
to
 
issue “blank
 
check” preferred
 
stock without
 
shareholder
approval;
●
providing for a classified board of directors with staggered, three-year
 
terms;
●
prohibiting cumulative voting in the election of directors;
●
authorizing
 
the
 
removal of
 
directors
 
only for
 
cause and
 
only
 
upon
 
the
 
affirmative
 
vote
 
of
 
the
holders
 
of
 
a
 
majority
 
of
 
the
 
outstanding shares
 
of
 
our
 
common
 
stock
 
entitled
 
to
 
vote
 
for
 
the
directors;
●
prohibiting shareholder action by written consent;
●
limiting the persons who may call special meetings of shareholders;
 
and
●
establishing advance notice requirements for nominations for election to our board of directors
or for proposing matters that can be acted on by shareholders at shareholder
 
meetings.
In addition, we have adopted an Amended and Restated
 
Stockholders Rights Agreement, dated February
2,
 
2024, pursuant
 
to
 
which our
 
board of
 
directors may
 
cause the
 
substantial dilution
 
of
 
any person
 
that
attempts to acquire us without
 
the approval of our board
 
of directors. See “Item 10.
 
Additional Information-
B. Memorandum and Articles of Association-Stockholders Rights
 
Agreement.”
 
These
 
anti-takeover
 
provisions,
 
including
 
provisions
 
of
 
our
 
Stockholders
 
Rights
 
Agreement,
 
could
substantially impede the ability of public shareholders to benefit from a change in control and, as a result,
may adversely affect the
 
market price of our
 
common stock and
 
your ability to
 
realize any potential
 
change
of control premium.
Our Series B Preferred Shares
 
are senior obligations of ours
 
and rank prior to our common
 
shares
with
 
respect
 
to
 
dividends,
 
distributions
 
and
 
payments
 
upon
 
liquidation,
 
which
 
could
 
have
 
an
adverse effect on the value of our common shares.
The rights of the holders
 
of our Series B Preferred Shares
 
rank senior to the obligations to
 
holders of our
common shares. Upon our liquidation, the holders of Series
 
B Preferred Shares will be entitled to receive
a liquidation preference
 
of $25.00 per share,
 
plus all accrued but
 
unpaid dividends, prior and
 
in preference
to any distribution to the holders of any other class of our equity securities, including our common shares.
The existence of the Series B Preferred
 
Shares could have an adverse effect on the value
 
of our common
shares.
40
Risks Relating to Our Series B Preferred Stock
We may not have
 
sufficient cash from our operations to
 
enable us to pay dividends on
 
our Series
B Preferred Shares following the payment of expenses and the establishment
 
of any reserves.
We
 
pay quarterly
 
dividends on
 
our Series
 
B Preferred
 
Shares only
 
from funds
 
legally available
 
for such
purpose when,
 
as and
 
if
 
declared by
 
our board
 
of
 
directors. We
 
may
 
not have
 
sufficient
 
cash available
each
 
quarter to
 
pay dividends.
 
The amount
 
of
 
dividends we
 
can pay
 
on our
 
Series B
 
Preferred Shares
depends upon the amount of cash we generate from and use in our
 
operations, which may fluctuate.
The
 
amount of
 
cash we
 
have
 
available for
 
dividends on
 
our Series
 
B Preferred
 
Shares will
 
not
 
depend
solely on our
 
profitability. The
 
actual amount of cash
 
we have available to
 
pay dividends on our
 
Series B
Preferred Shares depends on many factors, including
 
the following:
●
changes in
 
our operating
 
cash flow, capital expenditure
 
requirements, working
 
capital requirements
and other cash needs;
●
restrictions under our existing or future credit facilities or any future debt securities on our
 
ability to
pay dividends if an
 
event of default has
 
occurred and is
 
continuing or if
 
the payment of the
 
dividend
would result in
 
an event of
 
default, or under
 
certain facilities
 
if it would
 
result in the
 
breach of certain
financial covenants;
●
the amount of any cash reserves established by our board of directors;
 
and
●
restrictions under
 
Marshall Islands
 
law,
 
which generally
 
prohibits the
 
payment of
 
dividends other
than from
 
surplus (retained
 
earnings and
 
the excess
 
of consideration
 
received for
 
the sale
 
of shares
above the par value of the shares) or while a company is insolvent or would be rendered insolvent
by the payment of such a dividend.
The amount of cash we generate from our operations may differ materially
 
from our net income or loss for
the period, which
 
is affected by
 
non-cash items, and
 
our board of
 
directors in its discretion
 
may elect not
to declare
 
any dividends.
 
As a
 
result of
 
these and
 
the other
 
factors mentioned
 
above, we
 
may pay
 
dividends
during
 
periods
 
when
 
we
 
record
 
losses
 
and
 
may
 
not
 
pay
 
dividends
 
during
 
periods
 
when
 
we
 
record
 
net
income.
The Series B Preferred Shares represent perpetual equity
 
interests.
The Series B
 
Preferred Shares represent
 
perpetual equity interests
 
in us and,
 
unlike our indebtedness,
 
will
not give
 
rise to
 
a claim for
 
payment of a
 
principal amount at
 
a particular date.
 
As a
 
result, holders of
 
the
Series
 
B Preferred
 
Shares may
 
be required
 
to
 
bear the
 
financial risks
 
of
 
an investment
 
in the
 
Series B
Preferred Shares for an indefinite period
 
of time. In addition, the Series B
 
Preferred Shares will rank junior
to all our
 
indebtedness and other
 
liabilities, and to
 
any other senior
 
securities we may
 
issue in the
 
future
with respect to assets available to satisfy claims against us.
Our Series
 
B Preferred
 
Shares are
 
subordinate to
 
our indebtedness,
 
and your
 
interests could
 
be
diluted
 
by
 
the
 
issuance
 
of
 
additional
 
preferred
 
shares,
 
including
 
additional
 
Series
 
B
 
Preferred
Shares, and by other transactions.
Our Series B Preferred Shares are subordinated to all of our existing and future indebtedness. Therefore,
our ability to pay dividends on, redeem
 
or pay the liquidation preference on
 
our Series B Preferred Shares
in liquidation or
 
otherwise may be
 
subject to prior
 
payments due to
 
the holders of
 
our indebtedness. Our
existing indebtedness restricts, and our future indebtedness may include restrictions on, our
 
ability to pay
dividends on
 
or
 
redeem preferred
 
shares. Our
 
amended and
 
restated
 
articles of
 
incorporation currently
41
authorize the issuance
 
of up to
 
50,000,000 preferred
 
shares, par value
 
$0.01 per share.
 
Of these preferred
shares, 1,000,000 shares have been
 
designated Series A Participating
 
Preferred Stock, 5,000,000 shares
have been
 
designated Series
 
B Preferred
 
Shares, 10,675
 
are designated
 
as Series
 
C Preferred
 
Shares
and 400 are designated as
 
Series D Preferred Shares. The
 
Series B Preferred Shares are
 
senior in rank
to the
 
Series A
 
Participating Preferred
 
Shares. The
 
issuance of
 
additional Series
 
B Preferred
 
Shares or
other preferred shares
 
on a parity
 
with or senior
 
to the Series B
 
Preferred Shares would
 
dilute the interests
of holders of our
 
Series B Preferred Shares, and any issuance
 
of preferred shares senior to
 
our Series B
Preferred Shares or of additional indebtedness could affect our ability to pay dividends on, redeem or pay
the liquidation preference
 
on our Series
 
B Preferred Shares.
 
The Series B
 
Preferred Shares do
 
not contain
any provisions
 
affording the
 
holders of
 
our Series
 
B Preferred
 
Shares protection
 
in the
 
event of
 
a highly
leveraged or other transaction,
 
including a merger or the
 
sale, lease or conveyance
 
of all or substantially
all our assets
 
or business, which might
 
adversely affect the
 
holders of our Series
 
B Preferred Shares, so
long as the rights of our Series B Preferred Shares are not directly
 
materially and adversely affected.
We may redeem the
 
Series B Preferred
 
Shares, and you
 
may not be
 
able to reinvest
 
the redemption
price you receive in a similar security.
Since February 14, 2019, we
 
may, at our option, redeem Series B Preferred Shares,
 
in whole or in part, at
any time or from time to time. We may have an incentive to redeem Series B Preferred Shares voluntarily
if market conditions allow us
 
to issue other preferred shares
 
or debt securities at a
 
rate that is lower than
the dividend
 
on the
 
Series B
 
Preferred Shares.
 
If we
 
redeem Series
 
B Preferred
 
Shares, then
 
from and
after the
 
redemption date,
 
your dividends
 
will cease
 
to accrue
 
on your
 
Series B
 
Preferred Shares,
 
your
Series B Preferred Shares shall no longer be deemed outstanding and all your rights as a holder of those
shares
 
will
 
terminate,
 
except
 
the
 
right
 
to
 
receive
 
the
 
redemption
 
price
 
plus
 
accumulated
 
and
 
unpaid
dividends, if any,
 
payable upon redemption. If
 
we redeem the
 
Series B Preferred
 
Shares for any
 
reason,
you may not be able to reinvest the redemption price you receive in a similar
 
security.
 
Market interest rates may adversely affect the value of our Series B Preferred
 
Shares.
One of
 
the factors that
 
may influence the
 
price of
 
our Series B
 
Preferred Shares is
 
the dividend yield
 
on
the Series B Preferred Shares
 
(as a percentage of the
 
price of our Series B
 
Preferred Shares) relative to
market
 
interest
 
rates.
 
An
 
increase
 
in
 
market
 
interest
 
rates,
 
which
 
are
 
currently
 
at
 
low
 
levels
 
relative
 
to
historical
 
rates,
 
may
 
lead
 
prospective
 
purchasers
 
of
 
our
 
Series
 
B
 
Preferred
 
Shares
 
to
 
expect
 
a
 
higher
dividend yield, and
 
higher interest rates
 
would likely increase
 
our borrowing costs
 
and potentially decrease
funds available for
 
distribution. Accordingly,
 
higher market
 
interest rates could
 
cause the
 
market price of
our Series B Preferred Shares to decrease.
As a holder of Series B Preferred Shares you have extremely
 
limited voting rights.
Your voting rights as a holder of Series
 
B Preferred Shares are
 
extremely limited. Our common
 
shares are
the only outstanding class or series of our shares carrying full voting rights. Holders of Series B Preferred
Shares have
 
no voting
 
rights other
 
than the
 
ability,
 
subject to
 
certain exceptions,
 
to elect
 
one director
 
if
dividends for six
 
quarterly dividend
 
periods (whether
 
or not consecutive)
 
payable on
 
our Series B
 
Preferred
Shares are in arrears and certain other limited protective voting
 
rights.
Our
 
ability
 
to
 
pay
 
dividends
 
on
 
and
 
to
 
redeem
 
our
 
Series
 
B
 
Preferred
 
Shares
 
is
 
limited
 
by
 
the
requirements of Marshall Islands law.
Marshall Islands
 
law provides that
 
we may
 
pay dividends on
 
and redeem the
 
Series B
 
Preferred Shares
only to the
 
extent that assets
 
are legally available
 
for such purposes.
 
Legally available
 
assets generally
 
are
limited to our surplus, which essentially represents our retained earnings
 
and the excess of consideration
received by us for
 
the sale of shares
 
above the par value
 
of the shares. In
 
addition, under Marshall
 
Islands
42
law we
 
may not
 
pay dividends
 
on or
 
redeem Series
 
B Preferred
 
Shares if
 
we are
 
insolvent or
 
would be
rendered insolvent by the payment of such a dividend or the making
 
of such redemption.
The amount of your
 
liquidation preference is
 
fixed and you will
 
have no right
 
to receive any greater
payment regardless of the circumstances.
The
 
payment
 
due
 
upon
 
liquidation
 
is
 
fixed
 
at
 
the
 
redemption
 
preference
 
of
 
$25.00
 
per
 
share
 
plus
accumulated and
 
unpaid dividends
 
to
 
the
 
date
 
of
 
liquidation. If,
 
in the
 
case of
 
our
 
liquidation, there
 
are
remaining
 
assets
 
to
 
be distributed
 
after
 
payment
 
of
 
this
 
amount,
 
you
 
will
 
have
 
no right
 
to
 
receive
 
or
 
to
participate in these
 
amounts. Furthermore,
 
if the market
 
price for your
 
Series B Preferred
 
Shares is greater
than
 
the
 
liquidation
 
preference,
 
you
 
will
 
have
 
no
 
right
 
to
 
receive
 
the
 
market
 
price
 
from
 
us
 
upon
 
our
liquidation.
Risks Relating to Our Outstanding Warrants
The issuance
 
of our
 
common stock
 
upon the
 
exercise of
 
the Warrants may
 
depress our
 
stock price.
As
 
of
 
December 31,
 
2024, we
 
have
 
issued 9.8
 
million shares
 
of common
 
stock
 
and we
 
could issue
 
up
to 26.5
 
million additional shares
 
of
 
common
 
stock
 
in
 
connection
 
with
 
the
 
exercise
 
of
 
the
 
Warrants.
 
The
issuances of
 
the shares
 
of common
 
stock upon
 
exercise of
 
the Warrants
 
and the
 
resale of
 
such shares
after their issuance,
 
or the perception that
 
such sales could occur,
 
could result in
 
downward pressure on
our
 
stock
 
price
 
and
 
could
 
impact
 
our
 
ability to
 
raise
 
capital
 
through the
 
sale
 
of
 
additional shares
 
in
 
the
future. See
 
“Item 4. Information
 
on the
 
Company— A.
 
History and
 
development of
 
the Company—
 
Warrant
Distribution" for a more detailed discussion of our Warrants.
Item 4.
 
Information on the Company
A.
 
History and development of the Company
Diana Shipping Inc. is a holding company
 
incorporated under the laws of Liberia in
 
March 1999 as Diana
Shipping
 
Investments
 
Corp.
 
In
 
February
 
2005,
 
the
 
Company’s
 
articles
 
of
 
incorporation
 
were
 
amended.
Under the amended
 
and restated articles
 
of incorporation, the
 
Company was
 
renamed Diana Shipping
 
Inc.
and was re-domiciled from the Republic
 
of Liberia to the Republic of
 
the Marshall Islands.
 
Our executive
offices
 
are located
 
at Pendelis
 
16,
 
175 64
 
Palaio Faliro,
 
Athens, Greece.
 
Our telephone
 
number at
 
this
address is +30-210-947-0100. Our agent and authorized representative in the United States is our wholly
owned
 
subsidiary,
 
Bulk
 
Carriers
 
(USA)
 
LLC,
 
established in
 
September
 
2006,
 
in
 
the
 
State
 
of
 
Delaware,
which is located
 
at 2711 Centerville Road, Suite
 
400, Wilmington, Delaware
 
19808. The SEC
 
maintains an
Internet
 
site
 
that
 
contains
 
reports,
 
proxy
 
and
 
information
 
statements,
 
and
 
other
 
information
 
regarding
issuers that file electronically with
 
the SEC. The address of
 
the SEC's Internet site
 
is http://www.sec.gov.
The address of the Company's Internet site is http://www.dianashippinginc.com.
Recent Developments
 
Joint Venture Agreements
In
 
November
 
2023,
 
we
 
entered
 
into
 
a
 
joint
 
venture
 
agreement,
 
with
 
two
 
unrelated
 
companies
 
to
 
form
Windward
 
Offshore
 
GmbH
 
&
 
Co.
 
KG,
 
or
 
Windward,
 
for
 
the
 
purpose
 
of
 
establishing
 
and
 
operating
 
an
offshore wind
 
vessel company.
 
We
 
agreed to
 
contribute Euro
 
25.0 million,
 
being 45.45%
 
of Windward’s
capital,
 
to
 
construct
 
two
 
CSOVs.
 
In
 
January
 
2024,
 
we
 
committed
 
to
 
increase
 
our
 
contribution
 
to
 
the
partnership to Euro 50.0
 
million, being 45.87% of
 
Windward’s capital in
 
order for the partnership to
 
place
orders for two additional CSOVs.
43
On March 12, 2025,
 
we entered into a
 
joint venture agreement with
 
Ecogas Holding AS,
 
pursuant to which
we agreed to contribute $18.5 million, being 80.0%
 
interests of two LPG newbuilding
 
vessels with delivery
in 2027 and with the option for two more.
Tender offer
In
 
December 2024,
 
we
 
announced
 
the
 
commencement of
 
a
 
tender
 
offer
 
to
 
purchase
 
up
 
to
 
15,000,000
shares,
 
or
 
about
 
12.0%,
 
of
 
our
 
outstanding
 
common
 
stock
 
using
 
funds
 
available
 
from
 
cash
 
and
 
cash
equivalents
 
at
 
a
 
price
 
of
 
$2.00
 
per
 
share.
 
The
 
tender
 
offer
 
was
 
settled
 
on
 
January
 
7,
 
2025
 
and
 
we
purchased a total of 11,442,645 shares of common stock for an aggregate amount of $22.9 million.
Stockholders’ Rights Agreement
On
 
February 2,
 
2024,
 
we
 
entered
 
into
 
an
 
Amended
 
and
 
Restated Stockholders
 
Rights
 
Agreement (the
“Rights Agreement”)
 
with Computershare
 
Trust Company, N.A., as Rights
 
Agent, to amend
 
and restate
 
the
Stockholders Rights Agreement, dated January 15, 2016 which, among other things,
 
amends the original
rights agreement to extend the expiration date of the Rights Agreement
 
to February 1, 2034.
Equity Distribution Agreement
On September 9,
 
2024, we
 
entered into Amendment
 
No. 2 to
 
the Equity Distribution
 
Agreement dated
 
April
23, 2021, and amended July 9, 2021, between Maxim and the Company.
Dividends
On March
 
12, 2024,
 
we paid
 
a cash
 
dividend of
 
$0.075 per
 
share, or
 
$9.0 million,
 
to all
 
shareholders of
record as of March 5, 2024.
On June 18, 2024, we paid a cash dividend of $0.075 per share, or $9.4 million,
 
to shareholders of record
as of June 12, 2024.
 
On August
 
30, 2024,
 
we paid
 
a cash
 
dividend of
 
$0.075 per
 
share, or
 
$9.4 million,
 
to shareholders
 
of record
as of August 15, 2024.
On December
 
18, 2024,
 
we paid
 
a cash
 
dividend of
 
$0.01 per
 
share, or
 
$1.3 million,
 
to shareholders
 
of
record as of December 11, 2024.
On February 25, 2025, we declared a cash dividend of $0.01 per
 
share, or $1.1 million, payable on March
21, 2025 to shareholders of record as of March 12, 2025.
Loans
In
 
July
 
2024,
 
we
 
completed
 
the
 
pricing
 
of
 
a
 
$150
 
million
 
private
 
placement
 
of
 
senior
 
unsecured
 
bonds
maturing in July
 
2029 and callable
 
beginning three years
 
after issuance. The
 
bond offering was priced
 
with
a U.S. dollar fixed-rate coupon of
 
8.75%. Interest is payable semi-annually in arrears in
 
July and January
of each year.
 
In November 2024, we completed a $25
 
million tap issue under our senior
 
unsecured bond
issue priced at 102.00% of par value. The bond is trading on the Oslo Børs.
On July
 
25, 2024,
 
we refinanced
 
the outstanding
 
balance of
 
two loan
 
facilities with
 
Nordea Bank
 
amounting
to $167.3 million and
 
originally maturing in
 
October 2027 and June
 
2028 with a facility
 
of the same amount
and maturity extended to July 2030.
44
On October 18,
 
2024, we refinanced the
 
outstanding balance of a
 
loan facility with Danish
 
Ship Finance,
amounting to
 
$80.2 million,
 
originally maturing
 
in April
 
2028, with a
 
facility of
 
the same amount
 
and maturity
extended to April 2031.
 
Warrant Distribution
 
On December 14, 2023,
 
we issued warrants to
 
purchase common shares (the “Warrants”)
 
to the holders
of record of Common Stock
 
as of the close
 
of business on December 6, 2023
 
(the “Record Date”) on the
terms and conditions described in the Warrant Agreement (as defined below and attached as exhibit 2.10
to this
 
annual report). Each
 
holder received one
 
Warrant for
 
every five shares
 
of issued and
 
outstanding
shares of common stock held as of the
 
Record Date (rounded down to the nearest whole number for
 
any
fractional
 
Warrant).
 
Each
 
Warrant
 
entitles
 
the
 
holder
 
to
 
purchase,
 
at
 
the
 
holder’s
 
sole
 
and
 
exclusive
election,
 
at
 
the
 
exercise
 
price,
 
one
 
share
 
of
 
common
 
stock,
 
subject
 
to
 
adjustments,
 
plus
 
to
 
the
 
extent
described
 
below,
 
the
 
Bonus
 
Share
 
Fraction.
 
A
 
Bonus
 
Share
 
Fraction
 
entitles
 
a
 
holder
 
to
 
receive
 
an
additional 0.5 of
 
a share
 
of common stock
 
for each Warrant
 
exercised (the
 
“Bonus Share Fraction”)
 
without
payment of
 
any additional
 
exercise price,
 
also subject
 
to adjustments.
 
Since the
 
dividend ex-Date
 
on March
12, 2025, each
 
Warrant entitles the
 
holder to purchase 1.09653
 
shares of common stock
 
plus the Bonus
Share Fraction adjusted to 0.54827 of a share of common stock
 
for each Warrant exercised.
The right
 
to receive
 
the Bonus
 
Share Fraction
 
will expire
 
at 5:00
 
p.m. New
 
York City time (the
 
“Bonus Share
Expiration Date”) upon
 
the earlier of (i)
 
the date specified
 
by the Registrant
 
upon not less than
 
20 business
days’
 
notice
 
and
 
(ii)
 
the
 
first
 
business
 
day
 
following
 
the
 
last
 
day
 
of
 
the
 
first
 
30
 
consecutive trading
 
day
period
 
in
 
which
 
the
 
daily
 
VWAP
 
of
 
the
 
shares
 
of
 
common
 
stock
 
has
 
been
 
at
 
least
 
equal
 
to
 
the
 
then
applicable
 
trigger
 
price
 
for
 
at
 
least
 
20
 
trading
 
days
 
(whether
 
or
 
not
 
consecutive)
 
(the
 
“Bonus
 
Price
Condition”). Any Warrant
 
exercised with an
 
exercise date after
 
the Bonus Share
 
Expiration Date will
 
not be
entitled to any Bonus Share
 
Fraction. The Company will
 
make a public announcement
 
of the Bonus Share
Expiration Date
 
(i) at least
 
20 business
 
days prior
 
to such date,
 
in the
 
case of the
 
Company setting
 
a Bonus
Share Expiration Date
 
and (ii)
 
prior to market
 
open on the
 
Bonus Share Expiration
 
Date in the
 
case of
 
a
Bonus Price Condition.
Unless earlier redeemed, the Warrants will expire
 
and cease to be exercisable at
 
5:00 p.m. New York City
time on December 14, 2026 (the “Expiration Date”).
In connection with the Warrant distribution, we filed a prospectus
 
supplement, dated December 14, 2023,
pursuant to a shelf registration statement
 
on Form F-3 declared effective
 
on July 9, 2021, registering
 
up to
33,919,605 shares of common stock to be issued upon
 
exercise of the Warrants under the
 
Securities Act
of
 
1933, as
 
amended.
 
The
 
shelf
 
registration
 
statement on
 
Form
 
F-3
 
declared
 
effective
 
on
 
July
 
9,
 
2021
expired
 
and
 
the
 
Warrant
 
distribution
 
is
 
now
 
being
 
offered
 
pursuant
 
to
 
our
 
existing
 
shelf
 
registration
statement on Form F-3 declared effective on September 9, 2024.
The
 
Warrants
 
commenced
 
trading
 
on
 
the
 
New
 
York
 
Stock
 
Exchange
 
under
 
the
 
ticker
 
“DSX
 
WS”
 
on
December 14, 2023.
As of
 
the date
 
of this
 
annual report,
 
out of
 
the 22,613,070
 
Warrants distributed
 
in this
 
transaction, 6,397,117
Warrants have been exercised and 9,844,781 common shares have been issued.
Appointment of new Co-Chief Financial Officer
Effective January
 
17, 2025,
 
we appointed
 
Ms. Maria
 
Dede as
 
the Company’s
 
Co-Chief Financial
 
Officer
(Operations Finance). Mr. Ioannis Zafirakis, the
 
Company’s current Chief Financial
 
Officer, will continue to
serve in the Co-Chief Financial Officer (Strategic Finance) position with
 
Ms. Dede.
45
Vessels under construction
In February
 
2024, we
 
signed an
 
agreement
 
with an
 
unaffiliated third
 
party, for the
 
construction of
 
two 81,200
dwt methanol
 
dual fuel
 
new-building
 
Kamsarmax dry
 
bulk vessels
 
to be
 
built at
 
Tsuneishi Group (Zhoushan)
Shipbuilding Inc., China. The vessels
 
are expected to be delivered to
 
the Company by the second
 
half of
2027 and the first half of 2028.
Vessel acquisitions
In
 
August
 
2022,
 
we
 
entered
 
into
 
a
 
master
 
agreement
 
with
 
an
 
unaffiliated
 
third
 
party,
 
to
 
acquire
 
nine
Ultramax vessels for
 
an aggregate purchase
 
price of $330
 
million, of which
 
$220 million payable
 
in cash
and
 
$110
 
million
 
through
 
an
 
aggregate
 
of
 
18,487,393
 
newly
 
issued
 
common
 
shares,
 
issuable
 
on
 
the
delivery
 
of
 
each
 
vessel.
 
In
 
addition
 
to
 
the
 
master
 
agreement,
 
we
 
also
 
entered
 
into
 
nine
 
separate
memoranda of agreement for the acquisition of each vessel and issued nine warrants to the seller, for the
issuance of the shares, exercisable on the delivery date of each vessel. We took delivery of eight vessels
in December 2022 and the ninth vessel in January 2023.
 
In
 
March
 
2022,
 
we
 
took
 
delivery
 
of
 
Florida,
 
a
 
Japanese
 
new-building
 
Capesize
 
dry
 
bulk
 
vessel
 
of
approximately 181,500 dwt,
 
which we agreed
 
to acquire from an
 
unaffiliated third party in
 
December 2020.
In February
 
2022, we
 
took delivery
 
of Leonidas
 
P.C. (ex Magnolia), a
 
2011 built Kamsarmax
 
dry bulk
 
vessel
of 82,165 dwt, which we agreed to acquire from an unaffiliated third party in July
 
2021.
 
Vessel disposals
In February 2025, we agreed to sell to an unrelated third party, the vessel Alcmene, for $11.9
 
million. The
vessel was delivered to her new owners on March 13, 2025.
In February 2024, we agreed to sell to an unrelated third party,
 
the vessel Houston, for $23.3 million. The
vessel was delivered to her new owners on September 4, 2024.
In January 2024,
 
we agreed to
 
sell to an
 
unrelated third party,
 
the vessel Artemis, for
 
the purchase price
of $13.0 million. The vessel was delivered to her new owners on
 
March 5, 2024.
 
In October
 
2023, we
 
agreed to
 
sell to
 
an unrelated
 
third party,
 
the vessel
 
Boston, for
 
$18.0 million.
 
The
vessel was delivered to her new owners on December 6, 2023.
In February
 
2023, we
 
agreed to
 
sell to
 
OceanPal, a
 
related party,
 
the vessel
 
Melia, for
 
$14.0 million,
 
of
which $4.0
 
million was
 
paid in
 
cash and
 
$10.0 million through
 
13,157 of
 
OceanPal Series
 
D Convertible
Preferred Shares. The vessel was delivered to her
 
new owners on February 8, 2023.
In
 
January
 
2023,
 
we
 
agreed
 
to
 
sell
 
to
 
an
 
unrelated
 
third
 
party,
 
the
 
vessel Aliki,
 
for
 
$15.08
 
million.
 
The
vessel was delivered to her new owners on February 8, 2023.
In June 2022, we
 
sold to OceanPal Inc.,
 
or OceanPal, a related party
 
company, the
 
vessel Baltimore, for
a sale price of $22.0 million before commissions, of which $4.4 million was paid in cash and
 
$17.6 million
through
 
25,000
 
Series
 
D
 
Convertible
 
Preferred
 
shares.
 
The
 
vessel
 
was
 
delivered
 
to
 
OceanPal
 
on
September 20, 2022.
46
B.
 
Business overview
We specialize
 
in the ownership
 
and bareboat charter-in
 
of dry bulk
 
vessels, determined as one
 
business
segment. Each of our vessels is owned through a separate wholly-owned
 
subsidiary.
 
As of
 
the date
 
of this
 
report, our
 
fleet consisted
 
of 39
 
vessels of
 
which 37
 
in operation,
 
owned and
 
chartered-
in, having
 
a combined carrying
 
capacity of
 
4.1 million dead weight
 
tons, or
 
dwt, and
 
a weighted average
age of
 
11.4 years.
 
We also
 
have two
 
Kamsarmax vessels under
 
construction with expected
 
deliveries in
2027 and 2028.
 
As of December
 
31, 2024,
 
we had a
 
fleet of 38
 
dry bulk
 
carriers, owned and
 
chartered-in, consisting
 
of nine
Ultramax,
 
six
 
Panamax,
 
six
 
Kamsarmax,
 
five
 
Post-Panamax,
 
eight
 
Capesize
 
and
 
four
 
Newcastlemax
vessels, having
 
a combined
 
carrying capacity
 
of approximately
 
4.2 million
 
dwt and a
 
weighted average
 
age
of 11.3 years.
 
As of December
 
31, 2023,
 
we had a
 
fleet of 40
 
dry bulk
 
carriers, owned and
 
chartered-in, consisting
 
of nine
Ultramax, seven
 
Panamax, six
 
Kamsarmax, five
 
Post-Panamax, nine
 
Capesize and
 
four Newcastlemax
vessels, having
 
a combined
 
carrying capacity
 
of approximately
 
4.5 million
 
dwt and a
 
weighted average
 
age
of 10.5 years.
As
 
of
 
December
 
31,
 
2022,
 
we
 
had
 
a
 
fleet
 
of
 
42
 
dry
 
bulk
 
carriers,
 
consisting
 
of
 
eight
 
Ultramax,
 
eight
Panamax, six Kamsarmax, five Post-Panamax, eleven Capesize and four
 
Newcastlemax vessels,
 
having
a combined carrying capacity of approximately 4.9 million dwt and a weighted average age of 10.2 years.
As of
 
December 31,
 
2022, the
 
Company had
 
agreed to
 
acquire a
 
2016 built
 
Ultramax dry
 
bulk vessel
 
of
60,309 dwt, delivered on January 30, 2023.
 
During
 
2024,
 
2023
 
and
 
2022,
 
we
 
had
 
a
 
fleet
 
utilization
 
of
 
99.7%,
 
99.7%
 
and
 
98.9%,
 
respectively,
 
our
vessels achieved daily
 
time charter equivalent
 
rates of
 
$15,267, $16,713 and
 
$22,735, respectively,
 
and
we generated revenues of $228.2 million, $262.1 million and $290.0
 
million, respectively.
We
 
operate
 
our
 
vessels
 
worldwide,
 
in
 
markets
 
that
 
have
 
historically
 
exhibited
 
seasonal
 
variations
 
in
demand and,
 
as a
 
result, in
 
charter hire
 
rates. The
 
dry bulk
 
carrier market
 
is typically
 
stronger in the
 
fall
and winter months in
 
anticipation of increased
 
consumption of coal and
 
other raw materials
 
in the northern
hemisphere during the winter months. In addition, unpredictable weather patterns
 
in these months tend to
disrupt vessel scheduling
 
and supplies of certain
 
commodities. This seasonality
 
has a limited direct
 
impact
on our operating
 
results as we
 
charter our vessels to
 
customers pursuant to medium-term
 
and long-term
time charter agreements.
Management of Our Fleet
The commercial and technical management of our fleet,
 
owned and bareboat chartered-in, as well as the
provision of administrative services
 
relating to the fleet’s
 
operations, are carried out
 
by our wholly-owned
subsidiary, Diana Shipping Services S.A., which we refer to as DSS, and Diana Wilhelmsen Management
Limited, a 50/50 joint
 
venture with Wilhelmsen
 
Ship Management, which
 
we refer to as
 
DWM. In exchange
for
 
providing
 
us
 
with
 
commercial
 
and
 
technical
 
services,
 
personnel
 
and
 
office
 
space,
 
we
 
pay
 
DSS
 
a
commission,
 
which
 
is
 
a
 
percentage
 
of
 
the
 
managed
 
vessels’
 
gross
 
revenues,
 
a
 
fixed
 
monthly
 
fee
 
per
managed vessel and an additional monthly fee for the administrative services provided to Diana Shipping
Inc. Such services may
 
include budgeting, reporting,
 
monitoring of bank accounts,
 
compliance with banks,
payroll
 
services
 
and
 
any
 
other
 
possible
 
service
 
that
 
Diana
 
Shipping
 
Inc.
 
would
 
require
 
to
 
perform
 
its
operations. Similarly, in exchange
 
for providing
 
us with
 
commercial and
 
technical services,
 
we pay
 
to DWM
a commission
 
which is
 
a percentage
 
of the
 
managed vessels’
 
gross revenues
 
and a
 
fixed management
monthly fee
 
for each
 
managed vessel.
 
The amounts
 
deriving from
 
the agreements
 
with DSS
 
are considered
inter-company transactions and, therefore, are eliminated from
 
our consolidated financial statements. The
47
management fees
 
and commissions
 
deriving from
 
the agreements
 
with DWM
 
are included
 
in our
 
statement
of income in “Management fees to a related party” and “Voyage Expenses”.
Steamship
 
Shipbroking
 
Enterprises
 
Inc.,
 
or
 
Steamship,
 
a
 
related
 
party
 
controlled
 
by
 
our
 
CEO
 
Mrs.
Semiramis Paliou,
 
provides brokerage services to us, since June 1, 2010. Brokerage fees are included in
“General
 
and
 
Administrative
 
expenses”
 
in
 
our
 
statement
 
of
 
income.
 
The
 
terms
 
of
 
this
 
relationship
 
are
currently governed by a Brokerage Services Agreement dated
 
February 25, 2025.
The following table presents certain information concerning the dry bulk carriers in our fleet, as of the date Fleet Employment (As of March 19, 2025)
of this annual report.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
48
VESSEL
SISTE
R
SHIPS*
GROSS RATE
(USD PER
DAY)
COM**
CHARTERERS
DELIVERY DATE
TO
CHARTERERS***
REDELIVERY DATE TO
OWNERS****
NOTES
BUILT DWT
9 Ultramax Bulk Carriers
1
DSI Phoenix
A
16,500
5.00%
Bulk Trading SA
6-May-24
1/Aug/2025 - 30/Sep/2025
2017 60,456
2
DSI Pollux
A
14,000
4.75%
Cargill Ocean Transportation
(Singapore) Pte. Ltd.
28-Dec-23
20/Aug/2025 - 20/Oct/2025
2015 60,446
3
DSI Pyxis
A
13,100
5.00%
Stone Shipping Ltd
8-Nov-24
20/Feb/2026 - 20/Apr/2026
2018 60,362
4
DSI Polaris
A
15,400
5.00%
Stone Shipping Ltd
20-Jul-24
1/Jun/2025 - 15/Aug/2025
2018 60,404
5
DSI Pegasus
A
15,250
4.75%
Cargill Ocean Transportation
(Singapore) Pte. Ltd
5-Sep-24
1/Jun/2025 - 1/Aug/2025
2015 60,508
6
DSI Aquarius
B
13,300
5.00%
Bunge SA, Geneva
6-Dec-24
6/Oct/2025 - 21/Dec/2025
2016 60,309
7
DSI Aquila
B
12,500
5.00%
Western Bulk Carriers AS
11-Nov-23
21-Jan-25
2015 60,309
12,250
5.00%
21-Jan-25
23/Jun/2025 - 8/Aug/2025
1
8
DSI Altair
B
15,750
5.00%
Propel Shipping Pte. Ltd.
28-Sep-24
1/Nov/2025 - 31/Dec/2025
2016 60,309
9
DSI Andromeda
B
13,500
5.00%
Bunge SA, Geneva
27-Nov-23
28-Mar-25
2,3
2016 60,309
6 Panamax Bulk Carriers
10
LETO
16,000
5.00%
ASL Bulk Shipping Limited
3-May-24
9-Mar-25
4
2010 81,297
11
SELINA
C
10,500
5.00%
Raffles Shipping International Pte.
Ltd.
17-Oct-24
10-Apr-25
3
2010 75,700
12
MAERA
C
8,400
5.00%
China Resource Chartering Limited
15-Dec-24
20/Sep/2025-20/Nov/2025
2013 75,403
13
ISMENE
12,650
5.00%
Paralos Shipping Pte., Ltd.
13-Sep-23
15/Apr/2025 - 30/Jun/2025
2013 77,901
14
CRYSTALIA
D
13,900
5.00%
Louis Dreyfus Company Freight
Asia Pte. Ltd.
4-May-24
4/Feb/2026 - 4/Jun/2026
2014 77,525
15
ATALANDI
D
14,600
4.75%
Cargill International SA, Geveva
20-Jul-24
1/Jun/2025 - 31/Jul/2025
2014 77,529
6 Kamsarmax Bulk Carriers
16
MAIA
E
11,600
5.00%
Paralos Shipping Pte. Ltd.
9-Dec-24
1/Nov/2025 - 31/Dec/2025
2009 82,193
17
MYRSINI
E
17,100
5.00%
Cobelfret S.A. Luxembourg
25-Jun-24
9-Feb-25
5
2010 82,117
13,000
4.75%
Cargill International SA, Geneva
26-Feb-25
1/Jan/2026 - 28/Feb/2026
18
MEDUSA
E
14,250
5.00%
ASL Bulk Shipping Limited
14-May-23
21-Feb-25
6
2010 82,194
13,000
4.75%
Cargill International SA, Geneva
16-Mar-25
15/May/2026 - 15/Jul/2026
19
MYRTO
E
12,000
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
23-Dec-24
1/Mar/2026 - 15/May/2026
2013 82,131
20
ASTARTE
14,000
5.00%
Paralos Shipping Pte. Ltd.
19-Aug-24
15/Jul/2025 - 15/Sep/2025
2013 81,513
21
LEONIDAS P. C.
17,000
5.00%
Ming Wah International Shipping
Company Limited
22-Feb-24
20/Aug/2025 - 20/Oct/2025
2011 82,165
5 Post-Panamax Bulk Carriers
22
ALCMENE
6,000
5.00%
Lestari Shipping Pte Ltd
28-Dec-24
16-Jan-25
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
49
2010 93,193
2,000
5.00%
Pan Ocean Co., Ltd.
16-Jan-25
8-Mar-25
7
23
AMPHITRITE
F
15,000
5.00%
Cobelfret S.A., Luxembourg
13-Jan-24
8-Jan-25
8
2012 98,697
12,100
5.00%
8-Jan-25
1/Jan/2026 - 15/Mar/2026
9
24
POLYMNIA
F
17,500
5.00%
Reachy Shipping (SGP) Pte. Ltd.
8-Jun-24
1/Aug/2025 - 30/Sept/2025
2012 98,704
25
ELECTRA
G
14,000
4.75%
Aquavita International S.A.
3-Jun-24
15/Oct/2025 - 31/Dec/2025
2013 87,150
26
PHAIDRA
G
12,000
4.75%
Aquavita International S.A.
12-Oct-24
1/May/2025 - 15/Jul/2025
2013 87,146
8 Capesize Bulk Carriers
27
SEMIRIO
H
14,150
5.00%
Solebay Shipping Cape Company
Limited, Hong Kong
18-Aug-23
11-Feb-25
2007 174,261
16,650
5.00%
11-Feb-25
15/Feb/2026 - 15/Apr/2026
28
NEW YORK
H
16,000
5.00%
STX Green Logis Ltd
30-Nov-24
11-Jan-25
2010 177,773
17,600
5.00%
SwissMarine Pte. Ltd., Singapore
11-Jan-25
15/Jan/2026 - 30/Mar/2026
10,11
29
SEATTLE
I
17,500
5.00%
Solebay Shipping Cape Company
Limited, Hong Kong
1-Oct-23
15/Jul/2025 - 30/Sep/2025
2011 179,362
30
P.
 
S. PALIOS
I
27,150
5.00%
Bohai Shipping (HEBEI) Co., Ltd
7-May-24
1/Nov/2025 - 31/Dec/2025
2013 179,134
31
G. P. ZAFIRAKIS
J
26,800
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
16-Sep-24
16/Aug/2026 - 16/Nov/2026
2014 179,492
32
SANTA BARBARA
J
22,000
5.00%
Mitsui O.S.K. Lines, Ltd.
27-Dec-24
20/Oct/2025 - 20/Dec/2025
12
2015 179,426
33
NEW ORLEANS
20,000
5.00%
Kawasaki Kisen Kaisha, Ltd.
7-Dec-23
15/Aug/2025 - 31/Oct/2025
12
2015 180,960
34
FLORIDA
25,900
5.00%
Bunge S.A., Geneva
29-Mar-22
29/Jan/2027 - 29/May/2027
2
2022 182,063
4 Newcastlemax Bulk Carriers
35
LOS ANGELES
K
28,700
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
20-Jul-24
1/Oct/2025 - 15/Dec/2025
2012 206,104
36
PHILADELPHIA
K
22,500
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
4-Feb-24
20/Apr/2025 - 20/Jul/2025
2012 206,040
37
SAN FRANCISCO
L
22,000
5.00%
SwissMarine Pte. Ltd., Singapore
18-Feb-23
1-Mar-25
2017 208,006
26,000
5.00%
1-Mar-25
25/Oct/2026 - 25/Dec/2026
38
NEWPORT NEWS
L
20,000
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
20-Sep-23
15/Mar/2025 - 10/Jun/2025
3
2017 208,021
* Each dry bulk carrier is a “sister ship”, or closely
 
similar, to other dry bulk carriers that have the same letter.
** Total commission percentage paid to third parties.
*** In case of newly acquired vessel with
 
time charter attached, this date refers to the expected/actual
 
date of delivery of the vessel to the Company.
**** Range of redelivery dates, with the actual
 
date of redelivery being at the Charterers’
 
option, but subject to the terms, conditions, and
 
exceptions of the
particular charterparty.
1Charterers will compensate the Owners at a rate
 
of 115% of the average Baltic Tess 58 Supramax Index as published by the Baltic Exchange on a daily
basis or double the vessel’s present charter party rate, whichever
 
is higher, for the excess period commencing from January 10, 2025 until
 
the actual
redelivery date.
2Bareboat chartered-in for a period of ten years.
3Based on latest information.
4Currently without an active charterparty.
5Vessel on scheduled drydocking from February 9, 2025 until February
 
26, 2025.
6Vessel on scheduled drydocking from February 21, 2025 until March
 
16, 2025.
7Vessel has been sold and it is delivered to her new Owners on
 
March 13, 2025.
8The charter rate was US$12,250 per day for
 
the first thirty (30) days of the charter period.
50
9The charter rate will be US$8,750 per day for
 
the first fifty (50) days of the charter period.
10The charter rate will be US$6,300 per
 
day for the first trip of the charter period.
11Vessel currently off hire for drydocking.
12Bareboat chartered-in for a period of eight years.
Our Customers
Our customers include
 
regional and international
 
companies,
 
mainly with concentrations
 
below 10% of
 
our
gross revenues. During 2024,
 
only one of our
 
charterers accounted for 11% of our
 
revenues.
 
During 2023,
one of our
 
charterers accounted
 
for 13% of
 
our revenues and
 
during 2022,
 
two of our
 
charterers accounted
for 34% of our revenues,
 
in aggregate.
 
We charter our
 
dry bulk
 
carriers, owned
 
and bareboat
 
chartered-in, to
 
customers pursuant
 
to time charters.
Under our time charters, the charterer typically
 
pays us a fixed daily charter hire rate and
 
bears all voyage
expenses, including the cost
 
of bunkers (fuel
 
oil) and canal and
 
port charges. We
 
remain responsible for
paying the
 
chartered vessel's
 
operating expenses,
 
including the
 
cost of
 
crewing, insuring,
 
repairing and
maintaining the
 
vessel. In
 
2024, we
 
paid commissions that
 
ranged from
 
4.75% to
 
5.0% of
 
the total
 
daily
charter hire
 
rate of
 
each charter
 
to unaffiliated
 
ship brokers
 
and to
 
in-house brokers
 
associated with
 
the
charterer, depending on the number of brokers involved with arranging the charter.
We strategically monitor developments in the dry bulk shipping industry on a regular basis and, subject to
market
 
demand,
 
seek
 
to
 
adjust
 
the
 
charter
 
hire
 
periods
 
for
 
our
 
vessels
 
according
 
to
 
prevailing
 
market
conditions. In order to take advantage of relatively stable cash flow and high utilization rates,
 
we fix some
of our vessels on long-term time
 
charters. Currently, the
 
majority of our vessels are employed on
 
short to
medium-term time
 
charters, which
 
provides us
 
with flexibility in
 
responding to
 
market developments.
 
We
continuously evaluate our balance of
 
short-
 
and long-term charters and extend
 
or reduce the charter hire
periods of the vessels in our fleet according to the developments in
 
the dry bulk shipping industry.
Charter Hire Rates
Charter hire
 
rates fluctuate
 
by varying
 
degrees among
 
dry bulk
 
carrier size
 
categories. The
 
volume and
pattern of
 
trade in
 
a small
 
number of
 
commodities
 
(major bulks)
 
affect demand
 
for larger
 
vessels. Therefore,
charter rates
 
and vessel
 
values of
 
larger vessels
 
often show
 
greater volatility. Conversely, trade
 
in a
 
greater
number
 
of
 
commodities (minor
 
bulks)
 
drives
 
demand
 
for
 
smaller
 
dry
 
bulk
 
carriers.
 
Accordingly,
 
charter
rates and vessel values for those vessels are usually subject
 
to less volatility.
Charter
 
hire
 
rates
 
paid
 
for
 
dry
 
bulk
 
carriers
 
are
 
primarily
 
a
 
function
 
of
 
the
 
underlying
 
balance
 
between
vessel supply and demand, although at
 
times other factors may play a
 
role. Furthermore, the pattern seen
in
 
charter
 
rates
 
is
 
broadly
 
mirrored
 
across
 
the
 
different
 
charter
 
types
 
and
 
the
 
different
 
dry
 
bulk
 
carrier
categories. In the
 
time charter market,
 
rates vary depending
 
on the length
 
of the charter
 
period and vessel-
specific factors such as age, speed and fuel consumption.
In the
 
voyage charter
 
market, rates
 
are, among
 
other things,
 
influenced by
 
cargo size,
 
commodity,
 
port
dues and canal transit fees, as well
 
as commencement and termination
 
regions. In general, a larger
 
cargo
size is quoted
 
at a lower
 
rate per ton
 
than a smaller
 
cargo size.
 
Routes with
 
costly ports or
 
canals generally
command higher rates
 
than routes
 
with low port
 
dues and
 
no canals to
 
transit. Voyages
 
with a
 
load port
within a
 
region that
 
includes ports
 
where vessels
 
usually discharge
 
cargo or
 
a discharge
 
port within
 
a region
with
 
ports
 
where
 
vessels
 
load
 
cargo
 
also
 
are
 
generally
 
quoted
 
at
 
lower
 
rates,
 
because
 
such
 
voyages
generally increase vessel utilization
 
by reducing the unloaded portion
 
(or ballast leg) that is
 
included in the
calculation of the return charter to a loading area.
51
Within the dry bulk shipping industry, the
 
charter hire rate references, most likely to be monitored, are the
freight rate indices
 
issued by the
 
Baltic Exchange. These
 
references are based
 
on actual charter
 
hire rates
under
 
charters
 
entered
 
into
 
by
 
market
 
participants
 
as
 
well
 
as
 
daily
 
assessments
 
provided
 
to
 
the
 
Baltic
Exchange by a panel
 
of major shipbrokers.
 
The Baltic Panamax
 
Index is the index
 
with the longest
 
history.
The Baltic Capesize Index and Baltic Handymax Index are
 
of more recent origin.
 
The Baltic Dry Index, or BDI, is a daily average of charter rates
 
in 20 shipping routes measured on a time
charter and voyage basis and covering Capesize, Panamax, Supramax, and Handysize dry
 
bulk carriers.
In 2024, the BDI ranged from a low of 976 to a high of 2,419 and closed
 
at 1,635 on March 20, 2025.
The Dry Bulk Shipping Industry
The
 
global
 
dry
 
bulk
 
carrier
 
fleet
 
could
 
be
 
divided
 
into
 
seven
 
categories
 
based
 
on
 
a
 
vessel's
 
carrying
capacity. These categories consist of:
●
Very
 
Large Ore
 
Carriers
.
 
Very
 
large ore
 
carriers, or
 
VLOCs, have
 
a carrying
 
capacity of
 
more
than 200,000 dwt and are a comparatively new sector of the dry bulk carrier fleet. VLOCs are built
to exploit economies of scale on long-haul iron ore routes.
 
●
Capesize
.
 
Capesize vessels
 
have a
 
carrying capacity
 
of 110,000
 
-199,999 dwt.
 
Only the
 
largest
ports around the
 
world possess the
 
infrastructure to accommodate
 
vessels of this
 
size. Capesize
vessels are
 
primarily used
 
to transport
 
iron ore
 
or coal
 
and, to
 
a much
 
lesser extent,
 
grains, primarily
on long-haul routes.
 
●
Post-Panamax
.
 
Post-Panamax vessels
 
have a
 
carrying capacity
 
of 80,000-109,999
 
dwt. These
vessels tend
 
to have
 
a shallower
 
draft and
 
larger beam
 
than a
 
standard Panamax
 
vessel with
 
a
higher
 
cargo
 
capacity.
 
These
 
vessels
 
have
 
been
 
designed
 
specifically
 
for
 
loading
 
high
 
cubic
cargoes from draught restricted ports, although they cannot
 
transit the Panama Canal.
 
●
Panamax
.
 
Panamax vessels have a carrying capacity of 60,000-79,999 dwt. These vessels carry
coal,
 
iron ore,
 
grains, and,
 
to
 
a
 
lesser extent,
 
minor
 
bulks, including
 
steel products,
 
cement and
fertilizers.
 
Panamax
 
vessels
 
are
 
able
 
to
 
pass
 
through
 
the
 
Panama
 
Canal,
 
making
 
them
 
more
versatile than
 
larger vessels
 
with regard
 
to
 
accessing different
 
trade routes.
 
Most Panamax
 
and
Post-Panamax
 
vessels
 
are
 
“gearless,”
 
and
 
therefore
 
must
 
be
 
served
 
by
 
shore-based
 
cargo
handling equipment. However, there are a small number of geared
 
vessels with onboard cranes, a
feature
 
that
 
enhances
 
trading
 
flexibility
 
and
 
enables
 
operation
 
in
 
ports
 
which
 
have
 
poor
infrastructure in terms of loading and unloading facilities.
●
Ultramax
 
Ultramax
 
is
 
the
 
largest
 
class
 
before
 
Panamax
 
and
 
is
 
the
 
newer
 
form
 
of
 
the
 
smaller
Supramax with a
 
maximum length
 
of
 
200 meters
 
and capacity
 
that ranges
 
from
 
60,000 dwt
 
and
66,000 dwt. This class is considered an upgrade to Supramax class as it offers a better all-around
investment
 
for
 
Charterers
 
and
 
Shipowners
 
due
 
to
 
its
 
higher
 
cargo
 
carrying
 
capacity
 
and
 
better
bunker
 
efficiency.
 
Ultramax
 
class
 
bulk
 
carriers
 
have
 
5
 
cargo
 
holds.
 
are
 
fitted
 
with
 
4
 
cranes
 
and
usually are equipped with grabs allowing
 
them to call more ports with no such
 
facilities giving them
more versatility.
●
Handymax/Supramax
.
 
Handymax vessels have a carrying
 
capacity of 40,000-59,999 dwt.
 
These
vessels
 
operate
 
in
 
a
 
large
 
number
 
of
 
geographically
 
dispersed
 
global
 
trade
 
routes,
 
carrying
primarily grains and minor
 
bulks. Within the Handymax category
 
there is also a
 
sub-sector known
as Supramax. Supramax
 
bulk carriers are
 
ships between 50,000
 
to 59,999 dwt,
 
normally offering
cargo
 
loading
 
and
 
unloading
 
flexibility
 
with
 
on-board
 
cranes,
 
or
 
“gear,”
 
while
 
at
 
the
 
same
 
time
possessing the cargo carrying capability approaching conventional
 
Panamax bulk carriers.
 
 
52
●
Handysize
.
 
Handysize vessels have
 
a carrying capacity
 
of up
 
to 39,999 dwt.
 
These vessels are
primarily
 
involved
 
in
 
carrying
 
minor
 
bulk
 
cargoes.
 
Increasingly,
 
ships
 
of
 
this
 
type
 
operate
 
within
regional
 
trading
 
routes, and
 
may
 
serve
 
as
 
trans-shipment
 
feeders
 
for
 
larger vessels.
 
Handysize
vessels are well
 
suited for small
 
ports with length
 
and draft restrictions.
 
Their cargo gear
 
enables
them to service ports lacking the infrastructure for cargo loading and unloading.
Other size categories occur in regional trade,
 
such as Kamsarmax, with a maximum length
 
of 229 meters,
the maximum
 
length that can
 
load in
 
the port
 
of Kamsar
 
in the
 
Republic of Guinea.
 
Other terms
 
such as
Seawaymax, Setouchmax, Dunkirkmax, and Newcastlemax also appear
 
in regional trade.
The supply
 
of dry
 
bulk carriers
 
is dependent
 
on the
 
delivery of
 
new vessels
 
and the
 
removal of
 
vessels
from the global fleet,
 
either through scrapping
 
or loss. The level
 
of scrapping activity
 
is generally a function
of scrapping prices
 
in relation to current
 
and prospective charter market
 
conditions, as well as
 
operating,
repair
 
and
 
survey
 
costs.
 
The
 
age
 
range
 
at
 
which
 
a
 
vessel
 
is
 
scrapped
 
is
 
between
 
20
 
and
 
32
 
years,
depending on among others, the vessel type, the freight
 
market conditions and regulatory requirements.
The
 
demand
 
for
 
dry
 
bulk
 
carrier
 
capacity
 
is
 
determined
 
by
 
the
 
underlying
 
demand
 
for
 
commodities
transported in
 
dry bulk carriers,
 
which in turn
 
is influenced by
 
trends in
 
the global
 
economy.
 
Demand for
dry
 
bulk
 
carrier
 
capacity
 
is
 
also
 
affected
 
by
 
the
 
operating
 
efficiency
 
of
 
the
 
global
 
fleet,
 
along
 
with
 
port
congestion, which has been a feature of the market since 2004,
 
absorbing tonnage and therefore leading
to a
 
tighter balance
 
between supply
 
and demand.
 
In evaluating
 
demand factors
 
for dry
 
bulk carrier
 
capacity,
the Company believes that dry
 
bulk carriers can be
 
the most versatile element
 
of the global shipping
 
fleets
in terms of employment alternatives.
 
Vessel Prices
 
Dry bulk
 
vessel values in
 
2024 generally were
 
lower as
 
compared to 2023.
 
Consistent with these
 
trends
were the market
 
values of our
 
dry bulk carriers.
 
As charter rates
 
and vessel
 
values decreased during
 
2024,
and
 
continued to
 
decrease in
 
early 2025,
 
there can
 
be no
 
assurance as
 
to how
 
long charter
 
rates and
vessel values will remain at their current levels or whether they will decrease or improve to any significant
degree in the near future.
Competition
 
Our business
 
fluctuates in
 
line with
 
the main
 
patterns of
 
trade of
 
the major
 
dry bulk
 
cargoes and
 
varies
according to
 
changes in
 
the supply
 
and demand
 
for these
 
items. We
 
operate in
 
markets that
 
are highly
competitive and
 
based primarily
 
on supply
 
and demand.
 
We compete
 
for charters
 
on the
 
basis of
 
price,
vessel
 
location,
 
size,
 
age
 
and
 
condition
 
of
 
the
 
vessel,
 
as
 
well
 
as
 
on
 
our
 
reputation
 
as
 
an
 
owner
 
and
operator. We
 
compete with other owners of dry bulk carriers
 
in the Panamax, Post-Panamax and smaller
class
 
sectors and
 
with owners
 
of Capesize
 
and Newcastlemax
 
dry
 
bulk carriers.
 
Ownership of
 
dry
 
bulk
carriers is highly fragmented.
We believe that we possess a number
 
of strengths that provide us
 
with a competitive advantage in
 
the dry
bulk shipping industry:
●
We own
 
a modern, high
 
quality fleet of
 
dry bulk carriers
.
 
We believe that
 
owning a modern,
 
high
quality fleet
 
reduces operating
 
costs, improves
 
safety and
 
provides us
 
with a
 
competitive advantage
in securing favorable time charters.
 
We maintain the
 
quality of our vessels by
 
carrying out regular
inspections, both while in port and at sea, and adopting a comprehensive maintenance program for Our fleet includes groups of sister ships.
each vessel.
 
 
53
●
 
We believe
 
that maintaining
 
a fleet
 
that includes
 
sister
ships enhances the revenue
 
generating potential of our
 
fleet by providing us
 
with operational and
scheduling flexibility.
 
The uniform
 
nature of sister
 
ships also
 
improves our operating
 
efficiency by
allowing our
 
fleet managers
 
to
 
apply the
 
technical knowledge
 
of
 
one vessel
 
to
 
all vessels
 
of the
same series
 
and create
 
economies of
 
scale that
 
enable us
 
to realize
 
cost savings
 
when maintaining,
supplying and crewing our vessels.
●
We
 
have
 
an
 
experienced
 
management
 
team.
 
Our
 
management
 
team
 
consists
 
of
 
experienced
executives
 
who
 
have,
 
on
 
average,
 
more
 
than
 
30
 
years
 
of
 
operating
 
experience
 
in
 
the
 
shipping
industry and has demonstrated
 
ability in managing
 
the commercial, technical
 
and financial areas of
our business.
●
We benefit
 
from the
 
experience and
 
reputation of
 
Diana Shipping
 
Services S.A.
 
and the
 
relationship
with
 
Wilhelmsen
 
Ship
 
Management
 
through
 
the
 
Diana
 
Wilhelmsen
 
Management
 
Limited
 
joint
venture.
●
We
 
benefit from
 
strong relationships
 
with members
 
of the
 
shipping and
 
financial industries.
 
We
have developed strong relationships with major international charterers, shipbuilders and financial
institutions
 
that
 
we
 
believe
 
are
 
the
 
result
 
of
 
the
 
quality
 
of
 
our
 
operations,
 
the
 
strength
 
of
 
our
management team and our reputation for dependability.
●
We have
 
a strong
 
balance sheet
 
and a
 
relatively low
 
level of
 
indebtedness.
 
We believe
 
that our
strong
 
balance
 
sheet
 
and
 
relatively
 
low
 
level
 
of
 
indebtedness
 
provide
 
us
 
with
 
the
 
flexibility
 
to
increase
 
the
 
amount of
 
funds
 
that
 
we may
 
draw under
 
our
 
loan
 
facilities in
 
connection
 
with
 
any
future acquisitions or otherwise and enable us to use cash flow that would otherwise be dedicated
to debt service for other purposes.
 
Permits and Authorizations
We
 
are
 
required
 
by
 
various
 
governmental
 
and
 
quasi-governmental
 
agencies
 
to
 
obtain
 
certain
 
permits,
licenses and
 
certificates with
 
respect to
 
our vessels.
 
The kinds
 
of permits,
 
licenses and
 
certificates required
depend upon
 
several factors,
 
including the
 
commodity transported,
 
the waters
 
in which
 
the vessel
 
operates
the
 
nationality
 
of
 
the
 
vessel's
 
crew
 
and
 
the
 
age
 
of
 
a
 
vessel.
 
We
 
have
 
been
 
able
 
to
 
obtain
 
all
 
permits,
licenses and
 
certificates currently
 
required to
 
permit our
 
vessels to
 
operate. Additional
 
laws and
 
regulations,
environmental or
 
otherwise, may
 
be adopted
 
which could
 
limit our
 
ability to
 
do business
 
or increase
 
the
cost of us doing business.
Disclosure Pursuant to Section 219 of the Iran Threat Reduction and
 
Syrian Human Rights
Act
Section 219
 
of the U.S.
 
Iran Threat
 
Reduction and Syria
 
Human Rights Act
 
of 2012,
 
or the ITRA,
 
added
new Section
 
13(r) to
 
the U.S.
 
Securities Exchange
 
Act of
 
1934, as
 
amended, or
 
the Exchange
 
Act, requiring
each SEC reporting issuer to disclose in its
 
annual and, if applicable, quarterly reports
 
whether it or any of
its affiliates
 
have knowingly
 
engaged in
 
certain activities,
 
transactions or dealings
 
relating to
 
Iran or
 
with
the
 
Government
 
of
 
Iran
 
or
 
certain
 
designated
 
natural
 
persons
 
or
 
entities
 
involved
 
in
 
terrorism
 
or
 
the
proliferation of weapons of mass destruction during the period
 
covered by the report.
 
Pursuant to Section 13(r) of the Exchange Act, we note that none of our vessels made port calls to Iran in
2024 and to the date of this annual report.
 
Environmental and Other Regulations in the Shipping Industry
Government
 
regulation
 
and
 
laws
 
significantly
 
affect
 
the
 
ownership
 
and
 
operation
 
of
 
our
 
fleet.
 
We
 
are
subject to international conventions and treaties,
 
national, state and local laws
 
and regulations in force in
54
the
 
countries
 
in
 
which
 
our
 
vessels
 
may
 
operate
 
or
 
are
 
registered
 
relating
 
to
 
safety
 
and
 
health
 
and
environmental
 
protection
 
including
 
the
 
storage,
 
handling,
 
emission,
 
transportation
 
and
 
discharge
 
of
hazardous and non-hazardous materials, and the remediation of contamination and liability
 
for damage to
natural
 
resources.
 
Compliance
 
with
 
such
 
laws,
 
regulations
 
and
 
other
 
requirements
 
entails
 
significant
expense, including vessel modifications and implementation of certain
 
operating procedures.
A
 
variety
 
of
 
government
 
and
 
private
 
entities
 
subject
 
our
 
vessels
 
to
 
both
 
scheduled
 
and
 
unscheduled
inspections.
 
These entities
 
include the
 
local port
 
authorities (applicable
 
national authorities
 
such as
 
the
United
 
States
 
Coast
 
Guard (“USCG”),
 
harbor
 
master
 
or
 
equivalent),
 
classification
 
societies,
 
flag
 
state
administrations
 
(countries
 
of
 
registry)
 
and
 
charterers,
 
particularly
 
terminal
 
operators.
 
Certain
 
of
 
these
entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our
vessels. Failure to maintain
 
necessary permits or approvals
 
could require us to
 
incur substantial costs or
result in the temporary suspension of the operation of one or more
 
of our vessels.
Increasing
 
environmental
 
concerns
 
have
 
created
 
a
 
demand
 
for
 
vessels
 
that
 
conform
 
to
 
stricter
environmental
 
standards.
 
We
 
are
 
required
 
to
 
maintain
 
operating
 
standards
 
for
 
all
 
of
 
our
 
vessels
 
that
emphasize
 
operational
 
safety,
 
quality
 
maintenance,
 
continuous
 
training
 
of
 
our
 
officers
 
and
 
crews
 
and
compliance with United States and international regulations. We
 
believe that the operation of
 
our vessels
is in substantial compliance with applicable environmental
 
laws and regulations and that our vessels have
all
 
material
 
permits,
 
licenses,
 
certificates
 
or
 
other
 
authorizations
 
necessary
 
for
 
the
 
conduct
 
of
 
our
operations. However, because such laws and regulations frequently
 
change and may impose increasingly
stricter
 
requirements,
 
we
 
cannot
 
predict
 
the
 
ultimate
 
cost
 
of
 
complying with
 
these
 
requirements,
 
or
 
the
impact of these requirements
 
on the resale value
 
or useful lives of
 
our vessels. In
 
addition, a future
 
serious
marine incident that causes
 
significant adverse environmental impact could result
 
in additional legislation
or regulation that could negatively affect our profitability.
International Maritime Organization
The International Maritime
 
Organization, the United
 
Nations agency for
 
maritime safety and the
 
prevention
of pollution
 
by vessels (the “IMO”),
 
has adopted
 
the International
 
Convention for
 
the Prevention
 
of Pollution
from Ships, 1973, as modified
 
by the Protocol of
 
1978 relating thereto, collectively
 
referred to as MARPOL
73/78 and
 
herein as “MARPOL,”
 
the International
 
Convention for
 
the Safety
 
of Life
 
at Sea
 
of 1974 (“SOLAS
Convention”), and
 
the International
 
Convention on
 
Load Lines
 
of
 
1966 (the
 
“LL
 
Convention”). MARPOL
establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air
emissions, handling and
 
disposal of noxious
 
liquids and the
 
handling of harmful
 
substances in packaged
forms.
 
MARPOL is
 
applicable to
 
drybulk, tanker
 
and LNG carriers,
 
among other
 
vessels, and
 
is broken
into six Annexes, each
 
of which regulates a
 
different source of pollution.
 
Annex I relates to
 
oil leakage or
spilling;
 
Annexes
 
II
 
and
 
III
 
relate
 
to
 
harmful
 
substances
 
carried
 
in
 
bulk
 
in
 
liquid
 
or
 
in
 
packaged
 
form,
respectively; Annexes IV and
 
V relate to
 
sewage and garbage management, respectively;
 
and Annex VI,
lastly,
 
relates to air
 
emissions. Annex VI was
 
separately adopted by the
 
IMO in September
 
of 1997; new
emissions standards, titled IMO-2020, took effect on January 1, 2020.
Air Emissions
In
 
September
 
of
 
1997,
 
the
 
IMO
 
adopted
 
Annex
 
VI
 
to
 
MARPOL
 
to
 
address
 
air
 
pollution
 
from
 
vessels.
Effective May 2005, Annex VI sets limits
 
on sulfur oxide and nitrogen oxide
 
emissions from all commercial
vessel exhausts and prohibits
 
“deliberate emissions” of ozone depleting
 
substances (such as halons
 
and
chlorofluorocarbons), emissions of
 
volatile compounds from
 
cargo tanks, and
 
the shipboard incineration
 
of
specific substances.
 
Annex VI
 
also includes
 
a global
 
cap on
 
the sulfur
 
content of
 
fuel
 
oil and
 
allows for
special
 
areas
 
to
 
be
 
established
 
with
 
more
 
stringent
 
controls
 
on
 
sulfur
 
emissions,
 
as
 
explained
below.
 
Emissions of
 
“volatile
 
organic
 
compounds” from
 
certain vessels,
 
and
 
the
 
shipboard
 
incineration
(from incinerators
 
installed after
 
January 1,
 
2000) of
 
certain substances
 
(such as
 
polychlorinated biphenyls,
55
or
 
“PCBs”)
 
are
 
also
 
prohibited.
 
We
 
believe
 
that
 
all
 
our
 
vessels
 
are
 
currently
 
compliant
 
in
 
all
 
material
respects with these regulations.
The Marine Environment Protection Committee, or
 
“MEPC”, adopted amendments to Annex VI
 
regarding
emissions of
 
sulfur oxide,
 
nitrogen oxide,
 
particulate matter
 
and ozone
 
depleting substances,
 
which entered
into force on
 
July 1, 2010.
 
The amended Annex VI
 
seeks to further
 
reduce air pollution by,
 
among other
things, implementing
 
a progressive
 
reduction of
 
the amount
 
of sulfur
 
contained in
 
any fuel
 
oil used
 
on board
ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global
 
0.5% m/m sulfur
oxide emissions limit
 
(reduced from 3.50%)
 
starting from January
 
1, 2020.
 
This limitation can
 
be met by
using
 
low-sulfur compliant fuel
 
oil, alternative
 
fuels,
 
or
 
certain exhaust
 
gas cleaning
 
systems. Ships
 
are
now required
 
to obtain
 
bunker delivery
 
notes and
 
International Air
 
Pollution Prevention (“IAPP”)
 
Certificates
from their
 
flag states
 
that specify
 
sulfur content.
 
Additionally,
 
at MEPC
 
73, amendments
 
to Annex
 
VI to
prohibit the carriage of bunkers
 
above 0.5% sulfur on ships were
 
adopted and took effect March
 
1, 2020,
with the exception of
 
vessels fitted with exhaust
 
gas cleaning equipment
 
(“scrubbers”) which can
 
carry fuel
of
 
higher sulfur
 
content.
 
These regulations
 
subject ocean-going
 
vessels to
 
stringent emissions
 
controls
and may cause us to incur substantial costs.
Sulfur
 
content
 
standards
 
are
 
even
 
stricter
 
within
 
certain
 
“Emission
 
Control
 
Areas,”
 
or (“ECAs”).
 
As
 
of
January 1, 2015,
 
ships operating
 
within an
 
ECA were
 
not permitted
 
to use fuel
 
with sulfur content
 
in excess
of 0.1%
 
m/m. Amended Annex
 
VI establishes procedures
 
for designating new
 
ECAs. Currently,
 
the IMO
has designated
 
four ECAs,
 
including specified
 
portions of
 
the Baltic
 
Sea area,
 
Mediterranean Sea
 
area,
North Sea area, North American area and United States Caribbean
 
area. The Mediterranean
Sea became
 
an ECA
 
on May
 
1, 2024,
 
and compliance obligations
 
will begin
 
May 1,
 
2025. Ocean-going
vessels in these areas
 
will be subject to stringent emission
 
controls and may cause us
 
to incur additional
costs. Other areas in
 
China are subject to
 
local regulations that impose stricter
 
emission controls. In July
2023, MEPC
 
80 announced
 
three new
 
ECA proposals,
 
including the
 
Canadian Arctic
 
waters and
 
the North-
East
 
Atlantic
 
Ocean,
 
which were
 
adopted
 
in
 
draft
 
amendments
 
to
 
Annex
 
IV
 
that
 
will
 
enter
 
into
 
force
 
in
March 2026. If other ECAs are approved
 
by the IMO, or other new or
 
more stringent requirements relating
to
 
emissions
 
from
 
marine
 
diesel
 
engines
 
or
 
port
 
operations
 
by
 
vessels
 
are
 
adopted
 
by
 
the
 
U.S.
Environmental
 
Protection
 
Agency (“EPA”)
 
or
 
the
 
states
 
where
 
we
 
operate,
 
compliance
 
with
 
these
regulations could entail significant capital expenditures or otherwise increase
 
the costs of our operations.
Amended Annex VI also established
 
new tiers of stringent nitrogen oxide emissions
 
standards for marine
diesel engines, depending
 
on their date
 
of installation. Tier III
 
NOx standards were
 
designed for the
 
control
of NOx
 
produced by
 
vessels and
 
apply to
 
ships that
 
operate in
 
the North
 
American and
 
U.S. Caribbean
Sea
 
ECAs
 
with
 
a
 
marine
 
diesel
 
engine
 
installed
 
and
 
constructed
 
on
 
or
 
after
 
January
 
1,
 
2016.
 
Tier
 
III
requirements could apply
 
to areas that
 
will be
 
designated for Tier
 
III NOx in
 
the future.
 
At MEPC 70
 
and
MEPC 71, the MEPC approved the North
 
Sea and Baltic Sea as ECAs
 
for nitrogen oxide for ships built on
or
 
after
 
January
 
1,
 
2021.
 
For
 
the
 
moment,
 
this
 
regulation
 
relates
 
to
 
new
 
building
 
vessels
 
and
 
has
 
no
retroactive
 
application
 
to
 
existing
 
fleet.
 
The EPA
 
promulgated
 
equivalent
 
(and
 
in
 
some
 
senses
 
stricter)
emissions standards in 2010.
 
As a result of these designations or similar future designations, we may be
required to incur additional operating or other costs.
As determined
 
at the
 
MEPC 70,
 
Regulation 22A
 
of MARPOL
 
Annex VI became
 
effective as of
 
March 1,
2018
 
and
 
requires
 
ships
 
above
 
5,000
 
gross
 
tonnage
 
to
 
collect
 
and
 
report
 
annual
 
data
 
on
 
fuel
 
oil
consumption to an
 
IMO database, with
 
the first year
 
of data collection
 
having commenced on
 
January 1,
2019.
 
The IMO used such data as
 
part of its initial roadmap (through
 
2023) for developing its strategy to
reduce greenhouse gas emissions from ships, as discussed further below.
As of January
 
1, 2013, MARPOL
 
made mandatory certain
 
measures relating to
 
energy efficiency for
 
ships.
All
 
ships
 
are
 
now
 
required
 
to
 
develop
 
and
 
implement
 
a
 
Ship
 
Energy
 
Efficiency
 
Management
Plans (“SEEMPs”), and new ships must be designed in compliance
 
with minimum energy efficiency levels
per capacity mile
 
as defined by
 
the Energy Efficiency
 
Design Index (“EEDI”).
 
Under these measures,
 
by
56
2025, all new ships built will be 30% more energy
 
efficient than those built in 2014. Additionally, MEPC 75
adopted amendments to MARPOL Annex VI which brings forward the effective date of the EEDI’s
 
“phase
3” requirements
 
from April
 
1, 2022 to
 
January 1,
 
2025 for
 
several ship
 
types, including
 
gas carriers,
 
general
cargo ships, and LNG carriers.
Additionally,
 
in 2022,
 
MEPC 75
 
amended to
 
Annex VI
 
to impose
 
new regulations
 
to reduce
 
greenhouse
gas emissions from
 
ships.
 
These amendments
 
introduce requirements
 
to assess and
 
measure the energy
efficiency of all ships and set the
 
required attainment values, with
 
the goal of reducing the carbon
 
intensity
of international shipping. The requirements include (1) a
 
technical requirement to reduce carbon intensity
based
 
on
 
a
 
new
 
Energy
 
Efficiency
 
Existing
 
Ship
 
Index
 
(“EEXI”),
 
and
 
(2)
 
operational
 
carbon
 
intensity
reduction requirements, based on a new
 
operational carbon intensity indicator (“CII”).
 
The attained EEXI
is required to be calculated for ships of 400 gross tonnage and above, in accordance with different values
set for
 
ship types
 
and categories.
 
With respect
 
to the
 
CII, the
 
draft amendments
 
would require
 
ships of
5,000
 
gross
 
tonnage
 
to
 
document
 
and
 
verify
 
their
 
actual
 
annual
 
operational
 
CII
 
achieved
 
against
 
a
determined
 
required
 
annual
 
operational
 
CII.
 
All
 
ships
 
above
 
400
 
gross
 
tonnage
 
must
 
also
 
have
 
an
approved SEEMP on board.
 
For ships above 5,000
 
gross tonnage, the SEEMP needs
 
to include certain
mandatory content.
 
That same year,
 
MEPC amended MARPOL Annex I to
 
prohibit the use and carriage
for use as
 
fuel of heavy
 
fuel oil (“HFO”)
 
by ships in
 
Arctic waters on
 
and after July
 
1, 2024. In
 
July 2021,
MEPC 77 adopted a non-binding resolution
 
which urges Member States and ship
 
operators to voluntarily
use distillate or
 
other cleaner alternative
 
fuels or methods
 
of propulsion that
 
are safe for
 
ships and could
contribute
 
to
 
the
 
reduction of
 
Black
 
Carbon
 
emissions
 
from
 
ships
 
when operating
 
in
 
or
 
near the
 
Arctic.
MEPC 79 adopted amendments
 
to MARPOL Annex VI,
 
Appendix IX to include
 
the attained and required
CII values, the CII
 
rating and attained EEXI
 
for existing ships in
 
the required information to be
 
submitted to
the IMO Ship Fuel Oil Consumption Database. The Mediterranean Sea became an ECA on
 
May 1, 2024,
and compliance obligations will begin
 
May 1, 2025. MEPC 79 also revised
 
the EEDI calculation guidelines
to
 
include
 
a
 
CO2
 
conversion
 
factor
 
for
 
ethane,
 
a
 
reference
 
to
 
the
 
updated
 
ITCC
 
guidelines,
 
and
 
a
clarification that
 
in case of
 
a ship with
 
multiple load line
 
certificates, the maximum
 
certified summer draft
should be used when
 
determining the deadweight.
 
These amendments entered
 
into force on May
 
1, 2024.
In
 
July
 
2023, MEPC
 
80 approved
 
the
 
plan
 
for
 
reviewing CII
 
regulations
 
and
 
guidelines,
 
which
 
must
 
be
completed at the
 
latest by January
 
1, 2026. This
 
review commenced at
 
MEPC 82 in
 
Fall 2024 and
 
there
will be no immediate changes to
 
the CII framework, including correction factors
 
and voyage adjustments,
before the review is completed.
We
 
may
 
incur
 
costs
 
to
 
comply
 
with
 
these
 
revised
 
standards.
 
Additional
 
or
 
new
 
conventions,
 
laws
 
and
regulations may be adopted that could require the
 
installation of expensive emission control systems and
could adversely affect our business, results of operations, cash flows and
 
financial condition.
Safety Management System Requirements
The SOLAS
 
Convention was
 
amended to
 
address the
 
safe manning
 
of vessels
 
and emergency
 
training
drills.
 
The Convention of Limitation of Liability for Maritime Claims (the “LLMC”) sets limitations of liability
for
 
a
 
loss
 
of
 
life
 
or
 
personal
 
injury
 
claim
 
or
 
a
 
property
 
claim
 
against
 
ship
 
owners.
 
The ISM
Certification provides validation that
 
both company and
 
ships are operating
 
using a process-based system
approach to manage risks and achieve continual improvement. The ISM code is meant to be a preventive
tool
 
and
 
asks
 
companies
 
to
 
assess
 
all
 
risks
 
and
 
then
 
take
 
measured
 
to
 
safeguard
 
against
 
them.
Responsibilities and authorities
 
are set out
 
for the various
 
entities includes in
 
the ISM process.
 
All of our
vessels as well as our shore-based operations are fully certified under
 
the ISM Code.
Under Chapter
 
IX of
 
the SOLAS
 
Convention, or the
 
International Safety Management
 
Code for
 
the Safe
Operation
 
of
 
Ships
 
and
 
for
 
Pollution
 
Prevention (the “ISM
 
Code”),
 
our
 
operations
 
are
 
also
 
subject
 
to
environmental standards and requirements. The ISM Code requires the party with operational
 
control of a
vessel to develop
 
an extensive
 
safety management
 
system that
 
includes, among
 
other things,
 
the adoption
of a
 
safety and
 
environmental protection policy
 
setting forth
 
instructions and procedures
 
for operating its
57
vessels safely and describing procedures
 
for responding to emergencies. Through
 
strong leadership and
a
 
disciplined,
 
clearly
 
documented
 
management
 
system,
 
the
 
Company
 
promotes
 
the
 
concept
 
of
 
HSSE
(Health, Safety,
 
Security and
 
Environmental) excellence
 
at all
 
levels in
 
the organisation.
 
This concept
 
is
achieved
 
by consistent
 
measurement and
 
feedback of
 
the
 
Company’s Management
 
System in
 
order to
generate
 
continuous
 
and
 
sustainable
 
improvement
 
in
 
Health,
 
Safety,
 
Security,
 
and
 
Quality
 
and
Environmental
 
(including
 
Energy
 
Efficiency)
 
(HSSQE)
 
management
 
processes. The
 
failure
 
of
 
a
 
vessel
owner or bareboat
 
charterer to
 
comply with
 
the ISM
 
Code may
 
subject such
 
party to
 
increased liability, may
decrease available insurance coverage for the affected vessels and
 
may result in a denial of access to, or
detention in, certain ports.
The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they
operate. This
 
certificate evidences
 
compliance by
 
a vessel’s management
 
with the
 
ISM Code
 
requirements
for a
 
safety management
 
system. No
 
vessel can
 
obtain a
 
safety management
 
certificate unless
 
its manager
has been
 
awarded a document
 
of compliance, issued
 
by each flag
 
state, under the
 
ISM Code. We
 
have
obtained applicable documents of compliance for our offices and safety management certificates for all of
our vessels
 
for which
 
the certificates
 
are required by
 
the IMO.
 
The documents of
 
compliance and safety
management certificate are renewed as required.
Regulation II-1/3-10
 
of
 
the
 
SOLAS Convention
 
governs ship
 
construction and
 
stipulates that
 
ships
 
over
150 meters
 
in length
 
must have
 
adequate strength,
 
integrity and
 
stability to
 
minimize risk
 
of loss
 
or pollution.
Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012,
 
with July 1,
2016 set for application to new oil tankers and bulk carriers.
 
The SOLAS Convention regulation II-1/3-10
on goal-based
 
ship construction
 
standards for
 
bulk carriers
 
and oil
 
tankers, which
 
entered into
 
force on
January 1, 2012, requires
 
that all oil tankers
 
and bulk carriers of
 
150 meters in length
 
and above, for which
the building
 
contract is
 
placed on
 
or after
 
July 1,
 
2016, satisfy
 
applicable structural
 
requirements conforming
to
 
the
 
functional
 
requirements
 
of
 
the
 
International
 
Goal-based
 
Ship
 
Construction
 
Standards
 
for
 
Bulk
Carriers and Oil Tankers (“GBS Standards”).
Amendments to
 
the SOLAS Convention
 
Chapter VII
 
apply to
 
vessels transporting dangerous
 
goods and
require those
 
vessels be
 
in
 
compliance with
 
the
 
International Maritime
 
Dangerous Goods
 
Code (“IMDG
Code”). Effective
 
January 1, 2018,
 
the IMDG
 
Code includes (1)
 
updates to the
 
provisions for radioactive
material, reflecting
 
the
 
latest provisions
 
from the
 
International Atomic
 
Energy Agency,
 
(2) new
 
marking,
packing
 
and
 
classification
 
requirements
 
for
 
dangerous
 
goods,
 
and
 
(3)
 
new
 
mandatory
 
training
requirements. Amendments which took
 
effect on January
 
1, 2020 also reflect
 
the latest material from
 
the
UN Recommendations on the Transport of Dangerous
 
Goods, including (1) new provisions
 
regarding IMO
type 9 tank, (2) new abbreviations
 
for segregation groups, and
 
(3) special provisions for carriage
 
of lithium
batteries and of vehicles powered by flammable liquid or
 
gas. Additional amendments came into force on
June 1,
 
2022, include
 
(1) addition
 
of a
 
definition of
 
dosage rate,
 
(2) additions
 
to the
 
list of
 
high consequence
dangerous goods, (3)
 
new provisions for medical/clinical
 
waste, (4) addition
 
of various ISO
 
standards for
gas
 
cylinders,
 
(5)
 
a
 
new
 
handling
 
code,
 
and
 
(6)
 
changes
 
to
 
stowage
 
and
 
segregation
 
provisions.
 
The
newest
 
edition
 
of
 
the
 
IMDG
 
Code
 
took
 
effect
 
on
 
January
 
1,
 
2024,
 
although
 
the
 
changes
 
are
 
largely
incremental.
The
 
IMO
 
has
 
also
 
adopted
 
the
 
International
 
Convention
 
on
 
Standards
 
of
 
Training,
 
Certification
 
and
Watchkeeping for Seafarers (“STCW”).
 
As of February
 
2017, all seafarers
 
are required to
 
meet the STCW
standards
 
and
 
be in
 
possession of
 
a
 
valid STCW
 
certificate.
 
Flag
 
states that
 
have
 
ratified SOLAS
 
and
STCW
 
generally
 
employ
 
the
 
classification
 
societies,
 
which
 
have
 
incorporated
 
SOLAS
 
and
 
STCW
requirements into their class rules, to undertake surveys to confirm compliance.
The
 
IMO's
 
Maritime
 
Safety
 
Committee
 
and
 
MEPC,
 
respectively,
 
each
 
adopted
 
relevant
 
parts
 
of
 
the
International Code for Ships Operating in Polar Water
 
(the “Polar Code”). The Polar Code, which entered
into force
 
on January
 
1, 2017,
 
covers design,
 
construction, equipment,
 
operational, training,
 
search and
rescue as well
 
as environmental protection matters
 
relevant to ships
 
operating in the
 
waters surrounding
58
the two
 
poles. It
 
also includes mandatory
 
measures regarding
 
safety and pollution
 
prevention as
 
well as
recommendatory provisions. The Polar Code applies to new ships constructed after January 1, 2017, and
after
 
January
 
1,
 
2018,
 
ships
 
constructed
 
before
 
January
 
1,
 
2017
 
are
 
required
 
to
 
meet
 
the
 
relevant
requirements by the earlier of their first intermediate or renewal survey.
Furthermore, recent action by the
 
IMO’s Maritime Safety Committee and United
 
States agencies indicates
that cybersecurity regulations for the maritime industry are
 
likely to be further developed in the near future
in an
 
attempt to
 
combat cybersecurity
 
threats. By
 
IMO resolution,
 
administrations are
 
encouraged
 
to ensure
that cyber-risk management systems are incorporated by ship-owners
 
and managers by their first annual
Document of Compliance audit after January
 
1, 2021. In February 2021, the
 
U.S. Coast Guard published
guidance on addressing
 
cyber risks in
 
a vessel’s safety
 
management system.
 
This might
 
cause companies
to
 
create
 
additional
 
procedures
 
for
 
monitoring
 
cybersecurity,
 
which
 
could
 
require
 
additional
 
expenses
and/or capital expenditures.
 
The impact of future regulations is hard to predict at this time.
In June
 
2022, SOLAS
 
also set
 
out new
 
amendments that
 
took effect
 
on January
 
1, 2024,
 
which include
new
 
requirements for:
 
(1)
 
the
 
design for
 
safe
 
mooring operations,
 
(2)
 
the
 
Global
 
Maritime
 
Distress and
Safety System (“GMDSS”),
 
(3) watertight integrity, (4) watertight doors
 
on cargo ships,
 
(5) fault-isolation of
fire detection
 
systems, (6)
 
life-saving appliances, and
 
(7) safety
 
of ships
 
using LNG
 
as fuel.
 
These new
requirements may impact the cost of our operations.
Pollution Control and Liability Requirements
The IMO has negotiated international conventions
 
that impose liability for pollution in
 
international waters
and
 
the
 
territorial
 
waters
 
of
 
the
 
signatories
 
to
 
such
 
conventions.
 
For
 
example,
 
the
 
IMO
 
adopted
 
an
International
 
Convention
 
for
 
the
 
Control
 
and
 
Management
 
of
 
Ships’
 
Ballast
 
Water
 
and
 
Sediments, (the
“BWM Convention”), in 2004. The BWM Convention entered into force on September 8, 2017.
 
The BWM
Convention requires ships to manage their
 
ballast water to remove, render harmless,
 
or avoid the uptake
or discharge of
 
new or invasive
 
aquatic organisms
 
and pathogens within
 
ballast water and
 
sediments.
 
The
BWM
 
Convention’s
 
implementing
 
regulations
 
call
 
for
 
a
 
phased
 
introduction
 
of
 
mandatory
 
ballast
 
water
exchange requirements, to
 
be replaced in
 
time with mandatory
 
concentration limits, and
 
require all ships
to carry a ballast water record book and an international ballast water
 
management certificate.
On December 4, 2013, the
 
IMO Assembly passed a resolution
 
revising the application dates of the
 
BWM
Convention so that
 
the dates are
 
triggered by the
 
entry into force
 
date and not
 
the dates originally
 
in the
BWM
 
Convention.
 
This, in
 
effect,
 
makes
 
all
 
vessels delivered
 
before the
 
entry into
 
force date
 
“existing
vessels” and allows
 
for the installation
 
of ballast water
 
management systems on
 
such vessels at
 
the first
International Oil Pollution Prevention (“IOPP”) renewal survey
 
following entry into force of the convention.
The
 
MEPC
 
maintains
 
guidelines for
 
approval
 
of ballast
 
water
 
management systems
 
(G8).
 
At
 
MEPC 72
amendments
 
were
 
adopted
 
to
 
extend
 
the
 
date
 
existing
 
vessels
 
are
 
subject
 
to
 
certain
 
ballast
 
water
standards. Ships over
 
400 gross tons
 
generally must comply
 
with a “D-1
 
standard,” requiring
 
the exchange
of
 
ballast
 
water
 
only
 
in
 
open
 
seas
 
and
 
away
 
from
 
coastal
 
waters.
 
The
 
“D-2
 
standard”
 
specifies
 
the
maximum amount of
 
viable organisms allowed
 
to be discharged,
 
and compliance dates
 
vary depending on
the IOPP renewal dates. These standards have been in force since 2019, and for most ships, compliance
with the D-2
 
standard involved
 
installing on-board systems
 
to treat ballast
 
water and
 
eliminate unwanted
organisms.
 
Ballast
 
water
 
management
 
systems,
 
which
 
include
 
systems
 
that
 
make
 
use
 
of
 
chemical,
biocides, organisms
 
or biological
 
mechanisms, or
 
which alter
 
the chemical
 
or physical
 
characteristics of
the ballast
 
water, must be
 
approved in
 
accordance with
 
IMO Guidelines
 
(Regulation D-3).
 
Since September
8, 2024, all ships
 
have been required
 
to meet the D-2
 
standard.
 
Additionally, in November 2020, MEPC
 
75
adopted
 
amendments to
 
the
 
BWM
 
Convention which
 
would require
 
a
 
commissioning test
 
of the
 
ballast
water management system for the initial survey or when performing an additional survey for retrofits. This
analysis
 
will
 
not
 
apply
 
to
 
ships
 
that
 
already
 
have
 
an
 
installed
 
BWM
 
system
 
certified
 
under
 
the
 
BWM
Convention. These amendments have
 
entered into force
 
on June 1,
 
2022. In December 2022,
 
MEPC 79
59
agreed that it
 
should be permitted to
 
use ballast tanks for
 
temporary storage of treated
 
sewage and grey
water.
 
MEPC 79 also
 
established that ships
 
are expected to
 
return to D-2
 
compliance after experiencing
challenging uptake water and bypassing a BWM system should only
 
be used as a last resort.
 
In July 2023,
 
MEPC 80 approved
 
a plan
 
for a comprehensive
 
review of
 
the BWM Convention.
 
over the
 
next
three years and
 
the corresponding development of
 
a package of
 
amendments to the
 
Convention. MEPC
80 also adopted further amendments relating to Appendix
 
II of the BWM Convention concerning
 
the form
of the Ballast Water Record Book, which are
 
expected to enter into force in February 2025. A protocol for
ballast water compliance monitoring devices
 
and unified interpretation of
 
the form of the BWM Convention
certificate were
 
also adopted.
 
In
 
March 2024,
 
MEPC 81
 
adopted amendments
 
to
 
the
 
BWM Convention
concerning the
 
use of
 
Ballast Water Record
 
Books in
 
electronic form,
 
which are
 
expected to
 
enter into
 
force
in October 2025. Pursuant to the ongoing review, in Fall 2024, MEPC 82 approved the 2024 Guidance on
ballast water
 
record keeping
 
and reporting
 
and the
 
2024 Guidance
 
for Administrations
 
on the
 
type approval
process for ballast water management systems to support harmonized
 
evaluation by Administrations.
Once
 
mid-ocean
 
exchange
 
ballast
 
water
 
treatment
 
requirements
 
become
 
mandatory
 
under
 
the
 
BWM
Convention, the
 
cost of
 
compliance could
 
increase for
 
ocean carriers
 
and may have
 
a material effect
 
on
our operations. Irrespective of the BWM
 
convention, certain countries
 
such as the U.S. have
 
enforced and
implemented regional requirement related to the system certification,
 
operation and reporting.
The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the
“Bunker
 
Convention”) to
 
impose
 
strict liability
 
on
 
ship
 
owners
 
(including the
 
registered
 
owner,
 
bareboat
charterer, manager
 
or operator) for
 
pollution damage in jurisdictional
 
waters of ratifying states
 
caused by
discharges of
 
bunker fuel.
 
The Bunker
 
Convention requires registered
 
owners of
 
ships over
 
1,000 gross
tons
 
to
 
maintain
 
insurance
 
for
 
pollution
 
damage
 
in
 
an
 
amount
 
equal
 
to
 
the
 
limits
 
of
 
liability
 
under
 
the
applicable
 
national
 
or
 
international
 
limitation
 
regime
 
(but
 
not
 
exceeding
 
the
 
amount
 
calculated
 
in
accordance with the LLMC).
 
With respect to non-ratifying
 
states, liability for spills or
 
releases of oil carried
as fuel
 
in ship’s
 
bunkers typically
 
is determined by
 
the national
 
or other
 
domestic laws
 
in the
 
jurisdiction
where the events or damages occur.
Ships are
 
required to
 
maintain a
 
certificate attesting
 
that they
 
maintain adequate
 
insurance to
 
cover an
incident. In jurisdictions, such
 
as the United
 
States where the
 
Bunker Convention has not
 
been adopted,
various legislative schemes or
 
common law govern, and
 
liability is imposed either
 
on the basis of
 
fault or
on a strict-liability basis.
Anti-Fouling Requirements
In 2001, the IMO adopted the International Convention on the Control
 
of Harmful Anti-fouling Systems on
Ships,
 
or
 
the
 
“Anti-fouling
 
Convention.”
 
The
 
Anti-fouling
 
Convention,
 
which
 
entered
 
into
 
force
 
on
September 17,
 
2008,
 
prohibits
 
the
 
use
 
of
 
organotin
 
compound
 
coatings
 
to
 
prevent
 
the
 
attachment
 
of
mollusks and other sea life
 
to the hulls of vessels.
 
Vessels of over 400 gross tons engaged in
 
international
voyages will also be required to undergo an initial survey before
 
the vessel is put into service or before an
International Anti-fouling System Certificate is issued for
 
the first time; and subsequent
 
surveys when the
anti-fouling systems
 
are altered
 
or replaced.
 
Vessels of 24
 
meters in
 
length or
 
more but
 
less than
 
400 gross
tonnage engaged in international voyages will have to carry a Declaration on Anti-fouling Systems signed
by the owner or authorized agent.
In November 2020, MEPC
 
75 approved draft amendments
 
to the Anti-fouling Convention to
 
prohibit anti-
fouling
 
systems
 
containing
 
cybutryne,
 
which
 
would
 
apply
 
to
 
ships
 
from
 
January
 
1,
 
2023,
 
or,
 
for
 
ships
already bearing such an
 
anti-fouling system, at the
 
next scheduled renewal of the
 
system after that date,
but no later
 
than 60 months
 
following the last
 
application to the
 
ship of such
 
a system. In
 
addition, the IAFS
Certificate has been
 
updated to address
 
compliance options for
 
anti-fouling systems to
 
address cybutryne.
Ships which are affected by this ban on cybutryne must
 
receive an updated IAFS Certificate no later than
60
two years after
 
the entry
 
into force of
 
these amendments.
 
Ships which
 
are not
 
affected (i.e. with
 
anti-fouling
systems which do not contain cybutryne)
 
must receive an updated IAFS Certificate
 
at the next Anti-fouling
application to
 
the vessel.
 
These amendments
 
were formally
 
adopted at
 
MEPC 76
 
in June
 
2021 and
 
entered
into force on January 1, 2023.
We have obtained Anti-fouling System Certificates for all of our vessels that are subject to the Anti-fouling
Convention.
Requirements for the Safe and Environmentally Sound Recycling of Ships
In
 
2009
 
the
 
Hong
 
Kong
 
International
 
Convention
 
and
 
MEPC
 
269(68)
 
adopted
 
the
 
guidelines
 
for
 
the
preparation of
 
the Inventory
 
of Hazardous
 
Materials. The
 
Convention concerns
 
all vessels
 
over 500
 
GT
entitled
 
to
 
fly
 
the
 
flag
 
of
 
a
 
Party
 
or
 
operating
 
under
 
its
 
authority,
 
with
 
some
 
exceptions
 
like
 
warships.
According to
 
the Convention
 
the shipowner
 
should control
 
Ship’s Hazardous
 
Materials inherent
 
in ship’s
structure,
 
machinery,
 
equipment
 
and
 
paints,
 
coatings
 
and
 
prohibit
 
the
 
new
 
installations
 
of
 
Hazardous
Materials, by maintaining an Inventory of Hazardous Materials (IHM). It is the Company’s responsibility to
maintain the IHM
 
Part I up
 
to date, during
 
the life of
 
the ship, according
 
to MEPC Guidelines.
 
The ships
are
 
subject
 
to
 
survey
 
(initial,
 
renewal,
 
additional
 
and
 
final)
 
and
 
certification
 
and
 
should
 
keep
 
a
 
valid
International
 
Certificate
 
on
 
Inventory
 
of
 
Hazardous
 
Materials
 
or
 
an
 
International
 
Ready
 
for
 
Recycling
Certificate (in
 
case of
 
recycling), on
 
board. For
 
ships been
 
resulted to
 
contain hazardous
 
materials (like
asbestos),
 
actions
 
for
 
removal
 
should
 
be
 
taken
 
by
 
the
 
shipowner.
 
The
 
ships
 
should
 
only
 
be
 
recycled
according to the regulations. If the ship is detected to be in violation of this Convention, the Party carrying
out an inspection may take
 
steps to warn, detain, dismiss,
 
or exclude the ship from
 
its ports, which might
have an impact in our commercial image and
 
cause high fines to the company. Our fleet already complies
with
 
this
 
regulation
 
but
 
the
 
preparation,
 
maintenance
 
and
 
whenever
 
needed
 
removal
 
have
 
resulted
 
in
substantial costs.
Compliance Enforcement
Noncompliance
 
with
 
the
 
ISM
 
Code
 
or
 
other
 
IMO
 
regulations
 
may
 
subject
 
the
 
ship
 
owner
 
or
 
bareboat
charterer to increased liability, may lead to decreases
 
in available insurance coverage
 
for affected vessels
and may
 
result in
 
the denial
 
of access
 
to, or
 
detention in,
 
some ports.
 
The USCG
 
and European
 
Union
authorities have
 
indicated that
 
vessels not
 
in compliance with
 
the ISM
 
Code by
 
applicable deadlines will
be prohibited
 
from trading
 
in U.S.
 
and European
 
Union ports,
 
respectively.
 
As of
 
the date
 
of this
 
report,
each of our vessels
 
is ISM Code certified. The
 
IMO continues to review and
 
introduce new regulations. It
is impossible to
 
predict what additional regulations,
 
if any,
 
may be passed
 
by the IMO
 
and what effect,
 
if
any, such regulations might have on our operations.
U.S. Regulations
The U.S. Oil Pollution
 
Act of 1990 and
 
the Comprehensive Environmental Response, Compensation and
Liability Act
The U.S. Oil Pollution Act
 
of 1990 (“OPA”)
 
established an extensive regulatory and liability regime for
 
the
protection and
 
cleanup of
 
the environment
 
from oil
 
spills. OPA
 
affects all
 
“owners and
 
operators” whose
vessels trade or
 
operate within the U.S., its territories
 
and possessions or whose
 
vessels operate in U.S.
waters, which includes the U.S.’s territorial sea and its 200 nautical mile exclusive economic zone around
the U.S.
 
The U.S.
 
has
 
also
 
enacted
 
the
 
Comprehensive
 
Environmental
 
Response,
 
Compensation
 
and
Liability Act (“CERCLA”), which applies
 
to the discharge of hazardous substances other
 
than oil, except in
limited circumstances, whether on land or at sea.
 
OPA and CERCLA both define “owner and operator” in
the case of a vessel as any person owning, operating or chartering by demise, the
 
vessel.
 
Both OPA and
CERCLA impact our operations.
61
Under OPA,
 
vessel owners
 
and operators
 
are “responsible
 
parties” and
 
are jointly,
 
severally and
 
strictly
liable (unless the
 
spill results solely
 
from the act or
 
omission of a
 
third party, an act of God
 
or an act
 
of war)
for
 
all
 
containment
 
and
 
clean-up
 
costs
 
and
 
other
 
damages
 
arising
 
from
 
discharges
 
or
 
threatened
discharges of
 
oil from their
 
vessels, including bunkers
 
(fuel).
 
OPA
 
defines these other
 
damages broadly
to include:
(i)
 
injury to, destruction or loss of, or loss of use of, natural resources and
 
related assessment costs;
(ii)
 
injury to, or economic losses resulting from, the destruction of
 
real and personal property;
(iii)
 
loss of subsistence use of natural resources that are injured, destroyed
 
or lost;
(iv)
 
net
 
loss of
 
taxes, royalties,
 
rents, fees
 
or net
 
profit revenues
 
resulting from
 
injury,
 
destruction or
loss of real or personal property, or natural resources;
(v)
 
lost profits
 
or impairment
 
of earning
 
capacity due
 
to injury,
 
destruction or
 
loss of
 
real or
 
personal
property or natural resources; and
(vi)
 
net
 
cost
 
of
 
increased or
 
additional
 
public services
 
necessitated by
 
removal
 
activities
 
following a
discharge of oil, such as protection from fire,
 
safety or health hazards, and loss of subsistence
 
use
of natural resources.
OPA
 
contains
 
statutory
 
caps
 
on
 
liability
 
and
 
damages;
 
such
 
caps
 
do
 
not
 
apply
 
to
 
direct
 
cleanup
costs.
 
Effective November 12,
 
2019, the
 
USCG adjusted
 
the limits
 
of OPA
 
liability for
 
non-tank vessels,
edible oil
 
tank vessels,
 
and any
 
oil spill
 
response vessels,
 
to the
 
greater of
 
$1,200 per
 
gross ton
 
or $997,100
(subject to periodic
 
adjustment for
 
inflation). On December
 
23, 2022,
 
the USCG issued
 
a final rule
 
to adjust
the limitation of
 
liability under the OPA.
 
Effective March 23,
 
2022, the new adjusted
 
limits of OPA
 
liability
for non-tank
 
vessels, edible oil
 
tank vessels,
 
and any
 
oil spill
 
response vessels,
 
to the
 
greater of
 
$1,300
per gross
 
ton or
 
$1,076,000 (subject
 
to periodic
 
adjustment for
 
inflation).These limits
 
of liability
 
do not
 
apply
if an incident was proximately caused by the violation of an applicable U.S. federal safety,
 
construction or
operating
 
regulation
 
by
 
a
 
responsible
 
party
 
(or
 
its
 
agent,
 
employee
 
or
 
a
 
person
 
acting
 
pursuant
 
to
 
a
contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on
liability similarly does not apply if the responsible party fails or
 
refuses to (i) report the incident as required
by law where the responsible party knows or
 
has reason to know of the incident; (ii)
 
reasonably cooperate
and assist
 
as requested
 
in connection
 
with oil
 
removal activities;
 
or (iii)
 
without sufficient
 
cause, comply
with an order issued under the Federal
 
Water Pollution Act (Section 311 (c), (e)) or the Intervention on the
High Seas Act.
CERCLA contains
 
a similar
 
liability regime
 
whereby owners
 
and operators
 
of vessels
 
are liable
 
for cleanup,
removal and remedial costs, as well as damages for
 
injury to, or destruction or loss of, natural resources,
including
 
the
 
reasonable
 
costs
 
associated
 
with
 
assessing the
 
same,
 
and
 
health
 
assessments
 
or
 
health
effects studies. There is no liability
 
if the discharge of a hazardous
 
substance results solely from the
 
act or
omission of a third party, an act of God
 
or an act of war. Liability under CERCLA
 
is limited to the greater
 
of
$300 per gross ton or $5.0 million for vessels carrying
 
a hazardous substance as cargo and the greater of
$300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible
person liable for the total cost
 
of response and damages) if
 
the release or threat of release
 
of a hazardous
substance
 
resulted
 
from
 
willful
 
misconduct
 
or
 
negligence,
 
or
 
the
 
primary
 
cause
 
of
 
the
 
release
 
was
 
a
violation of applicable safety, construction or operating standards or regulations.
 
The limitation on liability
also does
 
not apply
 
if the
 
responsible person
 
fails or
 
refused to
 
provide all
 
reasonable cooperation
 
and
assistance as requested in connection with response activities where
 
the vessel is subject to OPA.
OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort
law.
 
OPA
 
and CERCLA both require
 
owners and operators of
 
vessels to establish and
 
maintain with the
62
USCG evidence of
 
financial responsibility sufficient to
 
meet the maximum
 
amount of liability to
 
which the
particular
 
responsible
 
person
 
may
 
be
 
subject.
 
Vessel
 
owners
 
and
 
operators
 
may
 
satisfy
 
their
 
financial
responsibility obligations by providing a proof of insurance, a
 
surety bond, qualification as a self-insurer or
a
 
guarantee.
 
We comply
 
and
 
plan
 
to
 
comply going
 
forward
 
with
 
the
 
USCG’s
 
financial
 
responsibility
regulations by providing applicable certificates of financial responsibility.
The 2010
Deepwater Horizon
 
oil spill
 
in the
 
Gulf of
 
Mexico resulted
 
in additional
 
regulatory initiatives
 
or
statutes, including higher liability caps under OPA, new regulations regarding offshore oil
 
and gas drilling,
and
 
a
 
pilot
 
inspection
 
program
 
for
 
offshore
 
facilities.
 
However,
 
several
 
of
 
these
 
initiatives
 
and
regulations have
 
been
 
or
 
may
 
be
 
revised.
 
For
 
example,
 
the
 
U.S.
 
Bureau
 
of
 
Safety
 
and
Environmental Enforcement’s
 
(“BSEE”)
 
revised
 
Production
 
Safety
 
Systems
 
Rule
 
(“PSSR”),
 
effective
December 27,
 
2018, modified
 
and relaxed
 
certain environmental
 
and safety
 
protections under
 
the 2016
PSSR.
 
Additionally, in August
 
2023, the
 
BSEE released
 
a final
 
Well Control
 
Rule which
 
strengthens testing
and performance requirements, and may affect offshore drilling operations.
 
In January 2021, the
 
Biden Administration issued an executive
 
order temporarily blocking new leases
 
for
oil
 
and
 
gas
 
drilling in
 
federal
 
waters,
 
but
 
ultimately,
 
the
 
order
 
was rendered
 
ineffective
 
by
 
a
 
permanent
injunction issued
 
by a
 
Louisiana court.
 
After being
 
blocked by
 
the courts,
 
in September
 
2023, the
 
Biden
administration announced a scaled back offshore oil drilling plan, including just three oil lease sales in the
Gulf of Mexico.
 
In December 2024,
 
the Biden Administration
 
also gave approval
 
for the sales
 
of oil and
 
gas
leases in Alaska. On January 6, 2025, the Biden Administration announced a ban on
 
new offshore oil and
gas drilling in more than 625 million acres of U.S. waters on the Atlantic and Pacific coasts and in Alaska,
but Louisiana-led states and
 
fossil fuel groups are
 
challenging the ban. On
 
January 21, 2025, the
 
Trump
Administration issued
 
an executive
 
order revoking
 
this ban,
 
although this
 
order is
 
being challenged
 
in court.
 
Additionally,
 
the Trump
 
Administration has
 
proposed leasing
 
new sections
 
of U.S.
 
waters to
 
oil and
 
gas
companies for offshore drilling.
With
 
these
 
rapid
 
changes,
 
compliance
 
with
 
any
 
new
 
requirements
 
of
 
OPA and
 
future
 
legislation
 
or
regulations applicable
 
to the
 
operation of
 
our vessels could
 
impact the
 
cost of
 
our operations
 
and adversely
affect our business.
OPA
 
specifically permits individual
 
states to
 
impose their own
 
liability regimes with
 
regard to oil
 
pollution
incidents
 
occurring
 
within
 
their
 
boundaries,
 
provided
 
they
 
accept,
 
at
 
a
 
minimum,
 
the
 
levels
 
of
 
liability
established
 
under
 
OPA
 
and
 
some
 
states
 
have
 
enacted
 
legislation
 
providing
 
for
 
unlimited
 
liability
 
for
 
oil
spills.
 
Many U.S. states that border a
 
navigable waterway have enacted
 
environmental pollution laws that
impose
 
strict liability
 
on a
 
person
 
for removal
 
costs
 
and damages
 
resulting from
 
a
 
discharge of
 
oil
 
or
 
a
release of a
 
hazardous substance.
 
These laws may be
 
more stringent than U.S.
 
federal law.
 
Moreover,
some states have enacted legislation providing for unlimited liability for discharge of pollutants within their
waters,
 
although in
 
some
 
cases, states
 
which have
 
enacted this
 
type
 
of legislation
 
have not
 
yet issued
implementing regulations defining vessel owners’
 
responsibilities under these laws.
 
The Company intends
to comply with all applicable state regulations in the ports where
 
the Company’s vessels call.
We currently maintain pollution
 
liability coverage insurance
 
in the amount
 
of $1 billion per
 
incident for each
of our
 
vessels. If
 
the damages from
 
a catastrophic spill
 
were to
 
exceed our
 
insurance coverage, it
 
could
have an adverse effect on our business and results of operation.
Other United States Environmental Initiatives
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires
 
the EPA to
promulgate
 
standards
 
applicable
 
to
 
emissions
 
of
 
volatile
 
organic
 
compounds
 
and
 
other
 
air
contaminants.
 
The
 
CAA
 
requires
 
states
 
to
 
adopt
 
State
 
Implementation
 
Plans,
 
or
 
SIPs,
 
some
 
of
 
which
regulate emissions resulting from vessel loading and unloading operations
 
which may affect our vessels.
63
The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water
in U.S.
 
navigable waters
 
unless authorized
 
by a
 
duly-issued permit
 
or exemption,
 
and imposes
 
strict liability
in the
 
form of
 
penalties for
 
any unauthorized
 
discharges.
 
The CWA
 
also imposes
 
substantial liability for
the costs of removal, remediation and damages
 
and complements the remedies available
 
under OPA and
CERCLA.
 
In 2015, the EPA
 
expanded the definition of “waters of the United States” (“WOTUS”),
 
thereby
expanding federal authority
 
under the CWA.
 
Following litigation on
 
the revised WOTUS rule,
 
in December
2018, the EPA and Department of the Army proposed a revised,
 
limited definition of WOTUS. In 2019
 
and
2020,
 
the
 
agencies repealed
 
the
 
prior
 
WOTUS Rule
 
and
 
promulgated the
 
Navigable Waters
 
Protection
Rule
 
(“NWPR”)
 
which significantly
 
reduced the
 
scope and
 
oversight of
 
EPA
 
and
 
the
 
Department of
 
the
Army
 
in
 
traditionally
 
non
 
navigable
 
waterways.
 
On
 
August
 
30,
 
2021,
 
a
 
federal
 
district
 
court
 
in
 
Arizona
vacated the NWPR and directed the agencies to replace the rule with the pre-2015 definition.
 
. In January
2023, the revised WOTUS rule was codified in place of the vacated NWPR. On May
 
25, 2023, the United
States Supreme Court ruled in
 
the case Sackett v. EPA that only wetlands and permanent bodies of water
with a "continuous
 
surface connection"
 
to "traditional
 
interstate navigable
 
waters" are covered
 
by the
 
CWA,
further narrowing the application
 
of the WOTUS rule.
 
On August 2023, the
 
EPA and the Department of the
Army
 
issued
 
the
 
final
 
WOTUS
 
rule,
 
effective
 
September
 
8,
 
2023,
 
that
 
largely
 
reinstated
 
the
 
pre-2015
definition and applied the
Sackett
ruling.
 
The EPA and the
 
USCG have
 
also enacted
 
rules relating
 
to ballast
 
water discharge,
 
compliance with
 
which
requires the
 
installation of
 
equipment on
 
our vessels
 
to treat
 
ballast water
 
before it
 
is discharged
 
or the
implementation of other port
 
facility disposal arrangements or
 
procedures at potentially substantial costs,
and/or otherwise restrict our
 
vessels from entering U.S.
 
Waters.
 
The EPA will regulate these ballast water
discharges and other discharges incidental to the normal operation
 
of certain vessels within United States
waters pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December
4,
 
2018
 
and
 
replaces
 
the
 
2013
 
Vessel
 
General
 
Permit
 
(“VGP”)
 
program
 
(which
 
authorizes
 
discharges
incidental to operations
 
of commercial
 
vessels and
 
contains numeric
 
ballast water
 
discharge limits
 
for most
vessels
 
to
 
reduce
 
the
 
risk
 
of
 
invasive
 
species
 
in
 
U.S.
 
waters,
 
stringent
 
requirements
 
for
 
exhaust
 
gas
scrubbers, and
 
requirements for
 
the use
 
of environmentally
 
acceptable lubricants)
 
and current
 
Coast Guard
ballast
 
water
 
management
 
regulations
 
adopted
 
under
 
the
 
U.S.
 
National
 
Invasive
 
Species
 
Act
 
(“NISA”),
such
 
as
 
mid-ocean
 
ballast
 
exchange
 
programs
 
and
 
installation
 
of
 
approved
 
USCG
 
technology
 
for
 
all
vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters.
 
VIDA establishes
a new framework
 
for the regulation
 
of vessel incidental
 
discharges under Clean
 
Water Act (CWA), requires
the
 
EPA
 
to
 
develop
 
performance
 
standards
 
for
 
those
 
discharges
 
within
 
two
 
years
 
of
 
enactment,
 
and
requires the U.S.
 
Coast Guard
 
to develop implementation,
 
compliance, and
 
enforcement regulations
 
within
two years
 
of EPA’s promulgation of standards.
 
On September
 
24, 2024,
 
the EPA finalized
 
its rule
 
on Vessel
Incidental
 
Discharge
 
Standards
 
of
 
Performance,
 
which
 
means
 
that
 
the
 
USCG
 
must
 
now
 
develop
corresponding regulations regarding ballast water within two years of
 
that date.
 
Under
 
VIDA,
 
all
 
provisions
 
of
 
the
 
2013
 
VGP
 
and
 
USCG
 
regulations
 
regarding
 
ballast
 
water
 
treatment
remain in force and
 
effect until the EPA and U.S.
 
Coast Guard regulations
 
are finalized.
 
Non-military, non-
recreational vessels
 
greater than
 
79 feet
 
in length
 
must continue
 
to comply
 
with the
 
requirements of
 
the
VGP,
 
including submission
 
of
 
a
 
Notice
 
of
 
Intent (“NOI”)
 
or
 
retention
 
of
 
a
 
PARI
 
form
 
and
 
submission of
annual reports. We have submitted NOIs for our vessels where required.
 
Compliance with the EPA,
 
U.S.
Coast Guard
 
and state
 
regulations could
 
require the
 
installation of ballast water
 
treatment equipment
 
on
our vessels or
 
the implementation of
 
other port facility
 
disposal procedures at
 
potentially substantial cost
or may otherwise restrict our vessels from entering U.S. waters.
European Union Regulations
In
 
October
 
2009,
 
the
 
European
 
Union
 
amended
 
a
 
directive
 
to
 
impose
 
criminal
 
sanctions
 
for
 
illicit
 
ship-
source discharges of polluting substances, including minor discharges,
 
if committed with intent, recklessly
or with serious negligence and the discharges individually or in the aggregate result in deterioration of the
quality
 
of
 
water.
 
Aiding
 
and
 
abetting
 
the
 
discharge
 
of
 
a
 
polluting
 
substance
 
may
 
also
 
lead
 
to
 
criminal
64
penalties. The
 
directive applies
 
to all
 
types of
 
vessels, irrespective
 
of their
 
flag, but
 
certain exceptions
 
apply
to warships or where human safety
 
or that of the ship is
 
in danger. Criminal liability for pollution may result
in
 
substantial
 
penalties
 
or
 
fines
 
and
 
increased
 
civil
 
liability
 
claims.
 
Regulation
 
(EU)
 
2015/757
 
of
 
the
European Parliament
 
and of
 
the Council
 
of 29
 
April 2015
 
(amending EU
 
Directive 2009/16/EC)
 
governs
the monitoring, reporting
 
and verification of
 
carbon dioxide emissions
 
from maritime transport,
 
and, subject
to some
 
exclusions, requires
 
companies with
 
ships over
 
5,000 gross
 
tonnages to
 
monitor and
 
report carbon
dioxide emissions annually, which may cause us to incur additional expenses.
The European Union has adopted
 
several regulations and directives requiring, among
 
other things, more
frequent inspections
 
of high-risk ships,
 
as determined
 
by type, age,
 
and flag as
 
well as the
 
number of
 
times
the ship has been detained. The European Union
 
also adopted and extended a ban on substandard
 
ships
and enacted
 
a minimum
 
ban period
 
and a
 
definitive ban
 
for repeated
 
offenses. The
 
regulation also
 
provided
the
 
European
 
Union
 
with
 
greater
 
authority
 
and
 
control
 
over
 
classification
 
societies,
 
by
 
imposing
 
more
requirements on classification societies and providing for fines or
 
penalty payments for organizations that
failed to comply. Furthermore,
 
the EU has implemented
 
regulations requiring
 
vessels to use
 
reduced sulfur
content
 
fuel
 
for
 
their
 
main
 
and
 
auxiliary
 
engines.
 
The
 
EU
 
Directive
 
2005/33/EC
 
(amending
 
Directive
1999/32/EC) introduced requirements parallel to those in Annex VI relating to the sulfur content of marine
fuels. In
 
addition, the EU imposed
 
a 0.1% maximum
 
sulfur requirement for
 
fuel used
 
by ships at
 
berth in
the
 
Baltic,
 
the
 
North
 
Sea
 
and
 
the
 
English
 
Channel
 
(the
 
so
 
called
 
“SOx-Emission
 
Control
 
Area”).
 
As
 
of
January 2020, EU member states must also ensure that ships in all
 
EU waters, except the SOx-Emission
Control Area, use fuels with a 0.5% maximum sulfur content.
On September
 
15, 2020,
 
the European
 
Parliament voted
 
to include
 
greenhouse gas
 
emissions from
 
the
maritime sector in the European Union’s carbon
 
market, the EU Emissions Trading System (“EU ETS”)
 
as
part of its “Fit-for-55”
 
legislation to reduce
 
net greenhouse gas
 
emissions by at
 
least 55% by 2030.
 
On July
14, 2021, the European Parliament
 
formally proposed its plan, which
 
would involve gradually including
 
the
maritime sector from
 
2023 and phasing the
 
sector in over
 
three-year period. This will
 
require shipowners
to
 
buy permits
 
to
 
cover these
 
emissions. The
 
Environment Council
 
adopted a
 
general approach
 
on
 
the
proposal
 
in
 
June
 
2022.
 
On
 
December
 
18,
 
2022,
 
the
 
Environmental
 
Council
 
and
 
European
 
Parliament
agreed to include
 
maritime shipping emissions within
 
the scope of
 
the EU ETS
 
on a gradual
 
introduction
of
 
obligations
 
for
 
shipping
 
companies
 
to
 
surrender
 
allowances
 
equivalent
 
to
 
a
 
portion
 
of
 
their
 
carbon
emissions:
 
40% for verified
 
emissions from 2024,
 
70% for 2025
 
and 100% for
 
2026. Most large
 
vessels will
be included
 
in the
 
scope of
 
the EU
 
ETS from the
 
start. Big
 
offshore vessels
 
of 5,000
 
gross tonnage and
above will
 
be included
 
in the
 
'MRV'
 
on the
 
monitoring, reporting
 
and verification
 
of CO2
 
emissions from
maritime transport
 
regulation from
 
2025
 
and in
 
the
 
EU
 
ETS
 
from
 
2027. General
 
cargo vessels
 
and off-
shore vessels
 
between 400-5,000
 
gross tonnage
 
will be
 
included in
 
the
 
MRV
 
regulation from
 
2025 and
their inclusion in
 
EU ETS will
 
be reviewed
 
in 2026. Furthermore,
 
starting from January
 
1, 2026, the
 
ETS
regulations
 
will
 
expand
 
to
 
include
 
emissions
 
of
 
two
 
additional
 
greenhouse
 
gases:
 
nitrous
 
oxide
 
and
methane.
 
Compliance
 
with the
 
Maritime
 
EU
 
ETS
 
will
 
result
 
in
 
additional compliance
 
and
 
administration
costs
 
to
 
properly
 
incorporate
 
the
 
provisions
 
of
 
the
 
Directive
 
into
 
our
 
business
 
routines.
 
Additional
 
EU
regulations
 
which
 
are
 
part
 
of
 
the
 
EU’s
 
"Fit-for-55,"
 
could
 
also
 
affect
 
our
 
financial
 
position
 
in
 
terms
 
of
compliance and administration costs when they take effect.
EU Ship Recycling Regulation
The Regulation
 
is mostly
 
aligned with
 
the
 
Hong Kong
 
Convention on
 
Ship Recycling,
 
mentioned earlier
and aims quick
 
ratification of the
 
Convention. However, it sets
 
some additional requirements
 
and has been
into force since 2015 for new ships
 
and 2020 for existing ships. It concerns
 
vessels over 500 GT flying the
flag of a
 
member state or
 
vessels flying
 
the flag
 
of a 3
rd
 
party calling at
 
port or anchorage
 
of member
 
states.
Our
 
fleet
 
fully
 
complies
 
with
 
this
 
regulation.
 
Our
 
fleet’s
 
Inventories
 
of
 
Hazardous Materials
 
preparation,
certification and continuous maintenance have resulted in a
 
significant cost to the Company.
65
International Labour Organization
The International Labour Organization (the “ILO”) is
 
a specialized agency of the UN
 
that has adopted the
Maritime Labor Convention
 
2006 (“MLC 2006”). A
 
Maritime Labor Certificate
 
and a Declaration
 
of Maritime
Labor
 
Compliance is
 
required to
 
ensure compliance
 
with the
 
MLC 2006
 
for all
 
ships that
 
are 500
 
gross
tonnage
 
or
 
over
 
and
 
are
 
either
 
engaged
 
in
 
international
 
voyages
 
or
 
flying
 
the
 
flag
 
of
 
a
 
Member
 
and
operating
 
from
 
a
 
port,
 
or
 
between
 
ports,
 
in
 
another
 
country.
 
All
 
of
 
our
 
vessels
 
are
 
certified
 
under
 
the
Maritime Labor Convention 2006 (“MLC 2006”).
Greenhouse Gas Regulation
Currently,
 
the
 
emissions
 
of
 
greenhouse
 
gases
 
from
 
international
 
shipping
 
are
 
not
 
subject
 
to
 
the
 
Kyoto
Protocol to
 
the United
 
Nations Framework
 
Convention on
 
Climate Change,
 
which entered
 
into force
 
in 2005
and pursuant
 
to which
 
adopting countries have
 
been required to
 
implement national programs
 
to reduce
greenhouse gas emissions
 
with targets extended
 
through 2020. International negotiations
 
are continuing
with respect to a successor to the Kyoto Protocol, and restrictions
 
on shipping emissions may be included
in
 
any
 
new
 
treaty.
 
In
 
December 2009,
 
more
 
than
 
27
 
nations,
 
including the
 
U.S.
 
and
 
China,
 
signed
 
the
Copenhagen Accord,
 
which includes
 
a non-binding
 
commitment
 
to reduce
 
greenhouse gas
 
emissions.
 
The
2015 United Nations Climate Change Conference in Paris resulted in
 
the Paris Agreement, which entered
into force on
 
November 4, 2016
 
and does not
 
directly limit greenhouse
 
gas emissions from
 
ships. The U.S.
initially
 
entered
 
into
 
the
 
agreement,
 
but
 
on
 
June
 
1,
 
2017,
 
the
 
former
 
U.S. President
 
Trump
 
announced
that the United States intends
 
to withdraw from the
 
Paris Agreement, and the
 
withdrawal became effective
on November 4, 2020. On January 20, 2021, U.S. President Biden signed an executive
 
order to rejoin the
Paris
 
Agreement,
 
which
 
the
 
U.S.
 
officially
 
rejoined
 
on
 
February
 
19,
 
2021.
 
However,
 
in
 
January
 
2025,
President Trump
 
signed an
 
executive order
 
to begin
 
the
 
withdrawal of
 
the United
 
States from
 
the Paris
Agreement.
At
 
MEPC
 
70
 
and
 
MEPC
 
71,
 
a
 
draft
 
outline
 
of
 
the
 
structure
 
of
 
the
 
initial
 
strategy
 
for
 
developing
 
a
comprehensive
 
IMO
 
strategy
 
on
 
reduction
 
of
 
greenhouse
 
gas
 
emissions
 
from
 
ships
 
was
 
approved.
 
In
accordance with this roadmap, in April 2018, nations at
 
the MEPC 72 adopted an initial strategy to reduce
greenhouse
 
gas
 
emissions
 
from
 
ships.
 
The
 
initial
 
strategy
 
identifies
 
“levels
 
of
 
ambition”
 
to
 
reducing
greenhouse
 
gas
 
emissions,
 
including
 
(1)
 
decreasing
 
the
 
carbon
 
intensity
 
from
 
ships
 
through
implementation of
 
further phases
 
of the
 
EEDI for
 
new ships;
 
(2) reducing
 
carbon dioxide
 
emissions per
transport
 
work,
 
as
 
an
 
average
 
across
 
international shipping,
 
by
 
at
 
least
 
40%
 
by
 
2030,
 
pursuing
 
efforts
towards 70%
 
by 2050,
 
compared to 2008
 
emission levels; and
 
(3) reducing the
 
total annual
 
greenhouse
emissions by
 
at least
 
50% by
 
2050 compared
 
to 2008
 
while pursuing
 
efforts
 
towards phasing
 
them out
entirely.
 
The initial strategy
 
notes that technological
 
innovation, alternative
 
fuels and/or energy
 
sources for
international shipping will be integral to achieve the overall ambition. These regulations could cause us to
incur additional
 
substantial expenses.
 
At MEPC
 
77, the
 
Member States
 
agreed to
 
initiate the
 
revision of
the Initial
 
IMO Strategy
 
on Reduction
 
of GHG
 
emissions from
 
ships, recognizing
 
the need
 
to strengthen
the ambition
 
during the
 
revision process.
 
In July
 
2023, MEPC
 
80 adopted
 
a revised
 
strategy, which includes
an enhanced
 
common ambition to
 
reach net-zero
 
greenhouse gas emissions
 
from international shipping
around or close to 2050, a
 
commitment to ensure an uptake of
 
alternative zero and near-zero greenhouse
gas fuels
 
by 2030,
 
as well
 
as i).
 
reducing the
 
total annual
 
greenhouse gas
 
emissions from
 
international
shipping by at
 
least 20%, striving for
 
30%, by 2030,
 
compared to 2008;
 
and ii). reducing
 
the total annual
greenhouse gas
 
emissions from
 
international shipping
 
by at
 
least 70%,
 
striving for
 
80%, by
 
2040, compared
to 2008.
 
In March
 
2024, MEPC 81
 
further developed the
 
goal based marine
 
fuel standard regulating
 
the
phased reduction of marine fuel’s GHG intensity as part of its mid-term measures. In Fall 2024, MEPC 82
made further progress
 
on the development
 
of these mid-term
 
measures, and the
 
Committee is expected
to approve amendments at MEPC 83 (Spring 2025) for adoption in
 
October 2025.
The EU made
 
a unilateral
 
commitment to
 
reduce overall
 
greenhouse gas
 
emissions from
 
its member
 
states
from 20% of 1990 levels
 
by 2020. The EU also committed
 
to reduce its emissions
 
by 20% under the
 
Kyoto
66
Protocol’s
 
second
 
period
 
from
 
2013
 
to
 
2020.
 
Starting
 
in
 
January
 
2018,
 
large
 
ships
 
over
 
5,000
 
gross
tonnage calling at EU ports
 
are required to collect
 
and publish data on
 
carbon dioxide emissions and
 
other
information.
 
Under
 
the
 
European
 
Climate
 
Law,
 
the
 
EU
 
committed
 
to
 
reduce
 
its
 
net
 
greenhouse
 
gas
emissions by at least 55% by 2030 through its “Fit-for-55” legislation
 
package. As part of this initiative, the
European Union’s
 
carbon market,
 
EU ETS,
 
has been
 
extended to
 
cover CO2
 
emissions from
 
all large
 
ships
entering EU ports starting January 2024.
Any passage
 
of climate
 
control legislation
 
or other
 
regulatory initiatives
 
by the
 
IMO, the EU,
 
the U.S.
 
or
other countries
 
where we
 
operate, or
 
any treaty
 
adopted at
 
the international
 
level to
 
succeed the
 
Kyoto
Protocol
 
or
 
Paris
 
Agreement,
 
that
 
restricts
 
emissions
 
of
 
greenhouse
 
gases
 
could
 
require
 
us
 
to
 
make
significant financial expenditures which we
 
cannot predict with certainty at
 
this time. Even in the
 
absence
of climate control
 
legislation, our business
 
may be indirectly
 
affected to the
 
extent that climate
 
change may
result in sea level changes or certain weather events.
Vessel Security Regulations
Since
 
the
 
terrorist
 
attacks
 
of
 
September
 
11,
 
2001
 
in
 
the
 
United
 
States,
 
there
 
have
 
been
 
a
 
variety
 
of
initiatives intended
 
to enhance
 
vessel security
 
such as
 
the U.S.
 
Maritime Transportation
 
Security Act
 
of
2002 (“MTSA”).
To
implement certain
 
portions of
 
the MTSA,
 
the
 
USCG issued
 
regulations requiring
 
the
implementation
 
of
 
certain
 
security
 
requirements
 
aboard
 
vessels
 
operating
 
in
 
waters
 
subject
 
to
 
the
jurisdiction of the
 
United States and
 
at certain ports
 
and facilities, some
 
of which are
 
regulated by the
 
EPA.
Similarly, Chapter XI-2 of
 
the SOLAS
 
Convention imposes
 
detailed security
 
obligations on
 
vessels and
 
port
authorities and
 
mandates compliance
 
with the
 
International Ship
 
and Port
 
Facility Security
 
Code (“the ISPS
Code”). The ISPS Code is designed to enhance
 
the security of ports and ships against
 
terrorism.
To
trade
internationally,
 
a vessel must
 
attain an
 
International Ship Security
 
Certificate (“ISSC”) from
 
a recognized
security organization approved
 
by the vessel’s flag
 
state. Ships operating
 
without a valid
 
certificate may be
detained, expelled
 
from, or
 
refused entry at
 
port until
 
they obtain an
 
ISSC. The
 
various requirements,
 
some
of
 
which
 
are
 
found
 
in
 
the
 
SOLAS
 
Convention, include,
 
for
 
example,
 
on-board
 
installation
 
of
 
automatic
identification systems to provide
 
a means for the
 
automatic transmission of safety-related
 
information from
among
 
similarly
 
equipped
 
ships
 
and
 
shore
 
stations,
 
including
 
information
 
on
 
a
 
ship’s
 
identity,
 
position,
course, speed
 
and navigational
 
status; on-board installation
 
of ship
 
security alert
 
systems, which
 
do not
sound on the vessel but only alert the authorities on shore; the development of vessel
 
security plans; ship
identification
 
number
 
to
 
be
 
permanently
 
marked
 
on
 
a
 
vessel’s
 
hull;
 
a
 
continuous
 
synopsis
 
record
 
kept
onboard showing a vessel's history including
 
the name of the ship, the state
 
whose flag the ship is entitled
to fly, the date on which the ship was registered
 
with that state, the ship's
 
identification number, the port at
which
 
the
 
ship
 
is
 
registered
 
and
 
the
 
name
 
of
 
the
 
registered
 
owner(s)
 
and
 
their
 
registered
 
address;
and compliance with flag state security certification requirements.
The USCG regulations, intended to align with
 
international maritime security standards, exempt non-U.S.
vessels
 
from
 
MTSA
 
vessel
 
security
 
measures,
 
provided
 
such
 
vessels
 
have
 
on
 
board
 
a
 
valid
 
ISSC
 
that
attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code.
Future security
 
measures could
 
have a
 
significant financial
 
impact on
 
us.
 
We intend
 
to comply
 
with the
various security measures addressed by MTSA,
 
the SOLAS Convention and the
 
ISPS Code. The cost of
vessel security
 
measures has
 
also been
 
affected by
 
the escalation
 
in the
 
frequency of
 
acts of
 
piracy against
ships, notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area. Substantial loss
of
 
revenue
 
and
 
other
 
costs
 
may
 
be
 
incurred
 
as
 
a
 
result
 
of
 
detention
 
of
 
a
 
vessel
 
or
 
additional
 
security
measures, and
 
the risk
 
of uninsured
 
losses could
 
significantly affect
 
our business.
 
Costs are
 
incurred in
taking
 
additional
 
security
 
measures
 
in
 
accordance
 
with
 
Best
 
Management
 
Practices
 
to
 
Deter
 
Piracy,
notably those contained in the BMP5 industry standard.
67
Inspection by Flag administration and Classification Societies
The flag represents the nationality of the ship, showing that it’s under the control of the registered country
and must comply with international and maritime law of it. The flag is required to take measures
 
to ensure
safety at sea
 
and should verify that
 
ships under its
 
authority,
 
conform relevant international standards,
 
in
regard to construction, design, equipment and manning of ships,
 
through on board physical inspections.
The hull and machinery of every commercial vessel
 
must be classed by a classification society
 
authorized
by
 
its
 
country
 
of
 
registry.
 
The
 
classification
 
society
 
certifies
 
that
 
a
 
vessel
 
is
 
safe
 
and
 
seaworthy
 
in
accordance with the
 
applicable rules and
 
regulations of the
 
country of registry of
 
the vessel and
 
SOLAS.
Most
 
insurance
 
underwriters
 
make
 
it
 
a
 
condition
 
for
 
insurance
 
coverage
 
and
 
lending
 
that
 
a
 
vessel
 
be
certified
 
“in
 
class”
 
by
 
a
 
classification
 
society
 
which
 
is
 
a
 
member
 
of
 
the
 
International
 
Association
 
of
Classification Societies, the IACS.
 
The IACS has adopted harmonized Common Structural Rules, or “the
Rules”, which
 
apply to
 
oil tankers
 
and bulk
 
carriers contracted
 
for construction
 
on or after
 
July 1,
 
2015.
 
The
Rules attempt to create a level of consistency between IACS Societies.
 
All of our vessels are certified as
being “in
 
class” by
 
all the
 
applicable Classification Societies
 
(e.g., American
 
Bureau of
 
Shipping, Lloyd's
Register of Shipping).
A vessel must undergo annual surveys,
 
intermediate surveys, drydockings and special surveys. In
 
lieu of
a special survey,
 
a vessel’s machinery may be
 
on a continuous survey cycle, under
 
which the machinery
would
 
be
 
surveyed
 
periodically
 
over
 
a
 
five-year
 
period.
 
Every
 
vessel
 
should
 
have
 
a
 
minimum
 
of
 
two
examinations of
 
the outside
 
of a
 
vessel's bottom
 
and related
 
items during
 
each five-year
 
special survey
period. One such examination is to
 
be carried out in conjunction with the
 
Special Periodical Survey.
 
In all
cases, the
 
interval between
 
any two
 
such examinations
 
is not
 
to exceed
 
36 months.
 
In all
 
cases, the
 
interval
between any two such examinations is not to exceed 36 months. If any vessel does not maintain its class
and/or fails any
 
annual survey, intermediate survey, drydocking
 
or special survey, the
 
vessel will be
 
unable
to
 
carry cargo
 
between ports
 
and
 
will be
 
unemployable and
 
uninsurable which
 
could
 
cause
 
us to
 
be
 
in
violation of certain covenants in our loan agreements.
 
Any such inability to carry cargo or be employed,
 
or
any such
 
violation of
 
covenants, could
 
have a
 
material adverse
 
impact on
 
our financial
 
condition and
 
results
of operations.
Risk of Loss and Liability Insurance
General
The operation
 
of any cargo
 
vessel includes
 
risks such
 
as mechanical
 
failure, physical damage,
 
collision,
property
 
loss,
 
cargo
 
loss
 
or
 
damage
 
and
 
business
 
interruption
 
due
 
to
 
political
 
circumstances
 
in
 
foreign
countries, piracy incidents, hostilities and
 
labor strikes. In
 
addition, there is
 
always an inherent
 
possibility
of
 
marine
 
disaster,
 
including
 
oil
 
spills
 
and
 
other
 
environmental
 
mishaps,
 
and
 
the
 
liabilities
 
arising
 
from
owning
 
and
 
operating
 
vessels
 
in
 
international
 
trade.
 
OPA,
 
which
 
imposes
 
virtually
 
unlimited
 
liability
upon shipowners,
 
operators
 
and bareboat
 
charterers
 
of any
 
vessel
 
trading
 
in
 
the
 
exclusive
 
economic
zone of the
 
United States
 
for certain
 
oil pollution
 
accidents in
 
the United
 
States, has
 
made liability
 
insurance
more
 
expensive
 
for shipowners
 
and
 
operators
 
trading
 
in
 
the United
 
States
 
market. We
 
carry
 
insurance
coverage as customary in
 
the shipping industry. However, not all risks can be
 
insured, specific claims
 
may
be rejected, and we might not be always
 
able to obtain adequate insurance coverage
 
at reasonable rates.
While we maintain hull and machinery insurance, war risks
 
insurance, protection and indemnity cover and
freight, demurrage and
 
defense cover for
 
our operating fleet
 
in amounts that
 
we believe to
 
be prudent to
cover
 
normal risks
 
in
 
our
 
operations,
 
we may
 
not
 
be
 
able to
 
achieve
 
or maintain
 
this
 
level of
 
coverage
throughout
 
a
 
vessel's
 
useful life.
 
Furthermore, while
 
we
 
believe
 
that
 
our
 
present
 
insurance
 
coverage is
adequate, not all risks can be insured, and there can be no guarantee that any specific
 
claim will be paid,
or that we will always be able to obtain adequate insurance coverage
 
at reasonable rates.
68
Hull & Machinery and War Risks Insurance
We maintain marine hull and
 
machinery and war risks insurance, which cover,
 
among other marine risks,
the risk
 
of actual
 
or constructive
 
total loss,
 
for all
 
of our
 
vessels. Our
 
vessels are
 
each covered
 
up to
 
at
least
 
fair
 
market
 
value
 
with
 
deductibles
 
ranging
 
to
 
a
 
maximum
 
of
 
$100,000
 
per
 
vessel
 
per
 
incident
 
for
Panamax, Kamsarmax and
 
Post-Panamax vessels
 
and $150,000 per
 
vessel per incident
 
for Capesize and
Newcastlemax vessels.
Protection and Indemnity Insurance
Protection and indemnity
 
insurance is provided
 
by mutual protection
 
and indemnity associations,
 
or “P&I
Associations,” and covers our third-party liabilities in connection with our shipping activities. This includes
third-party liability
 
and other
 
related expenses of
 
injury or
 
death of
 
crew, passengers and
 
other third
 
parties,
loss
 
or
 
damage
 
to
 
cargo,
 
claims
 
arising
 
from
 
collisions
 
with
 
other
 
vessels,
 
damage
 
to
 
other
 
third-party
property,
 
pollution
 
arising
 
from
 
oil
 
or
 
other
 
substances,
 
and
 
salvage,
 
towing
 
and
 
other
 
related
 
costs,
including
 
wreck
 
removal.
 
Protection
 
and
 
indemnity
 
insurance
 
is
 
a
 
form
 
of
 
mutual
 
indemnity
 
insurance,
extended by protection and indemnity mutual associations, or “clubs.”
Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident.
The 13
 
P&I Associations
 
that comprise
 
the International
 
Group insure
 
approximately 90%
 
of the world’s
commercial
 
tonnage
 
and
 
have
 
entered
 
into
 
a
 
pooling
 
agreement
 
to
 
reinsure
 
each association’s
liabilities. The
 
International
 
Group’s
 
website
 
states
 
that
 
the
 
Pool
 
provides
 
a
 
mechanism
 
for
 
sharing
 
all
claims in
 
excess of
 
US$10 million up
 
to, currently,
 
approximately US$8.2
 
billion.
 
As a
 
member of
 
a P&I
Association,
 
which
 
is
 
a
 
member
 
of
 
the
 
International
 
Group,
 
we
 
are
 
subject
 
to
 
calls
 
payable
 
to
 
the
associations based on our
 
claim records as
 
well as the claim
 
records of all
 
other members of the
 
individual
associations
 
and
 
members
 
of
 
the shipping
 
pool
 
of
 
P&I
 
Associations
 
comprising
 
the
 
International
Group.
 
Our
 
vessels
 
may
 
be
 
subject
 
to
 
supplemental
 
calls
 
which
 
are
 
based
 
on
 
estimates
 
of
 
premium
income and anticipated and paid claims. Such estimates
 
are adjusted each year by the Board of
 
Directors
of the
 
P&I Association
 
until the
 
closing of
 
the relevant
 
policy year, which
 
generally occurs
 
within three
 
years
from the
 
end of the
 
policy year.
 
Supplemental calls, if
 
any,
 
are expensed when
 
they are
 
announced and
according to the period they relate to.
 
C.
 
Organizational structure
Diana Shipping Inc. is the sole owner of all of the issued and outstanding shares of the subsidiaries listed
in Exhibit 8.1 to this annual report.
D.
 
Property, plants and equipment
Since October 8, 2010, DSS owns
 
the land and the building where
 
we have our principal corporate offices
in Athens, Greece. In addition, DSS owns three
 
additional plots, one partly acquired in 2021 and
 
partly in
2023 from two related parties and
 
two acquired in 2024 from unrelated
 
third parties. All plots of land are in
the same area as our principal offices and were acquired for corporate use.
 
Other than this interest in real
property, our only material properties are the vessels in our fleet.
Item 4A.
 
Unresolved Staff Comments
None.
69
Item 5.
 
Operating and Financial Review and Prospects
The
 
following
 
management's
 
discussion
 
and
 
analysis
 
should
 
be
 
read
 
in
 
conjunction
 
with
 
our
 
historical
consolidated financial statements
 
and their notes included
 
elsewhere in this
 
annual report. This
 
discussion
contains forward-looking
 
statements that
 
reflect our
 
current views
 
with respect
 
to future
 
events and
 
financial
performance.
 
Our
 
actual
 
results
 
may
 
differ
 
materially
 
from
 
those
 
anticipated
 
in
 
these
 
forward-looking
statements as a result of certain
 
factors, such as those set forth
 
in the section entitled “Risk Factors”
 
and
elsewhere in this annual report.
A.
Operating results
Factors Affecting Our Results of Operations
We believe that our results of operations are affected by the following factors:
(1)
 
Average number of
 
vessels is the
 
number of vessels
 
that constituted our fleet
 
for the relevant
period, as
 
measured by
 
the sum
 
of the
 
number of
 
days each
 
vessel was
 
a part
 
of our
 
fleet during
the period divided by the number of calendar days in the period.
 
(2)
 
Ownership days are the aggregate number of days in a period during which
 
each vessel in our
fleet
 
has been
 
owned
 
by us.
 
Ownership days
 
are
 
an
 
indicator of
 
the
 
size of
 
our
 
fleet
 
over a
period
 
and
 
affect
 
both
 
the
 
amount
 
of
 
revenues
 
and
 
the
 
amount
 
of
 
expenses
 
that
 
we
 
record
during a period.
 
(3)
 
Available days are
 
the number of our
 
ownership days less the
 
aggregate number of days
 
that
our vessels are off-hire
 
due to scheduled repairs or
 
repairs under guarantee, vessel upgrades
or special surveys and the aggregate amount of time that we spend positioning our vessels for
such events.
 
The shipping
 
industry uses
 
available days
 
to measure
 
the number
 
of days
 
in a
period during which vessels should be capable of generating
 
revenues.
 
(4)
 
Operating days are
 
the number of
 
available days in
 
a period less
 
the aggregate number
 
of days
that
 
our
 
vessels
 
are
 
off-hire
 
due
 
to
 
any
 
reason,
 
including
 
unforeseen
 
circumstances.
 
The
shipping industry
 
uses operating
 
days to
 
measure the
 
aggregate number
 
of days
 
in a
 
period
during which vessels actually generate revenues.
 
(5)
 
We calculate
 
fleet utilization
 
by dividing
 
the number
 
of our
 
operating days
 
during a
 
period by
the number of our available days
 
during the period. The shipping industry uses
 
fleet utilization
to measure
 
a company's
 
efficiency in
 
finding suitable
 
employment for
 
its vessels
 
and minimizing
the
 
amount
 
of
 
days
 
that
 
its
 
vessels
 
are
 
off-hire
 
for
 
reasons
 
other
 
than
 
scheduled
 
repairs
 
or
repairs
 
under
 
guarantee,
 
vessel
 
upgrades,
 
special
 
surveys
 
or
 
vessel
 
positioning
 
for
 
such
events.
 
(6)
 
Time
 
charter
 
equivalent
 
rates,
 
or
 
TCE
 
rates,
 
are
 
defined
 
as
 
our
 
time
 
charter
 
revenues
 
less
voyage expenses
 
during a
 
period divided
 
by the
 
number of
 
our available
 
days during
 
the period,
which
 
is
 
consistent
 
with
 
industry
 
standards.
 
Voyage
 
expenses
 
include
 
port
 
charges,
 
bunker
(fuel)
 
expenses,
 
canal
 
charges
 
and
 
commissions.
 
TCE
 
rate
 
is
 
a
 
non-GAAP
 
measure,
 
and
management
 
believes
 
it
 
is
 
useful
 
to
 
investors
 
because
 
it
 
is
 
a
 
standard
 
shipping
 
industry
performance measure used primarily
 
to compare daily earnings
 
generated by vessels on
 
time
charters
 
with
 
daily
 
earnings
 
generated
 
by
 
vessels
 
on
 
voyage
 
charters,
 
because
 
charter
 
hire
rates
 
for
 
vessels
 
on
 
voyage
 
charters
 
are
 
generally
 
not
 
expressed
 
in
 
per
 
day
 
amounts
 
while
charter hire rates for vessels on time charters are generally expressed
 
in such amounts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
70
(7)
 
Daily
 
vessel
 
operating
 
expenses,
 
which
 
include
 
crew
 
wages
 
and
 
related
 
costs,
 
the
 
cost
 
of
insurance, expenses relating to repairs and maintenance, the costs of
 
spares and consumable
stores,
 
tonnage
 
taxes
 
and
 
other
 
miscellaneous
 
expenses,
 
are
 
calculated
 
by
 
dividing
 
vessel
operating expenses by ownership days for the relevant period.
The following table reflects such factors for the periods indicated:
As of and for the
Year Ended December 31,
2024
2023
2022
Fleet Data:
Average number of vessels (1)
38.9
41.1
35.4
Number of vessels at year-end
38.0
40.0
42.0
Weighted average age of vessels at year-end (in
 
years)
 
11.3
10.5
10.2
Ownership days (2)
 
14,219
14,986
12,924
Available days (3)
 
14,057
14,867
12,449
Operating days (4)
 
14,009
14,824
12,306
Fleet utilization (5)
 
99.7%
99.7%
98.9%
Average Daily Results:
Time charter equivalent (TCE) rate (6)
 
$
15,267
$
16,713
$
22,735
Daily vessel operating expenses (7)
 
5,808
5,704
5,574
The following table reflects the calculation of our TCE rates for
 
the periods presented:
Year Ended December 31,
2024
2023
2022
(in thousands of U.S. dollars, except for TCE rates, which
are expressed in U.S. dollars, and available days)
Time charter revenues
 
$
228,209
$
262,098
$
289,972
Less: voyage expenses
 
(13,607)
(13,621)
(6,942)
Time charter equivalent revenues
 
$
214,602
$
248,477
$
283,030
Available days
 
14,057
14,867
12,449
Time charter equivalent (TCE) rate
 
$
15,267
$
16,713
$
22,735
Time Charter Revenues
Our revenues are driven primarily by
 
the number of vessels in our
 
fleet, the number of days during which
our vessels operate and
 
the amount of daily
 
charter hire rates that
 
our vessels earn under
 
charters, which,
in turn, are affected by a number of factors, including:
●
the duration of our charters;
●
our decisions relating to vessel acquisitions and disposals;
●
the amount of time that we spend positioning our vessels;
●
the amount of time that our vessels spend in drydock undergoing
 
repairs;
71
●
maintenance and upgrade work;
●
the age, condition and specifications of our vessels;
●
levels of supply and demand in the dry bulk shipping industry.
Vessels
 
operating on time
 
charters for a
 
certain period of
 
time provide more
 
predictable cash flows
 
over
that
 
period
 
of
 
time
 
but
 
can
 
yield
 
lower
 
profit
 
margins than
 
vessels
 
operating in
 
the
 
spot
 
charter market
during periods characterized by favorable market conditions. Vessels operating in the spot charter market
generate
 
revenues
 
that
 
are
 
less
 
predictable
 
but
 
may
 
enable
 
their
 
owners
 
to
 
capture
 
increased
 
profit
margins during
 
periods of
 
improvements in
 
charter rates
 
although their owners
 
would be
 
exposed to the
risk of
 
declining charter rates,
 
which may have
 
a materially adverse
 
impact on financial
 
performance. As
we employ vessels
 
on period charters,
 
future spot charter
 
rates may be
 
higher or lower
 
than the rates
 
at
which
 
we
 
have
 
employed
 
our
 
vessels
 
on
 
period
 
charters.
 
Our
 
time
 
charter
 
agreements
 
subject
 
us
 
to
counterparty risk.
 
In depressed
 
market conditions,
 
charterers may
 
seek to
 
renegotiate the
 
terms of
 
their
existing charter parties or
 
avoid their obligations
 
under those contracts.
 
Should a counterparty
 
fail to honor
their obligations
 
under agreements
 
with us,
 
we could
 
sustain significant
 
losses which
 
could have
 
a material
adverse effect on
 
our business,
 
financial condition,
 
results of
 
operations and
 
cash flows. Revenues
 
derived
from
 
time
 
charter
 
agreements
 
in
 
2024
 
decreased
 
compared
 
to
 
previous
 
years
 
due
 
to
 
the
 
decrease
 
in
charter
 
rates
 
during the
 
year
 
and
 
the
 
decrease in
 
the
 
size
 
of
 
our
 
fleet
 
following vessel
 
sales
 
described
elsewhere in this annual report.
 
Voyage Expenses
We incur
 
voyage expenses
 
that mainly
 
include commissions
 
because all
 
of our
 
vessels are
 
employed
 
under
time charters that require the
 
charterer to bear voyage expenses
 
such as bunkers (fuel oil), port
 
and canal
charges. Although the charterer bears the cost
 
of bunkers, we also have bunker gain or
 
loss deriving from
the price differences of bunkers. When a vessel is delivered to a charterer,
 
bunkers are purchased by the
charterer and sold back
 
to us on the
 
redelivery of the vessel.
 
Bunker gain, or loss,
 
results
 
when a vessel
is redelivered by her charterer and delivered to the next charterer
 
at different bunker prices, or quantities.
We usually
 
pay commissions
 
ranging from
 
4.75% to
 
5.00% of
 
the total
 
daily charter
 
hire rate
 
of each
 
charter
to unaffiliated ship brokers, in-house brokers
 
associated with the charterers, depending on the number of
brokers
 
involved with
 
arranging the
 
charter.
 
In
 
addition, we
 
pay
 
a commission
 
to
 
DWM
 
and to
 
DSS for
those vessels
 
for which
 
they provide
 
commercial management
 
services. The
 
commissions paid
 
to DSS
 
are
eliminated from our consolidated financial statements as intercompany
 
transactions.
 
Vessel Operating Expenses
Vessel operating expenses include
 
crew wages and
 
related costs,
 
the cost of
 
insurance, expenses
 
relating
to repairs and
 
maintenance, the cost
 
of spares and
 
consumable stores, tonnage
 
taxes, environmental
 
plan
costs and HSQ and vetting. Our vessel operating expenses generally
 
represent fixed costs.
 
Vessel Depreciation
 
The cost of our
 
vessels is depreciated
 
on a straight-line
 
basis over the estimated
 
useful life of each
 
vessel.
Depreciation is based
 
on the
 
cost of the
 
vessel less
 
its estimated salvage
 
value. We
 
estimate the useful
life of
 
our dry
 
bulk vessels
 
to be
 
25 years from
 
the date
 
of initial
 
delivery from
 
the shipyard,
 
which we
 
believe
is common in the
 
dry bulk shipping industry.
 
Furthermore, we estimate the salvage
 
values of our vessels
based on historical average prices
 
of the cost of
 
the light-weight ton of
 
vessels being scrapped. Effective
July 1, 2023, the Company
 
changed its estimated
 
scrap rate of its
 
vessels from $250 per
 
lightweight ton to
$400 per lightweight
 
ton, calculated
 
based on the
 
average demolition
 
prices in
 
different markets, during
 
the
last 15 years.
 
72
General and Administrative Expenses
We incur general
 
and administrative
 
expenses which
 
include our
 
onshore related
 
expenses such
 
as payroll
expenses
 
of
 
employees,
 
executive
 
officers,
 
directors
 
and
 
consultants,
 
compensation
 
cost
 
of
 
restricted
stock
 
awarded
 
to
 
senior
 
management
 
and
 
non-executive
 
directors,
 
traveling,
 
promotional
 
and
 
other
expenses of
 
the public
 
company,
 
such as
 
legal and
 
professional expenses and
 
other general expenses.
General and administrative expenses are not affected
 
by the size of the fleet.
 
However, they are
 
affected
by the exchange rate of Euro to US Dollars,
 
as about half of our administrative expenses are in Euro.
 
Interest and Finance Costs
We incur
 
interest expense and
 
financing costs
 
in connection with
 
vessel-specific debt,
 
senior unsecured
bond and finance liabilities. As of December 31, 2024 our aggregate debt amounted
 
to $522.6 million and
our finance
 
liabilities amounted
 
to $123.9
 
million. During
 
2023, we
 
replaced LIBOR,
 
being the
 
reference
rate to
 
calculate interest
 
expense in
 
our loan
 
facilities having
 
a floating
 
rate, with
 
term SOFR.
 
Interest rates,
which have
 
been increasing
 
since the
 
beginning of
 
2022, started
 
to decrease
 
from the
 
third quarter
 
of 2024.
 
We manage our exposure to interest
 
rates by maintaining a mix
 
of floating and fixed
 
interest rate financing
agreements. Floating
 
rate agreements
 
include secured
 
loan facilities
 
and fixed
 
rate agreements
 
include
leases and our senior unsecured
 
bond. Also, in 2023, we
 
entered into an interest
 
rate swap for 30% of
 
our
$100 million
 
loan facility
 
with DNB,
 
dated June
 
26, 2023,
 
under which
 
we pay
 
fixed interest
 
and receive
floating.
 
Lack of Historical Operating Data for Vessels before Their Acquisition
Although vessels are generally acquired free of charter, we have acquired (and may in the future acquire)
some vessels with time charters. It is rare in
 
the shipping industry for the last charterer of
 
the vessel in the
hands of the seller to continue as the first charterer
 
of the vessel in the hands of the buyer. In most cases,
when a
 
vessel is
 
under time
 
charter and
 
the buyer
 
wishes to
 
assume that
 
charter,
 
the vessel
 
cannot be
acquired without the charterer’s
 
consent and the buyer entering into
 
a separate direct agreement (called
 
a
“novation agreement”) with the
 
charterer to assume the
 
charter. The
 
purchase of a
 
vessel itself does not
transfer
 
the
 
charter
 
because
 
it
 
is
 
a
 
separate
 
service
 
agreement
 
between
 
the
 
vessel
 
owner
 
and
 
the
charterer.
Where we identify any intangible assets or liabilities associated with the acquisition
 
of a vessel, we record
all
 
identified assets
 
or
 
liabilities at
 
fair
 
value.
 
Fair value
 
is
 
determined by
 
reference to
 
market
 
data. We
value any
 
asset or
 
liability arising
 
from the
 
market value
 
of the
 
time charters
 
assumed when
 
a vessel
 
is
acquired. The amount to be recorded as an asset or liability at the
 
date of vessel delivery is based on the
difference
 
between
 
the
 
current
 
fair
 
market
 
value
 
of
 
the
 
charter
 
and
 
the
 
net
 
present
 
value
 
of
 
future
contractual cash
 
flows.
 
When the
 
present value
 
of the
 
time charter
 
assumed is
 
greater than the
 
current
fair market
 
value of
 
such charter, the
 
difference is
 
recorded as
 
prepaid charter
 
revenue.
 
When the
 
opposite
situation occurs,
 
any difference,
 
capped to
 
the vessel’s
 
fair value
 
on a
 
charter-free basis, is
 
recorded as
deferred revenue.
 
Such assets and
 
liabilities, respectively, are amortized
 
as a reduction of,
 
or an increase
in, revenue over the period of the time charter assumed.
When we
 
purchase a
 
vessel and
 
assume or
 
renegotiate a
 
related time
 
charter,
 
among others,
 
we must
take the following steps before the vessel will be ready to commence
 
operations:
●
obtain the charterer’s consent to us as the new owner;
●
obtain the charterer’s consent to a new technical
 
manager;
73
●
in some cases, obtain the charterer’s consent to
 
a new flag for the vessel;
●
arrange for a
 
new crew for the
 
vessel, and where the
 
vessel is on charter,
 
in some cases, the
crew must be approved by the charterer;
●
replace all hired equipment on board, such as gas cylinders
 
and communication equipment;
●
negotiate
 
and
 
enter
 
into
 
new
 
insurance
 
contracts
 
for
 
the
 
vessel
 
through
 
our
 
own
 
insurance
brokers;
●
register the vessel under a
 
flag state and perform
 
the related inspections in order
 
to obtain new
trading certificates from the flag state;
●
implement a new planned maintenance program for the vessel; and
●
ensure that the new
 
technical manager obtains new certificates for
 
compliance with the safety
and vessel security regulations of the flag state.
When we charter
 
a vessel
 
pursuant to a
 
long-term time
 
charter agreement
 
with varying rates,
 
we recognize
revenue on a straight-line basis, equal to the average revenue during
 
the term of the charter.
 
The following
 
discussion is
 
intended to
 
help you
 
understand how
 
acquisitions of
 
vessels affect
 
our business
and results of operations.
Our business is mainly comprised of the following elements:
●
employment and operation of our vessels; and
●
management of
 
the financial,
 
general and
 
administrative elements
 
involved in
 
the conduct
 
of
our business and ownership of our vessels.
The employment and operation of our vessels mainly require the
 
following components:
●
vessel maintenance and repair;
●
crew selection and training;
●
vessel spares and stores supply;
●
contingency response planning;
●
onboard safety procedures auditing;
●
accounting;
●
vessel insurance arrangement;
●
vessel chartering;
●
vessel security training and security response plans (ISPS);
●
obtaining of
 
ISM certification
 
and audit
 
for each
 
vessel within
 
the six
 
months of
 
taking over
 
a
vessel;
74
●
vessel hiring management;
●
vessel surveying; and
●
vessel performance monitoring.
The management of
 
financial, general and
 
administrative elements
 
involved in the
 
conduct of our
 
business
and ownership of our vessels mainly requires the following components:
●
management of our
 
financial resources, including
 
banking relationships, i.e.,
 
administration of
bank loans and bank accounts;
●
management of our accounting system and records and financial
 
reporting;
●
administration of the legal and regulatory requirements affecting our business
 
and assets; and
●
management of the relationships with our service providers and customers.
The principal factors
 
that affect our profitability, cash
 
flows and shareholders’
 
return on investment
 
include:
●
rates and periods of charter hire;
●
levels of vessel operating expenses;
●
depreciation expenses;
●
financing costs;
 
●
the war in the Ukraine;
 
●
inflation, and
 
●
fluctuations in foreign exchange rates.
Results of Operations
Year ended December 31, 2024 compared to the year ended December 31, 2023
Time
 
charter revenues.
 
Time
 
charter revenues
 
decreased by
 
$33.9 million,
 
or 13%,
 
to $228.2
 
million in
2024, compared to $262.1 million
 
in 2023. The
 
decrease in time charter
 
revenues was due to
 
decreased
average time
 
charter rates
 
achieved during
 
the year, reflected
 
in our
 
TCE rate
 
of $15,267
 
in 2024
 
compared
to $16,713 in 2023,
 
representing a 9% decrease.
 
A further decrease was due
 
to the decrease in the
 
size
of our fleet resulting from the disposal
 
of two vessels during 2024, which
 
decreased operating days during
2024, as compared to last year. Operating days in 2024 were 14,009 compared to 14,824 in 2023.
Voyage
 
expenses.
 
Voyage
 
expenses
 
amounted
 
to
 
$13.6
 
million
 
in
 
2024
 
and
 
remained
 
unchanged
compared
 
to
 
2023.
 
Although
 
commissions,
 
included
 
in
 
voyage
 
expenses,
 
decreased
 
in
 
2024
 
to
 
$11.6
million compared to $13.3
 
million in 2023, this
 
decrease was offset by
 
increased port expenses
 
and loss in
bunkers amounting
 
to $0.7
 
million in
 
2024 compared
 
to a
 
gain of
 
$0.5 million
 
in 2023.
 
The gain/loss
 
on
bunkers was mainly due
 
to the difference in the
 
price of bunkers paid
 
by the Company
 
to the charterers on
the redelivery of the vessels from the charterers
 
under the previous charter party agreement
 
and the price
75
of bunkers paid
 
by charterers to
 
the Company on
 
the delivery of
 
the same vessels
 
to their charterers
 
under
new charter party agreements.
Vessel operating expenses.
Vessel operating expenses decreased by $2.9 million, or 3%, to $82.6 million
in 2024
 
compared to $85.5
 
million in
 
2023. The decrease
 
in operating expenses
 
is mainly attributable
 
to
the decrease
 
in ownership
 
days in
 
2024, due
 
to the
 
sale of
 
vessels discussed
 
above. Daily
 
vessel operating
expenses were $5,808
 
in 2024 and
 
increased by 2%
 
compared to $5,704
 
in 2023. Therefore,
 
the decrease
in operating expenses due to the decreased number of vessels during the year was offset by increases in
vessel supplies and taxes.
 
Depreciation
 
and
 
amortization
 
of
 
deferred
 
charges.
Depreciation
 
and
 
amortization
 
of
 
deferred
 
charges
decreased
 
by $5.1
 
million,
 
or 10%,
 
to $44.7
 
million
 
in 2024,
 
compared
 
to $49.8
 
million
 
in 2023.
 
This decrease
was
 
due
 
to
 
the
 
sale
 
of
 
two
 
vessels,
 
as
 
noted
 
above.
 
The
 
decrease
 
was
 
partly
 
offset
 
by
 
increased
amortization of deferred cost as a result of the drydock cost incurred
 
in 2024 as compared to 2023.
General and
 
administrative expenses
. General and admini
strati
ve expenses
 
increased by
 
$0.4 million,
 
or
1%, to $33.4
 
million in 2024
 
compared to $33.0
 
million in 2023.
 
The increase was
 
mainly due to
 
increased
payroll and taxes and was partly offset by decreased transfer agent expenses and legal fees.
 
Management fees to
 
a related party.
 
Management fees to
 
a related party
 
amounted to $1.3
 
million both in
2024 and
 
2023 due
 
to the
 
fact that
 
the number
 
of vessels
 
managed by
 
DWM in
 
2024 remained
 
the same
with 2023.
 
Gain
 
on
 
sale
 
of
 
vessels.
 
Gain
 
on
 
sale
 
of
 
vessels
 
increased
 
by
 
$0.5
 
million,
 
or
 
9%,
 
to
 
$5.8
 
million
 
which
resulted
 
from
 
the
 
sale
 
of
 
vessels
Artemis
 
and
 
Houston
in
 
2024
 
compared
 
to
 
$5.3
 
million
 
in
 
2023
 
which
resulted from the sale of vessels
Aliki, Melia and Boston
in 2023.
Interest expense and
 
finance costs.
 
Interest expense and
 
finance costs decreased
 
by $1.8 million
 
or 4%
to $47.5
 
million
 
in 2024
 
compared
 
to $49.3
 
million
 
in 2023.
 
The decrease
 
derived from
 
a decreased
 
average
outstanding
 
balance
 
of
 
debt
 
and
 
finance
 
liabilities
 
in
 
2024
 
and
 
was
 
partly
 
offset
 
by
 
increased
 
average
interest rates compared to 2023.
 
Interest and
 
other income
. Interest
 
and other
 
income increased
 
by $0.2
 
million, or
 
2%, to
 
$8.4 million in
2024 compared to $8.2 million in 2023. The increase
 
is mainly attributable to an increased amount
 
of time
deposits booked during
 
2024 and was
 
partly offset by
 
decreased deposit
 
rates achieved
 
in 2024 compared
to 2023.
 
Loss on
 
extinguishment of
 
debt.
In 2024,
 
loss on
 
extinguishment of
 
debt increased
 
by $2.8
 
million, or
 
400%
to $3.5 million and consisted of the prepayment of the 8.375% Senior Unsecured bond at a price equal to
103.35% of nominal value, with the proceeds from the new bond.
 
In 2023, loss on extinguishment of debt
amounted to
 
$0.7 million
 
and consisted
 
of the
 
prepayment in
 
full of
 
six loan
 
agreements refinanced
 
by other
banks.
 
Gain/(loss) on derivatives
. In 2024,
 
gain on derivates amounted
 
to $0.3 million, as
 
compared to a loss
 
of
$0.4 million
 
in 2023.
 
Gain/(loss) on
 
derivative instruments
 
represents the
 
fair value
 
of an
 
interest rate
 
swap
dated July
 
6, 2023
 
we entered into
 
with DNB for
 
a notional
 
amount of
 
$30 million under
 
which we pay
 
a
fixed rate of 4.268% and receive floating under term SOFR.
Gain/(loss) on
 
related party
 
Investments.
Loss on
 
related party
 
investments amounted
 
to $3.9
 
million in
2024 and
 
resulted from
 
the measurement
 
of OceanPal’s
 
common shares
 
at fair
 
value on
 
December 31,
2024, based
 
on the
 
closing price
 
of the
 
shares on
 
that date. This
 
compares to
 
a gain
 
of $1.5
 
million in
 
2023,
which
 
consists
 
of
 
a
 
gain
 
of
 
$1.7
 
million
 
from
 
the
 
conversion
 
of
 
9,793
 
of
 
the
 
10,000
 
Series
 
C
 
Preferred
shares of OceanPal to 3,649,474 common
 
shares of OceanPal, having a fair
 
value of $9.2 million, based
76
on the
 
closing price
 
of OceanPal’s
 
common shares
 
on the
 
date of
 
conversion; a
 
gain of
 
$0.8 million
 
resulting
from the distribution of 13,157 Series D Preferred Shares of OceanPal to our shareholders as a non cash
dividend; and an
 
unrealized loss of
 
$1.0 million, resulting from
 
the measurement of OceanPal’s
 
common
shares at fair value on December 31, 2023, based on the closing price
 
of the shares on that date.
Gain on deconsolidation of
 
subsidiary.
Gain on deconsolidation of
 
subsidiary amounted to
 
$0.8 million in
2023 and
 
represented the gain
 
from the
 
Company’s 25%
 
interest in Bergen
 
Ultra measured at
 
fair value
on the date of its deconsolidation from the Company’s financial statements. No
 
such gain exists in 2024.
Gain/(loss) on equity securities.
Loss on equity securities amounted to $0.4
 
million in 2024, as compared
to a
 
gain of
 
$2.8 million
 
in 2023
 
and resulted
 
from the
 
measurement of
 
equity securities,
 
having a
 
book
value of $17.9 million, at fair value of $20.7 million on December 31, 2023, determined through Level 1 of
the fair
 
value hierarchy.
 
The Company
 
sold all
 
securities during
 
the first
 
quarter of
 
2024 and
 
recorded a
realized loss of $0.4 million.
Gain on warrants.
Gain on warrants
 
amounted to $0.7
 
million in 2024,
 
compared to $1.6
 
million in 2023,
which resulted
 
from the
 
fair value
 
adjustment of
 
the outstanding
 
warrants as
 
of December
 
31, 2024
 
and
2023, respectively.
Loss from equity method investments.
Loss from equity method investments,
 
amounted to $0.1 million in
2024, compared to $0.3 million
 
in 2023. In 2024, the loss was
 
attributable to a loss of
 
$0.5 million from our
45.87%
 
interest
 
in Windward
 
which was
 
partly
 
offset
 
by
 
a
 
gain
 
of
 
$0.3 million
 
from
 
our
 
25% interest
 
in
Bergen and a gain of $0.1 million
 
from our 50% interest in DWM. In 2023,
 
the loss is attributed to a loss of
$0.7 million from
 
our 45.45% interest
 
in Windward, which
 
was partly offset
 
by a
 
gain of $0.2
 
million from
our 50% interest in DWM,
 
and a gain of $0.2 million from our 25% interest in Bergen.
 
Year ended December 31, 2023 compared to the year ended December 31, 2022
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022,
please refer to “Item 5. Operating and Financial
 
Review and Prospects” in our Annual Report
 
on Form 20-
F,
 
for the year ended December 31, 2023 filed with the SEC on April
 
5, 2024.
B.
 
Liquidity and Capital Resources
Historically, we finance our short-term and long-term
 
capital requirements with cash
 
from operations, cash
at
 
banks,
 
equity
 
contributions
 
from
 
shareholders,
 
long-term
 
bank
 
debt,
 
finance
 
liabilities
 
and
 
senior
unsecured
 
bonds.
 
Our
 
main
 
uses
 
of
 
funds
 
have
 
been
 
capital
 
expenditures
 
for
 
the
 
acquisition
 
and
construction of
 
new vessels,
 
expenditures incurred
 
in connection
 
with
 
ensuring that
 
our vessels
 
comply
with international and
 
regulatory standards, repayments
 
of bank
 
loans, repurchase of
 
our common stock
and payment of dividends.
 
Our
 
short-term
 
liquidity
 
requirements
 
include
 
capital
 
expenditures
 
in
 
connection
 
with
 
our
 
investment
 
in
Windward,
 
expenditures
 
relating
 
to
 
drydocking
 
of
 
vessels
 
to
 
comply
 
with
 
international
 
and
 
regulatory
standards, repayments
 
of
 
bank
 
loans, repurchase
 
of
 
our
 
common stock,
 
payment
 
of
 
dividends and
 
our
bareboat
 
charters.
 
Our
 
primary
 
sources
 
of
 
short-term
 
liquidity
 
include
 
cash
 
generated
 
from
 
operating
activities and the sale of a vessel, available cash balances and proceeds from the
 
exercise of warrants, if
any.
 
Our
 
long-term
 
liquidity
 
requirements
 
include
 
funding
 
our
 
newbuilding
 
vessel
 
installments,
 
interest
 
and
principal payments
 
on outstanding
 
debt,
 
payment of
 
dividends,
 
expenditures for
 
vessel efficiency
 
upgrades
and
 
drydock
 
costs.
 
Sources
 
of
 
funding
 
for
 
our
 
long-term
 
liquidity
 
requirements
 
include
 
cash
 
flows
 
from
operations, bank borrowings, issuance of debt and equity securities, and
 
vessel sales.
77
As
 
of
 
December
 
31,
 
2024
 
and
 
2023,
 
working
 
capital,
 
which
 
is
 
current
 
assets
 
minus
 
current
 
liabilities,
including the current
 
portion of long-term
 
debt and finance
 
liabilities, amounted to
 
$126.4 million and
 
$97.1
million,
 
respectively.
 
The
 
increase
 
in
 
working
 
capital
 
was
 
mainly
 
due
 
to
 
increased
 
cash
 
and
 
cash
equivalents and time deposits, as a result of the liquidation of our investment in equity securities acquired
in 2023 amounting
 
to $20.7 million;
 
proceeds from
 
our $175 million
 
bond issued
 
in July 2024
 
which prepaid
the then outstanding $119 million bond and proceeds of $24.2
 
million from the exercise of warrants
 
during
2024. This increase
 
was partly offset
 
by increased drydock
 
costs incurred during 2024,
 
increased capital
expenditures for the acquisition of investments and decreased revenues as a result of the significant drop
of
 
the
 
charter
 
rates
 
during
 
2024
 
compared
 
to
 
2023.
 
The
 
increase
 
in
 
working
 
capital
 
in
 
2024
 
was
 
also
affected
 
by
 
decreased
 
current
 
portion
 
of
 
long-term
 
debt
 
compared
 
to
 
last
 
year,
 
as
 
a
 
result
 
of
 
loan
refinancings
 
during
 
2024,
 
under
 
which
 
we
 
extended
 
the
 
relevant
 
repayment
 
schedules
 
and
 
decreased
annual amortization. We believe that
 
our working capital is sufficient
 
to cover our short-term
 
requirements.
Cash and
 
cash equivalents, including
 
restricted cash,
 
are primarily held
 
in U.S.
 
dollars and
 
amounted to
$143.7 million
 
as
 
of
 
December 31,
 
2024
 
and $121.6
 
million as
 
of
 
December 31,
 
2023. Restricted
 
cash
represents minimum
 
liquidity requirements
 
under our
 
loan facilities
 
and as
 
of December
 
31, 2024
 
and 2023,
amounted
 
to
 
$19
 
million
 
and
 
$20
 
million,
 
respectively.
 
Also,
 
as
 
of
 
December
 
31,
 
2024
 
and
 
2023,
 
time
deposits with maturities
 
above three
 
months amounted
 
to $63.5 million
 
and $40.0
 
million, respectively. Our
cash and cash equivalents, restricted cash and time deposits represent our unused sources of
 
liquidity to
meet our short-
 
and long-term obligations.
During 2024 and 2023, our sources and uses of cash were as
 
follows:
Net Cash Provided by Operating Activities
Net cash
 
provided by operating
 
activities increased by
 
$13.1 million,
 
or 19%.
 
In 2024, net
 
cash provided
by
 
operating
 
activities
 
was
 
$83.5 million
 
compared
 
to
 
net
 
cash
 
provided
 
by
 
operating
 
activities
 
of
$70.4 million in 2023. This increase was mainly
 
attributable to the proceeds from sale of
 
our investment in
equity securities
 
that
 
we acquired
 
in 2023,
 
and was
 
partly offset
 
by decreased
 
revenues, as
 
a result
 
of
decreased
 
average
 
time
 
charter
 
rates
 
compared
 
to 2023
 
and
 
increased
 
dry-docking
 
costs
 
incurred
 
in
2024.
 
Net Cash Used in Investing Activities
Net cash
 
used in
 
investing activities
 
was $39.8
 
million for
 
2024, which
 
consists of
 
$20.5 million
 
paid for
vessels under
 
construction and
 
improvements; $35.2 million
 
of proceeds
 
from the
 
sale of
 
two vessels
 
in
2024; $27.2 million
 
paid to acquire
 
investments in
 
Windward; increased investment
 
by $23.5 million
 
in time
deposits
 
with
 
maturity
 
above
 
three
 
months;
 
and
 
$3.7
 
million
 
relating
 
to
 
the
 
acquisition
 
of
 
property
 
and
equipment.
Net cash
 
provided by investing
 
activities was $24.9
 
million for
 
2023, which consists
 
of $29.7 million
 
paid
for vessel acquisitions
 
and improvements;
 
$36.6 million
 
of proceeds from
 
the sale of
 
three vessels in
 
2023;
$10.5
 
million
 
paid
 
to
 
acquire
 
investments
 
in
 
Windward
 
and
 
Cohen;
 
$1.0
 
million
 
cash
 
divested
 
from
deconsolidation of Bergen
 
Ultra; decreased
 
investment by $6.5
 
million in time
 
deposits with
 
maturity above
three
 
months;$25.2 million
 
proceeds
 
from
 
convertible
 
loan
 
with
 
limited
 
partnership;
 
$0.2
 
million
 
paid
 
to
acquire other assets; and $2.0 million relating to the acquisition
 
of equipment.
Net Cash Provided by Financing Activities
Net cash used in financing activities was $21.7
 
million for 2024, which consists of $117.2 million proceeds
from issuance of
 
long term
 
debt; $123.0
 
million of indebtedness
 
and finance
 
liabilities that we
 
repaid; $24.2
million proceeds from issuance of common stock; $5.8 million and $29.0 million
 
of cash dividends paid on
78
our preferred and
 
common stock,
 
respectively; and
 
$5.3 million
 
of finance
 
costs paid in
 
relation to new
 
loan
agreements.
Net cash used in
 
financing activities was $71.1 million for
 
2023, which consists of $57.7
 
million proceeds
from issuance of long term debt and finance liabilities; $79.8 million of indebtedness and finance liabilities
that we repaid; $5.8 million and $41.4 million of
 
cash dividends paid on our preferred and common stock,
respectively; and $1.8 million of finance costs paid in relation
 
to new loan agreements.
For a detailed
 
discussion of
 
cash flows
 
for the
 
year ended
 
December 31,
 
2023
 
compared to
 
the year
 
ended
December 31, 2022
 
please see “Item 5. Operating and Financial Review and Prospects - B. Liquidity and
Capital Resources” included in our 2023 Annual Report filed on Form 20-F
 
with the SEC on April 5, 2024.
Commitments for Capital Expenditures
In January 2025, we paid $22.9 million for the purchase of 11,442,645 shares of common stock, pursuant
to
 
a
 
tender
 
offer
 
we
 
commenced
 
on
 
December
 
2,
 
2024.
 
As
 
of
 
the
 
date
 
of
 
this
 
annual
 
report,
 
we
 
have
commitments
 
of
 
$73.6
 
million
 
for
 
the
 
construction
 
of
 
two
 
81,200
 
dwt
 
methanol
 
dual
 
fuel
 
new-building
Kamsarmax dry bulk vessels,
 
expected to be delivered in the third quarter of
 
2027 and the first quarter of
2028. In February
 
and March 2025,
 
we paid €7.6
 
million, or $8.0
 
million, under our
 
€50 million commitment
to Windward
 
for the
 
construction of
 
four CSOVs
 
with deliveries
 
scheduled to
 
occur between
 
the third
 
quarter
of
 
2025
 
and the
 
fourth
 
quarter of
 
2026,
 
thus
 
reducing our
 
remaining commitment
 
as
 
of the
 
date of
 
this
report
 
to
 
€7.6
 
million,
 
expected
 
to
 
be
 
paid
 
in
 
the
 
following
 
months.
 
We
 
also
 
expect
 
to
 
incur
 
capital
expenditures for vessel efficiency upgrades amounting to $3.0 million,
 
scheduled to take place until 2027.
We also incur capital expenditures when our vessels undergo surveys. This
 
process of recertification may
require us to
 
reposition these vessels
 
from a discharging
 
port to
 
shipyard facilities, which
 
will reduce our
operating days during
 
the period. We may
 
also incur capital
 
expenditures for vessel
 
improvements to
 
meet
new regulations.
 
In the
 
next twelve
 
months, we
 
will require
 
capital to
 
fund ongoing
 
operations, debt
 
service,
the payment of our preferred dividends and the payment of our bareboat
 
charters.
 
We expect
 
to finance
 
part of
 
the construction
 
cost of
 
our methanol
 
vessels on
 
order with
 
new bank
 
debt
and our remaining
 
capital expenditures
 
from cash from
 
operations and cash
 
at banks. As
 
of the date
 
of this
annual report, we have contracted revenues covering around 70% of our ownership days in
 
2025, in time
charter agreements having
 
an average time
 
charter rate on
 
or around our
 
break-even rate as
 
of December
31, 2024,
 
and we
 
have fixed
 
around 10%
 
of our
 
ownerships days
 
in 2026.
 
Our revenues
 
for the
 
unfixed
days in 2025 and 2026 will be affected by the developments in the dry bulk market and we cannot assure
you that we will be able to successfully renew existing charters at rates sufficient to allow us to meet all of
our obligations.
 
However, as
 
of the date
 
of this annual
 
report, we believe
 
that contracted and
 
anticipated
revenues
 
will
 
result
 
in
 
internally
 
generated
 
cash
 
flows
 
and
 
together
 
with
 
available
 
cash
 
and
 
cash
equivalents
 
and
 
time
 
deposits
 
maturing
 
in
 
2025,
 
will
 
be
 
sufficient
 
to
 
fund
 
our
 
short
 
term
 
and
 
long-term
capital requirements.
Debt instruments and guarantees
As of December
 
31, 2024,
 
we had $522.6
 
million of
 
long-term debt
 
under the
 
agreements described
 
below.
Secured Term Loans
On January 4,
 
2017, we
 
drew down $57.24
 
million, under a
 
secured loan
 
agreement with
 
the Export-Import
Bank
 
of
 
China,
 
dated
 
January
 
7,
 
2016,
 
to
 
finance
 
part
 
of
 
the
 
construction
 
cost
 
of
San
 
Francisco
 
and
Newport News
, both
 
delivered on January
 
4, 2017. The
 
loan is payable
 
in equal quarterly
 
instalments of
about $1.0 million each, the last of which is payable by January
 
4, 2032.
79
On September 30, 2022, we entered into a $200 million loan agreement to finance
 
the acquisition price of
9 Ultramax vessels. The Company drew-down $197.2 million in tranches,
 
with each tranche drawn on the
delivery
 
of
 
each
 
vessel
 
to
 
us.
 
In
 
December
 
2022,
 
we
 
prepaid
 
$21.9
 
million
 
due
 
to
 
a
 
vessel
 
sale
 
and
leaseback transaction. On June 20, 2023, we
 
entered into a $22.5 million loan agreement with
 
Nordea to
refinance $20.9 million outstanding
 
balance of an
 
existing loan. On
 
July 25, 2024,
 
we refinanced the
 
two
agreements with
 
Nordea with
 
a new
 
$167.3 loan
 
agreement, drawn
 
on July
 
25, 2024.
 
The loan
 
is repayable
in equal quarterly instalments of $4.5 million and a balloon instalment of $64.8 million payable on July 25,
2030.
 
On
 
April
 
12,
 
2023,
 
we
 
entered
 
into
 
a
 
$100
 
million
 
term
 
loan
 
facility
 
with
 
Danish
 
Ship
 
Finance
 
A/S
 
to
refinance an
 
aggregate of
 
$75.2 million
 
outstanding balance
 
under existing
 
loans with
 
BNP Paribas
 
and
working capital. On October 18, 2024, we refinanced the outstanding
 
balance of the loan with a new loan
which is
 
repayable in
 
equal quarterly
 
instalments of
 
$2.5 million
 
each and
 
a balloon
 
of $14.3
 
million payable
together with the last instalment on April 18, 2031.
 
On June
 
26, 2023,
 
we entered
 
into a
 
$100 million
 
loan agreement
 
with DNB
 
Bank ASA,
 
or DNB,
 
to refinance
an aggregate
 
of $68.7
 
million outstanding
 
balance under
 
existing loans
 
with ABN
 
AMRO Bank
 
N.V,
 
and
for
 
working
 
capital
 
purposes.
 
The
 
loan
 
is
 
repayable
 
in
 
equal
 
quarterly
 
instalments
 
of
 
$3.8
 
million
 
until
December 27, 2029. Additionally,
 
the loan is
 
subject to a margin
 
reset, according to
 
which the borrowers
and the lenders
 
will enter into
 
discussions to agree
 
on a new
 
margin. Unless the
 
parties agree on
 
a new
margin, the loan will
 
be mandatorily repayable on
 
June 27, 2027. As part
 
of the loan agreement, on
 
July 6,
2023, we
 
entered into
 
an interest
 
rate swap
 
with DNB
 
for a
 
notional amount
 
of $30
 
million and
 
quarterly
amortization of
 
$1.2 million.
 
Under the
 
interest rate
 
swap, we
 
pay a
 
fixed rate
 
of 4.268%
 
and receive
 
floating
under term
 
SOFR. The swap
 
has a
 
termination date
 
on December 27,
 
2029, and
 
a mandatory break
 
on
June 27, 2027, which is the margin reset date of
 
the loan, according to which the swap will be terminated
if the loan is prepaid. As of December 31, 2024, the
 
interest rate swap was a liability having a fair value
 
of
$0.2 million.
Under
 
the
 
secured
 
term
 
loans
 
outstanding
 
as
 
of
 
December
 
31,
 
2024,
 
27
 
vessels
 
of
 
our
 
fleet
 
were
mortgaged with
 
first preferred
 
or priority
 
ship mortgages.
 
Additional securities
 
required by
 
the banks
 
include
first priority assignment of all earnings, insurances,
 
first assignment of time charter contracts with
 
duration
that
 
exceeds
 
a
 
certain
 
period,
 
pledge
 
over
 
the
 
shares
 
of
 
the
 
borrowers,
 
manager’s
 
undertaking
 
and
subordination and requisition compensation and either a corporate guarantee by Diana Shipping Inc. (the
“Guarantor”) or a
 
guarantee by
 
the ship owning
 
companies (where applicable),
 
financial covenants,
 
as well
as operating
 
account assignments.
 
The lenders
 
may
 
also require
 
additional security
 
in the
 
future in
 
the
event
 
the
 
borrowers
 
breach
 
certain
 
covenants
 
under
 
the
 
loan
 
agreements.
 
The
 
secured
 
term
 
loans
generally
 
include
 
restrictions
 
as
 
to
 
changes
 
in
 
management
 
and
 
ownership
 
of
 
the
 
vessels,
 
additional
indebtedness, as
 
well as
 
minimum requirements
 
regarding hull
 
cover ratio
 
and minimum
 
liquidity per
 
vessel
owned
 
by
 
the
 
borrowers,
 
or
 
the
 
Guarantor,
 
maintained
 
in
 
the
 
bank
 
accounts
 
of
 
the
 
borrowers,
 
or
 
the
Guarantor.
 
Furthermore, the secured
 
term loans contain
 
cross default provisions and
 
additionally we are
not permitted to pay any dividends following the occurrence of an event of default. All of our secured term
loans bear interest in Term SOFR plus a margin.
As of December 31, 2023 and
 
2024, and the date of this
 
annual report, we were in compliance with
 
all of
our loan covenants.
Senior Unsecured Bond:
On June 22, 2021,
 
we issued a $125
 
million senior unsecured bond maturing
 
in June 2026. On
 
June 29,
2023, we repurchased $5.9 million nominal
 
value of the bond and recognized
 
a loss of $0.2 million and on
July 2,
 
2024 we
 
prepaid the
 
outstanding balance at
 
a price
 
equal to
 
103.35% of
 
nominal value,
 
with the
proceeds from a new
 
bond and recognized
 
a loss of $3.5
 
million. On July 2,
 
2024, we issued
 
the new bond
amounting to
 
$150 million
 
nominal value,
 
issued at
 
par value,
 
and on
 
November 8,
 
2024, we
 
issued an
80
additional amount of
 
$25 million nominal
 
value, at 102.00%
 
of par value.
 
The new bond
 
has a US
 
Dollar
fixed-rate coupon of 8.75% payable
 
semi-annually in arrears in January
 
and July of each
 
year. The
 
bond
is callable in whole
 
or in part in July
 
2027 at a price equal
 
to 103.50% of nominal
 
value; in January 2028
 
at
a price
 
equal to 102.625%
 
of nominal
 
value; in
 
July 2028
 
at a
 
price equal to
 
101.75% and after
 
January
2029 at
 
a price
 
equal to
 
100.00% of
 
nominal value.
 
The bond
 
ranks ahead
 
of
 
subordinated capital
 
and
ranks the
 
same with
 
all other
 
senior unsecured obligations
 
of the
 
Company other
 
than obligations
 
which
are mandatorily
 
preferred by
 
law.
 
The bond
 
includes financial and
 
other covenants
 
and is
 
trading on
 
the
Oslo Stock Exchange under the ticker symbol “DIASH03”.
Finance Liabilities
On March 29, 2022, we entered into a $50 million sale and leaseback agreement with an unaffiliated third
party,
 
for a
 
period of ten
 
years, under which
 
we pay
 
hire, monthly in
 
advance and we
 
have the option
 
to
repurchase the vessel after the
 
end of the third year of
 
the charter period, or each
 
year thereafter, until the
termination
 
of the
 
lease, at
 
specific prices,
 
subject to
 
irrevocable and
 
written notice
 
to
 
the
 
owner.
 
If not
repurchased earlier, we have the obligation to repurchase the vessel
 
for $16.4 million, on the expiration of
the lease on the tenth year.
 
On August 17, 2022,
 
we entered into two
 
sale and leaseback agreements with two
 
unaffiliated Japanese
third parties, for
 
an aggregate amount
 
of $66.4 million,
 
for a period
 
of eight years,
 
each,
 
under which we
pay hire, monthly in advance,
 
and we have the option to purchase the vessels at the end of the third year
of
 
each
 
vessel's
 
bareboat
 
charter
 
period,
 
or
 
each
 
year
 
thereafter,
 
until
 
the
 
termination
 
of
 
the
 
lease,
 
at
specific prices, subject to irrevocable
 
and written notice to the
 
owner. If
 
not repurchased earlier,
 
we have
the
 
obligation to
 
repurchase the
 
vessels for
 
$13.0
 
million, each,
 
on the
 
expiration of
 
each
 
lease on
 
the
eighth year.
On
 
December
 
6,
 
2022,
 
we
 
entered
 
into
 
a
 
sale
 
and
 
leaseback
 
agreement
 
for
 
$29.9
 
million
 
with
 
an
unaffiliated third party, for
 
a period of
 
ten years,
 
under which
 
we pay
 
hire, monthly
 
in advance,
 
and we
 
have
the
 
option
 
to
 
repurchase
 
the
 
vessel
 
after
 
the
 
end
 
of
 
the
 
third
 
year
 
of
 
the
 
charter
 
period,
 
or
 
each
 
year
thereafter, until the
 
termination of the lease, at specific
 
prices, subject to irrevocable and written
 
notice to
the owner.
 
If not repurchased earlier,
 
we have the obligation to repurchase the
 
vessel for $8.1 million, on
the expiration of the lease on the tenth year.
Guarantees
On March 30,
 
2023, we entered
 
into a corporate
 
guarantee with Nordea
 
under which we
 
guaranteed the
performance by
 
Bergen Ultra,
 
an
 
equity method
 
investee
 
owning one
 
dry
 
bulk
 
carrier,
 
of
 
its
 
obligations
under a loan agreement with
 
the bank maturing on March
 
30, 2028. We consider the
 
likelihood of having
to make any
 
payments under
 
the guarantee
 
to be
 
remote, as
 
the loan is
 
also secured
 
by an
 
account pledge
by
 
Bergen,
 
first
 
preferred
 
mortgage
 
on
 
the
 
vessel,
 
a
 
first
 
priority
 
general
 
assignment
 
of
 
the
 
earnings,
insurances and requisition
 
compensation of the vessel,
 
a charter party assignment,
 
a partnership interests
security
 
deed,
 
and
 
a
 
manager’s
 
undertaking.
 
As
 
of
 
December
 
31,
 
2024,
 
the
 
loan
 
had
 
an
 
outstanding
balance of $13.5 million.
 
C.
 
Research and development, patents and licenses
We
 
incur from
 
time to
 
time expenditures
 
relating to
 
inspections for
 
acquiring new
 
vessels that
 
meet our
standards. Such expenditures are insignificant and they are expensed
 
as they incur.
D.
 
Trend information
Demand for dry
 
bulk vessel services is
 
influenced by global financial conditions.
 
Global financial markets
and economic
 
conditions have
 
been, and
 
continue
 
to be,
 
volatile. Our
 
results of
 
operations depend
 
primarily
81
on charter
 
hire rates available
 
to fix
 
our vessels and
 
the demand for
 
dry bulk vessel
 
services. The Baltic
Dry Index, or the BDI, has long been viewed as the main benchmark to monitor the movements of the dry
bulk vessel
 
charter market
 
and the
 
performance of the
 
entire dry
 
bulk shipping market.
 
In 2024,
 
the BDI
ranged from a low
 
of 976 to a
 
high of 2,419 and
 
closed at 1,635 on
 
March 20, 2025. Although
 
there can be
no assurance that the dry
 
bulk charter market will not
 
decline further, as
 
of the date of
 
this annual report,
we have
 
fixed about
 
70% of
 
our fleet
 
ownership days
 
in 2025
 
in time
 
charter agreements
 
having an
 
average
time charter rate on or
 
around our break-even rate. Nevertheless, our revenues and
 
results of operations
in 2025
 
will be
 
subject to
 
demand for
 
our services,
 
the level
 
of inflation,
 
market disruptions
 
and interest
rates.
 
Demand
 
for
 
our
 
dry
 
bulk
 
oceangoing vessels
 
is
 
dependent upon
 
economic
 
growth in
 
the
 
world’s
economies, seasonal and regional changes in demand and changes to the capacity of the global dry bulk
fleet
 
and
 
the
 
sources
 
and
 
supply
 
for
 
dry
 
bulk
 
cargo
 
transported
 
by
 
sea.
 
Continued
 
adverse
 
economic,
political
 
or
 
social
 
conditions
 
or
 
other
 
developments
 
could
 
further
 
negatively
 
impact
 
charter
 
rates
 
and
therefore have a material adverse effect on our business and results of operations.
E.
 
Critical Accounting Estimates
The
 
discussion
 
and
 
analysis
 
of
 
our
 
financial
 
condition
 
and
 
results
 
of
 
operations
 
are
 
based
 
upon
 
our
consolidated
 
financial
 
statements,
 
which
 
have
 
been
 
prepared
 
in
 
accordance
 
with
 
U.S.
 
GAAP.
 
The
preparation
 
of
 
those
 
financial
 
statements
 
requires
 
us
 
to
 
make
 
estimates
 
and
 
judgments
 
that
 
affect
 
the
reported
 
amounts of
 
assets
 
and liabilities,
 
revenues and
 
expenses and
 
related disclosure
 
of
 
contingent
assets and liabilities at the date of our financial statements. Actual
 
results may differ from these estimates
under different assumptions and conditions.
Impairment of Vessels
Long-lived assets
 
are
 
reviewed for
 
impairment whenever
 
events
 
or
 
changes in
 
circumstances (such
 
as
market conditions,
 
obsolesce or
 
damage to the
 
asset, potential sales
 
and other
 
business plans)
 
indicate
that the
 
carrying amount
 
of an
 
asset may
 
not be
 
recoverable. When
 
impairment indicators
 
are identified
and the estimate
 
of undiscounted projected
 
net operating cash
 
flows, excluding interest
 
charges, expected
to be generated
 
by the use
 
of an asset
 
over its remaining
 
useful life and
 
its eventual disposition
 
is less than
its carrying
 
amount, the
 
Company evaluates
 
the asset
 
for impairment
 
loss. Measurement
 
of the
 
impairment
loss is based on the fair value of the asset, determined mainly by
 
third party valuations.
 
For
 
vessels, we
 
calculate undiscounted
 
projected net
 
operating cash
 
flows by
 
considering the
 
historical
and
 
estimated
 
vessels’ performance
 
and
 
utilization
 
with
 
the
 
significant
 
assumption
 
being
 
future
 
charter
rates for
 
the unfixed
 
days, using
 
the most
 
recent 10-year
 
average of
 
historical 1
 
year time
 
charter rates
available for
 
each type
 
of
 
vessel over
 
the
 
remaining estimated
 
life
 
of
 
each vessel,
 
net
 
of
 
commissions.
Historical
 
ten-year
 
blended
 
average
 
one-year
 
time
 
charter
 
rates
 
are
 
in
 
line
 
with
 
the
 
Company’s
 
overall
chartering strategy,
 
they reflect the
 
full operating history
 
of vessels of
 
the same type
 
and particulars with
the Company’s
 
operating fleet
 
and they
 
cover at
 
least a
 
full business
 
cycle, where
 
applicable. When the
10-year average of historical 1 year time charter rates is
 
not available for a type of vessels, the Company
uses
 
the
 
average
 
of
 
historical
 
1
 
year
 
time
 
charter
 
rates
 
of
 
the
 
available
 
period.
 
The
 
historical
 
ten-year
average rate
 
used in
 
2024 to
 
calculate undiscounted
 
projected net
 
operating cash
 
flow was
 
$13,053 for
Panamax,
 
Kamsarmax
 
and
 
Post-Panamax
 
vessels,
 
$16,626
 
for
 
Ultramax
 
vessels
 
and
 
$16,315
 
for
 
our
Capesize
 
and
 
Newcastlmax
 
vessels,
 
compared
 
to
 
$12,775,
 
16,608
 
and
 
$16,115,
 
respectively
 
in
 
2023.
Other assumptions
 
used in
 
developing estimates
 
of future
 
undiscounted cash
 
flow are
 
the charter
 
rates
calculated for
 
the fixed
 
days using
 
the fixed
 
charter rate
 
of each
 
vessel from
 
existing time
 
charters, the
expected outflows
 
for scheduled
 
vessels’ maintenance;
 
vessel operating
 
expenses; fleet
 
utilization, and
the vessels’ residual
 
value if sold
 
for scrap. Assumptions
 
are in line
 
with our
 
historical performance
 
and our
expectations for future
 
fleet utilization under
 
our current fleet
 
deployment strategy. The difference between
the carrying amount of a vessel plus unamortized deferred costs and its fair value would be recognized in
our accounts as impairment loss,
 
if the undiscounted cash
 
flows were lower compared to carrying
 
value of
that vessel.
 
Although no impairment loss
 
was identified or recorded
 
in 2024, according to
 
our assessment,
82
the carrying value plus unamortized deferred cost of vessels for which impairment indicators
 
existed as of
December 31, 2024, was $361.4 million.
Historically,
 
the
 
market
 
values
 
of
 
vessels
 
have
 
experienced
 
volatility,
 
which
 
from
 
time
 
to
 
time
 
may
 
be
substantial.
 
As a result, the
 
charter-free market value of certain
 
of our vessels may
 
have declined below
those
 
vessels’
 
carrying
 
value
 
plus
 
unamortized
 
deferred
 
cost.
 
These
 
vessels
 
would
 
be
 
impaired
 
in
accordance with the
 
related US GAAP
 
guidance for impairment
 
recognition, if the
 
undiscounted cash
 
flows
were lower
 
compared to
 
their carrying
 
value. Based
 
on: (i)
 
the carrying
 
value plus
 
unamortized deferred
cost of
 
each of
 
our vessels as
 
of December 31,
 
2024 and
 
2023 and (ii)
 
what we
 
believe the charter-free
market value of each
 
of our vessels was
 
as of December 31,
 
2024 and 2023, the
 
aggregate carrying value
of 12 and
 
12 of the
 
vessels in our
 
fleet as of
 
December 31, 2024
 
and 2023, respectively,
 
exceeded their
aggregate charter-free market value
 
by approximately $22 million
 
and $49 million,
 
respectively,
 
as noted
in the table below. This represents the approximate amount
 
by which we believe we
 
would have to reduce
our net income if we sold all
 
of such vessels at December 31, 2024 and
 
2023, on industry standard terms,
in cash
 
transactions, and to
 
a willing buyer
 
where we were
 
not under
 
any compulsion to
 
sell, and
 
where
the buyer was
 
not under any
 
compulsion to buy.
 
For purposes of
 
this calculation, we
 
have assumed that
these
 
12 and
 
12 vessels
 
would be
 
sold at
 
a price
 
that reflects
 
our estimate
 
of their
 
charter-free market
values as of December 31, 2024 and 2023, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83
Vessel
Dwt
Year Built
Carrying Value plus unamortized
deferred cost
 
(in millions of US dollars)
2024
2023
1
Alcmene
93,193
2010
 
10.1
 
9.6
2
Amphitrite
98,697
2012
 
13.2
 
14.0
3
Artemis
76,942
2006
 
-
 
11.0
4
Astarte
81,513
2013
 
17.0
 
18.0
5
Atalandi
77,529
2014
 
16.0
 
15.7
6
Crystalia
77,525
2014
 
15.7
 
15.4
7
Electra
87,150
2013
 
13.4
 
14.1
8
G.P.
 
Zafirakis
179,492
2014
 
23.8
 
22.1
9
Houston
177,729
2009
 
-
 
18.4
10
Ismene
77,901
2013
 
11.1
 
11.7
11
Leto
81,297
2010
 
12.1
 
12.9
12
Los Angeles
206,104
2012
 
22.4
 
23.5
13
Maera
75,403
2013
 
11.0
 
11.7
14
Maia
82,193
2009
 
12.4
 
12.4
15
Medusa
82,194
2010
 
11.8
 
12.4
16
Myrsini
82,117
2010
 
13.4
 
14.2
17
Myrto
82,131
2013
 
16.8
 
17.8
18
New Orleans
180,960
2015
 
30.4
 
31.6
19
New York
177,773
2010
 
13.7
 
14.0
20
Newport News
208,021
2017
 
38.8
 
40.5
21
P.S.
 
Palios
179,134
2013
 
33.3
*
 
35.3
*
22
Phaidra
87,146
2013
 
12.9
 
13.5
23
Philadelphia
206,040
2012
 
23.1
 
24.2
24
Polymnia
98,704
2012
 
13.5
 
14.2
25
San Francisco
208,006
2017
 
38.9
 
40.6
26
Santa Barbara
179,426
2015
 
35.7
*
 
34.8
*
27
Seattle
179,362
2011
 
20.2
 
21.3
28
Selina
75,700
2010
 
8.6
 
9.1
29
Semirio
174,261
2007
 
14.7
 
16.1
30
LEONIDAS P.C.
82,165
2011
 
19.5
*
 
20.8
*
31
Florida
182,063
2022
 
55.0
 
57.0
32
DSI Pyxis
60,362
2018
 
33.8
*
 
35.6
*
33
DSI Pollux
60,446
2015
 
28.4
*
 
29.9
*
34
DSI Phoenix
60,456
2017
 
31.1
*
 
32.7
*
35
DSI Polaris
60,404
2018
 
34.4
*
 
36.2
*
36
DSI Andromeda
60,309
2016
 
30.2
*
 
31.8
*
37
DSI Aquila
60,309
2015
 
28.5
*
 
29.9
*
38
DSI Pegasus
60,508
2015
 
27.3
*
 
28.8
*
39
DSI Altair
60,309
2016
 
29.7
*
 
31.3
*
40
DSI Aquarius
60,309
2016
 
29.5
*
 
31.0
*
Total
 
4,481,283
 
851
 
 
915
 
_______________________________
*
Indicates dry bulk
 
vessels for which
 
we believe, as
 
of December 31,
 
2024 and 2023,
 
the charter-free
 
market value
was lower than the vessel’s
 
carrying value plus unamortized deferred
 
cost. We believe that the
 
aggregate carrying
value
 
plus
 
unamortized
 
deferred
 
cost
 
of
 
these
 
vessels
 
exceeded
 
their
 
aggregate
 
charter-free
 
market
 
value
 
by
approximately $22 million and $49 million, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
84
Our
 
estimates
 
of
 
charter-free
 
market
 
value
 
assume
 
that
 
our
 
vessels
 
were
 
all
 
in
 
good
 
and
 
seaworthy
condition without need for repair and if inspected would be certified in class without notations of any kind.
Our estimates are based on information available from various industry
 
sources, including:
 
●
reports
 
by industry
 
analysts and
 
data
 
providers that
 
focus
 
on our
 
industry and
 
related dynamics
affecting vessel values;
 
●
news and industry reports of similar vessel sales;
 
●
offers that we may have received from potential purchasers of our vessels; and
 
●
vessel
 
sale
 
prices
 
and
 
values
 
of
 
which
 
we
 
are
 
aware
 
through
 
both
 
formal
 
and
 
informal
communications
 
with
 
shipowners,
 
shipbrokers,
 
industry
 
analysts
 
and
 
various
 
other
 
shipping
industry participants and observers.
As
 
we
 
obtain information
 
from
 
various industry
 
and
 
other
 
sources, our
 
estimates
 
of charter-free
 
market
value are
 
inherently uncertain.
 
In addition,
 
vessel values
 
are highly
 
volatile; as
 
such, our
 
estimates may
not be
 
indicative of the
 
current or
 
future charter-free market
 
value of
 
our vessels or
 
prices that
 
we could
achieve if we
 
were to sell them.
 
We also refer
 
you to the
 
risk factor in “Item
 
3. Key Information—D. Risk
Factors” entitled
 
“
The market
 
values of
 
our vessels
 
could decline,
 
which could
 
limit the
 
amount of
 
funds
that we
 
can borrow
 
and could
 
trigger breaches
 
of certain
 
financial covenants
 
contained in
 
our loan
 
facilities,
which could adversely
 
affect our operating results,
 
and we may
 
incur a loss
 
if we sell
 
vessels following a
decline
 
in
 
their
 
market
 
values
”
 
and
 
the
 
discussion
 
under
 
the
 
heading
 
"Item
 
4.
 
Information
 
on
 
the
Company—B. Business Overview–Vessel Prices.”
Our impairment test
 
exercise is sensitive
 
to variances in
 
the time charter
 
rates. Our current
 
analysis, which
also
 
involved
 
a
 
sensitivity
 
analysis
 
by
 
assigning
 
possible
 
alternative
 
values
 
to
 
this
 
significant
 
input,
indicated that
 
time charter
 
rates would
 
need to
 
be reduced
 
by 14%
 
to result
 
in impairment
 
of individual
long-lived assets
 
with indication
 
of impairment.
 
However, there can
 
be no
 
assurance as
 
to how
 
long charter
rates and vessel values will remain at their current levels.
 
If charter rates decrease and remain depressed
for
 
some
 
time,
 
it
 
could
 
adversely
 
affect
 
our
 
revenue
 
and
 
profitability
 
and
 
future
 
assessments
 
of
 
vessel
impairment.
A comparison of the average estimated daily time charter equivalent rate used in our impairment analysis
with the average “break-even rate” for each major class of vessels is presented
 
below:
 
Average estimated daily time
charter equivalent rate used
Average break-even
 
rate
Ultramax
$16,626
$12,513
Panamax/Kamsarmax/Post-Panamax
$13,053
 
$9,399
Capesize/Newcastlemax
$16,315
$12,018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
85
It should be
 
noted that as
 
of December 31,
 
2024, twelve of
 
our vessels, having
 
indication of impairment,
would be affected by a
 
reduction in time charter
 
rates below the average break-even
 
rate. Additionally, the
use of the 1-year,
 
3-year and 5-year average blended rates
 
would not have any effect
 
on the Company’s
impairment analysis and as such on the Company’s results of operations:
Vessel type
1-year
(period)
Impairment
charge
(in USD
million)
3-year
(period)
Impairment
charge
(in USD
million)
5-year
(period)
Impairment
charge
(in USD
million)
Ultramax
$16,737
-
$18,297
-
$18,081
-
Panamax/Kamsarmax/Post-
Panamax
$14,813
-
$16,245
-
$16,239
-
Capesize/Newcastlemax
$23,750
-
$19,637
-
$19,451
-
Item 6.
 
Directors, Senior Management and Employees
A.
 
Directors and Senior Management
Set forth
 
below are
 
the names,
 
ages and
 
positions of
 
our directors
 
and executive
 
officers. Our
 
Board of
Directors
 
consists
 
of
 
eleven
 
members
 
and
 
is
 
elected
 
annually
 
on
 
a
 
staggered basis,
 
and
 
each
 
director
elected holds office for
 
a three-year term
 
and until his
 
or her successor
 
is elected and
 
has qualified, except
in the
 
event of
 
such director’s
 
death, resignation,
 
removal or
 
the earlier
 
termination of
 
his or
 
her term
 
of
office. Officers are
 
appointed from time to time by
 
our board of directors and
 
hold office until a
 
successor
is appointed or their employment is terminated.
Name
 
Age
 
Position
Semiramis Paliou
 
50
 
Class III Director and Chief Executive Officer
 
Simeon Palios
 
83
 
Class I Director and Chairman
Anastasios Margaronis
 
69
 
Class I Director and President
Ioannis Zafirakis
 
53
 
Class I Director, Co-Chief Financial Officer, Chief
Strategy Officer, Treasurer and Secretary
Konstantinos Psaltis
 
86
 
Class II Director
Kyriacos Riris
 
75
 
Class II Director
Apostolos Kontoyannis
 
76
 
Class III Director
Konstantinos Fotiadis
 
 
74
 
Class III Director
Eleftherios Papatrifon
 
54
Class II Director
Simon Frank Peter Morecroft
65
Class II Director
Jane Sih Ho Chao
48
Class I Director
Maria Dede
52
Co-Chief Financial Officer
Margarita Veniou
46
Chief Corporate Development, Governance &
Communications Officer
Maria Christina Tsemani
46
Chief People Officer
The term of our
 
Class I directors expires
 
in 2027, the
 
term of our Class
 
II directors expires in
 
2025, and the
term of our Class III directors expires in 2026.
 
The business address of
 
each officer and
 
director is the address
 
of our principal executive
 
offices, which
are located at Pendelis 16, 175 64 Palaio Faliro, Athens, Greece.
86
Biographical information with respect to each of our directors and executive
 
officers is set forth below.
Semiramis
 
Paliou
 
has
 
served
 
as
 
a
 
Director
 
of
 
Diana
 
Shipping
 
Inc.
 
since
 
March
 
2015,
 
and
 
as
 
the
Company’s
 
Chief
 
Executive
 
Officer,
 
Chairperson
 
of
 
the
 
Executive
 
Committee
 
and
 
member
 
of
 
the
Sustainability
 
Committee
 
since
 
March
 
2021.
 
Ms.
 
Paliou
 
has
 
been
 
the
 
Chief
 
Executive
 
Officer
 
of
 
Diana
Shipping Services S.A.
 
since March 2021.
 
She also serves
 
as a Director
 
of OceanPal Inc.
 
(NASDAQ: OP)
since
 
April
 
2021
 
and
 
as
 
the
 
Chairperson
 
of
 
the
 
Board
 
of
 
Directors
 
and
 
of
 
the
 
Executive
 
Committee
 
of
OceanPal Inc.
 
since November
 
2021. Ms.
 
Paliou is
 
the Chairperson
 
of the
 
Hellenic Marine
 
Environment
Protection Association (HELMEPA), a position she has
 
held since June 2020,
 
while she joined its
 
board of
directors in
 
March 2018.
 
As of
 
July 2023,
 
she serves
 
as Chairperson
 
of INTERMEPA. She
 
is also
 
a member
of
 
the
 
board
 
of
 
directors
 
of
 
the
 
UK
 
P&I
 
Club
 
since
 
November
 
2020,
 
member
 
of
 
the
 
Union
 
of
 
Greek
Shipowners since February
 
2022 and member
 
of the Global
 
Maritime Forum since
 
April 2022. She
 
is Vice-
Chairperson of the Greek committee of
 
Det Norske Veritas,
 
a member of the Greek
 
committee of Nippon
Kaiji Kyokai, Bureau Veritas, American Bureau of Shipping and Hellenic War Risks
Ms. Paliou
 
has over
 
20 years
 
of experience
 
in shipping
 
operations, technical
 
management and
 
crewing.
She began her
 
career at Lloyd’s
 
Register of Shipping
 
where she worked
 
as a trainee
 
ship surveyor from
1996
 
to
 
1998.
 
She
 
was
 
then
 
employed
 
by
 
Diana
 
Shipping
 
Agencies
 
S.A.
 
From
 
2007
 
to
 
2010
 
she
 
was
employed as a
 
Director and President of
 
Alpha Sigma Shipping Corp.
 
From February 2010 to
 
November
2015, she
 
was the
 
Head of the
 
Operations, Technical
 
and Crew
 
department of
 
Diana Shipping Services
S.A. From
 
November 2015
 
to October
 
2016, she
 
served as
 
Vice-President of
 
the same
 
company.
 
From
November 2016
 
to
 
the
 
end of
 
July 2018,
 
she served
 
as
 
Managing Director
 
and Head
 
of the
 
Technical,
Operations, Crew and
 
Supply department of Unitized
 
Ocean Transport
 
Limited. From November 2018
 
to
February
 
2020,
 
she
 
worked
 
as
 
Chief
 
Operating
 
Officer
 
of
 
Performance
 
Shipping
 
Inc.
 
(ex.
 
Diana
Containerships Inc.)
 
(NASDAQ: PSHG).
 
From October
 
2019 until
 
February 2021,
 
Ms. Paliou
 
served as
Deputy
 
Chief
 
Executive
 
Officer
 
of
 
Diana
 
Shipping
 
Inc.
 
She
 
also
 
served
 
as
 
member
 
of
 
the
 
Executive
Committee and the Chief Operating Officer of the Company from August 2018
 
until February 2021.
 
Ms.
 
Paliou obtained
 
her BSc
 
in Mechanical
 
Engineering from
 
Imperial College,
 
London and
 
her MSc
 
in
Naval
 
Architecture
 
from
 
University
 
College,
 
London.
 
She
 
completed
 
courses
 
in
 
“Finance
 
for
 
Senior
Executives”,
 
in
 
“Authentic
 
Leader
 
Development”
 
and
 
a
 
certificate
 
program
 
on
 
“Sustainable
 
Business
Strategy” all at
 
Harvard Business
 
School. Ms. Paliou
 
is also the
 
daughter of Simeon
 
Palios, the Company’s
Chairman.
Simeon
P.
Palios
 
has
 
served
 
as
 
the
 
Chairman
 
of
 
the
 
Board
 
of
 
Directors
 
of
 
Diana
 
Shipping
 
Inc.
 
since
February
 
2005
 
and
 
a
 
Director
 
of
 
the
 
Company
 
since
 
March
 
1999.
 
He
 
served
 
as
 
the
 
Company’s
 
Chief
Executive Officer
 
from February
 
2005 until
 
February 2021.
 
Mr. Palios also
 
serves as
 
the President
 
of Diana
Shipping Services
 
S.A. which
 
was formed
 
in 1986.
 
Mr. Palios has
 
experience in
 
the shipping
 
industry since
1969 and expertise in technical and
 
operational issues. He has served as
 
an ensign in the Greek Navy for
the
 
inspection of
 
passenger boats
 
on
 
behalf of
 
Ministry
 
of Merchant
 
Marine and
 
is
 
qualified as
 
a
 
naval
architect
 
and marine
 
engineer.
 
Mr.
 
Palios
 
was
 
the
 
founder
 
of
 
Diana
 
Shipping Agencies
 
S.A.,
 
where
 
he
served as Managing Director until November 2004, having the overall responsibility for its activities. From
January 13,
 
2010 until
 
February 28,
 
2022, Mr. Palios
 
also served
 
as the
 
Chairman of
 
the Board
 
of Directors
of Performance Shipping
 
Inc. (ex.
 
Diana Containerships Inc.)
 
(NASDAQ: PSHG) and
 
as Chief Executive
Officer until October 2020.
Mr.
 
Palios is
 
a member
 
of
 
various leading
 
classification societies
 
worldwide and
 
he
 
is a
 
member of
 
the
board
 
of
 
directors
 
of
 
the
 
United
 
Kingdom
 
Freight
 
Demurrage
 
and
 
Defense
 
Association
 
Limited.
 
Since
October 7, 2015, Mr.
 
Palios has served as
 
President of the Association “Friends of
 
Biomedical Research
Foundation,
 
Academy
 
of
 
Athens”.
 
He
 
holds
 
a
 
bachelor's
 
degree
 
in
 
Marine
 
Engineering
 
from
 
Durham
University.
87
Anastasios C. Margaronis
 
has served as President and
 
a Director of Diana Shipping
 
Inc. since February
2005.
 
He
 
is
 
also
 
member
 
of
 
the
 
Executive
 
Committee
 
of
 
the
 
Company.
 
Mr.
 
Margaronis
 
is
 
the
 
Deputy
President
 
of
 
Diana
 
Shipping
 
Services
 
S.A.,
 
where
 
he
 
also
 
serves
 
as
 
a
 
Director
 
and
 
Secretary.
 
Mr.
Margaronis has experience
 
in the shipping
 
industry,
 
including in ship
 
finance and insurance,
 
since 1980.
Prior to February 21,
 
2005, Mr.
 
Margaronis was employed by Diana
 
Shipping Agencies S.A. in
 
1979 and
performed on our behalf
 
the services he
 
now performs as President.
 
He joined Diana Shipping
 
Agencies
S.A. in
 
1979 and has
 
been responsible for
 
overseeing our vessels’
 
insurance matters, including
 
hull and
machinery,
 
protection and indemnity and war
 
risks insurances. From January
 
2010 to February 2020,
 
he
served as Director and
 
President of Performance
 
Shipping Inc. (ex. Diana
 
Containerships Inc.) (NASDAQ:
PSHG).
In
 
addition,
 
Mr.
 
Margaronis
 
is
 
a
 
member
 
of
 
the
 
Greek
 
National
 
Committee
 
of
 
the
 
American
 
Bureau
 
of
Shipping. He
 
has also
 
been on
 
the Members’
 
Committee of
 
the Britannia
 
Steam Ship
 
Insurance Association
Limited
 
since
 
October
 
2022.
 
From
 
October
 
2005
 
to
 
October
 
2019,
 
he
 
was
 
a
 
member
 
of
 
the
 
board
 
of
directors of the United Kingdom Mutual Steam Ship Assurance Association
 
(Europe) Limited.
 
He
 
holds
 
a
 
bachelor's
 
degree
 
in
 
Economics
 
from
 
the
 
University
 
of
 
Warwick
 
and
 
a
 
master's
 
of
 
science
degree in Maritime Law from the Wales Institute of Science and Technology.
Ioannis Zafirakis
 
has served
as a Director and Secretary
 
of Diana Shipping Inc.
 
since February 2005. He
has
 
also
 
been
 
the
 
Co-Chief
 
Financial
 
Officer
 
since
 
January
 
2025,
 
having
 
previously
 
served
 
as
 
the
Company’s Chief
 
Financial
 
Officer from
 
February 2020
 
(Interim Chief
 
Financial
 
Officer until
 
February 2021).
In addition,
 
he has
 
held the
 
role of
 
Treasurer since
 
February 2020
 
and is
 
also the
 
Company’s Chief
 
Strategy
Officer.
 
Mr.
 
Zafirakis is also member
 
of the Executive Committee
 
of the Company.
 
Mr.
 
Zafirakis has held
various executive positions
 
such as Chief
 
Operating Officer, Executive Vice-President and Vice-President.
In addition, Mr. Zafirakis has
 
served as the Chief Strategy Officer and Co-Chief Financial Officer
 
of Diana
Shipping Services
 
S.A. since
 
January 2025.
 
Prior to
 
this,
 
he was
 
the company’s
 
Chief Financial
 
Officer
from
 
March
 
2020
 
(Interim
 
Financial
 
Officer
 
until
 
February
 
2021)
 
and
 
continues
 
to
 
hold
 
the
 
positions
 
of
Director
 
and Treasurer.
 
Also,
 
he has
 
served as
 
a
 
Director of
 
OceanPal Inc.
 
(NASDAQ: OP)
 
since April
2021. He has also served as the
 
President, Secretary and Interim Chief
 
Financial Officer of OceanPal Inc.
from November 2021 to April 2023. He is also member of the Executive
 
Committee of OceanPal Inc.
 
From June 1997 to
 
February 2005, Mr.
 
Zafirakis was employed by
 
Diana Shipping Agencies S.A., where
he held
 
a number
 
of positions in
 
finance and
 
accounting. From January
 
2010 to
 
February 2020,
 
he also
served as Director and
 
Secretary of Performance
 
Shipping Inc. (ex. Diana
 
Containerships Inc.) (NASDAQ:
PSHG),
 
where
 
he
 
held
 
various
 
executive
 
positions
 
such
 
as
 
Chief
 
Operating
 
Officer
 
and
 
Chief
 
Strategy
Officer.
 
Mr.
 
Zafirakis,
 
currently
 
also
 
acts
 
as
 
Director,
 
President,
 
Secretary
 
and
 
Treasurer,
 
for
 
Sea
Transportation Inc.
Mr. Zafirakis is
 
a member
 
of the
 
Business Advisory
 
Committee of
 
the Shipping
 
Programs of
 
ALBA Graduate
Business School at
 
The American College
 
of Greece. In
 
2024, Mr.
 
Zafirakis attended and
 
completed the
Advanced
 
Management
 
Programme
 
at
 
INSEAD
 
Business
 
School
 
in
 
Singapore.
 
Mr.
 
Zafirakis
 
has
 
also
obtained
 
a
 
certificate
 
in
 
“Blockchain
 
Economics:
 
An
 
Introduction
 
to
 
Cryptocurrencies”
 
from
 
Panteion
University of
 
Social and
 
Political Sciences
 
in Greece.
 
He holds
 
a bachelor's
 
degree in
 
Business Studies
from City University Business School in London and a master's degree in International Transport from the
University of Wales in Cardiff.
Eleftherios (Lefteris) A. Papatrifon
 
has served as a Director and a member of the Executive Committee
of Diana
 
Shipping Inc.
 
since February
 
2023. Prior
 
to this
 
appointment, he
 
served as
 
Chief Operating
 
Officer
of the Company from March 2021 to February
 
2023. Mr. Papatrifon also serves as a Director of OceanPal
Inc.
 
(NASDAQ: OP)
 
and a
 
member
 
of
 
its
 
Executive Committee,
 
positions he
 
has
 
held
 
since
 
November
2021. From November 2021 to January 2023, he served as Chief
 
Executive Officer of OceanPal Inc.
 
88
Prior to joining Diana Shipping Inc., he was Chief Executive Officer, Co-Founder and Director of Quintana
Shipping Ltd,
 
a provider
 
of dry
 
bulk shipping
 
services, from
 
2010 until
 
the company’s
 
successful sale
 
of
assets and consequent liquidation in
 
2017. Previously,
 
for a period of
 
approximately six years, he served
as
 
the
 
Chief
 
Financial
 
Officer
 
and
 
Director
 
of
 
Excel
 
Maritime
 
Carriers
 
Ltd.
 
Prior
 
to
 
that,
 
Mr.
 
Papatrifon
served for approximately
 
15 years in
 
a number of
 
corporate finance
 
and asset
 
management positions,
 
both
in the USA and in Greece.
 
Mr. Papatrifon holds undergraduate (BBA) and
 
graduate (MBA) degrees
 
from Baruch College (CUNY).
 
He
is also a member of the CFA Institute and a CFA charterholder.
Konstantinos Psaltis
 
has served as a
 
Director of Diana Shipping
 
Inc. since March 2005,
 
the Chairman of
its Nominating Committee
 
since May
 
2015 and
 
a member
 
of its
 
Compensation Committee
 
since May
 
2017.
Mr.
 
Psaltis
 
serves
 
also
 
as
 
President
 
of
 
Ormos
 
Compania
 
Naviera
 
S.A.,
 
a
 
company
 
that
 
specializes
 
in
operating and managing multipurpose
 
container vessels, where from
 
1981 to 2006, he held
 
the position of
Managing Director. Prior to joining Ormos Compania Naviera S.A., Mr. Psaltis simultaneously served as
 
a
technical
 
manager
 
in
 
the
 
textile
 
manufacturing
 
industry
 
and
 
as
 
a
 
shareholder
 
of
 
shipping
 
companies
managed by M.J. Lemos. From 1961 to 1964, he served as ensign in
 
the Royal Hellenic Navy.
 
He holds a
 
degree in Mechanical Engineering
 
from Technische
 
Hochschule Reutlingen & Wuppertal
 
and
a bachelor's degree in Business Administration from Tubingen University in Germany.
Kyriacos Riris
 
has served
 
as a
 
Director of
 
Diana Shipping
 
Inc. since
 
March 2015
 
and a
 
member of
 
its
Nominating Committee since May 2015. From May 2022, he is also the Chairman of the Audit Committee
of the Company.
 
Commencing in 1998, Mr. Riris served
 
in a series
 
of positions in PricewaterhouseCoopers
 
(PwC), Greece,
including Senior
 
Partner, Managing
 
Partner of
 
the Audit
 
and the
 
Advisory/Consulting
 
Lines of
 
Service. From
2009 to 2014, Mr.
 
Riris served as Chairman of the Board of Directors of PricewaterhouseCoopers (PwC),
Greece. Prior to its
 
merger with PwC, Mr.
 
Riris was employed at
 
Grant Thornton, Greece, where
 
in 1984
he
 
became
 
a
 
Partner.
 
From
 
1976
 
to
 
1982,
 
Mr.
 
Riris
 
was
 
employed
 
at
 
Arthur
 
Young,
 
Greece.
 
Since
November
 
2018,
 
Mr.
 
Riris
 
has
 
served
 
as
 
Chairman
 
of
 
Titan
 
Cement
 
International
 
S.A.,
 
a
 
Belgian
corporation, while he
 
is currently the
 
Vice Chairman of
 
the Board and
 
the Chairman of
 
the Audit and
 
the
Risk Committee of the Group.
Mr.
 
Riris
 
holds
 
a
 
degree
 
from
 
Birmingham
 
Polytechnic
 
(presently
 
Birmingham
 
City
 
University)
 
and
completed his professional qualifications with the Association of
 
Certified Chartered Accountants (ACCA)
in the UK in 1975, becoming a Fellow of the Association of Certified
 
Accountants in 1985.
Apostolos Kontoyannis
 
is a Director, the Chairperson
 
of the Compensation
 
Committee and a
 
member of
the Audit Committee of Diana
 
Shipping Inc., positions he has
 
held since March 2005.
 
Since March 2021,
Mr. Kontoyannis also serves as the Chairperson of the Sustainability Committee of the Company.
 
Mr.
 
Kontoyannis has
 
over
 
40
 
years
 
of
 
experience
 
in
 
shipping
 
finance
 
and
 
currently
 
serves
 
as
 
financial
consultant to various shipping companies. He was employed by Chase Manhattan Bank N.A. in Frankfurt
(Corporate
 
Bank),
 
London
 
(Head
 
of
 
Shipping
 
Finance
 
South
 
Western
 
European
 
Region)
 
and
 
Piraeus
(Manager, Ship Finance Group) from 1975 to 1987.
 
Mr.
 
Kontoyannis holds a bachelor's
 
degree in Finance and
 
Marketing and a
 
master's degree in
 
Business
Administration and Finance from Boston University.
Konstantinos Fotiadis
 
has served as a
 
Director of Diana Shipping Inc.
 
since 2017.
 
Mr. Fotiadis served
as an independent
 
Director and
 
as the Chairman
 
of the Audit
 
Committee of
 
Performance Shipping
 
Inc. (ex.
Diana Containerships
 
Inc.) (NASDAQ:
 
PSHG) from
 
the completion
 
of Performance
 
Shipping Inc.
 
(ex. Diana
89
Containerships Inc.)’s
 
private offering
 
until February 2011.
 
From 1990
 
until 1994,
 
Mr.
 
Fotiadis served
 
as
the President and
 
Managing Director of Reckitt
 
& Colman (Greece),
 
part of the
 
British multinational Reckitt
&
 
Colman
 
plc,
 
manufacturers
 
of
 
household,
 
cosmetics
 
and
 
health
 
care
 
products.
 
From
 
1981
 
until
 
its
acquisition in 1989
 
by Reckitt &
 
Colman plc, Mr.
 
Fotiadis was a
 
General Manager at
 
Dr. Michalis
 
S.A., a
Greek company manufacturing and marketing cosmetics and health care products. From 1978 until
 
1981,
Mr.
 
Fotiadis held
 
positions
 
with
 
Esso
 
Chemicals Ltd.
 
and
 
Avrassoglou
 
S.A.
 
Mr.
 
Fotiadis
 
has
 
also
 
been
active as a business consultant and real estate developer.
Mr.
 
Fotiadis
 
holds
 
a
 
degree
 
in
 
Economics
 
from
 
Technische
 
Universitaet
 
Berlin
 
and
 
in
 
Business
Administration from Freie Universitaet Berlin.
Simon Morecroft
 
has served as
 
a Director of
 
Diana Shipping Inc.
 
since May 2022.
 
He also serves
 
as a
Director of Enarxis Ltd,
 
a shipping consultancy
 
company. Mr. Morecroft spent his career in the
 
shipbroking
industry
 
as
 
a
 
Sale
 
and
 
Purchase
 
broker.
 
He
 
joined
 
Braemar
 
Shipbrokers
 
Ltd
 
(now
 
Braemar
 
ACM
Shipbroking) in 1983 becoming
 
a director in 1986
 
and remained on the
 
board until his retirement
 
in August
2021.
 
During
 
this
 
time
 
Braemar
 
grew
 
from
 
a
 
boutique
 
broking
 
operation
 
into
 
one
 
of
 
the
 
world’s
 
most
successful fully integrated shipbroking companies with a listing on
 
the London Stock Exchange.
Mr. Morecroft graduated from Oxford University in 1980 with a Masters in PPE.
 
Jane Chao
 
has served
 
as a
 
Director of
 
Diana Shipping
 
Inc. since
 
February 2023.
 
She also
 
serves as
 
a
director of
 
Wah
 
Kwong Shipping
 
Holdings Limited,
 
a position
 
she has
 
held since
 
2008. Ms.
 
Chao is
 
the
managing
 
director
 
of
 
Wah
 
Kwong
 
China
 
Investment
 
which
 
comprises
 
of
 
residential
 
and
 
commercial
properties in Shanghai.
 
Ms. Chao has founded
 
her own art consultancy
 
company Galerie Huit and
 
lifestyle
gallery Maison Huit in 2009 and recently, the non-profit Chao-Lee Art Foundation in 2022.
 
Ms.
 
Chao
 
has
 
also
 
served
 
as
 
a
 
Council
 
Member
 
for
 
Changing
 
Young
 
Lives
 
Foundation
 
helping
underprivileged children in Hong Kong and China from 2014 to 2020.
Maria Dede
 
is the Co-Chief Financial Officer of Diana Shipping Inc. since January 2025. Prior to this role,
Ms. Dede served as the Company’s Chief Accounting Officer starting in September 2005. In addition, Ms.
Dede has served
 
as the Co-Chief
 
Financial Officer of
 
Diana Shipping Services S.A.
 
since January 2025,
having previously served as the
 
company’s Finance Manager and Chief
 
Accounting Officer.
 
In 2000, Ms.
Dede joined the Athens branch of Arthur Andersen, which merged with Ernst and Young (Hellas) in 2002,
where she served as an external
 
auditor of shipping companies until 2005. From
 
1996 to 2000 Ms. Dede
was
 
employed
 
by
 
Venus
 
Enterprises
 
S.A.,
 
a
 
ship-management company,
 
where
 
she
 
held
 
a
 
number
 
of
positions primarily in accounting and supplies.
Ms. Dede holds a Bachelor’s
 
degree in Maritime Studies
 
from the University of
 
Piraeus, a Master’s
 
degree
in Business
 
Administration from the
 
ALBA Graduate Business
 
School and a
 
Master’s degree in
 
Auditing
and Accounting from the Greek Institute of Chartered Accountants.
Margarita
 
Veniou
 
has
 
served
 
as
 
the
 
Chief
 
Corporate
 
Development,
 
Governance
 
&
 
Communications
Officer of Diana
 
Shipping Inc. since
 
July 2022. From
 
September 2004 until June
 
2022, she served in
 
the
Corporate
 
Planning
 
&
 
Governance
 
Department
 
of
 
Diana
 
Shipping
 
Inc.,
 
holding
 
various
 
positions
 
as
Associate,
 
Officer
 
and
 
Manager.
 
Ms.
 
Veniou
 
is
 
also
 
the
 
Corporate
 
Development,
 
Governance
 
&
Communications Manager of Diana Shipping Services S.A., a position she has held since 2022, and from
2004 to 2022
 
she held
 
various other
 
positions at
 
Diana Shipping
 
Services S.A.
 
In addition,
 
since November
2021, Ms. Veniou has served
 
as the Chief
 
Corporate Development &
 
Governance Officer of
 
OceanPal Inc.
(NASDAQ: OP) and
 
she has also served
 
as the company’s
 
Board Secretary since April
 
2023. She is the
General Manager of Steamship Shipbroking Enterprises Inc., a position
 
she has held since April 2014.
 
From
 
January
 
2010
 
to
 
February
 
2020,
 
Ms.
 
Veniou
 
also
 
held
 
the
 
position
 
of
 
Corporate
 
Planning
 
&
90
Governance Officer of Performance Shipping Inc. (ex. Diana Containerships
 
Inc.) (NASDAQ: PSHG).
Ms. Veniou
 
holds a bachelor's
 
degree in Maritime
 
Studies and a
 
master's degree in Maritime
 
Economics
& Policy from the University of
 
Piraeus, Greece. In 2024, she completed the
 
"Leadership Communication
with
 
Impact"
 
program
 
at
 
INSEAD
 
Business
 
School.
 
Additionally,
 
she
 
has
 
completed
 
the
 
“Sustainability
Leadership
 
and
 
Corporate
 
Responsibility”
 
program
 
at
 
London
 
Business
 
School
 
and
 
has
 
obtained
 
the
Certification in
 
Shipping Derivatives
 
from Athens
 
University of
 
Economics and
 
Business. Ms.
 
Veniou is also
a member of WISTA Hellas and ISO 14001 certified by Lloyd’s Register.
Maria-Christina
 
Tsemani
 
has
 
served
 
as
 
the
 
Company’s
 
Chief
 
People
 
Officer
 
since
 
July
 
2022.
 
Ms.
Tsemani
 
also
 
serves
 
as
 
HR
 
Manager
 
of
 
Diana
 
Shipping
 
Services
 
S.A.,
 
a
 
position
 
she
 
has
 
held
 
since
October 2020.
 
Ms.
 
Tsemani
 
has over
 
20 years
 
of experience
 
in human
 
resources across
 
multinational companies
 
and
institutional
 
organizations.
 
Before
 
joining
 
Diana
 
Shipping,
 
Ms.
 
Tsemani
 
was
 
People
 
Acquisition
 
and
Development Manager of
 
Vodafone Greece.
 
During her career in
 
Vodafone from
 
2008 to 2020,
 
she held
various
 
other
 
positions,
 
including
 
Senior
 
HR
 
Business
 
Partner
 
and
 
Organizational
 
Effectiveness
 
and
Reward
 
Manager.
 
From
 
2004
 
to
 
2008,
 
Ms.
 
Tsemani
 
worked
 
as
 
a
 
Senior
 
HR
 
Consultant
 
in
PricewaterhouseCoopers (PwC). From
 
2001 to
 
2004, she
 
served as
 
a Project Manager
 
in the
 
European
Commission, based in Luxembourg.
 
Ms. Tsemani
 
holds a
 
bachelor’s degree
 
in Mathematical
 
Sciences and
 
a Master’s
 
of Science
 
in Applied
Statistics from the University of Oxford, UK.
B.
 
Compensation
Aggregate executive
 
compensation (including
 
amounts paid
 
to Steamship)
 
for 2024
 
was $6.2
 
million. Since
June 1, 2010, Steamship, a related party,
 
as described in "Item 7. Major Shareholders and
 
Related Party
Transactions—B. Related
 
Party Transactions"
 
has provided
 
to us
 
brokerage services.
 
Under the
 
Brokerage
Services
 
Agreements
 
in
 
effect
 
during
 
2024,
 
fees
 
for
 
2024
 
amounted
 
to
 
$4.1
 
million
 
and
 
we
 
also
 
paid
commissions
 
for
 
vessel
 
sales
 
and
 
purchases
 
amounting to
 
$0.5
 
million.
 
We
 
consider
 
fees
 
under
 
these
agreements to be part of our executive compensation due to
 
the affiliation with Steamship.
 
Non-employee directors
 
receive
 
annual compensation
 
in
 
the
 
amount
 
of
 
$52,000 plus
 
reimbursement of
out-of-pocket expenses. In addition, each director serving as chairman of a committee receives additional
annual compensation of
 
$26,000, plus reimbursement
 
for out-of-pocket
 
expenses with the
 
exception of
 
the
chairman of
 
the audit
 
and compensation committee
 
who receive
 
annual compensation of
 
$40,000. Each
director
 
serving
 
as
 
member
 
of
 
a
 
committee
 
receives
 
additional
 
annual
 
compensation
 
of
 
$13,000,
 
plus
reimbursement for out-of-pocket expenses
 
with the exception
 
of the member
 
of the audit
 
committee who
receives annual compensation of $26,000, plus reimbursement for
 
out-of-pocket expenses. In 2024, fees
and expenses of our non-executive directors amounted to $0.6
 
million.
We do not have a retirement plan for our officers or directors.
 
Equity Incentive Plan
In November 2014, our board of directors approved, and the Company adopted the 2014
 
Equity Incentive
Plan for 5,000,000
 
shares of common
 
stock, amended on
 
May 31, 2018
 
to increase the
 
shares of common
stock to
 
13,000,000 and
 
further amended
 
on January
 
8, 2021,
 
referred to
 
as “the
 
Plan”, to
 
increase the
number
 
of
 
shares
 
of
 
common
 
stock
 
available for
 
the
 
issuance
 
of
 
equity awards
 
by
 
20,000,000
 
shares.
Currently, 9,144,759 shares remain reserved for issuance under the Plan.
 
 
91
Under the Plan, the Company’s
 
employees, officers and directors
 
are entitled to receive
 
options to acquire
the
 
Company’s
 
common
 
stock.
 
The
 
Plan
 
is
 
administered
 
by
 
the
 
Compensation
 
Committee
 
of
 
the
Company’s Board of Directors, or such other committee of the Board as
 
may be designated by the Board.
Under
 
the
 
terms
 
of
 
the
 
Plan,
 
the
 
Company’s
 
Board
 
of
 
Directors
 
is
 
able
 
to
 
grant
 
(a)
 
non-qualified stock
options, (b) stock appreciation rights,
 
(c) restricted stock, (d)
 
restricted stock units, (e)
 
unrestricted stock,
(f) other equity-based or equity-related awards, (g)
 
dividend equivalents and (h) cash awards. No options
or stock appreciation
 
rights can be
 
exercisable subsequent to the
 
tenth anniversary of
 
the date on
 
which
such
 
Award
 
was
 
granted.
 
Under
 
the
 
Plan,
 
the
 
Administrator
 
may
 
waive
 
or
 
modify
 
the
 
application
 
of
forfeiture of awards
 
of restricted stock
 
and performance
 
shares in connection
 
with cessation of
 
service with
the Company.
 
No Awards
 
may be
 
granted under
 
the Plan
 
following the
 
tenth anniversary
 
of the
 
date on
which the Plan was adopted by the Board (i.e.,
 
January 8, 2031).
During
 
2024
 
and
 
as
 
of
 
the
 
date
 
of
 
this
 
annual
 
report,
 
our
 
board
 
of
 
directors
 
awarded
 
an
 
aggregate
 
of
2,300,000 shares and
 
2,000,000 shares, respectively,
 
of restricted common
 
stock, awarded to
 
executive
and non-executive directors.
 
All restricted shares
 
vest ratably over
 
three years and are
 
subject to forfeiture
until they vest. Unless they forfeit, grantees have the right to
 
vote, to receive and retain all dividends paid
and to exercise all other rights, powers and privileges of a holder of
 
shares.
 
In
 
2024,
 
compensation costs
 
relating
 
to
 
the
 
aggregate
 
amount
 
of
 
restricted
 
stock
 
awards
 
amounted to
$10.0 million.
C.
 
Board Practices
We
 
have
 
established
 
an
 
Audit
 
Committee,
 
comprised
 
of
 
two
 
board
 
members,
 
which
 
is
 
responsible
 
for
reviewing
 
our
 
accounting
 
controls,
 
recommending
 
to
 
the
 
board
 
of
 
directors
 
the
 
engagement
 
of
 
our
independent auditors,
 
and pre-approving
 
audit and
 
audit-related
 
services and
 
fees. Each
 
member has
 
been
determined by our
 
board of directors
 
to be “independent”
 
under the rules
 
of the NYSE
 
and the rules
 
and
regulations of
 
the SEC.
 
As directed
 
by its
 
written charter, the
 
Audit Committee
 
is responsible
 
for appointing,
and overseeing the
 
work of the
 
independent auditors,
 
including reviewing
 
and approving their
 
engagement
letter
 
and
 
all
 
fees
 
paid
 
to
 
our
 
auditors,
 
reviewing
 
the
 
adequacy
 
and
 
effectiveness
 
of
 
the
 
Company's
accounting
 
and
 
internal
 
control
 
procedures
 
and
 
reading
 
and
 
discussing
 
with
 
management
 
and
 
the
independent auditors the
 
annual audited
 
financial statements. The
 
members of
 
the Audit
 
Committee are
Mr. Kyriacos
 
Riris (chairman and financial
 
expert) and Mr.
 
Apostolos Kontoyannis (member and
 
financial
expert).
We
 
have established
 
a Compensation
 
Committee comprised
 
of two
 
members, which,
 
as directed
 
by its
written charter, is responsible
 
for setting the
 
compensation of
 
executive officers of
 
the Company, reviewing
the Company’s incentive
 
and equity-based
 
compensation plans,
 
and reviewing
 
and approving
 
employment
and severance
 
agreements. The
 
members of
 
the Compensation
 
Committee are
 
Mr. Apostolos Kontoyannis
(chairman) and Mr. Konstantinos Psaltis (member).
We have established
 
a Nominating
 
Committee comprised
 
of two
 
members, which,
 
as directed
 
by its
 
written
charter,
 
is responsible
 
for identifying,
 
evaluating and
 
making recommendations
 
to the
 
board of
 
directors
concerning individuals for selections as
 
director nominees for the
 
next annual meeting of
 
stockholders or
to
 
otherwise
 
fill
 
board
 
of
 
director
 
vacancies.
 
The
 
members
 
of
 
the
 
Nominating
 
Committee
 
are
Mr. Konstantinos Psaltis (chairman) and Mr. Kyriacos Riris (member).
We have established a Sustainability
 
Committee comprised of Mr. Apostolos Kontoyannis
 
(Chairman) and
Ms.
 
Semiramis
 
Paliou
 
(member).
 
The
 
Sustainability
 
Committee,
 
as
 
directed
 
by
 
its
 
written
 
charter,
 
is
responsible for
 
Identifying, evaluating
 
and making
 
recommendations to
 
the Board
 
with respect
 
to significant
policies
 
and
 
performance
 
on
 
matters
 
relating
 
to
 
sustainability,
 
including
 
environmental
 
risks
 
and
opportunities, social responsibility and impact and the health and
 
safety of all of our stakeholders.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
92
We
 
have
 
established
 
an
 
Executive
 
Committee
 
comprised
 
of
 
Ms.
 
Semiramis
 
Paliou
 
(Chairperson),
 
Mr.
Anastasios
 
Margaronis
 
(member),
 
Mr.
 
Ioannis
 
Zafirakis
 
(member),
 
and
 
Mr.
 
Eleftherios
 
Papatrifon
(member).
 
The
 
Executive
 
Committee
 
has,
 
to
 
the
 
extent
 
permitted
 
by
 
law,
 
the
 
powers
 
of
 
the
 
Board
 
of
Directors in the management of the business and affairs of the Company.
We
 
also
 
maintain
 
directors’
 
and
 
officers’
 
insurance,
 
pursuant
 
to
 
which
 
we
 
provide
 
insurance
 
coverage
against certain
 
liabilities to
 
which our
 
directors and
 
officers may
 
be subject,
 
including liability
 
incurred under
U.S.
 
securities law.
 
Our executive
 
directors have
 
employment
 
agreements, which,
 
if terminated
 
without
cause, entitle them to continue
 
receiving their basic salary through the date of the agreement’s expiration.
Clawback Policy
In December 2023,
 
our Board
 
of Directors
 
adopted a policy
 
regarding the
 
recovery of erroneously
 
awarded
compensation (“Clawback Policy”) in accordance with the applicable rules of
 
NYSE and Section 10D and
Rule 10D-1 of the Securities Exchange Act of 1934, as amended. In the event we are required to prepare
an accounting restatement due to
 
material noncompliance with any
 
financial reporting requirements under
U.S. securities
 
laws or
 
otherwise erroneous
 
data or
 
if we
 
determine there
 
has been
 
a significant
 
misconduct
that causes material financial, operational
 
or reputational harm, we shall
 
be entitled to recover a portion
 
or
all of
 
any incentive-based
 
compensation, if
 
any,
 
provided to
 
certain executives
 
who, during
 
a three-year
period
 
preceding
 
the
 
date
 
on
 
which
 
an
 
accounting
 
restatement
 
is
 
required,
 
received
 
incentive
compensation
 
based
 
on
 
the
 
erroneous
 
financial
 
data
 
that
 
exceeds
 
the
 
amount
 
of
 
incentive-based
compensation the executive would have received based on
 
the restatement.
Our
 
Clawback
 
Policy
 
shall
 
be
 
administered
 
by
 
our
 
Compensation Committee
 
who
 
has
 
the
 
authority,
 
in
accordance with
 
the applicable
 
laws, rules
 
and regulations,
 
to interpret
 
and make
 
determinations
 
necessary
for the administration of the
 
Clawback Policy,
 
and may forego recovery in
 
certain instances, including if it
determines that recovery would be impracticable.
 
D.
 
Employees
We crew our vessels
 
primarily with Greek officers and Filipino officers
 
and seamen and may also employ
seamen from Poland,
 
Romania and
 
Ukraine. DSS
 
and DWM are
 
responsible for identifying
 
the appropriate
officers
 
and
 
seamen
 
mainly
 
through
 
crewing
 
agencies.
 
The
 
crewing
 
agencies
 
handle
 
each
 
seaman's
training, travel
 
and payroll.
 
The management
 
companies ensure
 
that all
 
our seamen
 
have the
 
qualifications
and licenses required to comply
 
with international regulations and shipping conventions. Additionally,
 
our
seafaring
 
employees
 
perform
 
most
 
commissioning
 
work
 
and
 
supervise
 
work
 
at
 
shipyards
 
and
 
drydock
facilities. We
 
typically man
 
our vessels
 
with more crew
 
members than
 
are required by
 
the country of
 
the
vessel's flag in order to allow for the performance of routine maintenance
 
duties.
The
 
following
 
table
 
presents
 
the
 
number
 
of
 
shoreside
 
personnel
 
employed
 
by
 
DSS
 
and
 
the
 
number
 
of
seafaring
 
personnel
 
employed
 
by
 
our
 
vessel-owning
 
subsidiaries
 
as
 
of
 
December
 
31,
 
2024,
 
2023
 
and
2022.
 
 
Year Ended December 31,
 
2024
2023
2022
Shoreside
 
11
7
11
2
113
Seafaring
 
864
906
907
Total
 
981
1,018
1,020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
93
E.
 
Share Ownership
With respect to
 
the total amount
 
of common shares,
 
Series B Preferred
 
Shares, Series C
 
Preferred Shares
and Series D Preferred Shares owned by our officers and directors, individually
 
and as a group, see “Item
7. Major Shareholders and Related Party Transactions—A. Major Shareholders.”
F.
Disclosure of Registrant's Action to Recover Erroneously Awarded
Compensation
Not applicable.
Item 7.
 
Major Shareholders and Related Party Transactions
 
A.
 
Major Shareholders
The following table
 
sets forth information
 
regarding ownership
 
of our common
 
stock of which
 
we are aware
as of the
 
date of this
 
annual report, for (i) beneficial
 
owners of five
 
percent or more of
 
our common stock
and
 
(ii) our
 
officers
 
and
 
directors,
 
individually
 
and
 
as
 
a
 
group.
 
All
 
of
 
our
 
shareholders,
 
including
 
the
shareholders listed in this table, are entitled to one vote for each share
 
of common stock held.
Title of Class
Identity of Person or Group
 
Number of
Shares Owned
 
Percent of
Class
*
 
Common Stock,
 
 
Semiramis Paliou (1)
 
24,719,462
 
20.3%
par value $0.01
Anastasios Margaronis (2)
10,505,922
8.8%
Sea Trade Holdings Inc. (3)
14,682,781
12.7%
F.
 
Laeisz GmbH (4)
6.305.426
5.4%
 
 
All other officers and directors as a group (5)
 
12,573,796
 
10.8%
* Based on 115,767,861 common shares outstanding as of March 20, 2025.
 
(1)
 
Mrs. Semiramis Paliou indirectly may be deemed to beneficially own 20.3% beneficially owned
through Tuscany Shipping Corp., or Tuscany,
 
and through 4 Sweet Dreams S.A., as the result
of her ability to
 
control the vote and
 
disposition of such entities.
 
The shares include 5,802,034
shares
 
of
 
common
 
stock
 
issuable
 
to
 
Semiramis Paliou
 
upon
 
exercise
 
of
 
3,527,501
 
warrants
distributed on December 14, 2023. As of December 31, 2022, 2023 and 2024, Mrs. Semiramis
Paliou
 
owned
 
indirectly
 
16.0%,
 
20.3%
 
and
 
18.4%,
 
respectively,
 
of
 
our
 
outstanding
 
common
stock. Additionally,
 
Mrs. Paliou
 
owns, through
 
Tuscany,
 
10,675 shares
 
of Series
 
C Preferred
Stock, par value $0.01 per share, and 400
 
shares of Series D Preferred Stock,
 
par value $0.01
per share. The
 
Series C Preferred Stock
 
vote with our common
 
shares and each share
 
of the
Series C Preferred Stock entitle the holder thereof to 1,000 votes on all matters submitted to a
vote of
 
the common
 
stockholders of
 
the Company. Each
 
share of
 
Series D
 
Preferred Stock
 
shall
entitle the holder thereof to
 
two hundred thousand (200,000) votes
 
on all matters submitted to
a vote of
 
the stockholders of the
 
Company, provided however,
 
that, notwithstanding any other
provision of the
 
Series D Preferred Stock
 
statement of designation, to
 
the extent that
 
the total
number of votes one
 
or more holders of
 
Series D Preferred Stock is
 
entitled to vote (including
any voting
 
power of
 
such holders
 
derived from
 
Series D
 
Preferred Stock,
 
shares of
 
Common
Stock or any other
 
voting security of
 
the Company issued
 
and outstanding
 
as of the date
 
hereof
or that
 
may be
 
issued in
 
the future)
 
on any
 
matter submitted
 
to a
 
vote of
 
stockholders of
 
the
Company would exceed 36.0% of the total
 
number of votes eligible to be cast
 
on such matter,
the total
 
number of votes
 
that holders
 
of Series D
 
Preferred Stock may
 
exercise derived from
the Series D Preferred Stock together with Common Shares and any
 
other voting securities of
94
the Company beneficially
 
owned by such
 
holder, shall
 
be reduced to
 
36% of the
 
total number
of votes that may be cast on such matter submitted to a vote of
 
stockholders.
(2)
 
Mr. Anastasios
 
Margaronis,
 
our
 
President
 
and
 
a
 
member
 
of
 
our
 
board
 
of
 
directors
 
may
 
be
deemed to beneficially
 
own Anamar Investments
 
Inc. and ESX Investments
 
Inc. as the result
 
of
his ability to
 
control the vote
 
and disposition of
 
such entities. These
 
shares include 2,948,820
shares
 
of
 
common
 
stock
 
issuable
 
to
 
Anastasios
 
Margaronis
 
upon
 
exercise
 
of
 
1,792,814
warrants distributed on December 14, 2023.
 
(3)
 
This
 
information
 
is
 
derived from
 
a
 
Schedule 13G/A
 
filed
 
with
 
the
 
SEC on
 
January
 
29,
 
2025,
adjusting the percentage figure based
 
on the common shares issued
 
and outstanding as of the
date of this report.
 
(4)
 
This
 
information
 
is
 
derived
 
from
 
a
 
Schedule
 
13G
 
filed
 
with
 
the
 
SEC
 
on
 
October
 
18,
 
2024,
adjusting the percentage figure based
 
on the common shares issued
 
and outstanding as of the
date of this report.
 
(5)
 
Ms. Semiramis
 
Paliou
 
and
 
Mr. Anastasios
 
Margaronis
 
are
 
our
 
only
 
directors
 
or
 
officers
 
that
beneficially
 
own
 
5%
 
or
 
more
 
of
 
our
 
outstanding
 
common
 
stock.
 
Mr.
 
Simeon
 
Palios
 
may
 
be
deemed
 
to
 
beneficially
 
own
 
5,533,206
 
shares,
 
or
 
4.7%
 
of
 
our
 
outstanding
 
common
 
stock,
beneficially owned
 
through Taracan
 
Investments S.A.
 
and Limon
 
Compania Financiera
 
S.A.;
Mr.
 
Ioannis
 
Zafirakis
 
may
 
be
 
deemed
 
to
 
beneficially
 
own
 
2,437,232
 
shares,
 
or
 
2.1%
 
of
 
our
outstanding common
 
stock, beneficially
 
owned through
 
Abra Marinvest
 
Inc.; and Mr. Eleftherios
Papatrifon may
 
be deemed
 
to beneficially
 
own 1,292,717
 
shares, or
 
1.1% of
 
our outstanding
common
 
stock.
 
All
 
other
 
officers
 
and
 
directors
 
each
 
own
 
less
 
than
 
1%
 
of
 
our
 
outstanding
common stock.
 
As of
 
March 20,
 
2025, we
 
had 78
 
shareholders of record,
 
64 of
 
which were located
 
in the
 
United States
and
 
held
 
an
 
aggregate
 
of
 
102,793,930
 
of
 
our
 
common
 
shares,
 
representing
 
82.1%
 
of
 
our
 
outstanding
common
 
shares.
 
However,
 
one
 
of
 
the
 
U.S.
 
shareholders
 
of
 
record
 
is
 
CEDE
 
&
 
CO.,
 
a
 
nominee
 
of
 
The
Depository Trust
 
Company,
 
which held 101,729,866
 
of our
 
common shares as
 
of that
 
date. Accordingly,
we believe
 
that the
 
shares held
 
by CEDE
 
& CO.
 
include common
 
shares beneficially
 
owned by
 
both holders
in the United
 
States and
 
non-U.S. beneficial
 
owners. We are
 
not aware of
 
any arrangements,
 
the operation
of which may at a subsequent date result in our change of control.
Holders
 
of
 
the
 
Series
 
B
 
Preferred
 
Shares
 
generally
 
have
 
no
 
voting
 
rights
 
except
 
(1)
 
in
 
respect
 
of
amendments to the Articles of
 
Incorporation which would adversely alter
 
the preferences, powers or rights
of
 
the
 
Series
 
B
 
Preferred
 
Shares
 
or
 
(2)
 
in
 
the
 
event
 
that
 
we
 
propose
 
to
 
issue
 
any
 
parity
 
stock
 
if
 
the
cumulative dividends payable
 
on outstanding Preferred
 
Stock are in
 
arrears or any
 
senior stock.
 
However,
if and whenever
 
dividends payable
 
on the
 
Series B
 
Preferred Shares
 
are in
 
arrears for
 
six or
 
more quarterly
periods, whether or not consecutive, holders
 
of Series B Preferred Shares (voting together
 
as a class with
all
 
other
 
classes
 
or
 
series
 
of
 
parity
 
stock
 
upon
 
which
 
like
 
voting
 
rights
 
have
 
been
 
conferred
 
and
 
are
exercisable) will
 
be entitled to
 
elect one additional
 
director to serve
 
on our
 
board of directors
 
until such time
as all accumulated and unpaid dividends on the Series B Preferred
 
Shares have been paid in full.
B.
 
Related Party Transactions
OceanPal Inc.,
 
or OceanPal
We own 500,000
 
of OceanPal’s
 
Series B
 
Preferred Shares,
 
207 shares
 
of OceanPal’s
 
Series C
 
Convertible
Preferred Shares and 3,649,474 common shares, being 49% of
 
OceanPal’s common stock.
 
95
Series
 
B
 
Preferred
 
Shares
 
entitle
 
the
 
holder
 
to
 
2,000
 
votes
 
on
 
all
 
matters
 
submitted
 
to
 
vote
 
of
 
the
stockholders of the
 
Company,
 
provided however,
 
that the total
 
number of votes
 
shall not exceed
 
34% of
the total
 
number of
 
votes, provided
 
further, that the
 
total number
 
of votes
 
entitled to
 
vote, including
 
common
stock or any other voting security, would not exceed 49% of the total number of votes.
 
Series C Preferred Shares do
 
not have voting rights unless
 
they are related to amendments
 
of the Articles
of Incorporation that adversely
 
alter the preference, powers
 
or rights of the
 
Series C Preferred
 
Shares or
to
 
issue
 
Parity
 
Stock
 
or
 
create
 
or
 
issue
 
Senior
 
Stock.
 
Series
 
C
 
Preferred
 
Shares
 
are
 
convertible
 
into
common stock
 
at the
 
Company’s option,
 
at a
 
conversion price
 
equal to
 
the lesser
 
of $6.5
 
and the
 
10-trading
day trailing VWAP of
 
OceanPal’s common shares,
 
subject to adjustments.
 
Additionally, Series C Preferred
Shares have a cumulative preferred dividend accruing
 
at the rate of 8% per annum, payable in cash or, at
OceanPal’s election,
 
in kind
 
and has
 
a liquidation
 
preference equal
 
to the
 
stated value
 
of $10,000.
 
Dividend
income from the OceanPal preferred shares during 2024 amounted to $16,560.
OceanPal Inc. Non-Competition Agreement
We have entered into a non-competition agreement with OceanPal Inc. ("OceanPal"), dated November 2,
2021, pursuant to which we
 
granted to OceanPal (i) a
 
right of first refusal over any
 
opportunity available to
us
 
(or
 
any
 
of
 
our
 
subsidiaries)
 
to
 
acquire
 
or
 
charter-in
 
any
 
dry
 
bulk
 
vessel
 
that
 
is
 
larger
 
than
 
70,000
deadweight
 
tons
 
and
 
that
 
was
 
built
 
prior
 
to
 
2006
 
and
 
(ii)
 
a
 
right
 
of
 
first
 
refusal
 
over
 
any
 
employment
opportunity for
 
a dry bulk
 
vessel pursuant
 
to a spot
 
market charter
 
presented or
 
available to
 
us with respect
to
 
any
 
vessel
 
owned
 
or
 
chartered
 
in,
 
directly
 
or
 
indirectly,
 
by
 
us.
 
The
 
non-competition
 
agreement
 
also
prohibits
 
us
 
and
 
OceanPal
 
from
 
soliciting
 
each
 
other's
 
employees.
 
The
 
terms
 
of
 
the
 
non-competition
agreement provide that it
 
will terminate on the
 
date that (i) our
 
ownership of OceanPal’s equity
 
securities
represents less than
 
10% of total
 
outstanding voting power
 
and (ii)
 
we and
 
OceanPal share no
 
common
executive officers.
OceanPal Inc. Right of First Refusal
On November
 
2, 2021
 
we entered
 
into a
 
right of
 
first refusal
 
agreement with
 
OceanPal Inc.
 
pursuant to
which we granted OceanPal
 
Inc. a right of
 
first refusal over six
 
drybulk carriers owned
 
by us, as of
 
the date
of the agreement, and identified in the agreement. Pursuant to this right of first refusal,
 
OceanPal Inc. has
the right, but not the obligation, to purchase one or all of the six identified vessels from us
 
when and if we
make a determination
 
to sell one
 
or more of
 
the vessels at
 
a price equal
 
to the fair
 
market value of
 
each
vessel at
 
the time
 
of sale,
 
as determined
 
by the
 
average of
 
two independent
 
shipbroker valuations
 
from
brokers mutually
 
agreeable to
 
us and
 
OceanPal Inc.
 
If OceanPal
 
Inc. does
 
not exercise
 
its right
 
to purchase
a vessel, we have the
 
right to sell the vessel
 
to any third party for
 
a period of three months
 
from the date
notified OceanPal Inc.
 
of our intent to
 
sell the vessel.
 
As of the
 
date of the
 
annual report, only one
 
of the
six vessels identified in the agreement remains unsold.
Series D Preferred Stock
In June 2021, we
 
issued 400 shares of
 
its newly-designated Series
 
D Preferred Stock,
 
par value $0.01
 
per
share,
 
to
 
Tuscany
 
Shipping
 
Corp.,
 
an
 
entity
 
controlled
 
by
 
its
 
Chief
 
Executive
 
Officer,
 
Mrs.
 
Semiramis
Paliou, for
 
an aggregate
 
purchase price
 
of
 
$360,000. The
 
Series D
 
Preferred Stock
 
has no
 
dividend or
liquidation rights.
 
Each share of
 
Series D Preferred
 
Stock shall entitle
 
the holder thereof
 
to two hundred
thousand (200,000) votes on all
 
matters submitted to a vote of
 
the stockholders of the Company, provided
however, that, notwithstanding
 
any other provision of
 
Series D Preferred Stock
 
statement of designation,
to the extent that
 
the total number of votes
 
one or more holders
 
of Series D Preferred Stock
 
is entitled to
vote (including
 
any voting
 
power of
 
such holders
 
derived from
 
Series D
 
Preferred Stock,
 
shares of
 
Common
Stock or
 
any other
 
voting security
 
of the
 
Company issued
 
and outstanding
 
as of
 
the date
 
hereof or
 
that
may
 
be
 
issued
 
in
 
the
 
future)
 
on
 
any matter
 
submitted to
 
a
 
vote
 
of
 
stockholders of
 
the
 
Company
 
would
exceed 36.0% of the total number of votes eligible to be cast on such matter, the total number of votes that holders of Series D Preferred Stock may exercise derived from the Series D Preferred Stock together with
 
96
Common Shares and any other voting securities of the Company beneficially owned by such holder, shall
be reduced
 
to 36%
 
of the
 
total number
 
of votes
 
that may
 
be cast
 
on such
 
matter submitted
 
to a
 
vote of
stockholders. The Series D Preferred Stock is
 
transferable only to the holder’s immediate
 
family members
and to affiliated
 
persons. The issuance of
 
shares of Series
 
D Preferred Stock to
 
Tuscany Shipping Corp.
was approved by an
 
independent committee of the Board
 
of Directors of the
 
Company, which
 
received a
fairness opinion from an independent third party that the transaction was fair
 
from a financial point of view
to the Company.
Series C Preferred Stock
In January 2019, we issued 10,675
 
shares of newly-designated Series C
 
Preferred Stock, par value $0.01
per share, to an
 
affiliate of our Chairman, Mr.
 
Simeon Palios.
 
In September 2020, the Series
 
C Preferred
Shares
 
were
 
transferred
 
from
 
an
 
affiliate
 
of
 
Mr.
 
Simeon
 
Palios
 
to
 
an
 
affiliate
 
of
 
the
 
Company’s
 
Chief
Executive Officer,
 
Mrs. Semiramis Paliou. The
 
Series C Preferred Stock
 
vote with the common
 
shares of
the Company, and each share entitles the holder thereof to 1,000 votes on all matters submitted to a vote
of the stockholders
 
of the Company. The
 
Series C
 
Preferred Stock
 
has no dividend
 
or liquidation
 
rights and
cannot be transferred without the consent of the
 
Company except to the holder’s affiliates and immediate
family members.
 
The issuance
 
of shares
 
of Series
 
C Preferred
 
Stock was
 
approved by
 
an independent
committee of the
 
Board of Directors,
 
which received
 
a fairness opinion
 
from an independent
 
third party that
the transaction was fair from a financial point of view to the Issuer.
 
Steamship Shipbroking Enterprises Inc.
Steamship,
 
an
 
affiliated
 
entity
 
controlled
 
by
 
our
 
CEO
 
Ms.
 
Semiramis
 
Paliou,
 
provides
 
to
 
us
 
brokerage
services for
 
an annual
 
fee pursuant
 
to a
 
Brokerage Services
 
Agreement.
 
In 2024,
 
brokerage fees
 
amounted
to $4.1 million
 
and we paid
 
an additional
 
amount of
 
$0.5 million
 
for commissions
 
on the
 
sale and
 
purchases
of vessels. The
 
terms of
 
this relationship
 
are currently
 
governed by
 
a Brokerage
 
Services Agreement
 
dated
February 25, 2025 due to expire on December 31, 2025.
Altair Travel Agency S.A.
Altair Travel Agency S.A., or Altair,
 
an affiliated entity that is controlled by our CEO Ms. Semiramis Paliou
provides us with travel related services. Travel related expenses in 2024, amounted
 
to $2.6 million.
 
Diana Wilhelmsen Management Limited
Diana Wilhelmsen
 
Management Limited,
 
or DWM,
 
is a
 
50/50 joint
 
venture which
 
provides management
services
 
to
 
certain
 
vessels
 
in
 
our
 
fleet
 
for
 
a
 
fixed
 
monthly
 
fee
 
and
 
commercial
 
services
 
charged
 
as
 
a
percentage
 
of
 
the
 
vessels’
 
gross
 
revenues.
 
Management
 
fees
 
in
 
2024
 
amounted
 
to
 
$1.3
 
million,
commissions on revenues amounted to $0.4 million.
Bond acquisition
 
Officers and directors of
 
the Company and/or
 
entities affiliated with them
 
purchased an aggregate
 
of $47.3
million principal amount of
 
the $150.0 million
 
senior unsecured bond
 
issued on July
 
2, 2024, on
 
the date
of issuance.
 
Bergen Ultra
Bergen Ultra,
 
or Bergen,
 
is a
 
limited partnership
 
which owns
 
a dry
 
bulk carrier.
 
One of
 
our subsidiaries,
Diana
 
General
 
Partner
 
Inc.,
 
owns
 
3%
 
of
 
the
 
partnership
 
and
 
acts
 
as
 
the
 
General
 
Partner
 
and
 
another
subsidiary, Komi Shipping
 
Company Inc.,
 
owns 22%
 
of the
 
partnership.
 
The remaining
 
partnership interests
97
are owned by unaffiliated parties. On March 30, 2023, we entered into a
 
corporate guarantee with Nordea
to secure Bergen’s
 
obligations under
 
a $15.4
 
million loan
 
facility and
 
a commission
 
agreement under
 
which
the
 
Company
 
is
 
paid
 
a
 
commission
 
of
 
0.8%
 
per
 
annum,
 
on
 
the
 
outstanding
 
balance
 
of
 
the
 
loan,
 
as
compensation for the
 
guarantee it
 
provided to Nordea.
 
We have also
 
entered into
 
an administrative
 
service
agreement
 
under
 
which
 
DSS
 
provides
 
administrative
 
services
 
to
 
Bergen.
 
In
 
2024,
 
income
 
from
administrative
 
fees
 
amounted
 
to
 
$15,000
 
and
 
we
 
received
 
$116,395
 
as
 
payment
 
for
 
the
 
guarantee
commission.
Windward Offshore GmbH
Windward
 
Offshore
 
GmbH
 
&
 
Co.
 
KG,
 
or
 
Windward,
 
is
 
a
 
limited
 
partnership operating
 
an
 
offshore
 
wind
vessel
 
company
 
based
 
in
 
Germany.
 
One
 
of
 
our
 
subsidiaries,
 
Diana
 
Energize
 
Inc.,
 
or
 
Diana
 
Energize,
entered
 
into
 
a
 
novated
 
agreement
 
to
 
contribute
 
capital
 
for
 
Windward’s
 
construction
 
of
 
four
 
CSOVs,
ultimately
 
contributing
 
45.87%
 
of
 
Windward’s
 
capital.
 
As
 
of
 
December
 
31,
 
2024,
 
the
 
investment
 
in
Windward amounted
 
to $36.6
 
million consisting
 
of advances
 
to fund
 
the construction
 
of the
 
vessels,
 
working
capital and our portion in Windward’s results.
Diana Mariners Inc.
 
In
 
2023,
 
we
 
acquired
 
through
 
one
 
of
 
our
 
subsidiaries,
 
Cebu
 
Shipping
 
Company
 
Inc.,
 
or
 
Cebu,
 
24%
 
of
Cohen
 
Global
 
Maritime
 
Inc.,
 
or
 
Cohen,
 
a
 
company organized
 
in
 
the
 
Republic of
 
the
 
Philippines for
 
the
purpose of providing manning services to our vessels.
 
Cohen was renamed Diana Mariners Inc., or Diana
Mariners, in August 2024. As of December 31,
 
2024, our investment in Diana Mariners amounted to $0.4
million and there
 
was an amount
 
of $0.1 million
 
due from Diana
 
Mariners. As of
 
December 31, 2024,
 
Diana
Mariners did not have any operations.
C.
 
Interests of Experts and Counsel
 
Not Applicable.
98
Item 8.
 
Financial information
A.
 
Consolidated statements and other financial information
See “Item 18. Financial Statements.”
Legal Proceedings
We have not been involved in any legal proceedings which may have, or have
 
had, a significant effect on
our business, financial position,
 
results of operations
 
or liquidity, nor are we aware of
 
any proceedings that
are pending or
 
threatened which may
 
have a significant
 
effect on our
 
business, financial position, results
of
 
operations
 
or
 
liquidity.
 
From time
 
to
 
time,
 
we may
 
be
 
subject to
 
legal proceedings
 
and
 
claims in
 
the
ordinary course of business,
 
principally personal injury
 
and property casualty
 
claims. We expect that
 
these
claims
 
would be
 
covered by
 
insurance, subject
 
to
 
customary deductibles.
 
Those claims,
 
even if
 
lacking
merit, could result in the expenditure of significant financial and
 
managerial resources.
 
Dividend Policy
Our board
 
of directors reviews
 
and amends our
 
dividend policy from
 
time to
 
time in
 
light of
 
our business
plans
 
and
 
other
 
factors. In
 
order
 
to
 
position
 
us
 
to
 
take
 
advantage
 
of
 
market
 
opportunities
 
in
 
a
 
then-
deteriorating
 
market,
 
our
 
board
 
of
 
directors,
 
beginning
 
with
 
the
 
fourth
 
quarter
 
of
 
2008,
 
suspended
 
our
common stock dividend. As a result of improving
 
market conditions in 2021, our board of directors
 
elected
to declare quarterly dividends
 
with respect to the
 
third quarter of 2021
 
and for each quarter
 
thereafter, until
the
 
fourth
 
quarter
 
of
 
2024
 
and
 
two
 
special
 
noncash
 
dividends,
 
as
 
described
 
in
 
Item
 
4A.
 
History
 
and
development of the Company.
 
The declaration and payment
 
of dividends will
 
always be subject to the
 
discretion of our board
 
of directors.
The
 
timing
 
and
 
amount
 
of
 
any
 
dividends
 
declared
 
will
 
depend
 
on,
 
among
 
other
 
things,
 
our
 
earnings,
financial condition and
 
cash requirements and
 
availability, our ability to obtain
 
debt and equity
 
financing on
acceptable terms as contemplated by our growth strategy and provisions of Marshall Islands
 
law affecting
the payment of dividends. In addition, other external factors,
 
such as our lenders imposing restrictions on
our
 
ability
 
to
 
pay
 
dividends
 
under
 
the
 
terms
 
of
 
our
 
loan
 
facilities,
 
may
 
limit
 
our
 
ability
 
to
 
pay
dividends.
 
Further,
 
under the
 
terms of
 
our loan
 
agreements, we
 
may not
 
be permitted
 
to pay
 
dividends
that would result in an event of default or if an event of default occurs
 
and is continuing.
Marshall
 
Islands
 
law
 
generally
 
prohibits
 
the
 
payment
 
of
 
dividends
 
other
 
than
 
from
 
surplus
 
or
 
when
 
a
company is insolvent or if the payment
 
of the dividend would render
 
the company insolvent. Also, our loan
facilities and bond prohibit the payment of dividends should an event
 
of default arise.
 
We believe
 
that, under
 
current law,
 
any dividends
 
that we
 
have paid
 
and may
 
pay in
 
the future
 
from earnings
and profits constitute
 
“qualified dividend
 
income” and as
 
such are generally
 
subject to a
 
20% United States
federal income tax rate with
 
respect to non-corporate United States shareholders. Distributions
 
in excess
of our earnings
 
and profits will
 
be treated first
 
as a non-taxable
 
return of capital
 
to the extent
 
of a United
States
 
shareholder’s tax
 
basis in
 
its
 
common stock
 
on a
 
dollar-for-dollar basis
 
and thereafter
 
as capital
gain.
 
Please
 
see
 
the
 
section
 
of
 
this
 
annual
 
report
 
entitled
 
“Taxation”
 
under
 
Item
 
10.E
 
for
 
additional
information relating to the tax treatment of our dividend payments.
Cumulative dividends on our Series
 
B Preferred Shares are payable
 
on each January 15, April
 
15, July 15
and October
 
15, when, as
 
and if
 
declared by our
 
board of
 
directors or any
 
authorized committee thereof
out
 
of
 
legally
 
available funds
 
for
 
such
 
purpose.
 
The
 
dividend
 
rate
 
for
 
our
 
Series
 
B
 
Preferred
 
Shares
 
is
8.875% per
 
annum per
 
$25.00 of
 
liquidation preference
 
per share
 
(equal to
 
$2.21875 per
 
annum per
 
share)
and is not subject to adjustment. Since February 14, 2019, we may redeem, in whole or from
 
time to time
99
in part, the Series B Preferred Shares at
 
a redemption price of $25.00 per share plus an
 
amount equal to
all accumulated and unpaid dividends thereon to the date of redemption,
 
whether or not declared.
Marshall Islands
 
law provides that
 
we may
 
pay dividends on
 
and redeem the
 
Series B
 
Preferred Shares
only to the
 
extent that assets
 
are legally available
 
for such purposes.
 
Legally available
 
assets generally
 
are
limited to our surplus, which essentially represents our retained earnings
 
and the excess of consideration
received by us for
 
the sale of shares
 
above the par value
 
of the shares. In
 
addition, under Marshall
 
Islands
law we
 
may not
 
pay dividends
 
on or
 
redeem Series
 
B Preferred
 
Shares if
 
we are
 
insolvent or
 
would be
rendered insolvent by the payment of such a dividend or the making
 
of such redemption.
B.
 
Significant Changes
There have
 
been no
 
significant changes
 
since the
 
date of
 
the
 
annual consolidated
 
financial statements
included in
 
this annual
 
report, other
 
than those
 
described in
 
Note 17
 
“Subsequent events”
 
of our
 
annual
consolidated financial statements.
Item 9.
 
The Offer and Listing
A.
 
Offer and Listing Details
The
 
trading market
 
for
 
shares of
 
our
 
common stock
 
is the
 
NYSE, on
 
which our
 
shares trade
 
under the
symbol “DSX” since March 23, 2005.
 
Our Series
 
B Preferred
 
Stock has
 
traded on
 
the NYSE
 
under the
 
symbol “DSXPRB”
 
since February
 
21,
2014.
 
Our Warrants to Purchase Common Stock, expiring on or about December 14, 2026, have
 
traded on the
NYSE under the symbol “DSX WS” since December 14, 2023.
B.
 
Plan of distribution
Not Applicable.
C.
 
Markets
Our common shares have traded on the NYSE since March 23, 2005 under the
 
symbol “DSX,” our Series
B Preferred Stock has traded on the NYSE
 
under the symbol "DSXPRB" since
 
February 21, 2014 and our
Warrants have traded on the NYSE under the symbol “DSX WS” since December 14, 2023. Since July 2,
2024,
 
our
 
8.75%
 
Senior
 
Unsecured
 
Bond
 
due
 
2029
 
commenced
 
trading
 
on
 
the
 
Oslo
 
Stock
 
Exchange,
under the symbol "DIASH03."
D.
 
Selling Shareholders
Not Applicable.
E.
 
Dilution
Not Applicable.
F.
Expenses of the Issue
Not Applicable.
100
Item 10.
 
Additional Information
A.
 
Share Capital
Not Applicable.
B.
 
Memorandum and Articles of Association
Our current amended and restated articles of incorporation are filed as exhibit 1.1 hereto, and our current
amended and restated
 
bylaws are filed
 
as exhibit 1.2
 
hereto. The information contained
 
in these exhibits
is incorporated by reference herein.
Information
 
regarding
 
the
 
rights,
 
preferences
 
and
 
restrictions
 
attaching
 
to
 
each
 
class
 
of
 
our
 
shares
 
is
described
 
in
 
Exhibit 2.8
 
to
 
this
 
annual
 
report
 
titled
 
“Description
 
of
 
Securities
 
Registered
 
Pursuant
 
to
Section 12 of the Securities Exchange Act of 1934.”
 
Stockholders Rights Agreement
On
 
February 2,
 
2024, we
 
entered
 
into
 
an
 
Amended and
 
Restated Stockholders
 
Rights
 
Agreement with
Computershare
 
Trust
 
Company,
 
N.A.,
 
as
 
Rights
 
Agent,
 
to
 
amend
 
and
 
restate
 
the
 
Stockholders
 
Rights
Agreement, dated January 15, 2016.
Under the Amended
 
and Restated
 
Stockholders Rights
 
Agreement, we
 
declared a
 
dividend payable
 
of one
preferred
 
stock
 
purchase
 
right,
 
or
 
Right,
 
for
 
each
 
share
 
of
 
common
 
stock
 
outstanding
 
at
 
the
 
close
 
of
business
 
on
 
January 26,
 
2016.
 
Each Right
 
entitles the
 
registered
 
holder to
 
purchase from
 
us
 
one one-
thousandth of a share of Series
 
A participating preferred stock, par value $0.01
 
per share, at an exercise
price of $25.00 per share. The
 
Rights will separate from the common stock and
 
become exercisable only
if a person or
 
group acquires beneficial
 
ownership of 15% or
 
more of our common
 
stock (including through
entry
 
into
 
certain
 
derivative
 
positions)
 
in
 
a
 
transaction
 
not
 
approved
 
by
 
our
 
Board
 
of
 
Directors.
 
In
 
that
situation, each holder of a Right (other than the
 
acquiring person, whose Rights will become void and will
not be exercisable)
 
will have the
 
right to purchase,
 
upon payment
 
of the exercise
 
price, a number
 
of shares
of our
 
common stock having
 
a then-current market
 
value equal to
 
twice the
 
exercise price. In
 
addition, if
the Company
 
is acquired
 
in a
 
merger or
 
other business
 
combination after
 
an acquiring
 
person acquires
15% or more
 
of our common
 
stock, each holder
 
of the Right
 
will thereafter
 
have the right
 
to purchase, upon
payment of the
 
exercise price, a
 
number of shares
 
of common stock
 
of the acquiring
 
person having a
 
then-
current market value equal
 
to twice the exercise price.
 
The acquiring person
 
will not be entitled
 
to exercise
these Rights.
 
Under the Amended and Restated Stockholders Rights Agreement's terms, it will expire on
February 1, 2034. A copy of the
 
Amended and Restated Stockholders Rights Agreement and a summary
of its
 
terms are
 
contained in
 
the Form
 
8-A12B filed
 
with the
 
SEC on
 
January 15,
 
2016, with
 
file number
001-32458, as amended on February 2, 2024.
C.
 
Material Contracts
Attached as exhibits
 
to this annual
 
report are the
 
contracts we consider
 
to be both
 
material and not
 
entered
into in the ordinary
 
course of business,
 
which (i) are
 
to be performed
 
in whole or
 
in part on
 
or after the
 
filing
date
 
of this
 
annual report
 
or (ii)
 
were entered
 
into not
 
more than
 
two years
 
before the
 
filing date
 
of this
annual report.
 
Other than these agreements, we have no material
 
contracts, other than contracts entered
into in
 
the ordinary
 
course of
 
business, to
 
which the
 
Company or
 
any member
 
of the
 
group is
 
a party.
 
A
description of these is
 
included in our description
 
of our agreements generally:
 
we refer you to Item
 
5.B for
a discussion of our loan facilities.
101
D.
 
Exchange Controls
Under
 
Marshall
 
Islands,
 
Panamanian,
 
Cypriot
 
and
 
Greek
 
law,
 
there
 
are
 
currently
 
no
 
restrictions on
 
the
export or import of
 
capital, including foreign exchange controls or restrictions
 
that affect the remittance
 
of
dividends, interest or other payments to non-resident holders of our securities.
E.
 
Taxation
In the
 
opinion of
 
Seward & Kissel
 
LLP,
 
the following is
 
a discussion of
 
the material Marshall
 
Islands and
U.S. federal
 
income
 
tax
 
considerations
 
of
 
the
 
ownership
 
and
 
disposition
 
by
 
a
 
U.S. Holder
 
and
 
a
 
Non-
U.S. Holder,
 
each as defined
 
below,
 
of the
 
common stock. This
 
discussion does not
 
purport to deal
 
with
the
 
tax
 
consequences
 
of
 
owning
 
common
 
stock
 
to
 
all
 
categories
 
of
 
investors,
 
some
 
of
 
which,
 
such
 
as
dealers in
 
securities or
 
commodities, financial
 
institutions, insurance
 
companies, tax-exempt
 
organizations,
U.S. expatriates, persons liable for the alternative minimum
 
tax, persons who hold common stock
 
as part
of
 
a
 
straddle,
 
hedge,
 
conversion
 
transaction
 
or
 
integrated
 
investment,
 
U.S. Holders
 
whose
 
functional
currency is not the United States dollar, persons required to recognize income for U.S. federal income tax
purposes
 
no
 
later
 
than
 
when
 
such
 
income
 
is
 
reported
 
on
 
an
 
“applicable
 
financial
 
statement,”
 
investors
subject to the “base erosion and
 
anti-avoidance” tax
 
and investors that own, actually or
 
under applicable
constructive ownership
 
rules, 10%
 
or more
 
of the
 
Company’s common
 
stock, may
 
be subject
 
to special
rules.
 
This
 
discussion
 
deals
 
only
 
with
 
holders
 
who
 
hold
 
the
 
common
 
stock
 
as
 
a
 
capital
 
asset.
 
You
 
are
encouraged to consult your own
 
tax advisors concerning the
 
overall tax consequences arising
 
in your own
particular situation under U.S. federal, state, local or foreign law of the
 
ownership of common stock.
Marshall Islands Tax Considerations
 
The Company is incorporated in the Marshall Islands. Under current Marshall
 
Islands law, the company is
not subject to
 
tax on income
 
or capital gains,
 
and no Marshall
 
Islands withholding tax
 
will be imposed
 
upon
payments of dividends by us to our shareholders.
 
United States Federal Income Taxation
 
The
 
following
 
discussion
 
is
 
based
 
upon
 
the
 
provisions
 
of
 
the
 
U.S.
 
Internal
 
Revenue
 
Code
 
of
 
1986,
 
as
amended
 
(the
 
“Code”),
 
existing
 
and
 
proposed
 
U.S.
 
Treasury
 
Department
 
regulations,
 
(the
 
“Treasury
Regulations”),
 
administrative
 
rulings,
 
pronouncements
 
and
 
judicial
 
decisions,
 
all
 
as
 
of
 
the
 
date
 
of
 
this
Annual Report.
 
This discussion assumes that we do not have an office or other fixed place of business
 
in
the United States. Unless the context otherwise
 
requires, the reference to Company below
 
shall be meant
to refer to both the Company and its vessel-owning and operating
 
subsidiaries.
 
Taxation of the Company’s Shipping Income
In General
 
The Company anticipates that it will derive substantially
 
all of its gross income from the use and operation
of
 
vessels
 
in
 
international
 
commerce
 
and
 
that
 
this
 
income
 
will
 
principally
 
consist
 
of
 
freights
 
from
 
the
transportation
 
of
 
cargoes,
 
hire
 
or
 
lease
 
from
 
time
 
or
 
voyage
 
charters
 
and
 
the
 
performance
 
of
 
services
directly related thereto, which the Company refers to as “Shipping
 
Income.”
 
Shipping Income that is attributable
 
to transportation that begins or
 
ends, but that does not
 
both begin and
end,
 
in
 
the
 
United
 
States
 
will
 
be
 
considered
 
to
 
be
 
50%
 
derived
 
from
 
sources
 
within
 
the
 
United
 
States.
Shipping
 
Income
 
attributable
 
to
 
transportation
 
that
 
both
 
begins
 
and
 
ends
 
in
 
the
 
United
 
States
 
will
 
be
considered to be
 
100% derived from
 
sources within the
 
United States. The
 
Company is not
 
permitted by
law
 
to
 
engage in
 
transportation that
 
gives rise
 
to
 
100% U.S. source
 
Shipping Income.
 
Shipping Income
attributable to
 
transportation exclusively
 
between non-U.S. ports
 
will be
 
considered to
 
be
 
100% derived
102
from sources outside the United States. Shipping Income
 
derived from sources outside the United States
will not be subject to U.S. federal income tax.
 
Based upon the
 
Company’s anticipated
 
shipping operations,
 
the Company’s vessels
 
will operate
 
in various
parts of the world, including to or from U.S. ports. Unless exempt from U.S. federal income taxation
 
under
Section 883
 
of
 
the
 
Code,
 
the
 
Company
 
will
 
be
 
subject
 
to
 
U.S. federal
 
income
 
taxation,
 
in
 
the
 
manner
discussed below,
 
to the extent
 
its Shipping Income
 
is considered derived
 
from sources within
 
the United
States.
 
In
 
the
 
year
 
ended
 
December
 
31,
 
2024,
 
approximately
 
6.1%
 
of
 
the
 
Company’s
 
shipping
 
income
 
was
attributable to the transportation of cargoes either to or from a U.S. port. Accordingly, approximately 3.1%
of
 
the
 
Company’s
 
shipping
 
income
 
would
 
be
 
treated
 
as
 
derived
 
from
 
U.S. sources
 
for
 
the
 
year
 
ended
December 31, 2024. In
 
the absence of
 
exemption from U.S. federal income
 
tax under Section 883 of
 
the
Code, the Company
 
would have been
 
subject to a
 
4% tax on its
 
gross U.S. source
 
Shipping Income, equal
to $0.3 million for the year ended December 31, 2024.
 
Application of Exemption under Section 883 of the Code
 
Under the relevant provisions of Section 883 of the Code and the final Treasury Regulations promulgated
thereunder,
 
a
 
foreign
 
corporation
 
will
 
be
 
exempt
 
from
 
U.S. federal
 
income
 
taxation
 
on
 
its
 
U.S. source
Shipping Income if:
(1)
 
It is organized in a qualified foreign country which, as defined, is one
 
that grants an equivalent
exemption from
 
tax to
 
corporations organized
 
in the
 
United States
 
in respect
 
of the
 
Shipping
Income for which exemption
 
is being claimed under
 
Section 883 of
 
the Code, or the
 
“Country of
Organization Requirement”; and
(2)
 
It can satisfy any one of the following two stock ownership requirements:
•
 
more
 
than
 
50%
 
of
 
its
 
stock,
 
in
 
terms
 
of
 
value,
 
is
 
beneficially
 
owned
 
by
 
qualified
shareholders
 
which,
 
as
 
defined,
 
includes
 
individuals
 
who
 
are
 
residents
 
of
 
a
 
qualified
foreign country, or the “50% Ownership Test”;
 
or
•
 
its stock is
 
“primarily and regularly” traded
 
on an established securities
 
market located
in the United States or a qualified foreign country, or the “Publicly Traded Test”.
The U.S. Treasury Department has recognized the Marshall Islands,
 
Panama and Cyprus the countries
 
of
incorporation of
 
each of
 
the Company
 
and its
 
subsidiaries
 
that earns
 
Shipping Income,
 
as a
 
qualified foreign
country.
 
Accordingly,
 
the
 
Company
 
and
 
each
 
of
 
the
 
subsidiaries
 
satisfy
 
the
 
Country
 
of
 
Organization
Requirement.
 
 
For
 
the
 
2024
 
taxable
 
year,
 
the
 
Company
 
believes
 
that
 
it
 
is
 
unlikely
 
that
 
the
 
50%
 
Ownership
 
Test
 
was
satisfied.
 
Therefore,
 
the
 
eligibility
 
of
 
the
 
Company
 
and
 
each
 
subsidiary
 
to
 
qualify
 
for
 
exemption
 
under
Section 883
 
of the
 
Code is
 
wholly dependent
 
upon the
 
Company’s
 
ability
 
to
 
satisfy the
 
Publicly Traded
Test.
 
 
Under
 
the
 
Treasury
 
Regulations,
 
stock
 
of
 
a
 
foreign
 
corporation
 
is
 
considered
 
“primarily
 
traded”
 
on
 
an
established
 
securities market
 
in
 
a
 
country
 
if
 
the
 
number
 
of
 
shares of
 
each
 
class
 
of
 
stock
 
that
 
is traded
during the taxable year on
 
all established securities markets in
 
that country exceeds the number
 
of shares
in
 
each
 
such
 
class that
 
is traded
 
during that
 
year
 
on
 
established securities
 
markets in
 
any
 
other single
country.
 
The Company’s
 
common stock
 
was “primarily
 
traded” on
 
the NYSE
 
during the
 
2024 taxable
 
year.
 
Under the Treasury Regulations, the Company’s common
 
stock will be considered to
 
be “regularly traded”
on the NYSE
 
if: (1) more than
 
50% of its
 
common stock, by voting
 
power and total
 
value, is listed
 
on the
103
NYSE, referred
 
to as
 
the “Listing
 
Threshold”, (2) its
 
common stock
 
is traded
 
on the
 
NYSE, other
 
than in
minimal
 
quantities, on
 
at
 
least
 
60 days
 
during
 
the
 
taxable
 
year
 
(or
 
one-sixth of
 
the
 
days
 
during
 
a
 
short
taxable year),
 
which is
 
referred to
 
as the
 
“Trading Frequency
 
Test”; and (3) the
 
aggregate number
 
of shares
of its common stock traded on the NYSE during
 
the taxable year is at least 10% of
 
the average number of
shares of its common stock outstanding
 
during such taxable year (as appropriately
 
adjusted in the case of
a short taxable year), which is referred to as the “Trading Volume
 
Test”.
 
The Trading Frequency Test
 
and
Trading Volume Test are deemed
 
to be
 
satisfied under
 
the Treasury
 
Regulations if
 
the Company’s
 
common
stock is regularly quoted by dealers making a market in the common
 
stock.
The Company believes
 
that its
 
common stock has
 
satisfied the Listing
 
Threshold, as well
 
as the Trading
Frequency Test
 
and Trading Volume Tests,
 
during the 2024 taxable year.
 
Notwithstanding the foregoing, the Treasury
 
Regulations provide, in pertinent part,
 
that stock of a
 
foreign
corporation
 
will
 
not
 
be
 
considered
 
to
 
be
 
“regularly
 
traded”
 
on
 
an
 
established
 
securities
 
market
 
for
 
any
taxable year during which 50%
 
or more of such stock
 
is owned, actually or constructively under specified
stock
 
attribution
 
rules,
 
on
 
more
 
than
 
half
 
the
 
days
 
during
 
the
 
taxable
 
year
 
by
 
persons,
 
or
 
“5%
Shareholders”,
 
who
 
each
 
own
 
5%
 
or
 
more
 
of
 
the
 
value
 
of
 
such
 
stock,
 
or
 
the
 
“5%
 
Override
 
Rule.”
 
For
purposes
 
of
 
determining
 
the
 
persons
 
who
 
are
 
5%
 
Shareholders,
 
a
 
foreign
 
corporation
 
may
 
rely
 
on
Schedules 13D and 13G filings with the SEC.
Based on Schedules 13D and 13G filings, during the 2024 taxable year,
 
less than 50% of the Company’s
common stock was owned by 5% Shareholders. Therefore, the
 
Company believes that it is not subject to
the 5% Override Rule
 
and thus has satisfied
 
the Publicly Traded Test for the 2024 taxable
 
year.
 
However,
there
 
can
 
be
 
no assurance
 
that the
 
Company will
 
continue
 
to
 
satisfy the
 
Publicly Traded
 
Test
 
in
 
future
taxable
 
years. For
 
example,
 
the
 
Company
 
could
 
be
 
subject
 
to
 
the
 
5%
 
Override
 
Rule
 
if
 
another
 
5%
Shareholder in
 
combination with
 
the Company’s
 
existing 5%
 
Shareholders were
 
to own
 
50% or
 
more of
the Company’s
 
common stock.
 
In such a
 
case, the Company
 
would be subject
 
to the 5%
 
Override Rule
unless
 
it
 
could
 
establish that,
 
among the
 
shares of
 
the
 
common
 
stock owned
 
by
 
the
 
5%
 
Shareholders,
sufficient shares are
 
owned by
 
qualified shareholders,
 
for purposes
 
of Section
 
883 of
 
the Code,
 
to preclude
non-qualified shareholders from owning 50% or more of the Company’s common stock for more than half
the
 
number of
 
days during
 
the
 
taxable year.
 
The requirements
 
of establishing
 
this exception
 
to the
 
5%
Override Rule are onerous and there is no assurance the
 
Company will be able to satisfy them.
Based
 
on
 
the
 
foregoing,
 
the
 
Company
 
believes
 
that
 
it
 
satisfied
 
the
 
Publicly
 
Traded
 
Test
 
and
 
therefore
believes that it was exempt from U.S. federal income tax
 
under Section 883 of the Code, during the 2024
taxable year and intends to take this position on its 2024 U.S. federal
 
income tax returns.
 
Taxation in Absence of Exemption Under Section 883 of the Code
 
To
 
the
 
extent the
 
benefits of
 
Section
 
883
 
of
 
the
 
Code
 
are
 
unavailable with
 
respect
 
to
 
any
 
item
 
of
 
U.S.
source Shipping Income, the Company and each of its subsidiaries
 
would be subject to a 4% tax imposed
on such income
 
by Section 887 of
 
the Code on
 
a gross basis, without
 
the benefit of
 
deductions, which is
referred to as
 
the “4%
 
Gross Basis Tax Regime”. Since
 
under the sourcing
 
rules described
 
above, no
 
more
than 50%
 
of the
 
Company’s Shipping
 
Income would
 
be treated
 
as being
 
derived from
 
U.S. sources,
 
the
maximum effective
 
rate of
 
U.S. federal
 
income tax
 
on the
 
Company’s Shipping
 
Income would
 
never exceed
2% under the 4% Gross Basis Tax Regime.
Based
 
on
 
its
 
U.S.
 
source Shipping
 
Income
 
for
 
the
 
2024
 
taxable
 
year
 
and
 
in
 
the
 
absence
 
of
 
exemption
under Section 883
 
of the Code,
 
the Company would
 
be subject to
 
$0.3 of U.S.
 
federal income tax
 
under
the 4% Gross Basis Tax Regime.
The 4%
 
Gross Basis
 
Tax Regime would not apply
 
to U.S. source
 
Shipping Income
 
to the extent
 
considered
to be
 
“effectively connected”
 
with the
 
conduct of
 
a U.S.
 
trade or
 
business.
 
In the
 
absence of
 
exemption
104
under Section
 
883 of
 
the Code,
 
such “effectively
 
connected” U.S.
 
source Shipping
 
Income, net
 
of applicable
deductions, would be
 
subject to U.S.
 
federal income tax
 
currently imposed at
 
a rate of
 
21%.
 
In addition,
earnings
 
“effectively
 
connected”
 
with
 
the
 
conduct
 
of
 
such
 
U.S.
 
trade
 
or
 
business,
 
as
 
determined
 
after
allowance for certain adjustments, and certain
 
interest paid or deemed paid attributable to
 
the conduct of
the U.S. trade or
 
business may be
 
subject to U.S.
 
federal branch profits
 
tax imposed at
 
a rate of 30%.
 
The
Company’s U.S. source Shipping Income would be considered “effectively connected” with the conduct of
a U.S. trade or business only if: (1) the
 
Company has, or is considered to have, a fixed place
 
or business
in the United States involved in the earning
 
of Shipping Income; and (2) substantially
 
all of the Company’s
U.S. source Shipping Income
 
is attributable to regularly
 
scheduled transportation, such
 
as the operation
 
of
a vessel that followed
 
a published schedule with
 
repeated sailings at regular
 
intervals between the same
points for voyages that begin or
 
end in the United States, or,
 
in the case of income from
 
the chartering of
a vessel,
 
is attributable
 
to a
 
fixed place
 
of business
 
in the
 
United States.
 
We
 
do not
 
intend to
 
have, or
permit
 
circumstances that
 
would result
 
in
 
having a
 
vessel
 
operating to
 
the
 
United
 
States on
 
a regularly
scheduled basis.
 
Based on the foregoing and on
 
the expected mode of our shipping
 
operations and other
activities, we believe that
 
none of our
 
U.S. source Shipping Income
 
will be effectively
 
connected with the
conduct of a U.S. trade or business.
Gain on Sale of Vessels
 
Regardless of whether we
 
qualify for exemption under
 
Section 883 of the Code,
 
we will not be
 
subject to
U.S.
 
federal
 
income
 
taxation
 
with
 
respect
 
to
 
gain
 
realized
 
on
 
a
 
sale
 
of
 
a
 
vessel,
 
provided
 
the
 
sale
 
is
considered to
 
occur outside
 
of the
 
United States under
 
U.S. federal
 
income tax
 
principles.
 
In general,
 
a
sale of a
 
vessel will
 
be considered
 
to occur
 
outside of
 
the United States
 
for this
 
purpose if
 
title to the
 
vessel,
and risk of
 
loss with respect
 
to the vessel,
 
pass to the
 
buyer outside of
 
the United States.
 
It is expected
that any sale of a vessel by us will be considered to occur outside of
 
the United States.
 
United States Taxation of U.S. Holders
 
The
 
following
 
is
 
a
 
discussion
 
of
 
the
 
material
 
U.S.
 
federal
 
income
 
tax
 
considerations
 
relevant
 
to
 
an
investment decision
 
by a
 
U.S. Holder, as
 
defined below, with
 
respect to
 
our common
 
stock. This discussion
does
 
not
 
purport
 
to
 
deal
 
with
 
the
 
tax
 
consequences
 
of
 
owning
 
our
 
common
 
stock
 
to
 
all
 
categories
 
of
investors,
 
some
 
of
 
which may
 
be
 
subject to
 
special rules. You
 
are
 
encouraged to
 
consult your
 
own tax
advisors
 
concerning
 
the
 
overall
 
tax
 
consequences
 
arising
 
in
 
your
 
own
 
particular
 
situation
 
under
 
U.S.
federal, state, local or foreign law of the ownership of our common stock.
 
As used
 
herein, the
 
term “U.S.
 
Holder” means
 
a beneficial
 
owner of our
 
common stock
 
that (i)
 
is a
 
U.S.
citizen or resident, a
 
U.S. corporation or other U.S.
 
entity taxable as a corporation,
 
an estate, the income
of which
 
is subject to
 
U.S. federal income
 
taxation regardless of
 
its source, or
 
a trust if
 
(a) a
 
court within
the
 
United
 
States is
 
able to
 
exercise primary
 
jurisdiction over
 
the
 
administration of
 
the trust
 
and one
 
or
more U.S. persons
 
have the authority
 
to control all
 
substantial decisions
 
of the trust
 
or (b) it
 
has an election
in
 
place
 
to
 
be
 
treated
 
as
 
a
 
United
 
States
 
person;
 
and
 
(ii)
 
owns
 
the
 
common
 
stock
 
as
 
a
 
capital
 
asset,
generally, for investment purposes.
 
If
 
a partnership
 
holds our
 
common stock,
 
the
 
tax treatment
 
of
 
a partner
 
will generally
 
depend upon
 
the
status of the partner and
 
upon the activities of the
 
partnership. If you are a partner
 
in a partnership holding
our common stock, you are encouraged to consult your own
 
tax advisor on this issue.
 
Distributions
 
Subject to
 
the discussion of
 
passive foreign investment
 
companies below,
 
any distributions made
 
by the
Company with respect to its common
 
stock to a U.S. Holder will
 
generally constitute dividends, which
 
may
be
 
taxable
 
as
 
ordinary
 
income
 
or
 
“qualified
 
dividend
 
income”
 
as
 
described
 
in
 
more
 
detail
 
below,
 
to
 
the
extent of
 
the Company’s
 
current or
 
accumulated earnings
 
and profits,
 
as determined
 
under U.S.
 
federal
105
income tax principles. Distributions in excess of the Company’s earnings
 
and profits will be treated first as
a non-taxable return of capital
 
to the extent of the U.S. Holder’s
 
tax basis in his common stock
 
on a dollar-
for-dollar basis
 
and thereafter
 
as capital
 
gain. Because
 
the Company
 
is not
 
a U.S.
 
corporation,
 
U.S. Holders
that are corporations will generally not
 
be entitled to claim a dividends-received deduction with respect
 
to
any distributions they receive from the Company.
Dividends paid to a
 
U.S. Holder which is
 
an individual, trust, or
 
estate, referred to herein
 
as a “U.S. Non-
Corporate
 
Holder,”
 
will
 
generally
 
be
 
treated
 
as
 
“qualified dividend
 
income”
 
that
 
is
 
taxable
 
to
 
Holders
 
at
preferential U.S.
 
federal income
 
tax rates,
 
provided that
 
(1) the common
 
stock is
 
readily tradable
 
on an
established securities
 
market in
 
the United
 
States (such
 
as the
 
NYSE on
 
which the
 
common stock
 
is listed);
(2) the Company
 
is not
 
a PFIC
 
for the
 
taxable year
 
during which the
 
dividend is
 
paid or
 
the immediately
preceding taxable year (which the Company does
 
not believe it is, has
 
been or will be); (3) the
 
U.S. Non-
Corporate Holder
 
has owned
 
the common
 
stock for
 
more than
 
60 days in
 
the 121-day
 
period beginning
60 days before
 
the date
 
on which
 
the common
 
stock becomes
 
ex-dividend; and
 
(4) the
 
U.S. Non-Corporate
Holder is not
 
under an obligation
 
(whether pursuant to
 
a short sale
 
or otherwise) to
 
make payments with
respect to positions in
 
substantially similar or related property.
 
There is no assurance that
 
any dividends
paid on our common stock
 
will be eligible for
 
these preferential rates in
 
the hands of a U.S.
 
Non-Corporate
Holder. Any dividends paid by the Company which
 
are not eligible for these
 
preferential rates will be taxed
as
 
ordinary
 
income
 
to
 
a
 
U.S.
 
Non-Corporate
 
Holder.
 
Special
 
rules
 
may
 
apply
 
to
 
any
 
“extraordinary
dividend,” generally, a dividend paid
 
by us in an amount which is equal to or in
 
excess of ten percent of a
U.S. Holder’s adjusted tax basis, or fair market
 
value in certain circumstances, in a
 
share of our common
stock.
 
If
 
we
 
pay
 
an
 
“extraordinary dividend”
 
on
 
our
 
common stock
 
that
 
is
 
treated
 
as “qualified
 
dividend
income,” then
 
any loss
 
derived by
 
a U.S. Individual
 
Holder from
 
the
 
sale or
 
exchange of
 
such common
stock will be treated as long-term capital loss to the extent of such dividend.
Sale, Exchange or other Disposition of Common Stock
 
Subject to the
 
discussion of the
 
PFIC rules below,
 
a U.S. Holder
 
generally will recognize
 
taxable gain or
loss upon
 
a sale,
 
exchange or
 
other disposition
 
of the
 
Company’s common
 
stock in
 
an amount
 
equal to
the
 
difference
 
between
 
the
 
amount
 
realized
 
by
 
the
 
U.S.
 
Holder
 
from
 
such
 
sale,
 
exchange
 
or
 
other
disposition and
 
the U.S.
 
Holder’s tax
 
basis in
 
such stock. Such
 
gain or
 
loss will
 
be treated
 
as long-term
capital gain or loss if the U.S. Holder’s holding period in the common stock is greater than one year
 
at the
time of the sale,
 
exchange or other disposition. Long-term capital
 
gain of a U.S.
 
Non-Corporate Holder is
taxable
 
at
 
preferential U.S.
 
Federal income
 
tax
 
rates.
 
A
 
U.S.
 
Holder’s ability
 
to
 
deduct capital
 
losses
 
is
subject to certain limitations.
PFIC Status and Significant Tax Consequences
Special
 
U.S.
 
federal
 
income
 
tax
 
rules
 
apply
 
to
 
a
 
U.S.
 
Holder
 
that
 
holds
 
stock
 
in
 
a
 
foreign
 
corporation
classified as a passive foreign investment company,
 
or a “PFIC”, for U.S. federal income tax purposes. In
general, the
 
Company will
 
be treated
 
as a
 
PFIC with
 
respect to
 
a U.S.
 
Holder if,
 
for any
 
taxable year
 
in
which such Holder held the Company’s common stock, either:
•
 
at least 75% of the Company’s gross income for such taxable year consists of passive
income (e.g., dividends, interest, capital gains and rents derived other
 
than in the
active conduct of a rental business), or
•
 
at least 50% of the average value of the assets held by the corporation
 
during such
taxable year produce, or are held for the production of, such passive
 
income.
 
For purposes of determining whether
 
the Company is a PFIC, the
 
Company will be treated as earning
 
and
owning its proportionate
 
share of the income and
 
assets, respectively, of any of its subsidiary
 
corporations
in which it owns at least 25% of the
 
value of the subsidiary’s stock. Income earned, or deemed
 
earned, by
106
the
 
Company
 
in
 
connection
 
with
 
the
 
performance
 
of
 
services
 
would
 
not
 
constitute
 
passive
 
income. By
contrast, rental
 
income would
 
generally constitute
 
passive income
 
unless the
 
Company is
 
treated under
specific rules as deriving its rental income in the active conduct of
 
a trade or business.
 
Based on the Company’s
 
current operations and future projections, the
 
Company does not believe that it
is,
 
nor
 
does
 
it
 
expect
 
to
 
become,
 
a
 
PFIC
 
with
 
respect
 
to
 
any
 
taxable
 
year. Although
 
there
 
is
 
no
 
legal
authority directly
 
on point,
 
the Company’s
 
belief is
 
based principally on
 
the position
 
that, for
 
purposes of
determining
 
whether
 
the
 
Company
 
is
 
a
 
PFIC,
 
the
 
gross
 
income
 
the
 
Company
 
derives
 
or
 
is
 
deemed
 
to
derive from
 
the
 
time
 
chartering and
 
voyage chartering
 
activities of
 
its
 
wholly-owned subsidiaries
 
should
constitute services income,
 
rather than rental
 
income. Correspondingly, the
 
Company believes that
 
such
income
 
does
 
not
 
constitute
 
passive
 
income,
 
and
 
the
 
assets
 
that
 
the
 
Company
 
or
 
its
 
wholly-owned
subsidiaries own and operate in connection with the production of such income, in particular,
 
the vessels,
do
 
not
 
constitute
 
assets
 
that
 
produce
 
or
 
are
 
held
 
for
 
the
 
production
 
of
 
passive
 
income
 
for
 
purposes of
determining whether the
 
Company is
 
a PFIC.
 
The Company
 
believes there
 
is substantial
 
legal authority
supporting its position consisting
 
of case law and
 
Internal Revenue Service, or
 
the “IRS”, pronouncements
concerning
 
the
 
characterization
 
of
 
income
 
derived
 
from
 
time
 
charters
 
and
 
voyage
 
charters
 
as
 
services
income for
 
other tax
 
purposes. However, there
 
is also
 
authority which characterizes
 
time charter
 
income
as rental
 
income rather
 
than services
 
income for
 
other tax
 
purposes.
 
It should
 
be noted
 
that in
 
the absence
of any
 
legal authority specifically
 
relating to
 
the statutory
 
provisions governing PFICs,
 
the IRS
 
or a
 
court
could
 
disagree
 
with
 
this
 
position. In
 
addition,
 
although
 
the
 
Company
 
intends
 
to
 
conduct
 
its
 
affairs
 
in
 
a
manner to
 
avoid being classified
 
as a
 
PFIC with respect
 
to any taxable
 
year, there
 
can be no
 
assurance
that the nature of its operations will not change in the future.
 
As discussed more fully below,
 
if the Company were to
 
be treated as a PFIC for
 
any taxable year,
 
a U.S.
Holder
 
would
 
be
 
subject
 
to
 
different
 
U.S.
 
federal
 
income taxation
 
rules
 
depending on
 
whether the
 
U.S.
Holder makes an
 
election to treat
 
the Company as
 
a “Qualified Electing Fund,”
 
which election is referred
to as
 
a “QEF
 
Election.” As
 
discussed below,
 
as an
 
alternative to
 
making a
 
QEF Election,
 
a U.S.
 
Holder
should be
 
able to
 
make a
 
“mark-to-market” election with
 
respect to
 
the common
 
stock, which
 
election is
referred to
 
as a
 
“Mark-to-Market Election”.
 
If the
 
Company were
 
to be
 
treated as
 
a PFIC,
 
a U.S.
 
Holder
would be
 
required to
 
file with
 
respect to
 
taxable years
 
ending on
 
or after
 
December 31,
 
2013 IRS
 
Form
8621 to report certain information regarding the Company.
 
Taxation of U.S. Holders Making a Timely QEF Election
 
If a U.S. Holder makes a
 
timely QEF Election, which U.S. Holder
 
is referred to as an “Electing
 
Holder”, the
Electing
 
Holder
 
must
 
report
 
each
 
year
 
for
 
U.S.
 
federal
 
income
 
tax
 
purposes
 
his
 
pro
 
rata
 
share
 
of
 
the
Company’s ordinary earnings and
 
net capital gain, if any, for the Company’s
 
taxable year that ends
 
with or
within the taxable year of the
 
Electing Holder, regardless of
 
whether or not distributions were received by
the Electing Holder from the Company.
 
The Electing Holder’s adjusted tax basis in the common stock will
be
 
increased
 
to
 
reflect
 
amounts
 
included
 
in
 
the
 
Electing
 
Holder’s income.
 
Distributions received
 
by
 
an
Electing Holder that had been previously taxed will result in a corresponding reduction in
 
the adjusted tax
basis in
 
the common
 
stock and
 
will not
 
be taxed
 
again once
 
distributed. An Electing
 
Holder would
 
generally
recognize capital gain or loss on the sale, exchange or other disposition
 
of the common stock.
Taxation of U.S. Holders Making a Mark-to-Market Election
 
Alternatively,
 
if the
 
Company were
 
to be
 
treated as
 
a PFIC
 
for any
 
taxable year
 
and, as
 
anticipated, the
common stock is treated
 
as “marketable stock,” a
 
U.S. Holder would be
 
allowed to make a
 
Mark-to-Market
Election with respect to the Company’s
 
common stock. If that election is made, the
 
U.S. Holder generally
would include as
 
ordinary income
 
in each
 
taxable year the
 
excess, if
 
any,
 
of the
 
fair market
 
value of
 
the
common
 
stock
 
at
 
the
 
end
 
of
 
the
 
taxable
 
year
 
over
 
such
 
Holder’s
 
adjusted
 
tax
 
basis
 
in
 
the
 
common
stock. The U.S. Holder
 
would also be
 
permitted an
 
ordinary loss in
 
respect of
 
the excess, if
 
any, of the U.S.
Holder’s adjusted tax basis in the
 
common stock over its fair
 
market value at the end
 
of the taxable year,
107
but only
 
to the
 
extent of
 
the net
 
amount previously
 
included in
 
income as
 
a result
 
of the
 
Mark-to-Market
Election. A U.S. Holder’s tax
 
basis in his
 
common stock would
 
be adjusted to
 
reflect any such
 
income or
loss
 
amount. Gain
 
realized
 
on
 
the
 
sale,
 
exchange
 
or
 
other
 
disposition
 
of
 
the
 
common
 
stock
 
would
 
be
treated as
 
ordinary income,
 
and any
 
loss realized
 
on the
 
sale, exchange
 
or other
 
disposition of
 
the common
stock would
 
be treated
 
as ordinary
 
loss to
 
the extent
 
that such
 
loss does
 
not exceed
 
the net
 
mark-to-market
gains previously included by the U.S. Holder.
 
Taxation of U.S. Holders Not Making a Timely QEF Election or Mark-to-Market Election
 
Finally,
 
if the
 
Company were
 
to be
 
treated as
 
a PFIC
 
for any
 
taxable year,
 
a U.S.
 
Holder who
 
does not
make
 
either a
 
QEF
 
Election or
 
a Mark-to-Market
 
Election for
 
that
 
year,
 
whom
 
is
 
referred to
 
as a
 
“Non-
Electing Holder”, would be subject to special U.S.
 
federal income tax rules with respect to
 
(1) any excess
distribution (i.e., the portion of any
 
distributions received by the Non-Electing
 
Holder on the common stock
in a
 
taxable year
 
in excess
 
of 125%
 
of the
 
average annual
 
distributions received
 
by the
 
Non-Electing Holder
in
 
the
 
three
 
(3)
 
preceding
 
taxable
 
years,
 
or,
 
if
 
shorter,
 
the Non-Electing Holder’s
 
holding
 
period
 
for
 
the
common
 
stock),
 
and
 
(2) any
 
gain
 
realized
 
on
 
the
 
sale,
 
exchange
 
or
 
other
 
disposition
 
of
 
the
 
common
stock. Under these special rules:
•
 
the excess distribution
 
or gain
 
would be
 
allocated ratably
 
over the Non-Electing
 
Holder’s
aggregate holding period for the common stock;
•
 
the
 
amount
 
allocated
 
to
 
the
 
current
 
taxable
 
year
 
and
 
any
 
taxable
 
years
 
before
 
the
Company became a PFIC would be taxed as ordinary income;
 
and
•
 
the amount allocated
 
to each
 
of the other
 
taxable years would
 
be subject to
 
tax at
 
the
highest
 
rate
 
of
 
tax
 
in
 
effect
 
for
 
the
 
applicable class
 
of
 
taxpayer
 
for
 
that
 
year,
 
and
 
an
interest charge
 
for the
 
deemed tax
 
deferral benefit
 
would be
 
imposed with
 
respect to
the resulting tax attributable to each such other taxable year.
 
These penalties would not
 
apply to a pension
 
or profit sharing trust
 
or other tax-exempt organization that
did not borrow
 
funds or otherwise
 
utilize leverage in
 
connection with its
 
acquisition of
 
the common stock.
 
If
a Non-Electing Holder who is an individual dies while
 
owning the common stock, such Holder’s successor
generally would not receive a step-up in tax basis with respect
 
to such stock.
 
U.S. Federal Income Taxation of “Non-U.S. Holders”
 
A beneficial owner of
 
our common stock that is
 
not a U.S. Holder (other
 
than a partnership) is referred
 
to
herein as a “Non-U.S. Holder.”
 
Dividends on Common Stock
 
Non-U.S.
 
Holders
 
generally
 
will
 
not
 
be
 
subject
 
to
 
U.S.
 
federal
 
income
 
or
 
withholding
 
tax
 
on
 
dividends
received from us
 
with respect to
 
our common stock,
 
unless that income
 
is effectively
 
connected with the
Non-U.S. Holder’s conduct of a trade
 
or business in the United States.
 
If the Non-U.S. Holder is entitled
 
to
the benefits of
 
a U.S. income
 
tax treaty with
 
respect to those
 
dividends, that income
 
is taxable in
 
the United
States only if
 
attributable to a permanent
 
establishment maintained by the Non-U.S.
 
Holder in the United
States.
 
Sale, Exchange or Other Disposition of Common Stock
 
Non-U.S.
 
Holders
 
generally
 
will
 
not
 
be
 
subject
 
to
 
U.S.
 
federal
 
income
 
or
 
withholding
 
tax
 
on
 
any
 
gain
realized upon the sale, exchange or other disposition of our common
 
stock, unless:
•
 
the
 
gain
 
is
 
effectively
 
connected
 
with
 
the
 
Non-U.S.
 
Holder’s
 
conduct
 
of
 
a
 
trade
 
or
business in the United States. If
 
the Non-U.S. Holder is entitled to
 
the benefits of a U.S.
 
108
income tax treaty with respect to that gain, the gain is taxable in
 
the United States only
if attributable
 
to a
 
permanent establishment maintained
 
by the
 
Non-U.S. Holder
 
in the
United States; or
•
 
the Non-U.S. Holder is an individual who is present
 
in the United States for 183 days or
more during the taxable year of disposition and other conditions
 
are met.
If the
 
Non-U.S. Holder
 
is engaged
 
in a
 
U.S. trade
 
or business
 
for U.S.
 
federal income
 
tax purposes,
 
the
income
 
from
 
our
 
common
 
stock,
 
including
 
dividends
 
and
 
the
 
gain
 
from
 
the
 
sale,
 
exchange
 
or
 
other
disposition
 
of
 
the
 
common
 
stock,
 
that
 
is
 
effectively
 
connected
 
with
 
the
 
conduct
 
of
 
that
 
U.S.
 
trade
 
or
business
 
will
 
generally
 
be
 
subject
 
to
 
U.S.
 
federal
 
income
 
tax
 
in
 
the
 
same
 
manner
 
as
 
discussed
 
in
 
the
previous section relating
 
to the taxation
 
of U.S. Holders.
 
In addition, in
 
the case of
 
a corporate Non-U.S.
Holder, such Holder’s
 
earnings and
 
profits that
 
are attributable
 
to the effectively
 
connected income,
 
subject
to certain adjustments, may be subject to an additional U.S. federal branch profits tax at a rate of 30%, or
at a lower rate as may be specified by an applicable U.S. income
 
tax treaty.
Backup Withholding and Information Reporting
In general, dividend
 
payments, or other
 
taxable distributions, made
 
within the United States
 
to a holder will
be subject to U.S.
 
federal information reporting requirements. Such payments will
 
also be subject to
 
U.S.
federal “backup withholding” if paid to a non-corporate U.S. holder who:
•
 
fails to provide an accurate taxpayer identification number;
•
 
is notified by the IRS that he has failed to report all interest or dividends
 
required to be
shown on his U.S. federal income tax returns; or
•
 
in certain circumstances, fails to comply with applicable certification
 
requirements.
 
Non-U.S.
 
Holders
 
may
 
be
 
required
 
to
 
establish
 
their
 
exemption
 
from
 
information
 
reporting
 
and
 
backup
withholding by certifying their status on an applicable IRS Form
 
W-8.
If a holder sells
 
his common stock to
 
or through a U.S.
 
office of a broker,
 
the payment of the
 
proceeds is
subject to
 
both backup
 
withholding and
 
information reporting
 
unless the
 
holder establishes
 
an exemption. If
a holder sells
 
his common
 
stock through a
 
non-U.S. office of
 
a non-U.S. broker
 
and the sales
 
proceeds are
paid to the holder
 
outside the United States, then information
 
reporting and backup withholding generally
will not
 
apply to
 
that payment. However,
 
information reporting requirements,
 
but not
 
backup withholding,
will apply to
 
a payment of
 
sales proceeds, including
 
a payment made
 
to a holder
 
outside the United
 
States,
if the holder
 
sells his common
 
stock through a
 
non-U.S. office of
 
a broker that
 
is a U.S.
 
person or has
 
some
other contacts with the United States.
 
Backup
 
withholding
 
is
 
not
 
an
 
additional
 
tax. Rather,
 
a
 
taxpayer
 
generally
 
may
 
obtain
 
a
 
refund
 
of
 
any
amounts
 
withheld
 
under
 
backup
 
withholding
 
rules
 
that
 
exceed
 
the
 
taxpayer’s
 
U.S.
 
federal
 
income
 
tax
liability by filing a refund claim with the IRS.
U.S. Holders who
 
are individuals (and
 
to the extent
 
specified in applicable
 
Treasury Regulations, certain
U.S. entities) who
 
hold “specified foreign financial
 
assets” (as defined
 
in Section 6038D of
 
the Code) are
required to
 
file
 
IRS Form
 
8938 with
 
information relating
 
to
 
the
 
asset for
 
each taxable
 
year
 
in
 
which the
aggregate value of all such assets
 
exceeds $75,000 at any time during
 
the taxable year or $50,000
 
on the
last
 
day
 
of
 
the
 
taxable
 
year
 
(or
 
such
 
higher
 
dollar
 
amount
 
as
 
prescribed
 
by
 
applicable
 
Treasury
Regulations).
 
Specified foreign
 
financial assets
 
would include,
 
among other
 
assets, our
 
common stock,
unless the
 
common stock
 
is held
 
through an
 
account maintained
 
with a
 
U.S. financial
 
institution. Substantial
penalties
 
apply
 
to
 
any
 
failure
 
to
 
timely
 
file
 
IRS
 
Form
 
8938,
 
unless
 
the
 
failure
 
is
 
shown
 
to
 
be
 
due
 
to
reasonable cause
 
and not
 
due to
 
willful neglect.
 
Additionally, in the
 
event a
 
U.S. Holder
 
who is
 
an individual
(and to the extent specified in applicable Treasury regulations, a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S.
 
109
federal income
 
taxes of
 
such holder
 
for the
 
related tax
 
year may
 
not close
 
until three
 
(3) years
 
after the
date that the required information is filed.
Changes in Global Tax Laws
 
Long-standing
 
international
 
tax
 
initiatives
 
that
 
determine
 
each
 
country’s
 
jurisdiction
 
to
 
tax
 
cross-border
international trade and profits are evolving
 
as a result of, among
 
other things, initiatives such as the
 
Anti-
Tax
 
Avoidance
 
Directives,
 
as
 
well
 
as
 
the
 
Base
 
Erosion
 
and
 
Profit
 
Shifting
 
reporting
 
requirements,
mandated
 
and/or
 
recommended
 
by
 
the
 
EU,
 
G8,
 
G20
 
and
 
Organization
 
for
 
Economic
 
Cooperation
 
and
Development, including the imposition of a minimum global
 
effective tax rate for multinational businesses
regardless of the jurisdiction of operation
 
and where profits are generated (Pillar
 
Two). As these and other
tax laws and
 
related regulations change (including
 
changes in the
 
interpretation, approach and guidance
of tax
 
authorities), our
 
financial results
 
could be
 
materially impacted.
 
Given the
 
unpredictability of
 
these
possible changes and their potential
 
interdependency, it
 
is difficult to
 
assess whether the overall effect
 
of
such potential tax changes would be cumulatively positive or negative for our earnings and cash flow,
 
but
such changes could adversely affect our financial results.
On December 12, 2022, the European Union member states agreed to implement the OECD’s
 
Pillar Two
global corporate
 
minimum tax
 
rate of
 
15% on
 
companies with
 
revenues of
 
at least
 
€750 million effective
from 2024. Various countries have either
 
adopted implementing legislation
 
or are in the
 
process of drafting
such
 
legislation. Any
 
new
 
tax
 
law
 
in
 
a
 
jurisdiction
 
where
 
we
 
conduct
 
business
 
or
 
pay tax
 
could
 
have
 
a
negative effect on our company.
F.
Dividends and paying agents
Not Applicable.
G.
 
Statement by experts
Not Applicable.
H.
 
Documents on display
We file reports
 
and other information with
 
the SEC. These materials,
 
including this annual report
 
and the
accompanying exhibits are available from the SEC’s website http://www.sec.gov.
 
I.
 
Subsidiary information
Not Applicable.
J.
 
Annual Report to Security Holders
We intend to submit any annual report provided to security holders in electronic
 
format as an exhibit to a
current report on Form 6-K.
 
Item 11.
 
Quantitative and Qualitative Disclosures about Market Risk
Interest Rates
We
 
are
 
exposed to
 
market risks
 
associated with
 
changes
 
in
 
interest rates
 
relating to
 
our
 
loan facilities,
according to which we were paying interest at term SOFR plus a margin.
 
Increases in interest rates could
110
affect
 
our
 
results
 
of
 
operations.
 
An
 
increase
 
of
 
1%
 
in
 
the
 
interest
 
rates
 
of
 
our
 
loan
 
facilities
 
bearing
 
a
variable interest rate during 2024, could have increased our interest
 
cost by $3.8 million.
 
We
 
will
 
continue
 
to
 
have
 
debt
 
outstanding,
 
which
 
could
 
impact
 
our
 
results
 
of
 
operations
 
and
 
financial
condition. We manage our exposure in interest rates, by maintaining
 
a mix of financing under agreements
with floating and
 
fixed interest rates.
 
More specifically, during 2022, we refinanced
 
part of our loans
 
having
a floating interest
 
rate, with sale
 
and leaseback
 
transactions with fixed
 
rates. Also, in
 
2023, we entered
 
into
an interest rate swap for
 
$30 million under which we
 
pay fixed interest and receive
 
floating. Through these
agreements and
 
our bond,
 
also bearing
 
fixed interest
 
rate, we
 
manage part
 
of our
 
exposure in
 
interest rates
caused by the remaining agreements which bear floating interest rates.
As of December
 
31, 2024, 2023
 
and 2022, and
 
as of the
 
date of this
 
annual report, we
 
did not and
 
have
not designated any financial instruments as accounting hedging
 
instruments.
 
 
Currency and Exchange Rates
We generate all of our
 
revenues in U.S. dollars
 
but currently incur less
 
than half of our
 
operating expenses
(around 29% in 2024 and
 
around 29% in 2023) and about
 
half of our general and administrative
 
expenses
(around 46% in 2024 and around
 
44% in 2023) in currencies other
 
than the U.S. dollar, primarily the Euro.
For
 
accounting
 
purposes,
 
including
 
throughout
 
this
 
annual
 
report,
 
expenses
 
incurred
 
in
 
Euros
 
are
converted
 
into
 
U.S.
 
dollars
 
at
 
the
 
exchange rate
 
prevailing on
 
the
 
date
 
of
 
each transaction.
 
Because a
significant portion of our
 
expenses are incurred in currencies
 
other than the U.S.
 
dollar, our expenses may
from time to
 
time increase relative
 
to our revenues
 
as a result
 
of fluctuations in
 
exchange rates, particularly
between
 
the
 
U.S.
 
dollar
 
and
 
the
 
Euro,
 
which
 
could
 
affect
 
our
 
results
 
of
 
operations
 
in
 
future
 
periods.
Currently,
 
we
 
do
 
not
 
consider
 
the
 
risk
 
from
 
exchange
 
rate
 
fluctuations
 
to
 
be
 
material
 
for
 
our
 
results
 
of
operations,
 
as
 
during
 
2024
 
and
 
2023,
 
these
 
non-US
 
dollar
 
expenses
 
represented
 
17%
 
and
 
15%,
respectively
 
of
 
our
 
revenues
 
and
 
therefore,
 
we
 
are
 
not
 
engaged
 
in
 
derivative
 
instruments
 
to
 
hedge
 
a
considerable part of those expenses.
 
 
While we
 
historically have
 
not mitigated
 
the risk
 
associated with
 
exchange rate
 
fluctuations through
 
the use
of financial
 
derivatives, we
 
may determine
 
to employ
 
such instruments
 
from time
 
to time
 
in the
 
future in
order to
 
minimize this
 
risk. Our
 
use of
 
financial derivatives
 
would involve
 
certain risks,
 
including the
 
risk
that losses on a hedged position could exceed
 
the nominal amount invested in the instrument
 
and the risk
that
 
the
 
counterparty
 
to
 
the
 
derivative
 
transaction
 
may
 
be
 
unable
 
or
 
unwilling
 
to
 
satisfy
 
its
 
contractual
obligations, which could have an adverse effect on our results.
 
Item 12. Description of Securities Other than Equity Securities Item 13.
Not Applicable.
 
111
PART II
Defaults, Dividend Arrearages and Delinquencies
None.
Item 14.
 
Material Modifications to the Rights of Security Holders and
 
Use
of Proceeds
None.
Item 15.
 
Controls and Procedures
a) Disclosure Controls and Procedures
 
Management,
 
including
 
our
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial
 
Officers,
 
has
 
conducted
 
an
evaluation of
 
the effectiveness
 
of our
 
disclosure controls and
 
procedures (as
 
defined in
 
Rules 13a-15(e)
and 15d-15(e) under the
 
Exchange Act) as of
 
the end of the
 
period covered by this
 
annual report. Based
upon
 
that
 
evaluation,
 
our
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial Officers
 
have
 
concluded
 
that
 
our
disclosure controls and procedures are
 
effective to ensure that information required
 
to be disclosed by the
Company in the reports that it
 
files or submits to the SEC
 
under the Exchange Act is
 
recorded, processed,
summarized and reported within the time periods specified in SEC rules
 
and forms.
b) Management’s Annual Report on Internal Control over Financial Reporting
Management
 
is
 
responsible
 
for
 
establishing
 
and
 
maintaining
 
adequate
 
internal
 
control
 
over
 
financial
reporting, as such term
 
is defined in Rule 13a-15(f)
 
of the Exchange Act. The
 
Company’s internal control
over
 
financial reporting
 
is a
 
process designed
 
under the
 
supervision of
 
the
 
Company’s
 
Chief
 
Executive
Officer
 
and
 
Chief
 
Financial Officer
 
to
 
provide reasonable
 
assurance
 
regarding
 
the
 
reliability
 
of
 
financial
reporting
 
and
 
the
 
preparation
 
of
 
the
 
Company’s
 
financial
 
statements
 
for
 
external
 
reporting
 
purposes
 
in
accordance with U.S. GAAP.
 
A company’s internal control over financial
 
reporting includes those policies
and
 
procedures that
 
(i)
 
pertain to
 
the
 
maintenance of
 
records that,
 
in
 
reasonable detail,
 
accurately and
fairly
 
reflect
 
the
 
transactions
 
and
 
dispositions
 
of
 
the
 
assets
 
of
 
the
 
company;
 
(ii)
 
provide
 
reasonable
assurance that transactions are
 
recorded as necessary to permit
 
the preparation of financial statements
 
in
accordance with U.S.
 
GAAP,
 
and that receipts
 
and expenditures of the
 
company are being
 
made only in
accordance with authorizations of
 
management and directors of the
 
company; and (iii) provide reasonable
assurance regarding prevention
 
or timely detection
 
of unauthorized acquisition,
 
use, or disposition
 
of the
company’s assets that could have a material effect on the financial statements.
Management has
 
conducted an
 
assessment of
 
the effectiveness
 
of the
 
Company’s internal
 
control over
financial reporting based on the framework established in Internal Control – Integrated Framework issued
by the
 
Committee of
 
Sponsoring Organizations of
 
the Treadway
 
Commission (2013
 
Framework). Based
on
 
this
 
assessment,
 
management
 
has
 
determined
 
that
 
the
 
Company’s
 
internal
 
control
 
over
 
financial
reporting as of December 31, 2024 is effective.
The registered
 
public accounting firm
 
that audited
 
the financial
 
statements included
 
in this
 
annual report
containing
 
the
 
disclosure
 
required
 
by
 
this
 
Item
 
15
 
has
 
issued
 
an
 
attestation
 
report
 
on
 
management's
assessment of our internal control over financial reporting.
 
112
c)
 
Attestation Report of Independent Registered Public
 
Accounting Firm
 
The attestation report
 
on the Company’s
 
internal control over
 
financial reporting issued
 
by the registered
public
 
accounting
 
firm
 
that
 
audited
 
the
 
Company’s
 
consolidated
 
financial
 
statements,
 
Deloitte
 
Certified
Public Accountants
 
S.A., appears
 
on page F-4
 
of the
 
financial statements
 
filed as part
 
of this annual
 
report.
d) Changes in Internal Control over Financial Reporting
None.
Inherent Limitations on Effectiveness of Controls
Our management, including
 
our Chief
 
Executive Officer
 
and our
 
Chief Financial Officer,
 
does not expect
that our disclosure
 
controls or our
 
internal control over
 
financial reporting will
 
prevent or detect
 
all error and
all fraud. A
 
control system, no matter
 
how well designed
 
and operated, can
 
provide only reasonable,
 
not
absolute,
 
assurance
 
that
 
the
 
control
 
system’s
 
objectives
 
will
 
be
 
met.
 
Further,
 
because
 
of
 
the
 
inherent
limitations
 
in
 
all
 
control
 
systems,
 
no
 
evaluation
 
of
 
controls
 
can
 
provide
 
absolute
 
assurance
 
that
misstatements due to
 
error or fraud
 
will not occur
 
or that all
 
control issues and
 
instances of fraud,
 
if any,
within the Company have been detected. These inherent limitations include the realities that judgments in
decision-making can
 
be faulty
 
and that
 
breakdowns can
 
occur because
 
of simple
 
error or
 
mistake. Controls
can also be
 
circumvented by the
 
individual acts of
 
some persons, by
 
collusion of two
 
or more people,
 
or
by management override of the controls. The
 
design of any system of controls
 
is based in part on
 
certain
assumptions
 
about
 
the
 
likelihood
 
of
 
future
 
events,
 
and
 
there
 
can
 
be
 
no
 
assurance
 
that
 
any
 
design
 
will
succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of
controls effectiveness
 
to future periods
 
are subject to
 
risks. Over time,
 
controls may become
 
inadequate
because of changes in conditions
 
or deterioration in the degree of
 
compliance with policies or procedures.
Item 16A. Audit Committee Financial Expert
Our Board of Directors has determined that both the members of our
 
Audit Committee, Mr. Kyriacos Riris
and
 
Mr.
 
Apostolos
 
Kontoyannis,
 
qualify
 
as
 
“Audit
 
Committee
 
financial
 
experts”
 
and
 
that
 
they
 
are
 
both
considered to be “independent” under applicable NYSE and SEC standards.
Item 16B. Code of Ethics
 
We have
 
adopted a code of
 
ethics that applies to
 
officers, directors, employees
 
and agents. Our code
 
of
ethics is posted on our website,
 
http://www.dianashippinginc.com
, under “About Us—Code of Ethics” and
is filed
 
as Exhibit
 
11.1
 
to this
 
Annual Report.
 
Copies of
 
our code
 
of ethics
 
are available
 
in print,
 
free of
charge, upon
 
request to
 
Diana Shipping
 
Inc., Pendelis
 
16, 175
 
64 Palaio
 
Faliro, Athens,
 
Greece. We intend
to
 
satisfy
 
any
 
disclosure requirements
 
regarding
 
any
 
amendment to,
 
or waiver
 
from,
 
a
 
provision of
 
this
code of ethics by posting such information on our website.
Item 16C. Principal Accountant Fees and Services
a) Audit Fees
Our
 
principal
 
accountants,
 
Deloitte
 
Certified
 
Public
 
Accountants
 
S.A.,
 
have
 
billed
 
us
 
for
 
audit
 
services
provided
 
in
 
2024
 
and
 
Ernst
 
and
 
Young
 
(Hellas), Certified
 
Auditors Accountants
 
S.A., have
 
billed us
 
for
audit services
 
provided in
 
2023. Audit
 
fees in
 
2024 and
 
2023 amounted
 
to €
 
360,000 and
 
€ 383,250,
 
or
approximately $388,000 and $416,000, respectively, and relate to compensation for professional services
rendered
 
for
 
the
 
audits
 
of
 
our
 
consolidated
 
financial
 
statements
 
and
 
in
 
connection
 
with
 
the
 
review
 
of
regulatory filings.
113
b) Audit-Related Fees
Audit related fees during 2024
 
amounted to € 51,301, as compared
 
to € 22,050 in 2023 and
 
relate to audit
services provided in connection with the Company’s filings with the SEC.
 
c) Tax Fees
During
 
2023,
 
we
 
paid
 
fees
 
amounting
 
to
 
$11,025,
 
for
 
the
 
calculation
 
of
 
Earnings
 
and
 
Profits
 
of
 
the
Company. The
 
services were provided by Ernst & Young
 
LLP,
 
an affiliate of our principal accountants for
2023.
d) All Other Fees
None.
e) Audit Committee’s Pre-Approval Policies and Procedures
 
Our
 
Audit
 
Committee
 
is
 
responsible
 
for
 
the
 
appointment,
 
replacement,
 
compensation,
 
evaluation
 
and
oversight of the work
 
of our independent auditors. As
 
part of this responsibility,
 
the Audit Committee pre-
approves the audit
 
and non-audit services performed
 
by the independent auditors
 
in order to
 
assure that
they
 
do not
 
impair the
 
auditor’s independence
 
from the
 
Company.
 
The Audit
 
Committee has
 
adopted a
policy
 
which
 
sets
 
forth
 
the
 
procedures
 
and
 
the
 
conditions
 
pursuant
 
to
 
which
 
services
 
proposed
 
to
 
be
performed by the independent auditors may be pre-approved.
f) Audit Work Performed by Other than Principal Accountant if Greater than
 
50%
Not applicable.
Item 16D. Exemptions from the Listing Standards for Audit
 
Committees
Our Audit Committee
 
consists of
 
two independent
 
members of our
 
Board of
 
Directors. Otherwise,
 
our Audit
Committee
 
conforms
 
to
 
each
 
other
 
requirement
 
applicable
 
to
 
audit
 
committees
 
as
 
required
 
by
 
the
applicable listing standards of the NYSE.
Item
 
16E.
 
Purchases
 
of
 
Equity
 
Securities
 
by
 
the
 
Issuer
 
and
 
Affiliated
Purchasers
On May 23, 2014, we announced that our
 
Board of Directors authorized a share repurchase
 
plan for up to
$100 million of the Company’s common shares. The
 
plan does not have an expiration date. During 2024,
we did
 
not repurchase
 
any shares
 
of common
 
stock and
 
as of
 
December 31,
 
2024 and
 
the date
 
of this
report, there
 
is an
 
outstanding value
 
of about
 
$66.3 million
 
of common
 
shares that
 
can be
 
repurchased
under
 
the
 
plan.
 
On
 
December
 
2,
 
2024,
 
the
 
Company
 
commenced
 
a
 
tender
 
offer
 
to
 
purchase
 
up
 
to
15,000,000 shares of its
 
outstanding common stock, at
 
$2.00 per share, using
 
funds available from cash
and
 
cash
 
equivalents.
 
The
 
tender
 
offer
 
was
 
settled
 
on
 
January
 
7,
 
2025
 
and
 
we
 
purchased
 
a
 
total
 
of
11,442,645 shares of common stock for an aggregate amount of $22.9 million.
Item 16F.
 
Change in Registrant’s Certifying Accountant
On May
 
21, 2024,
 
the Audit
 
Committee of
 
the Board
 
of Directors
 
approved and
 
signed the
 
engagement
letter
 
appointing
 
Deloitte
 
Certified
 
Public
 
Accountants
 
S.A.
 
(“Deloitte”)
 
as
 
the
 
Company’s
 
independent
registered public accounting firm for the year ending December 31, 2024. The Company's annual general
114
meeting of
 
shareholders held
 
on May
 
21, 2024
 
approved such
 
appointment. The
 
audit committee
 
approved
the engagement of Deloitte following the expiration of the engagement
 
letter with the Company's previous
independent registered
 
public accounting
 
firm, Ernst &
 
Young (Hellas) Certified Auditors
 
Accountants S.A..
The reports of
 
Ernst & Young
 
(Hellas) Certified Auditors
 
Accountants S.A. on
 
the financial statements
 
of
the
 
Company
 
as
 
of
 
December
 
31,
 
2023
 
and
 
2022
 
did
 
not
 
contain
 
an
 
adverse
 
opinion
 
or
 
disclaimer
 
of
opinion
 
and
 
were
 
not
 
qualified
 
or
 
modified
 
as
 
to
 
uncertainty,
 
audit
 
scope
 
or
 
accounting
 
principles.
 
In
connection with
 
the audits
 
of the
 
Company’s financial
 
statements for
 
each of
 
the two
 
fiscal years
 
ended
December 31, 2023 and
 
2022 there were no
 
disagreements with Ernst
 
& Young (Hellas) Certified Auditors
Accountants S.A.
 
on any
 
matters of
 
accounting principles or
 
practices, financial statement
 
disclosure, or
auditing scope or procedures which,
 
if not resolved to the
 
satisfaction of Ernst &
 
Young
 
(Hellas) Certified
Auditors Accountants
 
S.A. ,
 
would have
 
caused Ernst
 
& Young (Hellas)
 
Certified Auditors
 
Accountants S.A.
to make reference to the
 
matter of such disagreements
 
in their reports. In
 
connection with the audits
 
of the
Company's financial statements
 
for each of the
 
two fiscal years ended
 
December 31, 2023 and
 
2022 none
of the events described in paragraphs (A) through (D) of Item 16F(a)(1)(v)
 
of Form 20-F occurred.
In connection with the audits of the Company’s financial statements
 
for each of the two fiscal years ended
December 31, 2023
 
and 2022 neither
 
the Company nor
 
anyone on its
 
behalf consulted with
 
Deloitte on the
application of accounting principles
 
to a specified transaction, either
 
completed or proposed; or
 
the type of
audit opinion that might
 
be rendered on the
 
Company’s financial statements
 
or any matter that
 
would have
been
 
the
 
subject of
 
a
 
disagreement, as
 
that
 
term
 
is
 
defined in
 
Item
 
16F(a)(1)(iv) of
 
Form
 
20-F and
 
the
related
 
instructions
 
to
 
Item
 
16F
 
of
 
Form
 
20-F,
 
or
 
a
 
reportable
 
event,
 
as
 
that
 
term
 
is
 
defined
 
in
 
Item
16F(a)(1)(v).
The
 
Company
 
has
 
provided Ernst
 
&
 
Young
 
(Hellas)
 
Certified Auditors
 
Accountants S.A.
 
with
 
a
 
copy
 
of
these disclosures prior to
 
the filing hereof and
 
has requested that Ernst & Young
 
furnish to the Company
a letter
 
addressed to
 
the Securities
 
and Exchange
 
Commission stating
 
whether Ernst
 
& Young
 
(Hellas)
Certified Auditors Accountants S.A. agrees with the statements
 
made by the Company in this report.
Ernst &
 
Young (Hellas) Certified
 
Auditors Accountants
 
S.A.’s letter
 
is attached
 
as Exhibit
 
16.1 to
 
this Annual
Report on Form 20-
F.
Item 16G.
 
Corporate Governance
Overview
Pursuant to an exception for foreign private issuers,
 
we, as a Marshall Islands company,
 
are not required
to
 
comply with
 
the
 
corporate governance
 
practices followed
 
by U.S.
 
companies under
 
the
 
NYSE listing
standards.
 
We believe that our established practices in
 
the area of corporate governance are in
 
line with
the spirit
 
of the
 
NYSE standards
 
and provide
 
adequate protection to
 
our shareholders.
 
In fact,
 
we have
voluntarily adopted
 
NYSE required
 
practices, such
 
as (a)
 
having a
 
majority of
 
independent directors,
 
(b)
establishing audit,
 
compensation, sustainability
 
and nominating
 
committees and
 
(c)
 
adopting a
 
Code of
Ethics.
 
The significant differences between our corporate governance practices and the NYSE standards
are set forth below.
 
Executive Sessions
The
 
NYSE
 
requires
 
that
 
non-management
 
directors
 
meet
 
regularly
 
in
 
executive
 
sessions
 
without
management.
 
The NYSE also
 
requires that all
 
independent directors
 
meet in an
 
executive session
 
at least
once a year.
 
As permitted under Marshall Islands law and our bylaws, our non-management directors do
not
 
regularly
 
hold
 
executive
 
sessions
 
without
 
management
 
and
 
we
 
do
 
not
 
expect
 
them
 
to
 
do
 
so
 
in
 
the
future.
115
Audit Committee
The NYSE requires,
 
among other things,
 
that a company
 
have an audit
 
committee with a
 
minimum of three
members.
 
Our Audit
 
Committee consists
 
of two
 
independent members
 
of our
 
Board of
 
Directors. Our
 
Audit
Committee
 
conforms
 
to
 
every
 
other
 
requirement
 
applicable
 
to
 
audit
 
committees
 
set
 
forth
 
in
 
the
 
listing
standards of the NYSE.
Shareholder Approval of Equity Compensation Plans
The NYSE requires listed
 
companies to obtain prior
 
shareholder approval to adopt
 
or materially revise any
equity compensation
 
plan. As
 
permitted under
 
Marshall Islands
 
law and
 
our amended
 
and restated
 
bylaws,
we
 
do
 
not
 
need prior
 
shareholder approval
 
to
 
adopt or
 
revise
 
equity compensation
 
plans, including
 
our
equity incentive plan.
Corporate Governance Guidelines
 
The NYSE
 
requires companies
 
to adopt
 
and disclose
 
corporate governance
 
guidelines.
 
The guidelines
must address,
 
among other
 
things: director
 
qualification standards,
 
director responsibilities,
 
director access
to
 
management
 
and
 
independent
 
advisers,
 
director
 
compensation,
 
director
 
orientation
 
and
 
continuing
education, management succession
 
and an annual
 
performance evaluation.
 
We are not required to
 
adopt
such guidelines under Marshall Islands law and we have not adopted
 
such guidelines.
 
Share Issuances
 
In lieu of obtaining shareholder
 
approval prior to the
 
issuance of designated securities,
 
we will comply with
provisions
 
of
 
the
 
Marshall
 
Islands
 
Business
 
Corporations
 
Act,
 
which
 
allows
 
the
 
Board
 
of
 
Directors
 
to
approve share issuances. Additionally,
 
the NYSE restricts the issuance of super voting
 
stock such as our
Series
 
C
 
Preferred
 
Shares.
 
However,
 
pursuant
 
to
 
313.00
 
of
 
Section
 
3
 
of
 
the
 
NYSE
 
Listed
 
Company
Manual, the
 
NYSE will accept
 
any action or
 
issuance relating to
 
the voting
 
rights structure of
 
a non-U.S.
company
 
that
 
is
 
in
 
compliance
 
with
 
the
 
NYSE’s
 
requirements
 
for
 
domestic
 
companies
 
or
 
that
 
is
 
not
prohibited by
 
the company's
 
home country
 
law.
 
We
 
are not
 
subject to
 
such restrictions
 
under our
 
home
country, Marshall Islands, law.
Item 16H. Mine Safety Disclosure
Not applicable.
Item 16I.
 
Disclosure Regarding
 
Foreign Jurisdictions
 
that Prevent
 
Inspections
Not applicable.
Item 16J. Insider Trading Policies
 
Pursuant to applicable SEC transition guidance, we have
adopted
 
insider trading policies and procedures
governing
 
the
 
purchase,
 
sale,
 
and
 
other
 
dispositions
 
of
 
the
 
registrant’s
 
securities
 
by
 
directors,
 
senior
management, and employees
 
that are reasonable
 
designed to promote
 
compliance with applicable
 
insider
trading laws, rules and regulations, and
 
NYSE listing standards for fiscal
 
year ending December 31, 2024.
Our insider trading policies and procedures are filed as Exhibit
 
11.2 to this annual report.
116
Item 16K. Cybersecurity
 
Risk management and strategy
We have
 
security measures
in place
 
to mitigate the
 
risk of cybersecurity
 
threats affecting our
 
technology
environment and
 
our business.
 
Cybersecurity risk
 
management is
 
integrated into
 
our broader
 
enterprise
risk management
 
(ERM) framework
 
to protect
 
shareholder value
 
and ensure
 
business continuity.
 
Cyber
risks are assessed
 
alongside operational,
 
financial, and compliance
 
risks. By integrating
 
cybersecurity into
our broader risk management strategy, we aim to reduce exposure
 
to cyber incidents, safeguard sensitive
data, and maintain
 
investor confidence
 
in our
 
long-term resilience
 
and operational
 
stability. Since 2023, the
Company
 
has maintained
 
ISO
 
27001
 
certification,
 
demonstrating ongoing
 
compliance
 
with
 
the
 
rigorous
requirements of
 
this internationally
 
recognized standard.
The Company's
 
Chief Information
 
Security Officer
(CISO) regularly conducts internal reviews and enhancements to
 
ensure that our cyber risk management
framework remains
 
aligned with
 
ISO 27001
 
and integrated
 
into our
 
broader enterprise
 
risk management
strategy, considering financial, operational, and compliance impacts.
 
Additionally,
 
we
 
have
 
established structured
 
processes
 
for
 
third-party
 
risk
 
management.
 
During
 
vendor
onboarding and
 
ongoing monitoring,
 
information security
 
assessments are
 
conducted, including
 
security
questionnaires, contractual
 
requirements for
 
NDAs and
 
DPAs, and cybersecurity
 
liability clauses
 
to mitigate
supply chain risks.
Cybersecurity training
 
is carried
 
out on
 
a company-wide
 
basis to
 
all employees
 
and seafarers.
 
To help build
cultural
 
awareness
 
of
 
these
 
risks
 
within
 
the
 
Company,
 
additional
 
phishing
 
campaigns
 
have
 
been
implemented within
 
the organization
 
which have
 
motivated the
 
staff to
 
react, helping
 
to enhance
 
awareness
of these risks and mitigate their occurrence. The security team have further
 
enhanced our processes and
increased our defenses by implementing a cybersecurity testing program,
 
carried out on a yearly basis by
external
 
consultants.
 
Penetration
 
testing
 
was
 
also
 
carried
 
out
 
in
 
parallel
 
during
 
2024.
 
A
 
centralized
monitoring
 
system,
 
powered
 
by
 
Microsoft's
 
cloud-based
 
Security
 
Information
 
and
 
Event
 
Management
(SIEM)
 
solution,
 
is
 
in
 
place
 
throughout
 
the
 
year.
 
This
 
system
 
aggregates
 
security
 
data
 
from
 
various
sources, uses built-in artificial
 
intelligence to detect and investigate
 
threats, and enables our security
 
team
to respond to incidents rapidly.
 
We have also created a comprehensive Business Continuity and Disaster
Recovery plan to ensure business resilience and minimize potential
 
disruptions.
 
For the
 
year 2025,
 
the security
 
team has
 
planned a
 
comprehensive
 
collaboration with
 
a
third-party
 
company
to enhance our cybersecurity awareness and training initiatives. This partnership includes the
 
design and
implementation
 
of
 
a
 
multi-faceted
 
approach
 
to
 
staff
 
training,
 
encompassing
 
synchronous
 
and
asynchronous
 
security
 
awareness
 
sessions,
 
custom-tailored
 
phishing
 
campaigns
 
and
 
the
 
creation
 
of
informative cybersecurity awareness
 
newsletters to keep
 
our staff
 
up to date
 
on the latest
 
best practices
and emerging risks. Furthermore, the
 
collaboration will focus on the
 
customization and digitalization of our
vessels' cybersecurity awareness program, ensuring that our seafarers
 
maintain a robust security posture
while at sea.
 
In addition to
 
awareness initiatives, we will
 
continue to acquire
 
relevant tools to
 
support the
identification of
third-party
 
risks and further strengthen our overall security posture.
As
 
part
 
of
 
our
 
continuous
 
efforts
 
to
 
enhance
 
threat
 
detection
 
and
 
incident
 
response,
 
we
 
will
 
leverage
Security Operations
 
Center (SOC)
 
services through
 
a trusted
 
external provider. This
 
partnership will
 
enable
proactive
 
security
 
monitoring,
 
threat
 
intelligence,
 
and
 
rapid
 
incident
 
response,
 
further
 
reinforcing
 
our
cybersecurity resilience across both shore-based operations.
Additionally,
 
we
 
will
 
implement
 
a
 
disaster
 
recovery
 
site
 
to
 
the
 
cloud
 
for
 
critical
 
applications,
 
ensuring
business continuity and operational resilience in the event of
 
disruptions.
117
In parallel
 
to these security
 
measures, our Company
 
has established a
 
Data Management Platform
 
over
Microsoft
 
Azure
 
Technologies,
 
to
 
act
 
as
 
a
 
centralized
 
and
 
secure
 
source
 
of
 
truth
 
for
 
our
 
operations,
strengthening the quality and integrity
 
of company’s informational assets. The
 
Data Management Platform
was
 
integrated
 
with
 
our
 
core
 
systems
 
and
 
implementation
 
of
 
key
 
reports
 
was
 
initiated
 
within
 
2024,
delivering several
 
new Financial
 
Reports that
 
will enable
 
better,
 
faster and
 
more accurate
 
monitoring of
Company activities
 
and improve decision
 
making and
 
productivity.
 
This transition is
 
further strengthened
with the digital upskilling of relevant personnel, enabling the proper and secure use of information assets.
We
 
are
 
committed
 
to
 
enhance
 
and
 
enrich
 
our
 
operational
 
excellence
 
through
 
our
 
external
 
3rd
 
parties’
inspections and audits (PSC-Vetting inspections Audits). We openly
 
share our results and “lessons
 
learnt”
within the industry and organizations, we compare and
 
benchmark our performance and we continuously
improve our safety footprint.
Governance
Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated
the day-to-day oversight
 
of cybersecurity and
 
other technology risks
 
to the Cyber
 
Security Officer, who has
11 years of specialized information security experience.
 
This
 
experience
 
includes
 
serving
 
as
 
Cyber
 
Security
 
Officer
 
at
 
Diana
 
Shipping
 
Services,
 
Information
Security
 
Officer
 
at
 
Viva
 
Wallet,
 
Senior
 
IT
 
Auditor
 
at
 
First
 
Data
 
Corporation
 
focusing
 
on
 
EMEA
 
region
security
 
audits,
 
and
 
IT
 
Auditor/Security
 
Consultant
 
at
 
Deloitte's
 
Enterprise
 
Risk
 
Services.
 
The
 
Cyber
Security
 
Officer
 
holds
 
CISA
 
and
 
CDPSE
 
certifications
 
from
 
ISACA,
 
completed
 
Information
 
Security
Management
 
Systems
 
(ISMS)
 
Auditor/Lead
 
Auditor
 
Training
 
in
 
accordance
 
with
 
ISO
 
27001:2013,
 
and
possesses an MSc in Digital Systems Security from the University
 
of Piraeus.
The Cyber
 
Security Officer
 
is
responsible
 
for assessing,
 
managing and
 
mitigating cybersecurity
 
threats and
for
 
reporting
 
cybersecurity
 
updates,
 
including
 
updates
 
on
 
monitoring
 
strategies
 
and
 
efforts
 
to
 
prevent
cybersecurity threats, to the board of directors on a quarterly basis or
 
more often as needed.
 
Our management
 
team plays
 
a vital
 
role in
 
assessing and
 
managing the
 
Company's material
 
risks from
cybersecurity threats. The Cyber Security Officer leads our cybersecurity program, reporting to the Digital
Transformation
 
Officer,
 
who
 
in
 
turn
 
reports
 
to
 
the
 
Chief
 
Executive
 
Officer
 
on
 
matters
 
of
 
strategic
importance.
 
Additionally,
 
the
 
Cyber
 
Security
 
Officer
 
holds
 
biweekly
 
meetings
 
with
 
the
 
CEO
 
to
 
discuss
emerging threats, ongoing security initiatives, and strategic cybersecurity
 
priorities.
The
 
Cyber
 
Security Officer
 
reports to
 
the
 
management team
 
on
 
a
 
semi-annual
 
basis,
 
presenting major
cybersecurity incidents
 
and key
 
performance indicators
 
related to
 
the
 
company's cybersecurity
 
posture.
Additionally,
 
the Cyber
 
Security Officer
 
reports to
 
the audit
 
committee on
 
a semi-annual
 
basis regarding
progress
 
on
 
critical
 
cybersecurity
 
initiatives,
 
results
 
of
 
the
 
company's
 
cybersecurity
 
maturity
 
level
assessments, and updates on the implementation of our cybersecurity
 
strategy.
The
audit committee
 
receives regular
 
reports from
 
management
 
on
 
our cybersecurity
 
risks
.
 
In
 
addition,
management updates the audit committee, as
 
necessary, regarding
 
any material cybersecurity incidents,
as
 
well
 
as
 
any
 
incidents
 
with
 
lesser
 
impact
 
potential.
The
 
audit
 
committee
 
reviews
 
the
 
Company's
cybersecurity
 
risks
 
and
 
assess’
 
the
 
steps
 
that
 
management
 
has
 
taken
 
to
 
protect
 
against
 
threats
 
to
 
the
Company's information systems and security.
Our
 
board
 
of
 
directors
 
oversees
 
the
 
Company’s
 
cybersecurity
 
risk
 
exposures
 
and
 
the
 
steps
 
taken
 
by
management to
 
monitor and
 
mitigate cybersecurity
 
risks. The
 
board of
 
directors ensures
 
allocation and
prioritization of resources and
 
overall strategic direction for
 
cybersecurity and ensures alignment with
 
the
Company’s overall strategy.
118
Cybersecurity Threats
As of
 
the date
 
of this
 
annual report,
 
we have
 
not identifed
 
any cybersecurity threats
 
that have
 
materially
affected or are
 
reasonably likely
 
to materially
 
affect our business
 
strategy, results of operations,
 
or financial
condition. For more information about the cybersecurity risks we face, please see Item 3. Key Information
— D. Risk Factors — “A cyber-attack could materially disrupt our business.”
 
 
 
119
PART III
Item 17.
 
Financial Statements
See Item 18.
Item 18.
 
Financial Statements
The financial statements
 
required by this
 
Item 18 are
 
filed as a
 
part of this
 
annual report beginning
 
on page
F-1.
 
Item 19.
 
Exhibits
Exhibit
Number
 
Description
1.1
 
1.2
 
1.3
1.4
 
1.5
2.1
 
2.2
 
2.3
 
2.4
 
2.5
 
2.6
2.7
 
2.8
**
2.9
2.10
4.1
 
4.2
 
4.3
 
4.4
 
4.5
 
120
4.6
 
4.7:
(26)
4.8:
(26)
4.9:
 
**
4.10:
 
(26)
4.
11
:
 
(26)
4.12:
**
4.13:
**
8.1
11.1
**
11.2
**
12.1
**
12.2
**
13.1
**
13.2
**
15.1
**
15.2
**
16.1
**
97.1
101
 
The following materials
 
from the Company's
 
Annual Report on
 
Form 20-F for
 
the fiscal year
 
ended
December 31, 2024,
 
formatted in eXtensible
 
Business Reporting Language
 
(XBRL): (i) Consolidated
Balance Sheets as of December 31, 2024 and 2023; (ii) Consolidated Statements of Income for the
years ended December 31,
 
2024, 2023 and
 
2022; (iii) Consolidated
 
Statements of Comprehensive
Income for
 
the years
 
ended December
 
31, 2024,
 
2023 and
 
2022; (iv)
 
Consolidated Statements
 
of
Stockholders'
 
Equity
 
for
 
the
 
years
 
ended
 
December
 
31,
 
2024,
 
2023
 
and
 
2022;
 
(v)
 
Consolidated
Statements
 
of
 
Cash
 
Flows
 
for
 
the
 
years
 
ended
 
December
 
31,
 
2024,
 
2023
 
and
 
2022;
 
and
 
(v)
 
the
Notes to Consolidated Financial Statements
104
 
Cover Page Interactive Data File (formatted as Inline XBRL
 
and contained in Exhibit 101)
 
**
 
Filed herewith.
(1)
 
Filed as
 
Exhibit 99.2
 
to the
 
Company's Form
 
6-K filed
 
on November
 
15, 2023,
 
and incorporated
 
by
reference herein.
(2)
 
Filed as
 
Exhibit 99.3
 
to the
 
Company's Form
 
6-K filed
 
on November
 
15, 2023,
 
and incorporated
 
by
reference herein.
(3)
 
Filed
 
as
 
Exhibit
 
3.3
 
to
 
the
 
Company's
 
Form
 
8-A
 
filed
 
on
 
February
 
13,
 
2014,
 
and
 
incorporated
 
by
reference herein.
(4)
 
Filed as Exhibit 3.1 to the Company's Form 8-A12B/A filed on January 15, 2016, and incorporated by
reference herein.
(5)
 
Filed as Exhibit 4.1 to the Company's Form 6-K filed on May 28, 2015, and
 
incorporated by reference
herein.
(6)
 
Filed as Exhibit 4.2 to the Company's Form 6-K filed on May 28, 2015, and
 
incorporated by reference
herein.
(7)
 
Filed as Exhibit 4.1 to the Company's Form 8-A12B/A filed on February 2, 2024,
 
and incorporated by
reference herein.
(8)
 
Filed as an Exhibit to
 
the Company's Registration
 
Statement (File No. 123052)
 
on March 1, 2005, and
incorporated by reference herein.
(9)
 
Filed as
 
an Exhibit
 
to the
 
Company's Amended
 
Registration Statement
 
(File No.
 
123052) on
 
March
15, 2005, and incorporated by reference herein.
121
(10)
 
Filed as
 
Exhibit 1.1
 
to the
 
Company's Form
 
6-K filed
 
on September
 
9, 2024,
 
and incorporated
 
by
reference herein.
(11)
 
Filed
 
as
 
an
 
Exhibit
 
to
 
the
 
Company's
 
Annual
 
Report filed
 
on
 
Form
 
20-F
 
on
 
March
 
27,
 
2014,
 
and
incorporated by reference herein.
 
(12)
 
Reserved.
 
(13)
 
Filed
 
as
 
an
 
Exhibit
 
to
 
the
 
Company's
 
Annual
 
Report filed
 
on
 
Form
 
20-F
 
on
 
March
 
28,
 
2016,
 
and
incorporated by reference herein.
 
(14)
 
Reserved.
 
(15)
 
Reserved.
(16)
 
Filed as Exhibit 4.1 to the Company's Form 8-A12B filed on
 
February 13, 2014, and incorporated by
reference herein.
(17)
 
Reserved.
(18)
 
Filed
 
as
 
an
 
Exhibit
 
to
 
the
 
Company’s
 
Form
 
6-K
 
filed
 
on
 
February
 
6,
 
2019,
 
and
 
incorporated
 
by
reference herein.
(19)
 
Reserved.
(20)
 
Reserved.
(21)
 
Filed as an
 
Exhibit to the
 
Company’s Form 6-K
 
filed on April
 
23, 2021, and
 
incorporated by reference
herein.
(22)
 
Filed
 
as
 
an
 
Exhibit to
 
the
 
Company’s
 
Form
 
6-K filed
 
on
 
September
 
8,
 
2023,
 
and
 
incorporated by
reference herein.
(23)
 
Filed as an Exhibit to
 
the Company’s Form 6-K filed
 
on July 31, 2021, and
 
incorporated by reference
herein.
(24)
 
Filed
 
as
 
an
 
Exhibit to
 
the
 
Company’s
 
Annual
 
Report filed
 
on
 
Form
 
20-F
 
on
 
March
 
12,
 
2021,
 
and
incorporated by reference herein.
(25)
 
Filed
 
as
 
an
 
Exhibit
 
to
 
the
 
Company’s
 
Annual
 
Report
 
filed
 
on
 
Form
 
20-F
 
on
 
April
 
5,
 
2024,
 
and
incorporated by reference herein.
 
(26)
 
Filed as
 
an Exhibit
 
to the
 
Company’s Annual
 
Report filed
 
on Form
 
20-F
 
on March
 
27, 2023,
 
and
incorporated by reference herein.
(27)
 
Filed as
 
an Exhibit
 
to the
 
Company’s
 
Form 6-K
 
filed
 
on December
 
14, 2023,
 
and incorporated
 
by
reference herein.
122
SIGNATURES
The registrant hereby certifies that it meets all of the requirements
 
for filing on Form 20-F and has duly
caused and authorized the undersigned to sign this annual report on its
 
behalf.
DIANA SHIPPING INC.
/s/ Maria Dede
 
Maria Dede
Co-Chief Financial Officer
 
Dated: March 21, 2025
 
F-1
DIANA SHIPPING INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm: Deloitte
 
Certified Public
Accountants S.A. (PCAOB ID No.
1163
)
 
............................................................................
 
F-2
Report of Independent Registered Public Accounting Firm on
 
Internal Controls Over
Financial Reporting: Deloitte Certified Public Accountants S.A.
 
(PCAOB ID No.1163)
 
.......
 
F-4
Report of Independent Registered Public Accounting Firm: Ernst
 
& Young (Hellas)
Certified Auditors Accountants S.A. (PCAOB ID No.
1457
)
 
...................................................
 
F-6
Consolidated Balance Sheets as of December 31, 2024 and 2023
 
................................
 
...
 
F-7
Consolidated Statements of Income for the years ended December
 
31, 2024, 2023 and
2022 ................................................................
 
................................
 
................................
 
..
 
F-8
Consolidated Statements of Comprehensive Income for the years
 
ended December 31,
2024, 2023 and 2022
 
................................
 
................................
 
................................
 
.........
 
F-8
Consolidated Statements of Stockholders' Equity for the years
 
ended December 31,
2024, 2023 and 2022
 
................................
 
................................
 
................................
 
.........
 
F-9
Consolidated Statements of Cash Flows for the years ended December
 
31, 2024, 2023
and 2022 ................................
 
................................
 
................................
 
...........................
 
F-
11
Notes to Consolidated Financial Statements................................
 
................................
 
......
 
F-13
 
 
 
 
 
 
F-2
Report of Independent Registered
 
Public Accounting Firm
To the Shareholders
 
and the Board of Directors of
 
Diana Shipping Inc.
 
 
Opinion on the Financial Statements
 
We have audited the accompanying
 
consolidated balance sheet of Diana Shipping Inc.
 
and subsidiaries (the “Company”)
as of December 31, 2024, the related consolidated
 
statement of income,
 
comprehensive income, stockholders’
 
equity,
and cash flows, for the year ended December
 
31, 2024, and the related notes (collectively
 
referred to as the “financial
statements”).
 
In our opinion, the financial statements
 
present fairly,
 
in all material respects, the financial position of the
Company as of December 31, 2024, and the results of its operations
 
and its cash flows for the year ended
 
December 31,
2024, in conformity with accounting principles
 
generally accepted in the United States
 
of America.
We have also audited,
 
in accordance with the standards
 
of the Public Company Accounting
 
Oversight Board (United
States) (PCAOB), the Company’s
 
internal control over
 
financial reporting as of December 31, 2024, based on criteria
established in Internal Control
 
— Integrated Framework
 
(2013) issued by the Committee of Sponsoring
 
Organizations of
the Treadway
 
Commission and our report dated March
 
21, 2025, expressed an unqualified opinion on the Company’s
internal control over financial
 
reporting.
Basis for Opinion
 
These financial statements are
 
the responsibility of the Company’s
 
management. Our responsibility is to express
 
an
opinion on the Company’s financial statements
 
based on our audit. We are a public accounting
 
firm registered with the
PCAOB and are required to be
 
independent with respect to the Company in accordance
 
with the U.S. federal securities
laws and the applicable rules and regulations of
 
the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance
 
with the standards of the PCAOB. Those standards
 
require that we plan and
perform the audit to obtain reasonable
 
assurance about whether the financial statements
 
are free of material
misstatement, whether due to
 
error or fraud. Our audit included performing
 
procedures to assess the risks of material
misstatement of the financial statements,
 
whether due to error or fraud, and performing
 
procedures that respond to
those risks. Such procedures included examining,
 
on a test basis, evidence regarding
 
the amounts and disclosures in the
financial statements. Our audit also
 
included evaluating the accounting principles
 
used and significant estimates made by
management, as well as evaluating the overall
 
presentation of the financial
 
statements. We
 
believe that our audit
provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated
 
below is a matter arising from the current
 
-period audit of the financial
statements that was communicated
 
or required to be communicated
 
to the audit committee and that (1) relates
 
to
accounts or disclosures that are material
 
to the financial statements and (2) involved
 
our especially challenging,
subjective, or complex judgments. The communication
 
of critical audit matters does not alter
 
in any way our opinion on
the financial statements, taken
 
as a whole, and we are not, by communicating
 
the critical audit matter below,
 
providing a
separate opinion on the critical audit matter
 
or on the accounts or disclosures to which it relates.
 
 
F-3
Impairment of long-lived assets–
 
Future Charter Rates for vessels with impairment indicators
 
– Refer to Note 2 of the
consolidated financial statements.
Critical Audit Matter Description
The Company’s evaluation
 
of vessels held for use by the Company
 
for impairment involves
 
an initial assessment of each
vessel to determine whether events or
 
changes in circumstances indicate
 
that the carrying amount of the vessel may
 
not
be recoverable. As at December
 
31, 2024, 12 out of 38 vessels held for use had impairment
 
indicators.
If impairment indicators exist,
 
the Company compares undiscounted
 
projected net operating cash
 
flows to the carrying
value of the respective vessel with impairment
 
indicators to determine
 
if the vessel is required to be impaired.
 
When the
Company’s estimate
 
of undiscounted projected net
 
operating cash flows, excluding
 
interest charges, expected
 
to be
generated by the use and eventual
 
disposition of the vessel is less than its carrying amount,
 
the Company records an
impairment loss equal to the difference
 
between the vessel’s
 
carrying value and fair market
 
value.
The Company makes various assumptions
 
and judgments to determine the undiscounted
 
projected net operating
 
cash
flows expected to be generated
 
over the remaining useful life
 
of the vessel, including estimates and assumptions related
to the future charter rates. Future
 
charter rates are the most
 
significant and subjective assumption that the
 
Company
uses for its impairment analysis. For periods
 
of time where the vessels are not fixed
 
under time charter contracts, the
Company estimates the future
 
daily time charter equivalent rate
 
(the “future charter rate”)
 
for the vessels’ unfixed days
based on the most recent 10-year
 
average of historical 1 year
 
time charter rates available
 
for each type of vessel, as such
averages take
 
into account the volatility and cyclicalit
 
y
 
of the market.
 
We identified future charter
 
rates on vessels with impairment
 
indicators used in the undiscounted
 
projected net
operating cash flows as a critical audit matter
 
because of the complex judgements made
 
by management to estimate
them and the significant impact they have
 
on the undiscounted projected net
 
cash flows expected to be generated
 
over
the remaining useful life of the vessel.
 
This required a high degree of auditor judgment
 
and an increased extent of effort
 
when performing audit procedures
 
to
evaluate the reasonableness of
 
management’s future charter
 
rates.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the future charter rates on vessels with impairment
 
indicators utilized in the
undiscounted projected net operating cash flows included the following,
 
among others:
 
•
 
We tested the effectiveness of controls over management’s review of the impairment
 
analysis, including the
future charter rates used within the undiscounted projected net operating cash flows.
•
 
We evaluated the reasonableness of the Company’s estimate of future charter rates through
 
the performance of
the following procedures:
1.
 
Evaluating the Company’s methodology for estimating the future charter rates utilized
 
in the
undiscounted projected net operating cash flows by comparing them
 
to 1) the Company’s historical rates,
2) historical rate information of similar size vessels published by a third-party broker and
 
3) other external
market sources, including reports on prospective market outlook.
2.
 
Evaluating management’s ability to accurately forecast future charter rates by comparing
 
actual results to
management’s historical forecasts.
 
/s/
Deloitte Certified Public Accountants S.A.
Athens, Greece
 
March 21, 2025
We have served as the Company’s
 
auditor since 2024.
 
 
 
 
 
F-4
Report of Independent Registered
 
Public Accounting Firm
To the Shareholders
 
and the Board of Directors of
 
Diana Shipping Inc.
Opinion on Internal Control
 
over Financial Reporting
We have audited the internal
 
control over financial reporting
 
of Diana Shipping Inc. and subsidiaries (the “Company”) as
of December 31, 2024, based on criteria established
 
in Internal Control - Integrated
 
Framework (2013) issued by the
Committee of Sponsoring Organizations
 
of the Treadway
 
Commission (COSO).
 
In our opinion, the Company maintained,
in all material respects, effective
 
internal control over financial reporting
 
as of December 31, 2024, based on criteria
established in Internal Control
 
- Integrated Framework
 
(2013) issued by COSO.
We have also audited,
 
in accordance with the standards
 
of the Public Company Accounting
 
Oversight Board (United
States) (PCAOB), the consolidated
 
financial statements as of and for
 
the year ended December 31, 2024, of the Company
and our report dated March 21, 2025, expressed
 
an unqualified opinion on those financial statements.
Basis for Opinion
 
The Company’s management
 
is responsible for maintaining
 
effective internal control
 
over financial reporting and for
 
its
assessment of the effectiveness
 
of internal control over
 
financial reporting, included in the accompanying
“Management’s Annual Report
 
on Internal Control over Financial
 
Reporting”. Our responsibility
 
is to express an opinion
on the Company’s internal
 
control over financial reporting
 
based on our audit. We are a public accounting
 
firm registered
with the PCAOB and are required to be independent
 
with respect to the Company in accordance
 
with the U.S. federal
securities laws and the applicable rules and regulations
 
of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance
 
with the standards of the PCAOB. Those standards
 
require that we plan and
perform the audit to obtain reasonable
 
assurance about whether effective
 
internal control over
 
financial reporting was
maintained in all material respects.
 
Our audit included obtaining an understanding
 
of internal control over financial
reporting, assessing the risk that a material weakness exists,
 
testing and evaluating the design and operating
effectiveness of internal
 
control based on the assessed risk, and performing
 
such other procedures as we considered
necessary in the circumstances. We
 
believe that our audit provides a reasonable
 
basis for our opinion.
 
Definition and Limitations of Internal
 
Control over Financial Reporting
A company’s internal
 
control over financial reporting
 
is a process designed to provide reasonable
 
assurance regarding
the reliability of financial reporting and the preparation
 
of financial statements for
 
external purposes in accordance with
generally accepted accounting
 
principles. A company’s internal
 
control over financial reporting
 
includes those policies
and procedures that (1) pertain to
 
the maintenance of records
 
that, in reasonable detail, accurately
 
and fairly reflect the
transactions and dispositions of the assets of the company;
 
(2) provide reasonable assurance that
 
transactions are
recorded as necessary to permit preparation
 
of financial statements in accordance
 
with generally accepted accounting
principles, and that receipts and expenditures
 
of the company are being made only in accordance
 
with authorizations of
management and directors of
 
the company; and (3) provide reasonable
 
assurance regarding
 
prevention or timely
detection of unauthorized acquisition, use, or disposition
 
of the company’s assets
 
that could have a material effect
 
on
the financial statements.
Because of its inherent limitations,
 
internal control over financial
 
reporting may not prevent
 
or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
 
F-5
deteriorate.
/s/ Deloitte Certified Public Accountants
 
S.A.
Athens, Greece
March 21, 2025
 
 
 
 
F-6
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Diana Shipping Inc.
Opinion on the Financial Statements
We have
 
audited the accompanying
 
consolidated balance
 
sheet of Diana
 
Shipping Inc. (the
 
Company) as
 
of
December 31,
 
2023, the
 
related
 
consolidated statements
 
of income,
 
comprehensive income, stockholders'
equity and
 
cash
 
flows
 
for
 
each of
 
the two
 
years
 
in the
 
period ended
 
December 31,
 
2023,
 
and the
 
related
notes (collectively referred
 
to as
 
the “consolidated
 
financial statements”).
 
In our
 
opinion, the
 
consolidated
financial statements present
 
fairly, in all material respects,
 
the financial
 
position of
 
the Company at
 
December
31, 2023,
 
and the
 
results of
 
its operations
 
and its
 
cash flows
 
for each
 
of the
 
two years
 
in the
 
period ended
December 31, 2023, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These
 
financial
 
statements
 
are
 
the
 
responsibility
 
of
 
the
 
Company's
 
management.
 
Our
 
responsibility
 
is
 
to
express an
 
opinion on the Company’s
 
financial statements
 
based on our audits.
 
We are
 
a public accounting
firm
 
registered
 
with
 
the
 
PCAOB
 
and
 
are
 
required
 
to
 
be
 
independent
 
with
 
respect
 
to
 
the
 
Company
 
in
accordance with the U.S. federal securities
 
laws and the applicable
 
rules and regulations of the
 
Securities and
Exchange Commission and the PCAOB.
We conducted
 
our audits in
 
accordance with
 
the standards
 
of the PCAOB.
 
Those standards
 
require that
 
we
plan and perform the audit
 
to obtain reasonable assurance
 
about whether the financial statements
 
are free
of material
 
misstatement, whether due
 
to error or
 
fraud. Our
 
audits included
 
performing procedures to
 
assess
the risks of material
 
misstatement of the financial statements, whether
 
due to error or
 
fraud, and performing
procedures
 
that
 
respond
 
to
 
those
 
risks.
 
Such
 
procedures
 
included
 
examining,
 
on
 
a
 
test
 
basis,
 
evidence
regarding
 
the amounts
 
and disclosures
 
in the
 
financial statements.
 
Our audits
 
also included
 
evaluating the
accounting principles used and significant estimates
 
made by management, as well as evaluating
 
the overall
presentation
 
of
 
the
 
financial
 
statements.
 
We
 
believe
 
that
 
our
 
audits
 
provide
 
a
 
reasonable
 
basis
 
for
 
our
opinion.
/s/
Ernst & Young
 
(Hellas) Certified Auditors Accountants S.A.
We have served as the Company’s auditor from 2004 to 2023.
Athens, Greece
 
April 4, 2024
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-7
DIANA SHIPPING INC.
 
CONSOLIDATED BALANCE SHEETS
December 31, 2024 and 2023
(Expressed in thousands of U.S. Dollars – except
 
for share and per share data)
2024
2023
ASSETS
Current Assets
Cash and cash equivalents (Note 2 (e))
$
124,666
$
101,592
Time deposits (Note 2 (e))
63,500
40,000
Accounts receivable, trade (Note 2 (f))
6,565
5,870
Due from related parties (Note 4)
194
149
Inventories (Note 2 (g))
4,193
5,056
Prepaid expenses and other assets
7,490
8,696
Investments in equity securities (Note 5(b))
-
20,729
Fair value of derivatives
-
129
Total Current Assets
206,608
182,221
Fixed Assets:
Advances for vessels under construction (Note 6)
19,558
-
Vessels, net (Note 6)
833,412
900,192
Property and equipment, net (Note 7)
27,175
24,282
Total fixed assets
880,145
924,474
Other Noncurrent Assets
Restricted cash, non-current (Notes 2(e) and 8)
19,000
20,000
Due from related parties, non-current (Note 4)
155
319
Equity method investments (Note 4)
42,826
15,769
Investments in a related party (Notes 2(aa) and
 
5(a))
4,415
8,318
Other non-current assets
31
31
Deferred costs
17,838
15,278
Total Non-current Assets
964,410
984,189
Total Assets
$
1,171,018
$
1,166,410
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Long-term debt, current, net of deferred financing
 
costs (Note 8)
$
45,230
$
49,512
Finance liabilities, current (Note 9)
9,608
9,221
Accounts payable
8,990
9,663
Due to related parties (Note 3)
190
759
Accrued liabilities
11,896
12,416
Deferred revenue
4,235
3,563
Fair value of derivatives
31
-
Total Current Liabilities
80,180
85,134
Non-current Liabilities
Long-term debt, net of current portion and deferred
 
financing costs (Note 8)
469,387
461,131
Finance liabilities, net of current portion (Note 9)
113,300
122,908
Fair value of derivatives (Note 2 (dd))
134
568
Warrant liability (Note 11(e))
1,802
6,332
Other non-current liabilities
1,158
1,316
Total Noncurrent Liabilities
585,781
592,255
Commitments and contingencies (Note 10)
-
-
Stockholders' Equity
Preferred stock (Note 11)
26
26
Common stock, $
0.01
 
par value;
1,000,000,000
 
shares authorized and
125,203,405
 
and
113,065,725
 
issued and outstanding on December 31, 2024
 
and 2023, respectively (Note
11)
1,252
1,131
Additional paid-in capital
1,139,363
1,101,425
Accumulated other comprehensive income
312
308
Accumulated deficit
(635,896)
(613,869)
Total Stockholders' Equity
505,057
489,021
 
Total Liabilities and Stockholders' Equity
$
1,171,018
$
1,166,410
The accompanying notes are an integral part of
 
these consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-8
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS
 
OF INCOME
For the years ended December 31, 2024, 2023 and 2022
(Expressed in thousands of U.S. Dollars – except for share and per share data)
2024
2023
2022
REVENUES:
Time charter revenues
$
228,209
$
262,098
$
289,972
OPERATING EXPENSES
Voyage expenses
13,607
13,621
6,942
Vessel operating expenses
82,587
85,486
72,033
Depreciation and amortization of deferred charges
 
44,691
49,785
43,326
General and administrative expenses
33,435
32,968
29,367
Management fees to a related party (Note 4(a))
1,332
1,313
511
Gain on sale of vessels (Note 6)
(5,799)
(5,323)
(2,850)
Insurance recoveries
-
-
(1,789)
Other operating income
(422)
(1,464)
(265)
Operating income, total
$
58,778
$
85,712
$
142,697
OTHER INCOME/(EXPENSE)
Interest expense and finance costs (Note 13)
(47,468)
(49,331)
(27,419)
Interest and other income
8,369
8,170
2,737
Gain/(loss) on derivative instruments (Note 8)
274
(439)
-
Loss on extinguishment of debt (Note 8)
(3,475)
(748)
(435)
Gain on deconsolidation of subsidiary
-
844
-
Gain/(loss) on related party investments (Note 5(a))
(3,905)
1,502
589
Gain/(loss) on equity securities (Note 5(b))
(400)
2,813
-
Gain on warrants (Note 11(e))
719
1,583
-
Gain/(loss) from equity method investments (Note 4)
(146)
(262)
894
Total other expenses, net
$
(46,032)
$
(35,868)
$
(23,634)
Net income
$
12,746
$
49,844
$
119,063
Dividends on series B preferred shares (Notes 11(b) and 14)
(5,769)
(5,769)
(5,769)
Net income attributable to common stockholders
$
6,977
$
44,075
$
113,294
Earnings per common share, basic
 
(Note 14)
$
0.06
$
0.44
$
1.42
Earnings per common share, diluted
 
(Note 14)
$
0.05
$
0.42
$
1.36
Weighted average number of common shares outstanding,
basic
 
(Note 14)
115,956,249
100,166,629
80,061,040
Weighted average number of common shares outstanding,
diluted
 
(Note 14)
118,655,243
101,877,142
83,318,901
The accompanying notes are an integral part of these consolidated financial statements.
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS
 
OF COMPREHENSIVE INCOME
For the years ended December 31, 2024 and 2023 and 2022
(Expressed in thousands of U.S. Dollars)
2024
2023
2022
Net income
$
12,746
$
49,844
$
119,063
Other comprehensive income - Defined benefit plan For the years ended December 31, 2024, 2023 and 2022
4
55
182
Comprehensive income
$
12,750
$
49,899
$
119,245
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-9
DIANA SHIPPING INC.
 
CONSOLIDATED STATEMENTS
 
OF STOCKHOLDERS’ EQUITY
(Expressed in thousands of U.S. Dollars – except
 
for share data)
Preferred Stock
Series B
Preferred Stock
Series C
Preferred Stock
Series D
Common Stock
Additional
Paid-in
Capital
Other
Comprehe
nsive
Income
Accumulated
Deficit
Total
 
Equity
# of Shares
Par
Value
# of
Shares
Par
Value
# of
Shares
Par
Value
# of Shares
Par
Value
BALANCE,
 
December
31, 2021
2,600,000
$
26
10,675
$
-
400
$
-
84,672,258
$
847
$
982,537
$
71
$
(590,286)
$
393,195
Net income
-
-
-
-
-
-
-
-
-
-
119,063
119,063
Issuance of restricted
stock and
compensation cost
 
(Note 11(i))
-
-
-
-
-
-
1,470,000
15
9,267
-
-
9,282
Stock repurchased and
retired
 
(Note 11(e))
-
-
-
-
-
-
(820,000)
(8)
(3,791)
-
-
(3,799)
Issuance of common
stock
 
(Note 11(e))
-
-
-
-
-
-
877,581
9
5,313
-
-
5,322
Issuance of common
stock for vessel
acquisitions
 
(Note
11(e))
-
-
-
-
-
-
16,453,780
164
67,689
-
-
67,853
Dividends on series B
preferred stock
($
2.21875
 
per share)
(Note 11(d))
-
-
-
-
-
-
-
-
-
-
(5,769)
(5,769)
Dividends on common
stock ($
0.90
 
per share)
(Note 11(f))
-
-
-
-
-
-
-
-
-
-
(79,812)
(79,812)
Dividends in kind
 
(Note 11(g))
-
-
-
-
-
-
-
-
-
-
(18,189)
(18,189)
Other comprehensive
income
-
-
-
-
-
-
-
-
-
182
-
182
BALANCE,
 
December
31, 2022
2,600,000
$
26
10,675
$
-
400
$
-
102,653,619
$
1,027
$
1,061,015
$
253
$
(574,993)
$
487,328
Net income
-
-
-
-
-
-
-
-
-
-
49,844
49,844
Issuance of restricted
stock and
compensation cost
 
(Note 11(i))
-
-
-
-
-
-
1,750,000
18
9,920
-
-
9,938
Issuance of common
stock
 
(Note 11(f))
-
-
-
-
-
-
6,628,493
66
22,780
-
-
22,846
Issuance of common
stock for vessel
acquisitions
 
(Note 6,
11(e))
-
-
-
-
-
-
2,033,613
20
7,710
-
-
7,730
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-10
Dividends on series B
preferred stock
($
2.21875
 
per share)
(Note 11(b))
-
-
-
-
-
-
-
-
-
-
(5,769)
(5,769)
Dividends on common
stock ($
0.60
 
per share)
(Note 11(f))
-
-
-
-
-
-
-
-
-
-
(64,276)
(64,276)
Dividends in kind
 
(Note 11(g))
-
-
-
-
-
-
-
-
-
-
(10,761)
(10,761)
Warrants
 
(Note 11(h))
-
-
-
-
-
-
-
-
-
-
(7,914)
(7,914)
Other comprehensive
income
-
-
-
-
-
-
-
-
-
55
-
55
BALANCE,
 
December
31, 2023
2,600,000
$
26
10,675
$
-
400
$
-
113,065,725
$
1,131
$
1,101,425
$
308
$
(613,869)
$
489,021
Net income
-
-
-
-
-
-
-
-
-
-
12,746
12,746
Issuance of Restricted
Stock and
Compensation Cost
(Note 11(i))
-
-
-
-
-
-
2,300,000
23
9,989
-
-
10,012
Issuance of Common
Stock (Note 11(e))
-
-
-
-
-
-
9,837,680
98
27,949
-
-
28,047
Dividends on series B
preferred stock
($
2.21875
 
per share)
(Note 11(b))
-
-
-
-
-
-
-
-
-
-
(5,769)
(5,769)
Dividends on common
stock ($
0.235
 
per
share) (Notes 11(f))
-
-
-
-
-
-
-
-
-
-
(29,004)
(29,004)
Other Comprehensive
Income
-
-
-
-
-
-
-
-
-
4
-
4
BALANCE,
 
December
31, 2024
2,600,000
$
26
10,675
$
-
400
$
-
125,203,405
$
1,252
$
1,139,363
$
312
$
(635,896)
$
505,057
The accompanying notes are an integral part of
 
these consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-
11
DIANA SHIPPING INC.
 
CONSOLIDATED STATEMENTS
 
OF CASH FLOWS
For the years ended December 31, 2024, 2023 and 2022
(Expressed in thousands of U.S. Dollars)
2024
2023
2022
 
Cash Flows from Operating Activities:
 
Net income
$
12,746
$
49,844
$
119,063
Adjustments to reconcile net
 
income to cash provided
 
by operating
activities
Depreciation and amortization of deferred charges
44,691
49,785
43,326
Amortization of debt issuance costs (Note 13)
2,372
2,620
2,286
Compensation cost on restricted stock (Note 11(g))
10,012
9,938
9,282
Provision for credit loss
-
-
133
Dividend income (Note 5(a))
-
(3)
(100)
Pension and other postretirement benefits
4
55
182
(Gain)/loss on derivative instruments (Note 8)
(274)
439
-
Gain on sale of vessels (Notes 6)
(5,799)
(5,323)
(2,850)
(Gain)/loss on related party investments (Note 5)
3,905
(1,502)
(589)
Loss on extinguishment of debt
3,475
748
435
Gain on deconsolidation of subsidiary
-
(844)
-
(Gain)/loss from equity method investments (Note 4)
146
262
(894)
(Gain)/loss on equity securities (Note 5(b))
400
(2,813)
-
Gain on warrants (Note 11(e))
(719)
(1,583)
-
(Increase) / Decrease
Accounts receivable, trade
(695)
256
(3,427)
Due from related parties
119
(252)
736
Inventories
863
(511)
1,768
Prepaid expenses and other assets
1,247
(1,950)
(1,265)
Other non-current assets
-
70
(16)
Investments in equity securities
20,329
(17,916)
-
Increase / (Decrease)
 
Accounts payable, trade and other
(673)
(1,761)
1,465
Due to related parties
(569)
(57)
(72)
Accrued liabilities
(520)
282
3,956
Deferred revenue
 
672
(4,195)
2,026
Other non-current liabilities
(158)
437
(218)
Drydock cost
(8,044)
(5,646)
(16,368)
Net Cash Provided by Operating Activities
$
83,530
$
70,380
$
158,859
 
Cash Flows from Investing Activities:
 
Payments for vessels under construction and
 
vessel improvements
(Note 6)
(20,516)
(29,732)
(230,302)
Proceeds from sale of vessels, net of expenses (Note 6)
35,154
36,560
4,372
Payments to acquire investments (Note 4)
(27,203)
(10,595)
-
Time deposits (Note 2 (e))
 
(23,500)
6,500
(46,500)
Payments to acquire other assets
-
(216)
-
Cash divested from deconsolidation
-
(771)
-
Proceeds from convertible loan with limited partnership
-
25,189
-
Payments to acquire property, furniture and fixtures (Note 7)
(3,718)
(2,006)
(667)
Net Cash Provided by/(Used) in Investing Activities
$
(39,783)
$
24,929
$
(273,097)
 
Cash Flows from Financing Activities:
 
Proceeds
 
from
 
issuance
 
of
 
long-term
 
debt
 
and
 
finance
 
liabilities
(Note 8)
117,150
57,696
275,133
Proceeds from
 
issuance of
 
common stock,
 
net of
 
expenses (Note
11(e))
24,195
-
5,266
Payments for issuance of common stock (Note 11(e))
-
(79)
-
Payments of dividends, preferred stock (Note 11(b))
(5,769)
(5,769)
(5,769)
Payments of dividends, common stock (Note 11(f))
(29,004)
(41,427)
(79,812)
Payments for repurchase of common stock
-
-
(3,799)
Payments of financing costs (Notes 8 and 9)
(5,238)
(1,724)
(3,302)
Repayments of long-term debt
 
and finance liabilities (Notes
 
8 and 9)
(123,007)
(79,842)
(102,839)
Net Cash Provided by/(Used) in Financing Activities Cash, Cash Equivalents and Restricted Cash, Beginning
$
(21,673)
$
(71,145)
$
84,878
Cash,
 
Cash
 
Equivalents
 
and
 
Restricted
 
Cash,
 
Year
Increase/(Decrease)
22,074
24,164
(29,360)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-12
Balance
121,592
97,428
126,788
Cash, Cash Equivalents and Restricted Cash, Ending Balance
$
143,666
$
121,592
$
97,428
RECONCILIATION OF CASH, CASH EQUIVALENTS
 
AND RESTRICTED CASH
Cash and cash equivalents
$
124,666
$
101,592
76,428
Restricted cash, non-current
19,000
20,000
21,000
Cash, Cash Equivalents and Restricted Cash, Total
$
143,666
$
121,592
$
97,428
SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash acquisition of assets
$
-
$
7,809
136,038
Non-cash debt assumed
-
-
20,571
Non-cash finance liability
-
-
47,782
Stock issued in noncash financing activities
3,852
7,809
67,909
Non-cash investments acquired
-
10,000
-
Noncash dividend
-
41,521
-
Transfer to Investments
-
-
1,370
Interest paid, net of amounts capitalized (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
$
46,257
$
46,473
21,306
The accompanying notes are an integral part of these consolidated financial statements.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-13
1.
 
Basis of Presentation and General Information
 
The accompanying consolidated financial statements include the accounts
 
of Diana Shipping Inc., or DSI,
and
 
its
 
wholly owned
 
subsidiaries (collectively,
 
the
 
“Company”). DSI
 
was formed
 
on
March 8, 1999
,
 
as
Diana
 
Shipping
 
Investment
 
Corp.,
 
under
 
the
 
laws
 
of
 
the
 
Republic
 
of
 
Liberia.
 
In
 
February
 
2005,
 
the
Company’s
 
articles
 
of
 
incorporation
 
were
 
amended.
 
Under
 
the
 
amended
 
articles
 
of
 
incorporation,
 
the
Company
 
was
 
renamed
 
Diana
 
Shipping
 
Inc.
 
and
 
was
 
re-domiciled
 
from
 
the
 
Republic
 
of
 
Liberia
 
to
 
the
Republic of the Marshall Islands.
The Company
 
is engaged
 
in the ocean
 
transportation of
 
dry bulk
 
cargoes worldwide
 
through the ownership
and
 
bareboat charter
 
in of
 
dry bulk
 
carrier vessels.
 
The Company
 
operates its
 
own fleet
 
through Diana
Shipping Services
 
S.A. (or
 
“DSS”), a
 
wholly owned
 
subsidiary and
 
through Diana
 
Wilhelmsen Management
Limited,
 
or
 
DWM,
 
a
50
%
 
owned
 
joint
 
venture
 
(Note
 
4(a)).
 
The
 
fees
 
paid
 
to
 
DSS
 
are
 
eliminated
 
upon
consolidation.
 
2.
 
Significant Accounting Policies and Recent Accounting Pronouncements
a)
Principles
 
of
 
Consolidation
:
 
The
 
accompanying
 
consolidated
 
financial
 
statements
 
have
 
been
prepared in accordance
 
with U.S. generally
 
accepted accounting
 
principles and include
 
the accounts
of Diana
 
Shipping Inc.
 
and its
 
wholly owned
 
subsidiaries. All
 
intercompany balances
 
and transactions
have
 
been
 
eliminated
 
upon
 
consolidation.
 
Under
 
Accounting
 
Standards
 
Codification
 
(“ASC”)
 
810
“Consolidation”, the Company consolidates entities in which it has a controlling financial interest, by
first
 
considering
 
if
 
an
 
entity
 
meets
 
the
 
definition
 
of
 
a
 
variable
 
interest
 
entity
 
("VIE")
 
for
 
which
 
the
Company is deemed to be the primary
 
beneficiary under the VIE model, or if
 
the Company controls
an
 
entity
 
through
 
a
 
majority
 
of
 
voting
 
interest
 
based
 
on
 
the
 
voting
 
interest
 
model.
 
The
 
Company
evaluates
 
financial
 
instruments,
 
service
 
contracts,
 
and
 
other
 
arrangements
 
to
 
determine
 
if
 
any
variable interests relating
 
to an entity
 
exist. For entities
 
in which the
 
Company has
 
a variable interest,
the Company determines if the entity
 
is a VIE by considering whether the entity’s
 
equity investment
at
 
risk
 
is
 
sufficient
 
to
 
finance
 
its
 
activities
 
without
 
additional
 
subordinated
 
financial
 
support
 
and
whether the entity’s
 
at-risk equity holders
 
have the characteristics
 
of a controlling
 
financial interest.
In
 
performing analysis
 
of whether
 
the
 
Company is
 
the
 
primary beneficiary
 
of
 
a VIE,
 
the
 
Company
considers whether
 
it individually
 
has the
 
power to
 
direct the
 
activities of
 
the VIE
 
that most
 
significantly
affect the
 
entity’s performance
 
and also
 
has the
 
obligation to
 
absorb losses
 
or the
 
right to
 
receive
benefits of
 
the VIE
 
that could
 
potentially be
 
significant to
 
the VIE.
 
If the
 
Company holds
 
a variable
interest in
 
an entity
 
that previously
 
was not
 
a VIE,
 
it reconsiders
 
whether the
 
entity has
 
become a
VIE.
 
b)
Use
 
of
 
Estimates:
The
 
preparation
 
of
 
consolidated
 
financial
 
statements
 
in
 
conformity
 
with
 
U.S.
generally accepted accounting
 
principles requires management
 
to make estimates and
 
assumptions
that
 
affect
 
the
 
reported
 
amounts
 
of
 
assets
 
and
 
liabilities
 
and
 
disclosure
 
of
 
contingent
 
assets
 
and
liabilities at the date of the consolidated financial statements and the reported amounts
 
of revenues
and expenses during the reporting period.
 
Actual results could differ from those estimates.
c)
Other Comprehensive
 
Income /
 
(Loss):
The Company
 
separately presents
 
certain transactions,
which are
 
recorded directly
 
as components
 
of stockholders’
 
equity.
 
Other Comprehensive
 
Income/
(Loss) is presented in a separate statement.
d)
 
Foreign Currency Translation:
The functional currency of the Company is the U.S. dollar because
the Company’s vessels operate in international shipping markets, and therefore primarily transact (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
business
 
in
 
U.S.
 
dollars.
 
The
 
Company’s
 
accounting
 
records
 
are
 
maintained
 
in
 
U.S.
 
dollars.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-14
Transactions
 
involving
 
other
 
currencies
 
during
 
the
 
year
 
are
 
converted
 
into
 
U.S.
 
dollars
 
using
 
the
exchange rates in effect at
 
the time of the
 
transactions. At the balance
 
sheet dates, monetary assets
and liabilities which are denominated in other currencies
 
are translated into U.S. dollars at the year-
end exchange rates.
 
Resulting gains or losses
 
are included in other
 
operating income/ (loss) in
 
the
accompanying consolidated statements of income/(loss).
 
e)
Cash,
 
Cash Equivalents,
 
Time
 
Deposits and
 
Restricted Cash:
The Company
 
considers highly
liquid investments such as
 
time deposits, certificates of
 
deposit and their equivalents
 
with an original
maturity
 
of
 
up
 
to
 
three
 
months
 
to
 
be
 
cash
 
equivalents.
 
Time
 
deposits
 
with
 
maturity
 
above
 
three
months are
 
separately presented
 
as time
 
deposits. As
 
of December
 
31, 2024
 
and 2023,
 
time deposits
(with
 
maturity above
 
three
 
months)
 
amounted to
 
$
63,500
 
and
 
$
40,000
,
 
respectively.
 
During
 
2024
and 2023, the Company
 
placed new time deposits
 
exceeding three months of
 
$
63,500
 
and $
50,000
,
respectively,
 
and
 
during
 
the
 
same
 
periods,
 
deposits
 
of
 
$
40,000
 
and
 
$
56,500
 
matured.
 
Restricted
cash consists
 
mainly of
 
cash deposits
 
required to
 
be maintained
 
at all
 
times under
 
the Company’s
loan facilities
 
(Note
 
8) as
 
compensating cash
 
balances and
 
are not
 
pledged. As
 
of December
 
31,
2024 and 2023, accrued
 
interest income amounted to
 
$
605
 
and $
1,206
, respectively and is included
in prepaid expenses and other assets in the accompanying consolidated
 
balance sheets.
f)
Accounts Receivable, Trade:
The amount
 
shown as
 
accounts receivable, trade,
 
at each
 
balance
sheet date, includes
 
receivables from charterers
 
for hire from
 
lease agreements,
 
net of provisions
 
for
doubtful
 
accounts,
 
if
 
any.
 
At
 
each
 
balance
 
sheet
 
date,
 
all
 
potentially
 
uncollectible
 
accounts
 
are
assessed individually
 
for purposes of
 
determining the
 
appropriate provision
 
for doubtful accounts.
 
As
of December 31,
 
2024 and 2023 there
 
was
no
 
provision for doubtful accounts.
 
The Company does
not recognize interest income on trade receivables as all balances are
 
settled within a year.
g)
Inventories:
Inventories consist of lubricants and victualing which are stated, on a consistent
 
basis,
at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the
ordinary
 
course
 
of
 
business,
 
less
 
reasonably
 
predictable
 
costs
 
of
 
completion,
 
disposal,
 
and
transportation. When evidence exists that the net realizable value of inventory is lower than its cost,
the difference is recognized as a loss in
 
earnings in the period in
 
which it occurs. Cost is determined
by the first
 
in, first out method.
 
Amounts removed from inventory are
 
also determined by the
 
first in
first out method. Inventories may also consist of bunkers,
 
when on the balance sheet date, a vessel
is without
 
employment. Bunkers, if
 
any,
 
are also
 
stated at
 
the lower
 
of cost
 
or net
 
realizable value
and cost is determined by the first in, first out method.
 
h)
Vessel
 
Cost
: Vessels
 
are stated
 
at cost
 
which consists
 
of the
 
contract price
 
and any
 
capitalizable
expenditures
 
incurred
 
upon
 
acquisition
 
or
 
during
 
construction.
 
Expenditures
 
for
 
conversions
 
and
major improvements are
 
also capitalized when they
 
appreciably extend the
 
life, increase the earning
capacity or improve the efficiency or safety of the vessels; otherwise,
 
these amounts are charged to
expense as incurred. Interest incurred during
 
the assets' construction period,
 
that theoretically could
have
 
been
 
avoided
 
if
 
expenditure
 
for
 
the
 
assets
 
had
 
not
 
been
 
made,
 
is
 
also
 
capitalized.
 
The
capitalization rate,
 
applied on
 
accumulated expenditures
 
for the
 
vessel, is
 
based on
 
interest rates
applicable to outstanding borrowings of the period.
i)
 
Vessels held
 
for sale:
 
A long-lived asset classified
 
as held for
 
sale is measured at
 
the lower of its
carrying amount or fair value less cost to sell when the respective held for sale criteria are met. The
asset is
 
not depreciated
 
while it
 
is classified
 
as held
 
for sale.
 
The fair
 
value less
 
cost to
 
sell of
 
an
asset held for
 
sale is assessed
 
at each reporting period
 
it remains classified as
 
held for sale.
 
If the
plan to sell the
 
asset changes, the asset is
 
reclassified as held and used,
 
measured at the lower of
its carrying amount before it was classified as held for sale, adjusted for any depreciation expense (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-15
that would have been
 
recognized had the asset
 
been continuously classified as
 
held and used
 
and
its fair value at the date of the subsequent decision not to sell.
 
j)
Sale
 
and
 
leaseback:
 
In
 
accordance
 
with
 
ASC
 
842-40,
 
in
 
a
 
sale
 
and
 
leaseback
 
transaction
 
the
Company,
 
as seller-lessee, determines
 
whether the transfer
 
of the
 
asset is
 
a sale
 
under ASC 606.
For a sale
 
to have occurred, the
 
control of the asset
 
would need to be
 
transferred to the buyer
 
and
the
 
buyer
 
would
 
need
 
to
 
obtain
 
substantially
 
all
 
the
 
benefits
 
from
 
the
 
use
 
of
 
the
 
asset.
 
Sale
 
and
leaseback transactions,
 
which include
 
an obligation for
 
the Company, as seller-lessee,
 
to repurchase
the
 
asset,
 
or
 
other
 
situations
 
where
 
the
 
leaseback
 
would
 
be
 
classified
 
as
 
a
 
finance
 
lease,
 
are
determined to
 
be failed
 
sales under
 
ASC 842-40.
 
In these
 
cases, the
 
Company does
 
not derecognize
the asset from its balance sheet and accounts for any amounts
 
received as financial liability.
k)
Property and equipment:
 
The Company owns the
 
land and building where
 
its offices are
 
located.
The Company also owns other plots
 
acquired for office use (Note 7). Land is stated at cost, and it is
not
 
subject to
 
depreciation. The
 
building has
 
an estimated
 
useful life
 
of
55 years
 
with
no
 
residual
value. Furniture, office equipment and vehicles have a useful life of
5 years
, except for a car owned
by the Company, which has a
 
useful life of
10 years
. Computer software
 
and hardware have
 
a useful
life of
three years
. Depreciation is calculated on a straight-line basis.
l)
 
Impairment of
 
Long-Lived Assets:
Long-lived assets
 
are reviewed
 
for impairment
 
whenever events
or
 
changes
 
in
 
circumstances
 
(such
 
as
 
market
 
conditions,
 
obsolescence
 
or
 
damage
 
to
 
the
 
asset,
potential sales and
 
other business plans)
 
indicate that the
 
carrying amount of
 
an asset may
 
not be
recoverable. When impairment
 
indicators are identified and
 
the estimate of
 
undiscounted projected
net operating
 
cash flows,
 
excluding interest
 
charges, expected
 
to be
 
generated by
 
the use
 
of an
 
asset
over
 
its
 
remaining
 
useful
 
life
 
and
 
its
 
eventual
 
disposition
 
is
 
less
 
than
 
its
 
carrying
 
amount,
 
the
Company evaluates the asset for impairment loss. Measurement of the
 
impairment loss is based on
the fair value of the asset, determined mainly by third party valuations.
 
For vessels,
 
the Company
 
calculates undiscounted
 
projected net
 
operating cash
 
flows by
 
considering
the historical
 
and estimated
 
vessels’ performance
 
and utilization
 
with the
 
significant assumption
 
being
future charter rates for
 
the unfixed days, using
 
the most recent
10
-year average of historical
 
1 year
time charter rates available for each type of vessel over the remaining estimated life of each vessel,
net of commissions. Historical ten-year blended average one-year time charter rates are in line with
the
 
Company’s
 
overall
 
chartering
 
strategy,
 
they
 
reflect
 
the
 
full
 
operating
 
history
 
of
 
vessels
 
of
 
the
same type and particulars with the Company’s operating fleet and they cover at least
 
a full business
cycle,
 
where
 
applicable.
 
When
 
the
10
-year
 
average
 
of
 
historical
 
1
 
year
 
time
 
charter
 
rates
 
is
 
not
available for a type
 
of vessel, the Company uses
 
the average of historical 1
 
year time charter rates
of the available
 
period. Other
 
assumptions used in
 
developing estimates
 
of future undiscounted
 
cash
flow are
 
charter rates calculated
 
for the
 
fixed days using
 
the fixed
 
charter rate of
 
each vessel from
existing time charters, the
 
expected outflows for scheduled
 
vessels’ maintenance; vessel operating
expenses; fleet utilization, and the
 
vessels’ residual value if sold for
 
scrap.
 
Assumptions are in line
with the
 
Company’s historical
 
performance and
 
its expectations
 
for future
 
fleet utilization
 
under its
current fleet deployment
 
strategy. This calculation is then compared
 
with the vessels’
 
net book value
plus
 
unamortized
 
deferred
 
costs.
 
The
 
difference
 
between
 
the
 
carrying
 
amount
 
of
 
the
 
vessel
 
plus
unamortized
 
deferred
 
costs
 
and
 
their
 
fair
 
value
 
is
 
recognized
 
in
 
the
 
Company's
 
accounts
 
as
impairment loss.
The Company’s impairment
 
assessment did not
 
result in the
 
recognition of impairment
 
on any vessel
and therefore
no
 
impairment loss was identified or recorded in 2024, 2023 and 2022.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-16
For
 
the
 
building,
 
the
 
Company
 
determines
 
undiscounted
 
projected
 
net
 
operating
 
cash
 
flows
 
by
considering the
 
estimated monthly rent
 
the Company would
 
have to
 
pay in order
 
to lease
 
a similar
building for a period equal to its remaining useful life.
No
 
impairment loss was identified or recorded
for 2024, 2023 and
 
2022 and the Company has
 
not identified any other facts
 
or circumstances that
would require the write down of the value of its land or building in
 
the near future.
m)
Vessel
 
Depreciation:
Depreciation is
 
computed using
 
the straight-line
 
method over
 
the estimated
useful
 
life
 
of
 
the
 
vessels,
 
after
 
considering
 
the
 
estimated
 
salvage
 
(scrap)
 
value.
 
Each
 
vessel’s
salvage
 
value
 
is
 
equal
 
to
 
the
 
product
 
of
 
its
 
lightweight
 
tonnage
 
and
 
estimated
 
scrap
 
rate.
Management estimates
 
the useful
 
life of
 
the Company’s vessels
 
to be
25 years
 
from the date
 
of initial
delivery from
 
the shipyard.
 
Second-hand vessels are
 
depreciated from the
 
date of
 
their acquisition
through their remaining estimated useful life. When regulations place limitations over the ability of a
vessel to trade on
 
a worldwide basis,
 
its remaining useful
 
life is adjusted at
 
the date such regulations
are
 
adopted.
Effective July 1, 2023, the Company reassessed the estimated scrap rate used to
calculate depreciation and, based on the average demolition prices in different markets during the
last 15 years, adjusted upwards the estimated scrap rate of its vessels. This change in estimate
resulted
 
in
 
increased
 
salvage
 
values,
 
decreased
 
depreciation
 
expense
 
and
 
increased
 
operating
income. Additionally, for
 
the period
 
from July
 
1, 2023
 
to December
 
31, 2023,
 
net income
 
and earnings
per share, basic and diluted, increased by $
3,773
 
and $
0.04
, respectively.
n)
Deferred Costs
: The
 
Company follows
 
the deferral
 
method of
 
accounting for
 
dry-docking and
 
special
survey costs whereby actual costs incurred are deferred and amortized on a straight-line basis over
the period
 
through the date
 
the next
 
survey is
 
scheduled to
 
become due.
 
Unamortized deferred
 
costs
of vessels that
 
are sold or impaired
 
are written off
 
and included in
 
the calculation of
 
the resulting gain
or loss in the year of the vessel’s sale (Note 6) or impairment.
o)
Financing Costs
: Fees
 
paid for
 
obtaining finance liabilities,
 
fees paid
 
to lenders
 
for obtaining
 
new
loans,
 
new bonds, refinancing or amending existing loans,
 
are deferred and recorded as a contra to
debt. Other
 
fees paid
 
for obtaining
 
loan facilities
 
not used
 
at the
 
balance sheet
 
date are
 
deferred.
Fees relating to
 
drawn loan facilities
 
are amortized to
 
interest and finance
 
costs over the
 
life of the
related debt
 
using the
 
effective interest method
 
and fees
 
incurred for
 
loan facilities not
 
used at
 
the
balance sheet date are amortized using
 
the straight-line method according to
 
their availability terms.
Unamortized
 
fees
 
relating
 
to
 
loans
 
or
 
bonds
 
repaid
 
or
 
repurchased
 
or
 
refinanced
 
as
 
debt
extinguishment
 
are
 
written
 
off
 
in
 
the
 
period
 
the
 
repayment,
 
prepayment,
 
repurchase
 
or
extinguishment is made and
 
included in the determination
 
of gain/loss on debt extinguishment.
 
Loan
commitment fees are
 
expensed
 
in the period
 
incurred, unless they
 
relate to loans
 
obtained to finance
vessels under construction, in which case, they are capitalized
 
to the vessels’ cost.
p)
Concentration
 
of
 
Credit
 
Risk
:
 
Financial
 
instruments,
 
which
 
potentially
 
subject
 
the
 
Company
 
to
significant concentrations
 
of credit
 
risk, consist
 
principally of
 
cash and
 
trade accounts
 
receivable. The
Company places
 
its temporary
 
cash investments,
 
consisting mostly
 
of deposits,
 
with various
 
qualified
financial institutions
 
and performs
 
periodic evaluations
 
of the
 
relative credit
 
standing of
 
those financial
institutions that are considered in the Company’s investment strategy. The Company
 
limits its credit
risk
 
with
 
accounts
 
receivable
 
by
 
performing
 
ongoing
 
credit
 
evaluations
 
of
 
its
 
customers’
 
financial
condition and generally does
 
not require collateral for
 
its accounts receivable
 
and does not have
 
any
agreements to mitigate credit risk.
q)
 
Accounting for Revenues and Expenses:
Revenues are generated from time
 
charter agreements
which contain a lease
 
as they meet the
 
criteria of a lease
 
under ASC 842.
 
The time charter contracts
are considered operating leases because (i) the vessel is an identifiable asset (ii) the owner of the (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-17
vessel does not have substantive substitution
 
rights and (iii) the charterer has
 
the right to control the
use of the
 
vessel during the term
 
of the contract and
 
derives the economic benefits
 
from such use.
Agreements with
 
the same
 
charterer are
 
accounted for
 
as separate
 
agreements according to
 
their
specific
 
terms
 
and
 
conditions.
 
All
 
agreements
 
contain
 
a
 
minimum
 
non-cancellable
 
period
 
and
 
an
extension period at the option
 
of the charterer.
 
Each lease term is assessed at
 
the inception of that
lease. Under a time charter agreement, the charterer pays
 
a daily hire for the use of the
 
vessel and
reimburses the owner for
 
hold cleanings, extra
 
insurance premiums for navigating
 
in restricted areas
and
 
damages
 
caused
 
by
 
the
 
charterers.
 
Revenues
 
from
 
time
 
charter
 
agreements
 
providing
 
for
varying annual
 
rates are
 
accounted for
 
as operating
 
leases and
 
thus recognized
 
on a
 
straight-line
basis over the non-cancellable rental periods of such agreements,
 
as service is performed.
 
The charterer
 
pays to
 
third parties
 
port, canal
 
and bunkers
 
consumed during
 
the term
 
of the
 
time
charter agreement, unless they are for the account of the owner, in which case,
 
they are included in
voyage expenses. Voyage expenses also include commissions on time charter revenue (paid to the
charterers, the brokers
 
and the managers)
 
and gain or
 
loss from bunkers
 
resulting mainly from
 
the
difference
 
in
 
the
 
value
 
of
 
bunkers
 
paid
 
by
 
the
 
Company
 
when
 
the
 
vessel
 
is
 
redelivered
 
to
 
the
Company from
 
the charterer
 
under the
 
vessel’s previous
 
time charter
 
agreement and
 
the value
 
of
bunkers sold
 
by the
 
Company when
 
the vessel
 
is delivered
 
to a
 
new charterer
 
(Note 12).
 
Under a
time
 
charter
 
agreement,
 
the
 
owner
 
pays
 
for
 
the
 
operation
 
and
 
the
 
maintenance
 
of
 
the
 
vessel,
including
 
crew,
 
insurance,
 
spares
 
and
 
repairs,
 
which
 
are
 
recognized
 
in
 
operating
 
expenses.
 
The
Company,
 
as lessor, has
 
elected not to allocate the consideration
 
in the agreement to the
 
separate
lease
 
and
 
non-lease
 
components
 
(operation
 
and
 
maintenance
 
of
 
the
 
vessel)
 
as
 
their
 
timing
 
and
pattern
 
of
 
transfer
 
to
 
the
 
charterer,
 
as
 
the
 
lessee,
 
are
 
the
 
same
 
and
 
the
 
lease
 
component,
 
if
accounted
 
for
 
separately,
 
would
 
be
 
classified
 
as
 
an
 
operating
 
lease.
 
Additionally,
 
the
 
lease
component
 
is
 
considered
 
the
 
predominant
 
component,
 
as
 
the
 
Company
 
has
 
assessed
 
that
 
more
value is ascribed to the vessel rather than to the services provided under the time charter contracts.
In
 
time
 
charter
 
agreements
 
apart
 
from
 
the
 
agreed
 
hire
 
rate,
 
the
 
Company
 
may
 
be
 
entitled
 
to
 
an
additional income,
 
such as
 
ballast bonus.
 
Ballast bonus
 
is paid
 
by charterers
 
for repositioning
 
the
vessel. The Company analyzes
 
terms of each contract
 
to assess whether income
 
from ballast bonus
is
 
accounted
 
together
 
with
 
the
 
lease
 
component
 
over
 
the
 
duration
 
of
 
the
 
charter
 
or
 
as
 
service
component under
 
ASC 606.
 
Deferred revenue
 
includes cash
 
received prior
 
to the balance
 
sheet date
for which all criteria to recognize as revenue have not been
 
met.
r)
Repairs and
 
Maintenance:
 
All repair
 
and maintenance
 
expenses including underwater
 
inspection
expenses are expensed in the year incurred. Such costs are included in
 
vessel operating expenses
in the accompanying consolidated statements of income.
s)
Earnings / (loss) per Common Share:
 
Basic earnings / (loss) per common share are
 
computed by
dividing net
 
income /
 
(loss) available
 
to common
 
stockholders by
 
the weighted
 
average number
 
of
common shares outstanding during the year. Shares issuable at little or no cash consideration upon
satisfaction of
 
certain conditions,
 
are considered
 
outstanding and
 
included in
 
the computation
 
of basic
earnings/(loss) per
 
share as
 
of the
 
date that
 
all necessary
 
conditions have
 
been satisfied.
 
Diluted
earnings
 
per
 
common
 
share,
 
reflects
 
the
 
potential
 
dilution
 
that
 
could
 
occur
 
if
 
securities
 
or
 
other
contracts to issue common stock were exercised.
 
t)
 
Segmental Reporting:
The Company reports financial
 
information and evaluates its
 
operations and
operating
 
results
 
by
 
revenue
 
and
 
operating
 
expenses.
 
As
 
a
 
result,
 
the
 
Company’s
 
management,
including its
 
Chief Executive
 
Officer,
 
who is
 
the chief
 
operating decision
 
maker,
 
reviews operating
results solely by revenue and operating
 
results of the fleet, and
 
thus, the Company has determined
that it operates under one reportable segment, that of operating dry bulk vessels. The chief operating (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-18
decision maker
 
(“CODM”) does
 
not use
 
discrete financial
 
information to
 
evaluate the
 
operating results
for
 
each
 
type
 
of
 
charter
 
or
 
vessel
 
but
 
is
 
instead
 
regularly
 
provided
 
with
 
only
 
the
 
consolidated
expenses
 
as
 
noted
 
on
 
the
 
face
 
of
 
the
 
consolidated
 
statements
 
of
 
income.
 
The
 
CODM
 
assesses
performance
 
for
 
the
 
vessel
 
operations
 
segment and
 
decides
 
how
 
to
 
allocate
 
resources
 
based
 
on
consolidated net
 
income. Additionally,
 
the vessels
 
do not
 
operate in
 
specific geographic
 
areas, as
they trade worldwide; they do not
 
trade in specific trade routes, as
 
their trading (route and cargo) is
dictated by the charterers;
 
and the Company
 
does not evaluate
 
the operating results
 
for each type
 
of
dry bulk vessels (i.e. Panamax, Capesize etc.) for the purpose of making decisions about allocating
resources and assessing performance.
In
 
November
 
2023,
 
the
 
FASB
 
issued
 
ASU
 
2023-07,
 
which
 
requires
 
the
 
disclosure
 
of
 
significant
segment
 
expenses
 
that
 
are
 
part
 
of
 
an
 
entity’s
 
segment
 
measure
 
of
 
profit
 
or
 
loss
 
and
 
regularly
provided to
 
the chief
 
operating decision
 
maker.
 
In addition,
 
it adds
 
or makes
 
clarifications to
 
other
segment-related
 
disclosures,
 
such
 
as
 
clarifying
 
that
 
the
 
disclosure
 
requirements
 
in
 
ASC
 
280
 
are
required
 
for
 
entities
 
with
 
a
 
single
 
reportable
 
segment
 
and
 
that
 
an
 
entity
 
may
 
disclose
 
multiple
measures
 
of
 
segment
 
profit
 
and
 
loss.
 
ASU
 
2023-07
 
is
 
effective
 
for
 
fiscal
 
years
 
beginning
 
after
December 15, 2023 and
 
interim periods beginning
 
after December 15, 2024.
 
The Company adopted
ASU 2023-07 as of January 1, 2024 and its adoption has limited impact on the
 
Company’s financial
disclosures and there was no impact to financial position or results
 
of operations.
u)
Fair Value
 
Measurements
: The
 
Company classifies and
 
discloses its
 
assets and
 
liabilities carried
at fair
 
value in
 
one of the
 
following categories: Level
 
1: Quoted
 
market prices in
 
active markets for
identical assets
 
or liabilities;
 
Level 2:
 
Observable market-based
 
inputs or
 
unobservable inputs
 
that
are corroborated by market data; Level 3:
 
Unobservable inputs that are not corroborated by
 
market
data.
v)
Share Based Payments:
 
The Company issues
 
restricted share awards
 
which are measured
 
at their
grant date fair value and are not subsequently
 
re-measured. That cost is recognized over the period
during which
 
an employee
 
is required
 
to provide
 
service in
 
exchange for
 
the award—the
 
requisite
service period
 
(usually the
 
vesting period).
 
No compensation
 
cost is
 
recognized for
 
equity instruments
for
 
which employees
 
do not
 
render
 
the
 
requisite service
 
unless the
 
board of
 
directors determines
otherwise.
 
Forfeitures
 
of
 
awards
 
are
 
accounted
 
for
 
when
 
and
 
if
 
they
 
occur.
 
If
 
an
 
equity
 
award
 
is
modified after the grant date, incremental compensation cost will be recognized in an amount equal
to
 
the
 
excess
 
of
 
the
 
fair
 
value
 
of
 
the
 
modified
 
award
 
over
 
the
 
fair
 
value
 
of
 
the
 
original
 
award
immediately before the modification.
 
w)
 
Equity
 
method
 
investments:
 
Investments
 
in
 
common
 
stock
 
in
 
entities
 
over
 
which
 
the
 
Company
exercises significant influence but does not exercise control are accounted for by the equity method
of accounting. Under this
 
method, the Company records such
 
an investment at cost
 
(or fair value if
a consequence of deconsolidation) and
 
adjusts the carrying amount for
 
its share of the
 
earnings or
losses
 
of
 
the
 
entity
 
subsequent to
 
the
 
date
 
of
 
investment and
 
reports
 
the
 
recognized
 
earnings
 
or
losses in income. Dividends received,
 
if any,
 
reduce the carrying amount of the
 
investment and are
recorded
 
as
 
receivable
 
on
 
dividend
 
declaration.
 
When
 
the
 
carrying
 
value
 
of
 
an
 
equity
 
method
investment is
 
reduced to
 
zero because of
 
losses, the
 
Company does
 
not provide
 
for additional
 
losses
unless
 
it
 
is
 
committed
 
to
 
provide
 
further
 
financial
 
support
 
to
 
the
 
investee.
 
The
 
Company
 
also
evaluates whether a loss in value of an investment that
 
is other than a temporary decline should be
recognized. Evidence
 
of a
 
loss in
 
value might
 
include absence
 
of an
 
ability to
 
recover the
 
carrying
amount of the investment
 
or inability of
 
the investee to
 
sustain an earnings
 
capacity that would
 
justify
the carrying amount of the investment. For equity method investments that the Company has elected (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-19
to account
 
for using
 
the fair
 
value option,
 
all subsequent
 
changes in
 
fair value
 
are included
 
in gain/loss
on related party investments.
x)
Going concern:
Management evaluates, at each
 
reporting period, whether there
 
are conditions or
events that raise
 
substantial doubt about
 
the Company's ability
 
to continue as
 
a going concern
 
within
one year from the date the financial statements are issued.
y)
Shares repurchased and retired:
The Company’s shares
 
repurchased are immediately cancelled
and the Company’s share capital
 
is accordingly reduced. Any excess of
 
the cost of the shares
 
over
their par value is allocated
 
in additional paid-in capital, in
 
accordance with ASC 505-30-30, Treasury
Stock.
 
z)
Financial Instruments, credit losses
: At each reporting date,
 
the Company evaluates its financial
assets
 
individually
 
for
 
credit
 
losses
 
and
 
presents
 
such
 
assets
 
in
 
the
 
net
 
amount
 
expected
 
to
 
be
collected on
 
such financial
 
asset. When
 
financial assets
 
present similar
 
risk characteristics,
 
these are
evaluated
 
on
 
a
 
collective
 
basis.
 
When
 
developing
 
an
 
estimate
 
of
 
expected
 
credit
 
losses,
 
the
Company considers available information relevant to assessing the
 
collectability of cash flows such
as internal
 
information, past
 
events, current
 
conditions and
 
reasonable and
 
supportable forecasts.
No
 
credit losses were identified and recorded in 2024 and 2023.
aa)
Financial Instruments, Investments-Equity
 
Securities, Recognition and
 
Measurement
: Equity
investments
 
with
 
readily
 
determinable
 
fair
 
values
 
are
 
recognized
 
at
 
the
 
transaction
 
price
 
and
subsequently
 
measured
 
at
 
fair
 
value
 
through
 
net
 
income.
 
According
 
to
 
ASC
 
321-10-35-2,
 
the
Company has elected to measure equity securities without a readily determinable fair value, that do
not
 
qualify
 
for
 
the
 
practical expedient
 
in
 
ASC
 
820
Fair
 
Value
 
Measurement
to
 
estimate
 
fair
 
value
using
 
the
 
NAV
 
per
 
share
 
(or
 
its
 
equivalent),
 
at
 
its
 
cost
 
minus
 
impairment,
 
if
 
any.
 
If
 
the
 
Company
identifies observable price changes in orderly
 
transactions for the identical or
 
a similar investment of
the same
 
issuer,
 
it shall
 
measure equity
 
securities at
 
fair value
 
as of
 
the date
 
that the
 
observable
transaction occurred.
 
The Company
 
shall continue
 
to apply
 
this measurement
 
until the
 
investment
does
 
not qualify
 
to
 
be measured
 
in
 
accordance with
 
this paragraph.
 
At
 
each reporting
 
period,
 
the
Company reassesses
 
whether an
 
equity investment
 
without a
 
readily determinable
 
fair value
 
qualifies
to
 
be
 
measured
 
in
 
accordance
 
with
 
this
 
paragraph.
 
The
 
Company
 
may
 
subsequently
 
elect
 
to
measure equity
 
securities at
 
fair value
 
and the
 
election to measure
 
securities at
 
fair value
 
shall be
irrevocable. Any resulting
 
gains or
 
losses on the
 
securities for
 
which that election
 
is made shall
 
be
recorded in
 
earnings at
 
the time
 
of the
 
election. At
 
each reporting
 
period, the
 
Company also
 
evaluates
indicators such
 
as the
 
investee’s performance
 
and its
 
ability to
 
continue as
 
going concern
 
and market
conditions, to determine
 
whether an investment
 
is impaired
 
in which
 
case, the Company
 
will estimate
the fair value of the investment to determine the amount of impairment
 
loss.
bb)
 
Contracts
 
in
 
entity’s
 
equity:
Under
 
ASC
 
815-40
 
contracts
 
that
 
require
 
settlement
 
in
 
shares
 
are
considered equity instruments, unless an event that is not in the entity’s control will require net cash
settlement.
 
Additional
 
conditions
 
necessary
 
for
 
equity
 
classification
 
include
 
settlement
 
to
 
be
permitted in
 
unregistered shares,
 
the entity
 
to have
 
sufficient authorized
 
and unissued
 
shares, the
contract to contain an explicit share
 
limit, there should be no requirement
 
for net cash settlement in
the event the entity fails to make timely filings with the Securities and Exchange Commission (SEC)
and there are no cash settled top-off or make-whole provisions. The Company,
 
when assessing the
accounting
 
of
 
warrants
 
and
 
pre-funded
 
warrants, takes
 
into
 
consideration
 
ASC
 
480
 
to
 
determine
whether the warrants
 
and pre-funded warrants should be
 
classified as permanent
 
equity instead of
temporary equity
 
or
 
liability.
 
The Company
 
further analyses
 
the key
 
features of
 
warrants and
 
pre-
funded warrants and examines whether these fall under the definition of a derivative according to (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-20
ASC 815 applicable guidance or whether certain of these
 
features affect the classification. In cases
when derivative accounting is deemed inappropriate, no bifurcation
 
of these features is performed.
cc)
Guarantees:
Guarantees
 
issued
 
by
 
the
 
Company,
 
excluding
 
those
 
that
 
guarantee
 
its
 
own
performance,
 
are
 
recognized
 
at
 
fair
 
value
 
at
 
the
 
time
 
the
 
guarantees
 
are
 
issued,
 
or
 
upon
 
the
deconsolidation of a subsidiary. A liability
 
for the fair value
 
of the obligation undertaken
 
in issuing the
guarantee
 
is
 
recognized. If
 
it
 
becomes
 
probable
 
that
 
the
 
Company
 
will
 
have
 
to
 
perform
 
under
 
a
guarantee (Note
 
10(c)), the
 
Company will
 
recognize an
 
additional liability
 
if the
 
amount of
 
the loss
can be
 
reasonably estimated.
 
The recognition
 
of fair
 
value is
 
not required
 
for certain
 
guarantees such
as the parent's guarantee of
 
a subsidiary's debt to a
 
third party. For those guarantees excluded from
the above
 
guidance requiring the
 
fair value
 
recognition provision of
 
the liability,
 
financial statement
disclosures of such items are made.
dd)
Derivative instruments:
 
Derivative instruments
 
are recorded
 
in the
 
balance sheet
 
as either
 
an asset
or liability measured at its fair value
 
with changes in the instruments' fair value recognized as
 
either
a
 
component
 
in
 
other
 
comprehensive
 
income
 
if
 
specific
 
hedge
 
accounting
 
criteria
 
are
 
met
 
in
accordance
 
with
 
guidance
 
relating
 
to
 
“Derivatives
 
and
 
Hedging”
 
or
 
in
 
earnings
 
if
 
hedging
 
criteria
are not met.
New Accounting Pronouncements
In November
 
2024, the
 
FASB
 
issued
 
ASU 2024-03, “Income
 
Statement
 
-
 
Reporting
 
Comprehensive
Income
 
-
 
Expense
 
Disaggregation
 
Disclosures
 
(Subtopic 220-40):
 
Disaggregation
 
of
 
Income
 
Statement
Expenses”.
 
The
 
standard
 
is
 
intended
 
to
 
require
 
more
 
detailed
 
disclosure
 
about
 
specified
 
categories
 
of
expenses (including employee compensation, depreciation,
 
and amortization) included in certain expense
captions presented on
 
the face
 
of the
 
income statement. This
 
ASU is effective
 
for fiscal
 
years beginning
after December
 
15,
 
2026, and
 
for
 
interim
 
periods
 
within
 
fiscal
 
years
 
beginning
 
after December
 
15,
2027. Early
 
adoption
 
is
 
permitted.
 
The
 
amendments may be
 
applied
 
either
 
prospectively
 
to
 
financial
statements issued
 
for reporting
 
periods after
 
the effective
 
date of
 
this ASU
 
or retrospectively
 
to all
 
prior
periods presented
 
in the
 
financial statements.
 
The Company
 
is currently
 
assessing the
 
impact this
 
standard
will have on its consolidated financial statements.
 
3.
 
Transactions with related parties
a)
 
Altair Travel Agency S.A. (“Altair”):
 
The Company uses the
 
services of an affiliated
 
travel agent,
Altair, which is controlled by the Company’s CEO Mrs. Semiramis Paliou. Travel expenses for 2024, 2023
and
 
2022
 
amounted
 
to
 
$
2,569
,
 
$
2,525
 
and
 
$
2,644
,
 
respectively,
 
and
 
are
 
mainly
 
included
 
in
 
vessel
operating expenses and general and administrative expenses in the accompanying consolidated financial
statements. As of
 
December 31, 2024
 
and 2023, an
 
amount of $
190
 
and $
62
, respectively,
 
was payable
to Altair and is included in “Due to related parties” in the accompanying
 
consolidated balance sheets.
 
b)
 
Steamship Shipbroking Enterprises Inc. or
 
Steamship:
 
Steamship is a company controlled by
the Company’s
 
CEO Mrs.
 
Semiramis Paliou
 
and provides
 
brokerage services
 
to DSI
 
for a
 
fixed monthly
fee plus commission on
 
the sale of vessels, pursuant
 
to a Brokerage Services
 
Agreement.
 
For 2024, 2023
and 2022
 
brokerage fees
 
amounted to
 
$
4,093
, $
3,900
 
and $
3,309
, respectively, and
 
are included
 
in general
and
 
administrative expenses
 
in
 
the
 
accompanying consolidated
 
statements of
 
income.
 
For
 
2024, 2023,
and 2022,
 
commissions related to
 
Steamship amounted to
 
$
544
, $
906
 
and $
1,219
, respectively
 
and are
included in gain
 
on the sale
 
of vessels,
 
vessel cost and
 
equity method investments.
 
As of December
 
31,
2024 and 2023,
 
an amount of
 
$
0
 
and $
697
, respectively, was due to Steamship
 
included in “Due
 
to related
parties” in the accompanying consolidated balance sheets.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-21
c)
 
Bond
 
issuance:
 
Officers
 
and
 
directors
 
of
 
the
 
Company
 
and/or
 
entities
 
affiliated
 
with
 
them
purchased an
 
aggregate of
 
$
47,300
 
principal amount
 
of the
 
$
150,000
 
senior unsecured
 
bond issued
 
on
July 2, 2024 (Note 8).
 
4.
 
Equity Method Investments
a)
 
Diana Wilhelmsen Management Limited, or DWM:
 
DWM is a joint venture between
 
Diana Ship
Management Inc., a
 
wholly owned subsidiary
 
of DSI, and
 
Wilhelmsen Ship Management
 
Holding AS, an
unaffiliated third party,
 
each holding
50
% of DWM. As of December 31, 2024 and 2023, the investment in
DWM
 
amounted to
 
$
794
 
and
 
$
734
 
and
 
is
 
included
 
in
 
equity
 
method
 
investments
 
in
 
the
 
accompanying
consolidated balance sheets.
 
In 2024, 2023
 
and 2022, the
 
investment in DWM
 
resulted in a
 
gain of $
60
,
$
228
 
and $
894
, respectively, included in gain/(loss) from equity method investments in the accompanying
consolidated statements of income.
DWM performs the
 
technical and commercial
 
management of
six
 
vessels of
 
the Company’s fleet
 
for a fixed
monthly fee separately presented as management fees to a
 
related party and a percentage of their gross
revenues included in voyage expenses. Management fees to
 
DWM in 2024, 2023 and 2022 amounted to
$
1,332
,
 
$
1,313
 
and
 
$
511
,
 
respectively.
 
Voyage
 
expenses
 
(commissions)
 
incurred
 
by
 
DWM
 
under
 
the
management agreements during 2024,
 
2023 and 2022, amounted
 
to $
368
, $
390
 
and $
162
, respectively.
As of December 31, 2024 and 2023, there was an amount of $
3
 
and $
25
 
due from DWM, included in due
from related parties in the accompanying consolidated balance
 
sheets.
 
b)
 
Bergen Ultra
 
LP, or Bergen:
 
Bergen is
 
a limited
 
partnership which
 
was established
 
for the
 
purpose
of acquiring,
 
owning, chartering
 
and/or operating
 
a vessel.
 
Bergen was
 
a wholly
 
owned subsidiary
 
of Diana,
which on February
 
14, 2023, signed
 
a Memorandum of
 
Agreement to acquire
 
from an unrelated
 
third-party
an Ultramax dry bulk vessel,
 
delivered on April 10, 2023. On March
 
30, 2023, Bergen entered into a loan
agreement with Nordea
 
for a $
15,400
 
loan to finance
 
part of the
 
purchase price of
 
the vessel. On
 
the same
date, the Company entered into a
 
corporate guarantee with Nordea to secure
 
Bergen’s obligations under
the loan. On April 28, 2023,
 
the Company entered into (i)
 
an investment agreement with an
 
unrelated third
party to
 
acquire
75
% of
 
the limited
 
partnership interests;
 
(ii) an
 
amended limited
 
partnership agreement
under
 
which
 
the
 
Company
 
acts
 
as
 
the
 
General
 
Partner
 
of
 
the
 
partnership
 
through
 
its
 
wholly
 
owned
subsidiary Diana General
 
Partner Inc.; (iii)
 
an administrative service
 
agreement under which
 
DSS provides
administrative
 
services
 
to
 
Bergen;
 
(iv)
 
a
 
commission
 
agreement
 
under
 
which
 
the
 
Company
 
is
 
paid
 
a
commission
 
on
 
the
 
outstanding
 
balance
 
of
 
the
 
loan,
 
as
 
compensation
 
for
 
the
 
guarantee
 
it
 
provided
 
to
Nordea and (v)
 
a convertible loan with
 
Bergen under which Bergen
 
would have to repay
 
all expenditures
made by the
 
Company for the acquisition
 
of the vessel.
 
Pursuant to the
 
terms of the
 
convertible loan, on
April
 
28,
 
2023,
 
the
 
Company
 
received
 
from
 
Bergen
 
$
25,189
 
in
 
cash
 
while
 
an
 
amount
 
of
 
$
3,675
 
was
converted into partnership interests in Bergen, representing
25
% of the total partnership interests.
The Company
 
evaluated its variable
 
interests in Bergen
 
under ASC
 
810 and concluded
 
that Bergen
 
is a
VIE and that the Company does
 
not individually have the power
 
to direct the activities of the
 
VIE that most
significantly affect the partnership’s performance. From April 28, 2023 the Company no
 
longer retains the
power to
 
control the board
 
of directors. On
 
the same date,
 
Bergen was considered
 
an affiliate
 
entity and
not a controlled subsidiary of the Company. The Company accounted for the deconsolidation
 
of Bergen in
accordance
 
with
 
ASC
 
610
 
and
 
the
 
retained
 
noncontrolling
 
interest
 
was
 
accounted
 
for
 
under
 
the
 
equity
method due to the Company’s significant influence over Bergen.
On
 
the
 
date
 
of
 
deconsolidation,
 
the
 
fair
 
value
 
of
 
the
 
Company’s
 
interest
 
amounted
 
to
 
$
4,519
 
and
 
was
calculated through Level 2 inputs of the fair value hierarchy in accordance with ASC 610, by taking into (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-22
 
 
 
 
 
 
 
 
consideration the
 
fair value
 
of the
 
distinct assets
 
and liabilities
 
of Bergen
 
on the
 
date of
 
the deconsolidation.
This resulted in a gain on
 
deconsolidation amounting to $
844
, separately presented in the accompanying
consolidated statement
 
of income,
 
being the
 
difference between
 
the fair
 
value of
 
the retained
 
noncontrolling
interest plus
 
the carrying
 
value of
 
the liabilities assumed
 
by Bergen
 
and the
 
carrying value
 
of the
 
assets
derecognized.
As
 
of
 
December
 
31,
 
2024
 
and
 
2023,
 
the
 
investment
 
in
 
Bergen
 
amounted
 
to
 
$
5,012
 
and
 
$
4,700
,
respectively,
 
and
 
is
 
included
 
in
 
equity
 
method
 
investments
 
in
 
the
 
accompanying
 
consolidated
 
balance
sheets. In 2024 and 2023, the investment in Bergen
 
resulted in a gain of $
312
 
and $
181
, respectively and
is included in gain/(loss) from equity
 
method investments in the accompanying
 
consolidated statements
 
of
income. Also, in 2024
 
and 2023, income from
 
management fees from Bergen amounted
 
to $
15
 
and $
10
,
respectively,
 
included
 
in
 
time
 
charter
 
revenues
 
and
 
income
 
from
 
the
 
commission
 
paid
 
on
 
the
 
loan
guarantee
 
amounted
 
to
 
$
40
 
and
 
$
28
,
 
included
 
in
 
interest
 
and
 
other
 
income
 
in
 
the
 
accompanying
consolidated statements
 
of income. As
 
of December 31,
 
2024 and 2023,
 
there was an
 
amount of $
246
 
and
$
443
, respectively, due from Bergen included in due from related parties, current and non-current.
c)
 
Windward Offshore
 
GmbH,
 
or Windward:
 
On November
 
7, 2023,
 
the Company
 
through its
 
wholly
owned subsidiary Diana
 
Energize Inc., or Diana
 
Energize, entered into a
 
joint venture agreement, with
two
unrelated companies
 
to form Windward
 
Offshore GmbH &
 
Co. KG or
 
Windward, based
 
in Germany, for the
purpose of
 
establishing and
 
operating an
 
offshore wind
 
vessel company
 
with the
 
aim of
 
becoming a
 
leading
provider
 
of
 
service
 
vessels
 
to
 
the
 
growing
 
offshore
 
wind
 
industry
 
and
 
acquire
 
certain
 
vessels.
 
Diana
Energize agreed
 
to contribute
25,000,000
 
Euro, being
45.45
% of
 
the limited
 
partnership’s capital
 
for the
construction of two CSOVs, and
 
in January 2024 agreed to
 
increase its contribution to
50,000,000
 
Euro or
45.87
% of the limited partnership’s capital pursuant to
 
a novated agreement in order for the
 
partnership to
place orders for two
 
additional CSOVs. As of
 
December 31, 2024 and 2023,
 
the investment in Windward
amounted to
 
$
36,631
 
and $
10,063
,
 
respectively,
 
consisting
 
of
 
advances to
 
fund
 
the
 
construction of
 
the
vessels and working capital. In 2024 and 2023,
 
the investment in Windward resulted in a
 
loss of $
518
 
and
$
671
,
 
respectively,
 
included
 
in
 
gain/(loss)
 
from
 
equity
 
method
 
investments
 
in
 
the
 
accompanying
consolidated statements of income.
d)
 
Diana Mariners
 
Inc., or
 
Diana Mariners:
 
On September
 
12, 2023,
 
the Company
 
through its
 
wholly
owned subsidiary Cebu Shipping
 
Company Inc., or Cebu, acquired
24
% of Cohen Global Maritime Inc., or
Cohen,
 
a
 
company
 
organized
 
in
 
the
 
Republic
 
of
 
the
 
Philippines
 
for
 
the
 
purpose
 
of
 
providing
 
manning
agency services.
 
In August 2024, Cohen was renamed Diana Mariners and will act as the manning agent
of
 
the
 
Company’s
 
vessels.
 
As
 
of
 
December
 
31,
 
2024
 
and
 
2023,
 
the
 
Company’s
 
investment
 
in
 
Diana
Mariners amounted to
 
$
389
 
and $
272
, respectively and
 
there was an
 
amount of $
100
 
and $
0
, respectively,
due from Diana Mariners included
 
in due from related
 
parties. As of December 31,
 
2024, Diana Mariners
did not have any operations.
 
 
5.
 
Investments in a related party and other
a)
 
OceanPal Inc., or
 
OceanPal:
 
As of December
 
31, 2024 and
 
2023, the Company
 
was the holder
of
500,000
 
Series B Preferred Shares and
207
 
of Series C Convertible Preferred
 
Shares of OceanPal and
3,649,474
 
common shares,
 
being
49
%
 
of OceanPal’s
 
common
 
stock.
 
As
 
the
 
Company applied
 
the
 
fair
value option to
 
its investment in
 
the common shares
 
of OceanPal that
 
would otherwise be
 
accounted for
under the equity method of accounting,
 
it also applied fair value
 
to all of its financial
 
interests in OceanPal.
Series
 
B
 
preferred
 
shares
 
entitle
 
the
 
holder
 
to
2,000
 
votes
 
on
 
all
 
matters
 
submitted
 
to
 
vote
 
of
 
the
stockholders of the Company, provided however, that the total number of votes shall not exceed (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
34
% of
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-23
 
the total
 
number of
 
votes, provided
 
further, that the
 
total number
 
of votes
 
entitled to
 
vote, including
 
common
stock or any other voting security,
 
would not exceed
49
% of the total number of votes. Series B Preferred
Shares have no dividend or distribution rights.
Series C preferred shares do not have voting rights unless related to amendments of the Articles of
Incorporation that adversely alter the preference, powers or rights of the Series C Preferred Shares or to
issue Parity Stock or create or issue Senior Stock.
 
Series C preferred
 
shares have a
 
liquidation preference
equal
 
to
 
the
 
stated
 
value
 
of
 
$
1,000
 
and
 
are
 
convertible
 
into
 
common
 
stock
 
at
 
the
 
Company’s
 
option
commencing upon the first anniversary of the issue date, at a conversion price equal to the lesser
 
of $
6.5
and the
 
10-trading day
 
trailing VWAP
 
of OceanPal’s
 
common shares,
 
subject to
 
adjustments. Dividends
on
 
each
 
share
 
of
 
Series
 
C
 
Preferred
 
Shares
 
are
 
cumulative
 
and
 
accrue
 
at
 
the
 
rate
 
of
8
%
 
per
 
annum.
Dividends are payable in cash or, at OceanPal’s election, in kind.
On October 17,
 
2023, the Company
 
converted
9,793
 
of the
10,000
 
Series C Preferred
 
shares of OceanPal
to
3,649,474
 
common shares, having a
 
fair value of
 
$
9,160
 
determined through Level
 
1 inputs of
 
the fair
value hierarchy, based on
 
the closing
 
price of
 
OceanPal’s common shares
 
on the
 
date of
 
conversion.
 
Upon
conversion the
 
Company realized
 
a gain
 
of $
1,742
,
 
being the
 
difference between
 
the
 
book value
 
of the
9,793
 
Series
 
C
 
Preferred
 
shares
 
and
 
the
 
fair
 
value
 
of
 
the
 
common
 
shares
 
acquired
 
and
 
is
 
included
 
in
gain/(loss)
 
on
 
related
 
party
 
investments,
 
separately
 
presented
 
in
 
the
 
accompanying
 
consolidated
statements
 
of
 
income.
 
Following
 
the
 
conversion,
 
the
 
Company
 
is
 
the
 
beneficial
 
owner
 
of
49
%
 
of
 
the
outstanding common
 
stock of
 
OceanPal and since
 
the shares are
 
listed at
 
NASDAQ, the Company
 
elected
to account for its common stock ownership in OceanPal at fair value.
 
As
 
of
 
December
 
31,
 
2024
 
and
 
2023,
 
the
 
Company’s
 
investment
 
in
 
the
 
common
 
stock
 
of
 
OceanPal
amounted to $
4,235
 
and $
8,138
, respectively,
 
being the fair value of OceanPal’s
 
common shares on that
date, determined through Level 1
 
inputs of the fair
 
value hierarchy.
 
In 2024 and 2023,
 
unrealized loss on
investment
 
amounted
 
to
 
$
3,905
 
and
 
$
1,022
,
 
respectively,
 
resulting
 
from
 
such
 
valuation,
 
included
 
in
gain/(loss)
 
on
 
related
 
party
 
investments,
 
separately
 
presented
 
in
 
the
 
accompanying
 
consolidated
statements of income.
As of
 
December 31,
 
2024 and
 
2023, the
 
Company’s investment
 
in the
 
Series B
 
preferred shares
 
and Series
C preferred shares,
 
amounted to $
180
 
and $
180
, respectively, including $
3
 
and $
3
, respectively, dividends
receivable
 
on
 
the
 
Series
 
C
 
preferred
 
shares,
 
and
 
are
 
included
 
in
 
investments
 
in
 
a
 
related
 
party
 
in
 
the
accompanying consolidated balance sheets.
In 2023
 
and 2022, the
 
Company distributed
13,157
 
and
25,000
 
Series D Preferred
 
Shares, respectively,
as non-cash dividends
 
to its shareholders (Note 11).
 
The Series D Preferred Shares were offered as non-
cash consideration
 
for the
 
sale of
 
the vessels
 
Melia (in
 
2023) (Note
 
6) and
 
Baltimore (in
 
2022) to
 
OceanPal.
The Company
 
accounted for
 
the transactions
 
as a
 
nonreciprocal transfer
 
with its
 
owners in
 
accordance
with ASC
 
845 and measured
 
the fair
 
value of the
 
preferred shares on
 
the date
 
of declaration at
 
$
10,761
and $
18,189
, respectively.
 
The fair
 
value of the
 
Series D
 
Preferred Shares was
 
determined by using
 
the
income approach,
 
taking into
 
account the
 
present value
 
of the
 
future cash
 
flows, the
 
holder of
 
shares would
expect to receive from holding
 
the equity instrument. In 2023 and 2022,
 
the transactions
 
resulted in a gain
of $
761
 
and $
589
, respectively,
 
being the difference
 
between the fair
 
value and the
 
carrying value of the
investments, separately
 
presented as gain/(loss)
 
on related party
 
investments in
 
the related accompanying
consolidated statements
 
of income.
In
 
2024,
 
2023
 
and
 
2022,
 
dividend
 
income
 
from
 
the
 
Series
 
C
 
and
 
Series
 
D
 
OceanPal
 
preferred
 
shares
amounted to $
17
, $
801
 
and $
917
, respectively, included in interest and other income in the accompanying (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
consolidated statements of income.
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-24
b)
 
Investment
 
in
 
equity
 
securities:
 
In
 
2023,
 
the
 
Company
 
acquired
 
equity
 
securities
 
of
 
an
 
entity
listed in the NYSE which as of December
 
31, 2023 had a fair value of $
20,729
. The equity securities were
initially recorded at
 
cost amounting
 
to $
17,916
 
and measured at
 
year-end at fair
 
value, determined
 
through
Level 1
 
of the
 
fair value
 
hierarchy. The securities
 
were considered
 
marketable securities
 
that were
 
available
to
 
be
 
converted
 
into
 
cash
 
to
 
fund
 
current
 
operations
 
and
 
were
 
classified
 
in
 
current
 
assets
 
in
 
the
accompanying consolidated
 
balance sheet.
 
The Company
 
sold all
 
securities during
 
the first
 
quarter of
 
2024
and in
 
2024 and
 
2023, recorded
 
a realized
 
loss of
 
$
400
 
and an
 
unrealized gain
 
of $
2,813
, respectively,
presented in gain/(loss) on equity securities in the accompanying
 
consolidated statements of income.
6.
 
Advances for vessels under construction and Vessels, net
It is in
 
the Company’s normal
 
course of business
 
from time to
 
time to acquire
 
and sell vessels.
 
Accordingly,
in 2024 and 2023, the Company entered into the below transactions.
Vessels under construction
On
 
February
 
8,
 
2024,
 
the
 
Company
 
signed
 
an
 
agreement
 
with
 
an
 
unaffiliated
 
third
 
party,
 
for
 
the
construction of
two
 
81,200 dwt methanol dual
 
fuel new-building Kamsarmax dry
 
bulk vessels, to be
 
built at
Tsuneishi
 
Group
 
(Zhoushan) Shipbuilding
 
Inc.,
 
China.
 
The
 
vessels
 
are
 
expected
 
to
 
be
 
delivered to
 
the
Company by
 
the second
 
half of
 
2027 and
 
the first
 
half of
 
2028. As
 
of December
 
31, 2024,
 
advances for
vessels under construction amounted to $
19,558
, including $
1,146
 
of capitalized interest.
Vessel Acquisitions
On January 30,
 
2023, the Company
 
took delivery of
 
the Ultramax dry
 
bulk vessel
Aquarius
 
paid partly in
cash and
2,033,613
 
newly issued common shares, having a fair value of $
7,809
. The value of the shares
issued in
 
2023, was
 
determined through
 
Level 1
 
inputs of
 
the fair
 
value hierarchy
 
based on
 
the closing
price
 
of
 
the
 
Company’s common
 
stock
 
on
 
the
 
date
 
of
 
issuance
 
which was
 
the
 
date
 
of
 
delivery
 
of
 
each
vessel.
 
On
 
February 14,
 
2023, the
 
Company,
 
through
 
a wholly
 
owned
 
subsidiary,
 
acquired from
 
an unaffiliated
third-party
 
the
 
Ultramax
 
dry
 
bulk
 
vessel
DSI
 
Drammen.
On
 
April
 
28,
 
2023,
 
this
 
subsidiary
 
was
deconsolidated from the Company’s
 
financial statements due to
 
the Company’s loss of
 
control described
in
 
note
 
4(b)
 
and
 
the
 
net
 
book
 
value
 
of
 
the
 
vessel
 
was
 
included
 
in
 
both
 
vessel
 
acquisitions
 
and
 
vessel
disposals in the related year.
 
Vessel Disposals
In
 
2023,
 
the
 
Company sold
 
to
 
unrelated third
 
parties
 
the
 
vessels
Aliki
 
and
Boston,
and to
 
OceanPal, a
related party company,
 
the vessel
Melia
 
(Note 5) and recognized an aggregate gain on sale amounting to
$
5,323
.
 
In 2024, the Company sold to unrelated third parties the vessels
Artemis
 
and
Houston
 
and recognized an
aggregate gain of $
5,799
.
The amount reflected in Vessels, net in the accompanying consolidated balance sheets is analyzed as (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
follows:
 
 
 
 
 
 
 
 
 
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-25
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vessel Cost
Accumulated
Depreciation
Net Book
Value
Balance, December 31, 2022
$
1,141,128
$
(191,512)
$
949,616
- Additions for vessel acquisitions and improvements
61,682
-
61,682
- Vessel disposals
(60,655)
21,688
(38,967)
 
- Vessel disposal due to deconsolidation
 
of subsidiary
(27,908)
-
(27,908)
- Depreciation for the year
-
(44,231)
(44,231)
Balance, December 31, 2023
$
1,114,247
$
(214,055)
$
900,192
- Additions for vessel improvements
958
-
958
- Vessel disposals
(46,001)
16,849
(29,152)
- Depreciation for the year
-
(38,586)
(38,586)
Balance, December 31, 2024
$
1,069,204
$
(235,792)
$
833,412
7.
 
Property and Equipment, net
The Company
 
owns the
 
land and
 
building of
 
its principal
 
corporate offices
 
in Athens,
 
Greece and
 
three
plots of which two were acquired in 2024 from unaffiliated third parties and one in 2023 from Alpha Sigma
Shipping Corp, a
 
related party company,
 
all acquired for
 
corporate purposes.
 
Other assets consist
 
of office
furniture and equipment,
 
computer software and
 
hardware and vehicles.
 
The amount reflected
 
in “Property
and equipment, net” is analyzed as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and
Equipment
Accumulated
Depreciation
Net Book
Value
Balance, December 31, 2022
$
28,936
$
(5,973)
$
22,963
- Additions in property and equipment
2,006
-
2,006
- Depreciation for the year
-
(687)
(687)
Balance, December 31, 2023
$
30,942
$
(6,660)
$
24,282
- Additions in property and equipment
3,718
-
3,718
- Depreciation for the year
-
(825)
(825)
Balance, December 31, 2024
$
34,660
$
(7,485)
$
27,175
8.
 
Long-term debt
The
 
amount of
 
long-term debt
 
shown in
 
the
 
accompanying consolidated
 
balance sheets
 
is
 
analyzed as
follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2024
2023
Senior unsecured bond
175,000
119,100
Secured long-term debt
347,590
397,857
Total long-term
 
debt
$
522,590
$
516,957
Less: Deferred financing costs
 
(7,973)
(6,314)
Long-term debt, net of deferred financing costs
$
514,617
$
510,643
Less: Current long-term debt, net of deferred financing
 
costs,
current
(45,230)
(49,512)
Long-term debt, excluding current maturities (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
$
469,387
$
461,131
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-26
 
8.375% Senior Unsecured Bond
:
 
On
June 22, 2021
, the
 
Company issued a
 
$
125,000
 
senior unsecured bond
 
maturing in
 
June 2026. The
bond ranks ahead of subordinated capital and ranks the
 
same with all other senior unsecured obligations
of
 
the
 
Company
 
other
 
than
 
obligations
 
which
 
are
 
mandatorily
 
preferred
 
by
 
law.
 
Entities
 
affiliated
 
with
executive officers
 
and directors of
 
the Company purchased
 
an aggregate of
 
$
21,000
 
principal amount of
the bond. On June 29, 2023, the Company repurchased $
5,900
 
nominal value of the bond for $
5,851
 
and
recognized an
 
amount of
 
$
159
 
as loss
 
on debt
 
extinguishment, representing the
 
difference between
 
the
reacquisition price
 
of $
5,851
 
and the
 
net carrying
 
amount of
 
the debt
 
being extinguished
 
of $
5,900
 
less
deferred financing
 
fees of
 
$
208
. In
 
June 2024,
 
the bond
 
became callable,
 
and on
 
July 2,
 
2024,it was
 
prepaid
at a price equal to
103.35
% of nominal value, with the proceeds from the new bond discussed below. The
Company
 
applied
 
the
 
debt
 
modification
 
guidance
 
for
 
the
 
part
 
of
 
the
 
transaction
 
refinanced
 
by
 
existing
investors
 
amounting
 
to
 
$
57,850
 
and
 
the
 
debt
 
extinguishment for
 
the
 
remaining
 
$
61,250
.
 
An
 
amount
 
of
$
5,336
 
consisting
 
of
 
the
 
costs
 
paid
 
to
 
investors
 
who
 
participated
 
in
 
the
 
refinancing
 
and
 
unamortized
deferred fees were deferred
 
over the term of
 
the new bond and
 
an amount of $
3,475
 
was recorded as loss
on
 
debt
 
extinguishment. The
 
bond included
 
financial and
 
other
 
covenants and
 
was trading
 
on the
 
Oslo
Stock Exchange under the ticker symbol “DIASH02”.
 
8.75% Senior Unsecured Bond
:
 
On July 2, 2024, the Company
 
issued $
150,000
 
out of the $
175,000
 
maximum amount of a new
 
issue of a
senior unsecured
 
bond maturing
 
in July
 
2029 having
 
a US Dollar
 
fixed-rate coupon
 
of
8.75
% payable
 
semi-
annually in arrears in January and
 
July of each year.
 
The bond is callable in whole or
 
in part in July 2027
at a
 
price equal
 
to
103.50
% of
 
nominal value;
 
in January
 
2028 at
 
a price
 
equal to
102.625
% of
 
nominal
value; in
 
July 2028
 
at a
 
price equal
 
to
101.75
% and
 
after January
 
2029 at
 
a price
 
equal to
100.00
%
 
of
nominal value.
 
On November
 
8, 2024,
 
the Company
 
issued the
 
remaining $
25,000
 
nominal value
 
of the
bond issue, at
102.00
% of
 
par value. The
 
bond ranks ahead
 
of subordinated capital and
 
ranks the same
with all
 
other senior
 
unsecured obligations of
 
the Company
 
other than
 
obligations which are
 
mandatorily
preferred
 
by
 
law.
 
The
 
bond
 
includes
 
financial
 
and
 
other
 
covenants
 
and
 
is
 
trading
 
on
 
the
 
Oslo
 
Stock
Exchange under the ticker symbol “DIASH03”.
Secured Term Loans:
Under the
 
secured term
 
loans outstanding
 
as of
 
December 31,
 
2024,
27
 
vessels of
 
the Company’s
 
fleet
are
 
mortgaged
 
with
 
first
 
preferred
 
or
 
priority
 
ship
 
mortgages,
 
having
 
an
 
aggregate
 
carrying
 
value
 
of
$
585,780
.
 
Additional
 
securities
 
required
 
by
 
the
 
banks
 
include
 
first
 
priority
 
assignment
 
of
 
all
 
earnings,
insurances, first assignment of time
 
charter contracts that exceed a
 
certain period, pledge over the
 
shares
of
 
the
 
borrowers,
 
manager’s
 
undertaking
 
and
 
subordination
 
and
 
requisition
 
compensation
 
and
 
either
 
a
corporate
 
guarantee
 
by
 
DSI
 
(the
 
“Guarantor”)
 
or
 
a
 
guarantee
 
by
 
the
 
ship
 
owning
 
companies
 
(where
applicable), financial covenants, as well as operating account assignments. The lenders may also require
additional
 
security
 
in
 
the
 
future
 
in
 
the
 
event
 
the
 
borrowers
 
breach
 
certain
 
covenants
 
under
 
the
 
loan
agreements.
 
The
 
secured
 
term
 
loans
 
generally
 
include
 
restrictions
 
as
 
to
 
changes
 
in
 
management
 
and
ownership of the vessels, additional indebtedness, as well as minimum requirements regarding hull cover
ratio and minimum liquidity
 
per vessel owned by the
 
borrowers, or the Guarantor,
 
maintained in the bank
accounts of the borrowers, or the Guarantor.
 
As of December 31,
 
2024 and 2023 minimum
 
cash deposits required to
 
be maintained at all
 
times under
the Company’s
 
loan facilities,
 
amounted to
 
$
19,000
 
and $
20,000
, respectively
 
and are
 
included in
 
restricted
cash, non-current in the accompanying consolidated balance sheets. Furthermore, the secured term loans (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
contain
 
cross
 
default
 
provisions
 
and
 
additionally
 
the
 
Company
 
is
 
not
 
permitted
 
to
 
pay
 
any
 
dividends
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-27
 
following the occurrence
 
of an event
 
of default. All
 
of the Company’s
 
secured term loans
 
bear interest at
SOFR plus a margin. In 2024 and 2023, the weighted
 
average interest rate of the secured term
 
loans was
7.3
% and
7.3
%, respectively.
As of December
 
31, 2024 and
 
2023, the Company
 
had the following
 
agreements with banks,
 
either as a
borrower or as a guarantor, to guarantee the loans of its subsidiaries:
Nordea Bank
 
AB, London
 
Branch (“Nordea”):
 
On September
 
30, 2022,
 
the
 
Company entered
 
into a
$
200
 
million loan
 
agreement to
 
finance the
 
acquisition of
 
9 Ultramax
 
vessels. The
 
Company drew
 
down
$
197,236
 
under the loan,
 
in tranches for
 
each vessel on
 
their delivery to
 
the Company and
 
in December
2022 prepaid
 
$
21,937
 
due to
 
a vessel
 
sale and
 
leaseback transaction. The
 
loan was
 
repayable in equal
quarterly instalments of an aggregate amount of $
3,719
, and a balloon of $
100,912
 
payable together with
the last instalment on
October 11, 2027
.
 
On June 27, 2023, the Company drew down $
22,500
 
under a secured loan agreement and prepaid in full
the
 
outstanding
 
balance
 
of
 
an
 
existing
 
loan
 
amounting
 
to
 
$
20,934
 
and
 
recorded
 
a
 
loss
 
on
 
debt
extinguishment amounting to $
220
. The loan, maturing
 
on
June 27, 2028
 
was repayable in equal
 
quarterly
instalments of $
1,125
.
On
 
July
 
25,
 
2024,
 
the
 
Company
 
entered
 
into
 
a
 
$
167,263
 
loan
 
agreement,
 
drawn
 
on
 
July
 
25,
 
2024,
 
to
refinance
 
the
 
outstanding
 
balance
 
of
 
the
 
two
 
loans
 
mentioned
 
above.
 
The
 
loan
 
is
 
repayable
 
in
 
equal
quarterly instalments of $
4,454
 
and a balloon instalment of $
64,827
 
payable on
July 25, 2030
.
 
Export-Import Bank of China:
 
On January 4,
 
2017, the Company drew
 
down $
57,240
 
under a secured
loan
 
agreement,
 
which
 
is
 
repayable
 
in
 
equal
 
quarterly
 
instalments
 
of
 
$
954
,
 
each,
 
until
 
its
 
maturity
 
on
January 4, 2032
.
DNB Bank
 
ASA or DNB:
 
On June
 
26, 2023, the
 
Company entered into
 
a $
100,000
 
sustainability linked
loan agreement which was drawn on June 27, 2023, to refinance the outstanding balance of another loan
and
 
for
 
working
 
capital
 
purposes.
 
The
 
loan
 
is
 
repayable
 
in
 
equal
 
quarterly
 
instalments
 
of
 
$
3,846
 
until
December 27, 2029
. The loan is subject to a margin reset
 
and unless the parties agree on a new margin,
the loan will
 
be mandatorily repayable
 
on June 27,
 
2027. On
 
July 6, 2023,
 
the Company entered
 
into an
interest rate swap with DNB for a notional amount for the
30
% of the loan amount. Under the interest rate
swap, the Company pays
 
a fixed rate and
 
receives floating under term
 
SOFR.
 
The swap has a
 
termination
date on December 27,
 
2029, and a mandatory
 
break on June 27,
 
2027, according to which the
 
swap will
be terminated if the loan is prepaid. As of December 31,
 
2024 and 2023, the fair value of the interest rate
swap amounted
 
to
 
$
165
 
and $
439
, respectively,
 
and is
 
separately presented
 
in current
 
assets/liabilities
and non-current liabilities. In 2024 and 2023, the Company recognized a gain of $
274
 
and a loss of $
439
,
respectively, from
 
the swap valuation separately presented as gain/(loss) on derivative instruments in the
accompanying consolidated statements
 
of income.
Danish Ship
 
Finance A/S
 
or Danish:
 
On April
 
12,
 
2023, the
 
Company signed
 
a term
 
loan facility
 
with
Danish, for
 
$
100,000
 
to refinance
 
the outstanding
 
balance of
 
loans with
 
other banks
 
and for
 
working
 
capital.
On
 
April
 
18
 
and
 
19,
 
2023,
 
the
 
Company
 
drew
 
down
 
$
100,000
 
which
 
was
 
repayable
 
in
 
equal
 
quarterly
instalments of $
3,301
 
each and a balloon of $
33,972
 
payable together with the last instalment on
 
April 19,
2028. On
 
October 18,
 
2024, the
 
Company refinanced
 
the outstanding
 
balance of
 
this loan
 
with a
 
loan which
is repayable in equal quarterly instalments of $
2,533
 
each and a balloon of $
14,323
 
payable together with
the last instalment on
April 18, 2031
.
As of December 31, 2024 and 2023, the Company was in compliance
 
with all of its loan covenants.
 
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-28
As of December 31, 2024, the maturities of
 
the Company’s bond and debt facilities throughout their term,
are shown in the table below and do not include related debt issuance
 
costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period
Principal Repayment
Year 1
$
47,150
Year 2
47,150
Year 3
47,149
Year 4
47,149
Year 5
222,149
Year 6 and
 
thereafter
111,843
Total
$
522,590
9.
 
Finance Liabilities
On March 29, 2022, the Company
 
sold
Florida
 
to an unrelated third party
 
and leased back the vessel
 
from
the buyer for
 
a period of
ten years
, under which
 
the Company pays
 
a fixed monthly
 
hire. The Company
 
has
the option to
 
repurchase the vessel
 
at specific prices, after
 
the end of
 
the third year
 
of the charter period
and for
 
each year
 
thereafter,
 
and the
 
obligation to
 
purchase the
 
vessel on
 
the expiration
 
of the
 
lease on
the tenth year.
 
On August 17, 2022, the
 
Company entered into
two
 
sale and leaseback agreements with two
 
unaffiliated
third parties for
New Orleans
 
and
Santa Barbara
. The vessels
 
were delivered
 
to their buyers
 
on September
8, 2022 and
 
September 12,
 
2022, respectively
 
and the
 
Company chartered-in
 
both vessels
 
under bareboat
charter parties for a period of
eight years
, each, under which the Company pays
 
fixed monthly hire. Under
the bareboat charter, the
 
Company has the
 
option to repurchase
 
the vessel at
 
specific prices, after
 
the end
of the
 
third year
 
of the
 
charter period
 
and for
 
each year
 
thereafter, and the
 
obligation to
 
purchase the
 
vessel
on the expiration of the lease on the eighth year.
 
On December 6, 2022, the Company
 
sold
DSI Andromeda
 
to an unrelated third party and leased
 
back the
vessel under
 
a bareboat
 
agreement, for
 
a period
 
of
ten years
, under
 
which the
 
Company pays
 
fixed monthly
hire. The Company
 
has the
 
option to
 
repurchase the vessel
 
at specific prices,
 
after the end
 
of the
 
third year
of
 
the
 
charter
 
period
 
and
 
for
 
each
 
year
 
thereafter,
 
and
 
the
 
obligation
 
to
 
purchase
 
the
 
vessel
 
on
 
the
expiration of the lease on the tenth year.
 
The Company determined
 
that, under ACS
 
842-40 Sale and
 
Leaseback Transactions, the
 
transactions are
failed
 
sales
 
and
 
consequently the
 
assets
 
were not
 
derecognized from
 
the
 
financial
 
statements
 
and
 
the
proceeds from the sale of the vessels were accounted for as financial liabilities. As of December
 
31, 2024
and
 
2023,
 
finance
 
liability
 
amounted
 
to
 
$
9,608
 
and
 
$
9,221
,
 
respectively,
 
included
 
in
 
finance
 
liabilities,
current and $
113,300
 
and $
122,908
 
respectively included in finance liabilities, net of
 
current portion. As of
December 31, 2024, the
 
weighted average remaining lease
 
term of the above lease
 
agreements was
6.70
years, the
 
average interest rate
 
was
4.83
% and
 
the sublease
 
income during the
 
years ended
 
December
31, 2024 was $
28,814
, included in time charter revenues.
As of
 
December 31,
 
2024, and
 
throughout
 
the term
 
of the
 
leases,
 
the Company
 
has annual
 
finance liabilities
as shown in the table below:
 
 
 
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-29
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period
Principal Repayment
Year 1
$
9,808
Year 2
10,224
Year 3
10,661
Year 4
11,151
Year 5
11,604
Year 6 and
 
thereafter
70,452
Total
$
123,900
10.
 
Commitments and Contingencies
a)
 
Various
 
claims, suits,
 
and complaints,
 
including those
 
involving government
 
regulations and
 
product
liability, arise in
 
the ordinary
 
course of
 
the shipping
 
business. In
 
addition, losses
 
may arise
 
from disputes
with
 
charterers,
 
agents,
 
insurance
 
and
 
other
 
claims
 
with
 
suppliers
 
relating
 
to
 
the
 
operations
 
of
 
the
Company’s
 
vessels.
 
The
 
Company
 
accrues
 
for
 
the
 
cost
 
of
 
environmental
 
and
 
other
 
liabilities
 
when
management becomes
 
aware that
 
a liability
 
is probable
 
and is
 
able to
 
reasonably estimate
 
the probable
exposure. The Company’s vessels are
 
covered for pollution in the
 
amount of $
1
 
billion per vessel per
incident, by the
 
P&I Association in
 
which the Company’s
 
vessels are entered.
 
In 2022, the
 
Company
recorded a
 
gain of
 
$
1,789
 
from insurance
 
recoveries received
 
from its
 
insurers for
 
claims covered
 
under
its insurance
 
policies, which
 
is separately
 
presented as
 
insurance recoveries
 
in the
 
accompanying 2022
consolidated statement of income.
b)
 
Pursuant to the sale and lease
 
back agreements signed between the Company
 
and its counterparties,
the
 
Company
 
has
 
purchase
 
obligations
 
amounting
 
to
 
$
50,400
,
 
at
 
the
 
end
 
of
 
the
 
lease
 
agreements
described in Note 9.
 
c)
 
On March
 
30, 2023,
 
the Company
 
entered into
 
a
 
corporate guarantee
 
with Nordea
 
under which
 
the
Company guarantees
 
the performance
 
by Bergen
 
of all
 
of its
 
obligations
 
under the
 
loan until
 
the maturity
of the loan
 
on March 30, 2028
 
(Note 4 (b)). The
 
Company considers the likelihood of
 
having to make
any payments under the guarantee to be remote, as the loan is also secured by an account pledge by
Bergen,
 
first
 
preferred
 
mortgage
 
on
 
the
 
vessel,
 
a
 
first
 
priority
 
general
 
assignment
 
of
 
the
 
earnings,
insurances
 
and
 
requisition
 
compensation
 
of
 
the
 
vessel,
 
a
 
charter
 
party
 
assignment,
 
a
 
partnership
interests
 
security
 
deed,
 
and
 
a
 
manager’s
 
undertaking.
 
Accordingly,
 
as
 
of
 
December
 
31,
 
2024,
 
the
Company
 
did
 
not
 
record
 
a
 
provision for
 
losses
 
under
 
the
 
guarantee
 
of
 
Bergen’s
 
loan
 
amounting to
$
13,533
 
on that date.
d)
 
As of December 31,
 
2024, the Company had
 
total obligations under shipbuilding
 
contracts (Note 6), as
follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period
Amount
Year 1
$
-
Year 2
9,200
Year 3
36,800
Year 4
27,600
Total
$
73,600
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-30
e)
As
 
of
 
December
 
31,
 
2024,
 
the
 
Company’s
 
vessels,
 
owned
 
and
 
chartered-in,
 
were
 
fixed
 
under
 
time
charter
 
agreements,
 
considered
 
operating
 
leases.
 
The
 
minimum
 
contractual
 
gross
 
charter
 
revenue
expected to
 
be generated
 
from fixed
 
and non-cancelable
 
time charter
 
contracts existing
 
as of
 
December
31, 2024 and until their expiration was as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period
Amount
Year 1
$
124,091
Year 2
17,373
Year 3
725
 
Total
$
142,189
 
 
 
 
 
 
 
11.
 
Capital Stock and Changes in Capital Accounts
a)
 
Preferred stock
:
 
As of December 31, 2024, and 2023, the
 
Company’s authorized preferred stock
consists of
50,000,000
 
shares, respectively
 
(all in
 
registered form),
 
par value
 
$
0.01
 
per share,
 
of which
1,000,000
 
shares
 
are
 
designated
 
as
 
Series
 
A
 
Participating
 
Preferred
 
Shares,
5,000,000
 
shares
 
are
designated as
 
Series B
 
Preferred Shares,
10,675
 
shares are designated
 
as Series
 
C Preferred
 
Shares and
400
 
shares
 
are
 
designated
 
as
 
Series
 
D
 
Preferred
 
Shares.
 
As
 
of
 
December
 
31,
 
2024
 
and
 
2023,
 
the
Company had
zero
 
Series A Participating Preferred Shares issued and outstanding.
b)
 
Series
 
B
 
Preferred
 
Stock:
 
As
 
of
 
December
 
31,
 
2024,
 
and
 
2023,
 
the
 
Company
 
had
2,600,000
Series B Preferred
 
Shares issued and
 
outstanding with
 
par value $
0.01
 
per share, at
 
$
25.00
 
per share and
with liquidation preference
 
at $
25.00
 
per share.
Holders of Series B Preferred Shares have no voting rights
other than the ability, subject to certain exceptions, to elect one director if dividends for six quarterly
dividend periods (whether or not consecutive) are in arrears and certain other limited protective voting
rights.
 
Also, holders of Series B Preferred
 
Shares rank prior to the holders
 
of common shares with respect
to dividends,
 
distributions and
 
payments upon
 
liquidation and
 
are subordinated
 
to all
 
of the
 
existing and
future indebtedness.
Dividends on the Series
 
B Preferred Shares
 
are cumulative from
 
the date of original
 
issue and are
 
payable
on the 15th
 
day of January, April, July
 
and October of
 
each year at
 
the dividend rate
 
of
8.875
% per annum,
or
 
$
2.21875
 
per
 
share
 
per
 
annum.
 
In
 
2024,
 
2023,
 
and
 
2022,
 
dividends
 
on
 
Series
 
B
 
Preferred
 
Shares
amounted
 
to
 
$
5,769
,
 
$
5,769
 
and
 
$
5,769
,
 
respectively.
 
Since
 
February
 
14,
 
2019,
 
the
 
Company
 
may
redeem, in whole or in part, the Series B Preferred Shares at a redemption price of $
25.00
 
per share plus
an amount equal
 
to all accumulated
 
and unpaid dividends thereon
 
to the date
 
of redemption, whether
 
or
not declared.
 
c)
 
Series
 
C
 
Preferred
 
Stock
:
 
As
 
of
 
December
 
31,
 
2024,
 
and
 
2023,
 
the
 
Company
 
had
10,675
shares of Series C Preferred Stock, issued and outstanding, with par value $
0.01
 
per share, owned by an
affiliate of its Chief Executive Officer, Mrs. Semiramis Paliou.
The Series C Preferred Stock votes with the
common shares of the Company, and each share entitles the holder thereof to 1,000 votes on all matters
submitted to a vote of the shareholders of the Company.
 
The Series C Preferred Stock has no dividend
 
or
liquidation rights
 
and
 
cannot
 
be
 
transferred
 
without the
 
consent
 
of
 
the
 
Company
 
except
 
to
 
the
 
holder’s
affiliates and immediate family members.
d)
 
Series D Preferred Stock
: As of December 31, 2024, and 2023, the Company had
400
 
shares of
Series D Preferred Stock, issued and outstanding,
 
with par value $
0.01
 
per share, owned by an affiliate of
its Chief
 
Executive Officer,
 
Mrs. Semiramis
 
Paliou.
 
The Series
 
D Preferred Stock
 
is not
 
redeemable and
has
no
 
dividend or
 
liquidation rights.
The Series D Preferred Stock vote with the common shares of the
Company, and each share of the Series D Preferred Stock entitles the holder thereof to up to 200,000
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-31
 
 
 
 
 
 
 
 
 
 
 
votes,
 
on
 
all
 
matters
 
submitted
 
to
 
a
 
vote
 
of
 
the
 
stockholders
 
of
 
the
 
Company,
 
provided
 
however,
 
that,
notwithstanding any other
 
provision of the
 
Series D Preferred
 
Stock statement of
 
designation, to the
 
extent
that the total number
 
of votes one or
 
more holders of Series
 
D Preferred Stock
 
is entitled to vote
 
(including
any voting power of such holders derived from Series D Preferred
 
Stock, shares of Common Stock or any
other voting security of the
 
Company issued and outstanding as of
 
the date hereof or that
 
may be issued
in the
 
future) on any
 
matter submitted to
 
a vote
 
of stockholders of
 
the Company would
 
exceed
36.0
% of
the total number
 
of votes eligible
 
to be cast on
 
such matter, the total
 
number of votes
 
that holders of
 
Series
D Preferred Stock may exercise derived
 
from the Series D Preferred Stock
 
together with Common Shares
and any
 
other voting
 
securities of
 
the
 
Company beneficially
 
owned by
 
such holder,
 
shall be
 
reduced to
36
% of the total number of votes that may be cast on such matter submitted
 
to a vote of stockholders.
e)
 
Issuance
 
and Repurchase
 
of
 
Common Shares:
In
 
2022, the
 
Company repurchased
 
under its
share repurchase program
820,000
 
shares of common stock,
 
at an average price
 
of $
4.56
 
per share, for
an
 
aggregate
 
cost
 
of
 
$
3,799
,
 
including
 
expenses.
 
Also,
 
the
 
Company
 
issued
 
under
 
its
 
ATM
 
program
877,581
 
shares of
 
common stock,
 
at an
 
average price
 
of $
6.27
 
per share
 
and received
 
net proceeds
 
of
$
5,322
, and
16,453,780
 
shares of common stock, at an average price of $
4.13
, for the acquisition of
eight
vessels, upon exercise of warrants issued to the vessels’ sellers.
 
In
 
2023,
 
the
 
Company
 
issued
2,033,613
 
shares
 
of
 
common
 
stock,
 
at
 
$
3.84
,
 
for
 
the
 
acquisition
 
of
 
one
vessel, upon
 
exercise of
 
a warrant
 
issued to
 
the vessel’s
 
sellers (Note
 
6). The
 
Company did
no
t receive
any proceeds from the exercise of the warrants
 
in 2022 and 2023, and the value of
 
the shares issued was
included in vessels, net.
 
On December 2,
 
2024, the Company commenced
 
a tender offer
 
to purchase up
 
to
15,000,000
 
shares of
its outstanding common stock,
 
at $
2.00
 
per share, using funds
 
available from cash and
 
cash equivalents
(Note 17).
f)
 
Dividend on Common Stock:
On March 21,
 
2022, the Company paid
 
a dividend on its
 
common
stock of
 
$
0.20
 
per share,
 
to its
 
shareholders of
 
record as
 
of March
 
9, 2022.
 
On June
 
17, 2022,
 
the Company
paid a dividend on its common stock of
 
$
0.25
 
per share, to its shareholders of record as
 
of June 6, 2022.
On
 
August
 
19,
 
2022,
 
the
 
Company
 
paid
 
a
 
dividend
 
on
 
its
 
common
 
stock
 
of
 
$
0.275
 
per
 
share,
 
to
 
its
shareholders of record as of August 8, 2022. On December 15, 2022, the Company paid a
 
dividend on its
common stock of $
0.175
 
per share, to its shareholders
 
of record as of November
 
28, 2022. During 2022,
the Company paid total cash dividends on common stock amounting
 
to $
79,812
.
On March
 
20, 2023, the
 
Company paid
 
a dividend of
 
$
0.15
 
per share, or
 
$
15,965
, to
 
its shareholders of
record as of March 13, 2023. On July 10, 2023, the Company distributed a dividend of $
0.15
 
per share to
all shareholders of record as
 
of June 12, 2023, and
 
paid $
12,424
 
in cash to its shareholders
 
who elected
to receive cash
 
and distributed
965,044
 
newly issued common shares
 
to its shareholders
 
who elected to
receive
 
shares.
 
On
 
September
 
8,
 
2023,
 
the
 
Company
 
distributed
 
a
 
dividend
 
of
 
$
0.15
 
per
 
share
 
to
 
all
shareholders of record as
 
of August 14, 2023, and
 
paid $
13,041
 
in cash to its shareholders
 
who elected to
receive
 
cash
 
and
 
distributed
831,672
 
newly
 
issued
 
common
 
shares
 
to
 
its
 
shareholders
 
who
 
elected
 
to
receive
 
shares.
 
On
 
December
 
4,
 
2023,
 
the
 
Company
 
distributed
 
a
 
dividend
 
of
 
$
0.15
 
per
 
share
 
to
 
all
shareholders of record
 
as of November
 
27, 2023 in
 
the form of
 
common stock and
 
distributed
4,831,777
newly issued common shares.
On March
 
12, 2024,
 
the Company
 
paid a
 
cash dividend
 
on its
 
common stock
 
of $
0.075
 
per share,
 
or $
8,989
to shareholders of record
 
as of March 5,
 
2024. On June 18,
 
2024, the Company paid a
 
cash dividend on
its common
 
stock of
 
$
0.075
 
per share,
 
or $
9,379
, to shareholders of record as of June 12, 2024. On August (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
30,
 
2024,
 
the
 
Company
 
paid
 
a
 
cash
 
dividend
 
on
 
its
 
common
 
stock
 
of
 
$
0.075
 
per
 
share,
 
or
 
$
9,384
,
 
to
 
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-32
shareholders of record as of
 
August 15, 2024. On
 
December 18, 2024, the
 
Company paid a cash
 
dividend
on its common stock of $
0.01
 
per share, or $
1,252
, to shareholders of record as of December 11, 2024.
g)
 
Dividend in Kind
:
On December 15, 2022,
 
the Company distributed the
 
Company’s investment in
the Series D Preferred
 
Shares of OceanPal in
 
the form of a stock
 
dividend amounting to $
18,189
, or $
0.18
per
 
share,
 
to
 
its
 
shareholders
 
of
 
record
 
as
 
of
 
November
 
28,
 
2022.
 
On
 
June
 
9,
 
2023,
 
the
 
Company
distributed the Company’s investment in the Series
 
D Preferred Shares of OceanPal in
 
the form of a stock
dividend amounting to $
10,761
, or $
0.10
 
per share, to its shareholders of record as of April 24, 2023.
 
h)
 
Warrants:
On December 14, 2023, the Company distributed
22,613,070
 
warrants to its shareholders
of
 
record
 
on
 
December
 
6,
 
2023.
 
Holders
 
received
 
one
 
warrant
 
for
 
every
 
five
 
shares
 
of
 
issued
 
and
outstanding
 
shares
 
of
 
common
 
stock
 
held
 
as
 
of
 
the
 
record
 
date
 
(rounded
 
down
 
to
 
the
 
nearest
 
whole
number for any
 
fractional warrant. Each Warrant
 
entitles the holder
 
to purchase, at
 
the holder’s sole and
exclusive election, at the exercise price of
 
$
4
 
per warrant,
one
 
share of common stock plus a
 
bonus share
fraction. A bonus share fraction entitles a holder to receive
 
an additional part of a share of common stock
for each
 
warrant exercised
 
without payment
 
of any
 
additional exercise
 
price. In
 
2023,
no
 
warrants were
exercised.
In
 
2024,
 
the
 
Company
 
issued
 
9,837,680
 
shares
 
of
 
common
 
stock,
 
having
 
a
 
value
 
of
 
$
28,047
,
 
net
 
of
expenses, or $
2.86
 
per share, upon the exercise of
6,392,765
 
warrants issued in 2023 and distributed as
dividend to
 
the Company’s
 
shareholders. The
 
Company received $
24,195
 
in proceeds,
 
net of
 
fees, from
the
 
exercise of
 
warrants. If
 
all
 
warrants were
 
exercised as
 
of
 
December 31,
 
2024, the
 
Company would
have issued
36,369,395
 
shares of
 
common stock
 
with a
 
fair value
 
of $
80,049
 
and would
 
have received
$
90,452
 
of
 
gross
 
proceeds.
 
The
 
warrants
 
were
 
measured
 
on
 
the
 
date
 
of
 
distribution
 
at
 
fair
 
value,
determined through
 
Level 1
 
account hierarchy,
 
being the
 
opening price
 
of the
 
warrants on
 
the NYSE
 
on
the date of distribution
 
as they are listed
 
under the ticker DSX_W. As
 
of December 31, 2024
 
and 2023,
 
the
warrant liability,
 
measured at
 
fair value,
 
amounted to
 
$
1,802
 
and $
6,332
, respectively.
 
During the
 
years
ended December 31, 2024 and 2023, gain from warrants amounted to $
719
 
and $
1,583
, respectively and
is separately presented in the consolidated statements
 
of income.
i)
 
Incentive
 
Plan:
As
 
of
 
December
 
31,
 
2024,
11,144,759
 
shares
 
remained
 
reserved
 
for
 
issuance
according to the Company’s incentive plan.
Restricted stock in 2024, 2023 and 2022 is analyzed as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Shares
Weighted Average
Grant Date Price
Outstanding as of December 31, 2021
9,514,649
$
2.83
Granted
1,470,000
 
4.15
Vested
(3,118,060)
 
2.86
Outstanding as of December 31, 2022
7,866,589
$
3.07
Granted
1,750,000
 
4.54
Vested
(2,822,753)
 
3.05
Outstanding as of December 31, 2023
6,793,836
$
3.45
Granted
2,300,000
2.96
Vested
(2,996,334)
3.38
Outstanding as of December 31, 2024
6,097,502
$
3.30
 
The
 
fair
 
value
 
of
 
the
 
restricted
 
shares
 
has
 
been
 
determined
 
with
 
reference
 
to
 
the
 
closing
 
price
 
of
 
the
Company’s
 
stock
 
on
 
the
 
date
 
such
 
awards
 
were
 
approved
 
by
 
the
 
Company’s
 
board
 
of
 
directors.
 
The
 
 
 
 
 
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-33
aggregate
 
compensation
 
cost
 
is
 
recognized
 
ratably
 
in
 
the
 
consolidated
 
statement
 
of
 
income
 
over
 
the
respective vesting periods. In
 
2024, 2023 and 2022,
 
compensation cost amounted
 
to $
10,012
, $
9,938
 
and
$
9,282
,
 
respectively,
 
and
 
is
 
included
 
in
 
general
 
and
 
administrative
 
expenses
 
in
 
the
 
accompanying
consolidated statements of income.
As of
 
December 31,
 
2024 and
 
2023, the
 
total unrecognized cost
 
relating to
 
restricted share
 
awards was
$
11,674
 
and $
14,880
, respectively. As of
 
December 31,
 
2024, the weighted-average
 
period over
 
which the
total compensation cost related to
 
non-vested awards not yet
 
recognized is expected to be
 
recognized is
1.54
 
years.
12.
 
Voyage expenses
The amounts in the accompanying consolidated statements of income
 
are analyzed as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2024
2023
2022
Commissions
$
11,640
$
13,331
$
14,412
Loss/(gain) from bunkers
725
(474)
(8,100)
Port expenses and other
1,242
764
630
Total
 
$
13,607
$
13,621
$
6,942
13.
 
Interest and Finance Costs
The amounts in the accompanying consolidated statements of income
 
are analyzed as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2024
2023
2022
Interest expense, debt
$
38,385
$
39,617
$
21,983
Finance liabilities interest expense
6,353
6,786
2,735
Amortization of debt and finance liabilities issuance costs
2,372
2,620
2,286
Loan and other expenses
358
308
415
Interest expense and finance costs
$
47,468
$
49,331
$
27,419
 
14.
 
Earnings per Share
All common
 
shares issued
 
(including the
 
restricted shares
 
issued under
 
the Company’s
 
incentive plans)
are
 
the
 
Company’s
 
common
 
stock
 
and
 
have
 
equal
 
rights
 
to
 
vote
 
and
 
participate
 
in
 
dividends.
 
The
calculation of basic earnings per share does not treat the non-vested shares (not considered participating
securities) as outstanding until the time/service-based
 
vesting restriction has lapsed.
The dilutive effect on
unexercised warrants that are
 
in-the-money, is computed using the treasury stock
 
method which assumes
that the proceeds
 
upon exercise of
 
these warrants are
 
used to purchase
 
common shares at
 
the average
market
 
price
 
for
 
the
 
period.
 
Incremental
 
shares
 
are
 
the
 
number
 
of
 
shares
 
assumed
 
issued
 
under
 
the
treasury stock
 
method weighted for
 
the periods the
 
non-vested shares
 
were outstanding. In
 
2024, 2023,
and 2022,
 
there were
2,698,994
,
1,710,513
 
and
3,257,861
 
incremental shares
 
included in
 
the denominator
of
 
the
 
diluted
 
earnings
 
per
 
share
 
calculation.
 
Securities
 
that
 
could
 
potentially
 
dilute
 
basic
 
earnings
 
per
share in the future but
 
were not included in the computation of
 
diluted earnings per share—because their
inclusion would have
 
been anti-dilutive—consist of
 
any incremental shares
 
from unexercised warrants
 
that
were
 
out
 
of
 
the
 
money
 
during
 
the
 
reporting
 
period
 
and
 
any
 
incremental shares
 
resulting
 
from
 
the
 
non-
vested
 
restricted
 
share
 
awards.
 
During
 
the
 
years
 
ended
 
December
 
31,
 
2024
 
and
 
2023,
 
the
 
number
 
of
common shares that could potentially be issued in connection with unexercised warrants that were out of (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
the
 
money
 
for
 
a
 
portion
 
of
 
the
 
respective
 
period
 
was
390,132
,
 
and
nil
,
 
respectively.
 
There
 
were
no
 
 
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-34
outstanding securities
 
during the
 
year ended
 
December 31,
 
2022 that
 
could potentially
 
dilute basic
 
earnings
per share.
 
During the
 
years ended
 
December 31,
 
2024, 2023
 
and 2022,
 
the number
 
of common
 
shares
that
 
could
 
potentially
 
be
 
issued
 
in
 
connection
 
with
 
non-vested
 
restricted
 
share
 
awards
 
was
469,525
,
109,089
 
and
nil
, respectively.
Net income attributable to common stockholders is adjusted
 
by the dividends on Series B Preferred Stock
and the gain on warrants to calculate the diluted earnings per share.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2024
2023
2022
Net income
$
12,746
$
49,844
$
119,063
Dividends on series B preferred shares
(5,769)
(5,769)
(5,769)
Net income attributable to common stockholders
$
6,977
$
44,075
$
113,294
Weighted average number of common shares, basic
115,956,249
100,166,629
80,061,040
Earnings per share, basic
$
0.06
$
0.44
$
1.42
Net income
$
12,746
$
49,844
$
119,063
Dividends on series B preferred shares
(5,769)
(5,769)
(5,769)
Gain on warrants
(719)
(1,583)
-
Adjusted net income attributable to common
stockholders
$
6,258
$
42,492
$
113,294
Weighted average number of common shares, basic
115,956,249
100,166,629
80,061,040
Incremental shares
 
2,698,994
1,710,513
3,257,861
Weighted average number of common shares, diluted
 
118,655,243
101,877,142
83,318,901
Earnings per share, diluted
$
0.05
$
0.42
$
1.36
15.
 
Income Taxes
Under
 
the
 
laws
 
of
 
the
 
countries
 
of
 
the
 
companies’
 
incorporation
 
and
 
/
 
or
 
vessels’
 
registration,
 
the
companies are
 
not subject
 
to tax
 
on international
 
shipping income;
 
however, they are
 
subject to
 
registration
and tonnage
 
taxes, which
 
are included
 
in vessel
 
operating expenses
 
in the
 
accompanying consolidated
statements of income.
The vessel-owning
 
companies with
 
vessels that
 
have called
 
on the
 
United States
 
are obliged
 
to file
 
tax
returns with the Internal Revenue Service. However, pursuant to the Internal Revenue Code of the United
States, U.S.
 
source income from
 
the international operations
 
of ships
 
is generally exempt
 
from U.S.
 
tax.
The applicable tax is
50
% of
4
% of U.S.-related gross transportation
 
income unless an exemption
 
applies.
The Company and each
 
of its subsidiaries expects it
 
qualifies for this statutory
 
tax exemption for the 2024,
2023 and
 
2022 taxable years,
 
and the
 
Company takes this
 
position for
 
United States federal
 
income tax
return reporting purposes.
 
16.
 
Financial Instruments and Fair Value Disclosures
Interest rate risk and concentration of credit risk
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, (Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
consist
 
principally
 
of
 
cash
 
and
 
trade
 
accounts
 
receivable.
 
The
 
ability
 
and
 
willingness
 
of
 
each
 
of
 
the
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
F-35
Company’s counterparties to perform their
 
obligations under a contract depend upon a
 
number of factors
that are
 
beyond the
 
Company’s control
 
and may
 
include, among
 
other things,
 
general economic
 
conditions,
the
 
state
 
of
 
the
 
capital
 
markets,
 
the
 
condition
 
of
 
the
 
shipping
 
industry
 
and
 
charter
 
hire
 
rates. The
Company’s credit risk with financial institutions is limited as it has temporary cash investments, consisting
mostly of deposits, placed with various qualified financial institutions and performs periodic evaluations of
the relative credit
 
standing of those financial
 
institutions. The Company limits
 
its credit risk
 
with accounts
receivable by performing ongoing
 
credit evaluations of its
 
customers’ financial condition and by
 
receiving
payments
 
of
 
hire
 
in
 
advance.
 
The
 
Company,
 
generally,
 
does
 
not
 
require
 
collateral
 
for
 
its
 
accounts
receivable and does not have any agreements to mitigate credit risk.
 
In
 
2024,
 
2023 and
 
2022 charterers
 
that
 
individually accounted
 
for
10
% or
 
more
 
of
 
the
 
Company’s time
charter revenues were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charterer
2024
2023
2022
Cargill International SA
*
13%
19%
Koch Shipping PTE LTD.
 
Singapore
*
*
15%
Nippon Yusen Kaisha
11%
*
*
*Less than 10%
 
The Company
 
is exposed
 
to interest
 
rate fluctuations
 
associated with
 
its variable
 
rate of
 
borrowings. On
July 6,
 
2023, the company
 
entered into an
 
interest rate swap
 
with DNB (Note
 
8) to
 
manage part of
 
such
exposure. Additionally, in 2022 and
 
2023, the Company refinanced part of its variable rate debt with fixed
rate financial liabilities (Note 9).
Fair value of assets and liabilities
The
 
carrying
 
values
 
of
 
financial
 
assets
 
reflected
 
in
 
the
 
accompanying
 
consolidated
 
balance
 
sheet
approximate their respective fair values
 
due to the short-term nature
 
of these financial instruments.
 
Cash
and cash equivalents
 
and restricted cash
 
are considered Level 1 items
 
as they represent
 
liquid assets with
short-term maturities. The fair value of long-term bank loans with
 
variable interest rates approximates the
recorded values, generally due to their variable interest rates.
 
Fair value measurements disclosed
 
As of December 31, 2024, the Bond having a fixed interest
 
rate and a carrying value of $
175,000
 
(Note 8)
had a fair value of $
178,938
 
determined through the Level 1 input of the fair value hierarchy as defined in
FASB guidance for Fair Value Measurements.
 
 
 
 
 
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-36
Other Fair value measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
2023
Quoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Other
Observable
Inputs (Level 3)
Assets
Recurring fair value measurements
Investments in equity securities
$
20,729
$
20,729
$
$
Investments in related party
8,315
8,138
177
Interest rate swap, asset
129
129
Total
 
recurring fair value measurements
$
29,173
$
28,867
$
129
$
177
Non-recurring fair value measurements
Equity method investments(1)
$
4,519
$
$
4,519
Long-lived assets held for use(2)
7,809
7,809
Total
 
non-recurring fair value measurements
$
12,328
$
7,809
$
4,519
Liabilities
Recurring fair value measurements
Warrant liability
$
6,332
$
6,332
$
Interest rate swap, liability
568
568
Total
 
recurring fair value measurements
$
6,900
$
6,332
$
568
December 31,
2024
Quoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Other
Observable
Inputs (Level 3)
Assets
Recurring fair value measurements
Investments in related party
$
4,415
$
4,235
$
-
$
180
Total
 
recurring fair value measurements
$
4,415
$
4,235
$
-
$
180
Liabilities
Recurring fair value measurements
Warrant liability
$
1,802
$
1,802
$
-
Interest rate swap, liability
165
165
Total
 
recurring fair value measurements
$
1,967
$
1,802
$
165
(1)
 
 
 
On
 
April 28,
 
2023, the
 
Company
 
estimated that
 
the
 
fair
 
value of
 
its
25
%
 
interest in
 
Bergen was
$
4,519
,
 
determined
 
through
 
the
 
Level
 
2
 
inputs
 
of
 
the
 
fair
 
value
 
hierarchy,
 
as
 
defined
 
in
 
FASB
guidance for Fair
 
Value Measurements, and recorded a
 
gain of $
844
, being the difference
 
between
the fair value
 
of the retained noncontrolling
 
interest plus the carrying
 
value the liabilities assumed
by Bergen and the carrying value of the assets derecognized
 
(Note 3(e)).
(2)
 
On January
 
30, 2023.
 
the Company
 
took delivery
 
of one
 
vessel under
 
its master
 
agreement with
Sea Trade, acquired for
 
$
23,955
 
which was paid
 
in cash and
 
$
7,809
 
which was paid
 
through newly
issued
 
common
 
stock
 
(Note
 
6).
 
The
 
fair
 
value
 
of
 
the
 
common
 
shares
 
issued
 
to
 
Sea
 
Trade
 
was
determined based
 
on the
 
closing price
 
of the
 
Company’s shares
 
on the
 
date
 
of delivery
 
of each
vessel, which was also the date of issuance of such shares.
 
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024
(Expressed in thousands of U.S. Dollars – except share, per share
 
data, unless otherwise stated)
F-37
 
 
17.
 
Subsequent Events
a)
 
Repurchase
 
of
 
common
 
stock
:
On
 
January
 
7,
 
2025,
 
the
 
tender
 
offer
 
which
 
had
 
commenced
 
in
December 2024 (Note 11)
 
was settled and the
 
Company purchased a total
 
of
11,442,645
 
shares of
common stock for an aggregate amount of $
22,885
.
b)
 
Exercise of
 
warrants
:
From January
 
1, 2025
 
until March
 
21, 2025,
 
the Company
 
issued
7,101
 
shares
of common stock, resulting to $
17
 
of proceeds from the exercise of
4,352
 
warrants.
c)
 
Series B Preferred Stock Dividends
: On January 15, 2025, the Company paid a quarterly
 
dividend
on its series B preferred stock, amounting to $
0.5546875
 
per share, or $
1,442
, to its stockholders of
record as of January 14, 2025.
d)
 
Sale of Vessel Alcmene:
 
On February 10, 2025, the Company, through a wholly owned subsidiary,
entered into an
 
agreement with an
 
unrelated third party to
 
sell the vessel
 
Alcmene. The vessel
 
was
delivered to the new owners on March 13, 2025. The Company expects to have a gain from the sale
of the vessel.
e)
 
Restricted share
 
awards:
 
On February
 
25, 2025, the
 
Company’s Board of
 
Directors approved the
award of
2,000,000
 
shares of restricted common stock to executive management and non-executive
directors, pursuant to
 
the Company’s amended plan,
 
as annual bonus.
 
The fair value of
 
the restricted
shares based
 
on the
 
closing price
 
on the
 
date of
 
the Board
 
of Directors’
 
approval was
 
$
3,680
. The
cost of these awards
 
will be recognized
 
ratably over the restricted
 
shares vesting period which
 
will be
3 years
.
f)
 
Common
 
Stock
 
Dividend:
 
On
 
February 25,
 
2025,
 
the
 
Company
 
declared
 
a
 
cash
 
dividend
 
on
 
its
common stock
 
of $
0.01
 
per share,
 
based on
 
the Company’s
 
results of
 
operations during
 
the fourth
quarter
 
ended
 
December
 
31,
 
2024.
 
The
 
cash
 
dividend
 
will
 
be
 
paid
 
on
 
March
 
21,
 
2025,
 
to
 
all
shareholders of record as of March 12, 2025.
 
g)
 
Joint Venture
 
agreement:
 
On March
 
12, 2025,
 
the
 
Company,
 
through a
 
wholly owned
 
subsidiary
Diana Gas
 
Inc., entered
 
into a
 
joint venture
 
agreement with
 
Ecogas Holding AS,
 
pursuant to
 
which
we
 
agreed to
 
contribute $
18.5
 
million, being
80.0
%
 
interests of
two
 
LPG newbuilding
 
vessels
 
with
delivery in 2027 and with the option for DESCRIPTION OF THE REGISTRANT'S SECURITIES REGISTERED PURSUANT TO SECTION 12
two
 
more.
EX-2.8 7 exhibit28.htm EX-2.8 exhibit28
OF THE SECURITIES EXCHANGE ACT OF 1934
As of December
 
31, 2024, Diana
 
Shipping Inc. (the
 
“Company”) had five classes
 
of securities registered under
 
Section
12 of the Securities Exchange Act of 1934, as amended:
1)
Common stock, $0.01 par value (the “common shares”) ;
2)
Preferred stock purchase rights (the “Preferred Stock Purchase Rights”) ;
3)
Series C Preferred Shares;
4)
Series D Preferred Shares;
5)
8.875% Series B Cumulative Redeemable Perpetual Preferred Shares, $0.01 par value (the “Series Preferred
Shares”); and
6)
Warrants to purchase common stock. The following description
 
sets forth certain material
 
provisions of these
securities. The following
 
summary does
 
not purport to
 
be complete and
 
is subject to,
 
and is qualified
 
in its
entirety by reference to, the applicable provisions of
 
(i)
 
the
 
Company’s
 
Amended
 
and
 
Restated
 
Articles
 
of
 
Incorporation,
 
as
 
amended
 
(the
 
“Articles
 
of
Incorporation”) and
(ii)
 
the
 
Company’s
 
Amended
 
and
 
Restated
 
Bylaws
 
(the
 
“Bylaws”),
 
each
 
of
 
which
 
is
 
incorporated
 
by
reference as an exhibit to the Annual Report on Form 20-F of
 
which this Exhibit is a part. We encourage you
to refer to our
 
Articles of Incorporation and Bylaws
 
for additional information. Please note in
 
this description
of securities, “we”,
 
“us”, “our” and
 
“the Company” all
 
refer to Diana
 
Shipping. and its
 
subsidiaries, unless
the context requires otherwise.
 
DESCRIPTION OF COMMON SHARES
The respective number of common shares issued and outstanding as of the last day of the fiscal year for annual report
on Form 20-F to which this description is
 
attached or incorporated by reference as an exhibit, is
 
provided on the cover
page of such annual report on Form 20-
F.
Each
 
outstanding
 
share
 
of
 
common
 
stock
 
entitles
 
the
 
holder
 
to
 
one
 
vote
 
on
 
all
 
matters
 
submitted
 
to
 
a
 
vote
 
of
stockholders.
 
Subject to
 
preferences that
 
may
 
be applicable
 
to any
 
outstanding
 
shares of
 
preferred
 
stockholders
 
of
shares of common stock
 
are entitled to receive ratably
 
all dividends, if any,
 
declared by our board of
 
directors out of
funds legally available
 
for dividends. Upon
 
our dissolution or
 
liquidation or the
 
sale of all
 
or substantially all
 
of our
assets, after payment in full of all
 
amounts required to be paid to creditors and to
 
the holders of preferred stock having
liquidation
 
preferences,
 
if any,
 
the holders
 
of our
 
common stock
 
will be
 
entitled to
 
receive pro
 
rata our
 
remaining
assets available for
 
distribution. Holders of
 
common stock do
 
not have conversion,
 
redemption or
 
preemptive rights
to subscribe to any of our securities. The rights, preferences and privileges of holders of common stock are subject to
the rights of the holders of our preferred stock.
Voting
 
Rights
Each outstanding common share entitles
 
the holder to one vote on
 
all matters submitted to a vote
 
of shareholders. At
any annual or
 
special general meeting
 
of shareholders where
 
there is a quorum,
 
the affirmative vote
 
of a majority
 
of
the votes cast by holders of shares of stock represented at the meeting shall be
 
the act of the shareholders. (Under the
Bylaws, at all meetings
 
of shareholders except otherwise
 
expressly provided by law,
 
there must be present
 
in person
or proxy shareholders
 
of record holding
 
at least 33
 
1/3% of the
 
shares issued and
 
outstanding and entitled
 
to vote at
such meeting in order to constitute a quorum.)
Our Bylaws do not confer any conversion, redemption or preemptive rights
 
attached to our common shares.
Dividend Rights
Subject
 
to
 
preferences
 
that
 
may
 
be
 
applicable
 
to
 
any
 
outstanding
 
preferred
 
shares,
 
holders
 
of
 
common
 
shares
 
are
entitled to
 
receive ratably
 
all dividends,
 
if any,
 
declared by
 
our board
 
of directors
 
out of
 
funds legally
 
available for
dividends.
Liquidation Rights
Upon
 
our
 
dissolution
 
or
 
liquidation
 
or
 
the
 
sale of
 
all or
 
substantially
 
all of
 
our
 
assets, after
 
payment
 
in
 
full
 
of
 
all
amounts required
 
to be paid
 
to creditors and
 
to the holders
 
of our preferred
 
shares having liquidation
 
preferences, if
any,
 
the
 
holders
 
of
 
our
 
common
 
shares
 
will
 
be
 
entitled
 
to
 
receive
 
pro
 
rata
 
our
 
remaining
 
assets
 
available
 
for
distribution.
Variation
 
of Rights
Generally,
 
the rights
 
or privileges
 
attached
 
to our
 
common shares
 
may
 
be varied
 
or abrogated
 
by the
 
rights of
 
the
holders of
 
our preferred
 
shares, including
 
our existing
 
classes of
 
preferred shares
 
and any
 
preferred shares
 
we may
issue in the future.
Limitations on Ownership
Under Marshall Islands law generally,
 
there are no limitations on the right of non-residents of the Marshall Islands or
owners who are not citizens of the Marshall Islands to hold or vote our common
 
shares.
Anti-takeover Effect of Certain Provisions of our Amended and
 
Restated Articles of In Company and Bylaws
Several provisions of our amended and restated articles of incorporation
 
and bylaws may have anti-takeover effects.
These provisions, which are summarized below, are intended to avoid costly takeover battles, lessen our vulnerability
to
 
a
 
hostile
 
change
 
of
 
control
 
and
 
enhance
 
the
 
ability
 
of
 
our
 
board
 
of
 
directors
 
to
 
maximize
 
stockholder
 
value
 
in
connection with
 
any unsolicited
 
offer to
 
acquire us.
 
However,
 
these anti-takeover
 
provisions could
 
also discourage,
delay or prevent (I) the
 
merger or acquisition of
 
our company by means
 
of tender offer,
 
a proxy contest or otherwise
that a stockholder may consider in its best interest and (ii) the removal of
 
incumbent officers and directors.
Business Combinations
Our amended
 
and restated
 
articles of
 
incorporation generally
 
prohibit us
 
from entering
 
into a
 
business combination
with an
 
"interested shareholder" for
 
a period
 
of three
 
years following the
 
date on
 
which the
 
person became an
 
interested
shareholder.
 
Interested shareholder
 
is defined,
 
with certain
 
exceptions, as
 
a person
 
who (i)
 
owns more
 
than 15%
 
of
our
 
outstanding
 
voting
 
stock, or
 
(ii) is
 
an affiliate
 
or associate
 
of
 
the Company
 
that owned
 
more
 
than
 
15% of
 
our
outstanding stock at any
 
time in the prior three
 
years from the date the
 
determination is being made
 
as to whether he
or she is an interested shareholder.
This
 
prohibition
 
does
 
not
 
apply
 
in
 
certain
 
circumstances
 
such
 
as
 
if
 
(i)
 
prior
 
to
 
the
 
person
 
becoming
 
an
 
interested
shareholder, our board of directors approved the business combination
 
or the transaction which resulted in the person
becoming an interested shareholder, or (ii) the person became an interested shareholder
 
prior to the Company's initial
public offering.
Blank Check Preferred
 
Stock
Under the
 
terms of our
 
amended and
 
restated articles
 
of incorporation,
 
our board
 
of directors has
 
authority,
 
without
any further
 
vote or action
 
by our stockholders,
 
to issue up
 
to 25,000,000
 
shares of blank
 
check preferred
 
stock. Our
board of directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of
control of our company or the removal of our management.
Classified Board of Directors
Our amended and restated articles of incorporation provide for the division of our board of directors into three classes
of directors, with each
 
class as nearly equal
 
in number as
 
possible, serving staggered, three-year terms. Approximately
one-third of our board of directors is elected each year.
 
This classified board provision could discourage a third party
from making a tender
 
offer for our
 
shares or attempting to
 
obtain control of us.
 
It could also delay
 
stockholders who
do not
 
agree with
 
the policies
 
of our
 
board of
 
directors from
 
removing a
 
majority of
 
our board
 
of directors
 
for two
years.
Election and Removal of Directors
Our
 
amended
 
and
 
restated
 
articles
 
of
 
incorporation
 
prohibit
 
cumulative
 
voting
 
in
 
the
 
election
 
of
 
directors.
 
Our
amended
 
and
 
restated
 
bylaws
 
require
 
parties
 
other
 
than
 
the
 
board
 
of
 
directors
 
to
 
give
 
advance
 
written
 
notice
 
of
nominations
 
for the
 
election of
 
directors.
 
Our amended
 
and restated
 
articles of
 
incorporation
 
also provide
 
that our
directors may be removed only for cause and only upon the
 
affirmative vote of a majority of the outstanding shares of
our capital stock
 
entitled to vote
 
for those directors.
 
These provisions may
 
discourage, delay or
 
prevent the removal
of incumbent officers and directors. The Articles prohibit the use
 
of cumulative voting to elect Directors.
Limited Actions by Stockholders
Our amended and restated articles of incorporation and bylaws provide that special meetings of the shareholders may
be
 
called by
 
the Board
 
of Directors
 
who
 
shall
 
state the
 
purpose
 
or purposes
 
of the
 
proposed
 
special
 
meeting.
 
The
business transacted at any special
 
meeting shall be limited to
 
the purposes stated in the
 
notice of such meeting. If there
is a failure
 
to hold the
 
annual meeting within
 
a period of
 
ninety (90) days
 
after the date
 
designated therefor,
 
or if no
date has been designated for a period of thirteen (13) months after
 
the organization of the Corporation or after
 
its last
annual
 
meeting, holders
 
of not
 
less than
 
one-fifth
 
of the
 
shares entitled
 
to vote
 
in an
 
election
 
of directors
 
may,
 
in
writing, demand the call of a special
 
meeting in lieu of the annual
 
meeting specifying the time thereof, which shall
 
not
be less than two (2) nor more than three(3) months from the date of such call.
 
The Chairman, Chief Executive Officer
or Secretary of
 
the Corporation upon
 
receiving the written
 
demand shall promptly
 
give notice of
 
such meeting, or
 
if
the
 
Chairman,
 
Chief
 
Executive
 
Officer
 
or
 
Secretary
 
fails
 
to
 
do
 
so
 
within
 
five
 
(5)
 
business
 
days
 
thereafter,
 
any
shareholder signing such
 
demand may give
 
such notice. Such
 
notice shall state
 
the purpose or
 
purposes of the
 
proposed
special meeting.
 
The business transacted at any special meeting shall be limited to the purposes stated in the notice of
such meeting.
Advance Notice Requirements for Stockholder
 
Proposals and Director Nominations
Our amended and
 
restated bylaws provide
 
that stockholders seeking
 
to nominate candidates
 
for election as
 
directors
or to bring business before an annual
 
meeting of stockholders must provide
 
timely notice of their proposal in
 
writing
to the corporate
 
secretary.
 
Generally,
 
to be timely,
 
a stockholder's notice must
 
be received at our
 
principal executive
offices not
 
less than 90
 
days nor
 
more than 120
 
days prior to
 
the date on
 
which we first
 
mailed our
 
proxy materials
for
 
the
 
preceding
 
year's
 
annual
 
meeting.
 
Our
 
bylaws
 
also
 
specify
 
requirements
 
as
 
to
 
the
 
form
 
and
 
content
 
of
 
a
stockholder's notice. These provisions may impede
 
stockholders' ability to bring matters before an annual meeting
 
of
stockholders or make nominations for directors at annual meeting
 
of stockholders.
DESCRIPTION OF THE SERIES B PREFERRED SHARES
On
 
February
 
3,
 
2014,
 
we
 
filed
 
a
 
Prospectus
 
Statement
 
for
 
the
 
registration
 
of
 
2,400,000
 
of
 
our
 
8.875%
 
Series
Cumulative Redeemable Perpetual Preferred Shares,
 
par value $0.01
 
per share, with
 
a liquidation preference of
 
$25.00
per share.
We have
 
summarized the material terms
 
and conditions of the
 
rights of these Series B
 
Preferred Shares below.
 
For a
complete
 
description
 
of
 
the
 
rights,
 
we
 
encourage
 
you
 
to
 
read
 
the
 
“Description
 
of
 
Registrant’s
 
Securities
 
to
 
be
Registered”, which we have filed as an exhibit to the Form 8-A on February 13,
 
2014.
Dividends
 
Under the
 
Agreement, we declared
 
a dividend payment
 
of 8.875%
 
per annum
 
per $25.00 liquidation
 
preference per
share (equal to $2.21875 per annum per share). These dividends accrue and are cumulative from the date the Series B Cumulative shares are originally issued.
The dividends are payable, as and if declared by the Board on January 15,
April 15, July 15 and October 15 of each year.
Liquidation Preference
 
Holders of the
 
Series B Preferred Shares
 
are entitled to a
 
liquidation preference. Upon
 
the occurrence of
 
liquidation,
dissolution or
 
winding up
 
of the affairs
 
of the
 
Company,
 
whether voluntary
 
or involuntary
 
(a “Liquidation
 
Event”),
Holders of Series B Preferred Shares shall be entitled to receive out of the assets of
 
the Company or proceeds thereof
legally
 
available
 
for
 
distribution
 
to
 
stockholders
 
of
 
the
 
Company,
 
(I)
 
aftersatisfaction
 
of
 
all
 
liabilities,
 
if
 
any,
 
to
creditors of the
 
Company,
 
(ii) after all
 
applicable distributions
 
of such assets
 
or proceeds being
 
made to or
 
set aside
for the holders of any Senior Stock
 
then outstanding in respect of such Liquidation
 
Event, (iii) concurrently with any
applicable
 
distributions
 
of such
 
assets or
 
proceeds
 
being made
 
to or
 
set aside
 
for holders
 
of any
 
Parity Stock
 
then
outstanding in
 
respect of such
 
Liquidation Event
 
and (iv) before
 
any distribution of
 
such assets or
 
proceeds is
 
made
to or set aside for the holders of Common Stock and any
 
other classes or series of Junior Stock as to such distribution,
a liquidating distribution or payment in full redemption of such Series B Preferred Shares in an amount initially equal
to $25.00 per
 
share in cash, plus
 
an amount equal
 
to accumulated and
 
unpaid dividends thereon
 
to the date
 
fixed for
payment of such amount (whether or not declared).
Voting
 
Rights
In
 
the
 
event
 
that six
 
quarterly
 
dividends,
 
whether
 
consecutive
 
or
 
not,
 
payable
 
on
 
the
 
Series B
 
Preferred
 
Shares
 
in
arrears, the
 
Holders of
 
Series B Preferred
 
Shares shall
 
have the
 
right, voting
 
as a
 
class together
 
with holders
 
of any
Parity Stock upon
 
which like voting
 
rights have been
 
conferred and are
 
exercisable, at the
 
next meeting of
 
stockholders
called for the
 
election of directors,
 
to elect one
 
member of the
 
Board of Directors,
 
and the size
 
of the Board
 
of Directors
shall be increased as needed to accommodate such change.
Unless the Company
 
shall have received
 
the affirmative
 
vote or consents
 
of the Holders
 
of at least
 
two-thirds of the
outstanding
 
Series B
 
Preferred
 
Shares, voting
 
as a
 
single class,
 
the Company
 
may
 
not adopt
 
an amendment
 
to the
Articles of Incorporation that adversely alters the preferences, powers or
 
rights of the Series B Preferred Shares.
Unless the
 
Company shall
 
have received
 
the affirmative
 
vote or
 
consent of
 
the Holders
 
of at
 
least two-thirds
 
of the
outstanding Series
 
B Preferred Shares,
 
voting as a
 
class together with
 
holders of any
 
other Parity
 
Stock upon
 
which
like voting
 
rights have
 
been conferred
 
and are
 
exercisable, the
 
Company
 
may not
 
(x) issue
 
any Parity
 
Stock if
 
the
cumulative dividends payable on outstanding Series B Preferred Shares are in arrears or(y) create or
 
issue any Senior
Stock.
Redemption Rights
The Company shall have the right at any time on or after February 14, 2019, to redeem the Series B Preferred Shares,
in whole or from time to time in part, from any funds available for such purpose. Any such redemption shall occur on
a date set by the Company.
DESCRIPTION OF THE SERIES C PREFERRED SHARES
We
 
filed a statement
 
of designations with
 
the Marshall Islands
 
registry establishing our
 
Series C Preferred
 
Stock, of
which 10,675 are
 
issued and outstanding,
 
par value $0.01 per
 
share. The Series
 
C Preferred Stock
 
will vote with
 
the
common
 
shares of
 
the Company,
 
and each
 
share of
 
the Series
 
C Preferred
 
Stock shall
 
entitle the
 
holder thereof
 
to
1,000 votes on all matters
 
submitted to a vote of
 
the stockholders of the Company.
 
The Series C Preferred Stock
 
has
no dividend or liquidation rights and cannot be transferred without the consent of the Company
 
except to the holder's
affiliates and immediate family members.
For
 
a
 
complete
 
description
 
of
 
the
 
rights,
 
we
 
encourage
 
you
 
to
 
read
 
the
 
“Certificate
 
of
 
Designation
 
of
 
Rights,
Preferences, and
 
Privileges of
 
Series C Preferred
 
Stock of
 
the Company”,
 
which we
 
have filed
 
as exhibit
 
3.1 to
 
the
Form 6-K on February 6, 2019.
DESCRIPTION OF THE SERIES D PREFERRED SHARES
We
 
filed a statement
 
of designations with
 
the Marshall Islands
 
registry establishing our
 
Series D Preferred
 
Stock, of
which 400
 
are issued
 
and outstanding,
 
par value
 
$0.01 per
 
share. The
 
Series D
 
Preferred Stock
 
has no
 
dividend or
liquidation rights. The Series D Preferred Stock votes with the common shares of the Company, and each share of the
Series D Preferred
 
Stock shall entitle
 
the holder thereof
 
to up to 200,000
 
votes, on all
 
matters submitted to
 
a vote of
the stockholders of
 
the Company,
 
notwithstanding any other
 
provision of the
 
Statement of Designation
 
of the Series
D Preferred
 
Stock,
 
to the
 
extent that
 
the total
 
number of
 
votes one
 
or more
 
holders of
 
Series D
 
Preferred
 
Stock is
entitled to vote (including any
 
voting power of such holders
 
derived from Series D Preferred
 
Stock, shares of common
stock or any other voting
 
security of the Company issued
 
and outstanding as of the
 
date hereof or that may be
 
issued
in the
 
future) on
 
any matter
 
submitted to
 
a vote
 
of stockholders
 
of the
 
Company
 
would exceed
 
36.0% of
 
the total
number of votes eligible to
 
be cast on such matter,
 
the total number of votes that holders
 
of Series D Preferred Stock
may exercise derived from the Series
 
D Preferred Stock together with Common Shares
 
and any other voting securities
of the Company beneficially owned by such holder,
 
shall be reduced to 36% of the total number of votes that may be
cast on such matter submitted to a vote of stockholders.
For
 
a
 
complete
 
description
 
of
 
the
 
rights,
 
we
 
encourage
 
you
 
to
 
read
 
the
 
“Statement
 
of
 
Designation
 
of
 
Rights,
Preferences and
 
Privileges of
 
Series D
 
Preferred Stock
 
of the
 
Company”, which
 
we have filed
 
as Exhibit
 
3.1 to
 
the
Form 6-K on September 8, 2023.
DESCRIPTION OF WARRANTS
On December 14,
 
2023, we issued warrants
 
to purchase common
 
shares (the “Warrants”)
 
to the holders
 
of record of
Common Stock
 
as of
 
the close
 
of business
 
on December
 
6, 2023
 
(the “Record
 
Date”) on
 
the terms
 
and conditions
described in the Warrant Agreement (as defined below and attached as exhibit 2.10 to this
 
annual report). Each holder
received one
 
Warrant
 
for every five
 
shares of issued
 
and outstanding shares
 
of common stock
 
held as of
 
the Record
Date (rounded
 
down
 
to the
 
nearest whole
 
number
 
for any
 
fractional
 
Warrant).
 
Each
 
Warrant
 
entitles the
 
holder
 
to
purchase,
 
at the
 
holder’s
 
sole and
 
exclusive election,
 
at the
 
exercise price,
 
one share
 
of common
 
stock plus,
 
to the
extent, described below,
 
the Bonus Share Fraction.
 
A Bonus Share Fraction
 
entitles a holder to receive
 
an additional
0.5 of
 
a share
 
of common
 
stock for
 
each Warrant
 
exercised (the
 
“Bonus Share
 
Fraction”) without
 
payment
 
of any
additional exercise
 
price. Since
 
the dividend
 
ex-Date on
 
March 12, 202
 
5, the
 
Bonus Share
 
Fraction was
 
adjusted to
0.54827 of a share of common stock for each Warrant
 
exercised.
The
 
right
 
to
 
receive
 
the
 
Bonus
 
Share
 
Fraction
 
will
 
expire
 
at
 
5:00
 
p.m.
 
New
 
York
 
City
 
time
 
(the
 
“Bonus
 
Share
Expiration
 
Date”) upon
 
the earlier
 
of (I)
 
the date
 
specified by
 
the Registrant
 
upon
 
not less
 
than
 
20
 
business days
’
notice and (ii) the first business day
 
following the last day of the first 30
 
consecutive trading day period in
 
which the
daily VWAP
 
of the shares of common stock
 
has been at least equal to
 
the then applicable trigger price for
 
at least 20
trading days (whether or
 
not consecutive) (the “Bonus
 
Price Condition”). Any Warrant exercised with an
 
exercise date
after the
 
Bonus Share
 
Expiration Date
 
will not
 
be entitled
 
to any
 
Bonus Share
 
Fraction. The
 
Company will
 
make a
public announcement of
 
the Bonus Share Expiration
 
Date (I) at least
 
20 business days
 
prior to such
 
date, in the case
of the Company
 
setting a Bonus
 
Share Expiration
 
Date and (ii)
 
prior to market
 
open on the
 
Bonus Share
 
Expiration
Date
 
in
 
the
 
case
 
of
 
a
 
Bonus
 
Price
 
Condition.
 
Unless
 
earlier
 
redeemed,
 
the
 
Warrants
 
will
 
expire
 
and
 
cease
 
to
 
be
exercisable at 5:00 p.m.
 
New York
 
City time on December
 
14, 2026 (the “Expiration
 
Date”). In connection
 
with the
Warrant
 
distribution,
 
we
 
filed
 
a
 
prospectus
 
supplement,
 
dated
 
December
 
14,
 
2023,
 
pursuant
 
to
 
ashelf
 
registration
statement on Form F-3 declared effective on July 9, 2021, registering up to 33,919,605 shares of common stock to be
issued upon exercise
 
of the Warrants
 
under the Securities
 
Act of 1933,
 
as amended. The
 
shelf registration statement
on Form F-3 declared effective on July 9, 2021 expired and the Warrant
 
distribution is now being offered pursuant to
our
 
existing
 
shelf
 
registration
 
statement
 
on
 
Form
 
F-3
 
declared
 
effective
 
on
 
September
 
9,
 
2024.
 
The
 
Warrants
commenced trading on the New York
 
Stock Exchange under the ticker “DSX WS” on December 14, 2023.
DESCRIPTION OF PREFERRED STOCK PURCHASE RIGHTS
On February 2, 2024, we entered into an Amended and
 
Restated Stockholders Rights Agreement with Computershare
Trust Company, N.A., as Rights Agent, to amend and restate the Stockholders Rights Agreement, dated January 15, Under the Rights Agreement, we declared a dividend payable of one preferred stock purchase right, or right, for each
2016.
share of
 
common stock
 
outstanding at
 
the close
 
of business
 
on January
 
26, 2016.
 
Each Right
 
entitles the
 
registered
holder to purchase
 
from us one
 
one-thousandth of
 
a share of Series
 
A Participating Preferred
 
Stock, par value
 
$0.01
per
 
share,
 
at
 
an
 
exercise
 
price
 
of
 
$25.00
 
per
 
share.
 
The
 
Rights
 
will
 
separate
 
from
 
the
 
common
 
stock
 
and
 
become
exercisable only if a
 
person or group acquires
 
beneficial ownership of 15%
 
or more of our common
 
stock (including
through entry into
 
certain derivative positions) in
 
a transaction not
 
approved by our
 
board of directors.
 
In that situation,
each holder of
 
a Right (other than
 
the acquiring person,
 
whose Rights will become
 
void and will not
 
be exercisable)
will have the right to
 
purchase, upon payment of
 
the exercise price, a number
 
of shares of our common
 
stock having
a then-current market
 
value equal to
 
twice the exercise
 
price. In addition,
 
if the Company
 
is acquired in
 
a merger or
other business combination after an acquiring
 
person acquires 15% or more of our
 
common stock, each holder of the
Right will thereafter
 
have the right
 
to purchase, upon
 
payment of the
 
exercise price, a
 
number of shares
 
of common
stock
 
of
 
the
 
acquiring
 
person
 
having
 
a
 
then-current
 
market
 
value
 
equal
 
to
 
twice
 
the
 
exercise
 
price.
 
The
 
acquiring
person will not be entitled to exercise
 
these Rights. Until a Right is exercised, the
 
holder of a Right will
 
have no rights
to vote or receive dividends or any other stockholder rights. The Rights may
 
have anti-takeover effects.
 
The Rights will
 
cause substantial dilution
 
to any person
 
or group that
 
attempts to acquire
 
us without the
 
approval of
our board of
 
directors. As a result,
 
the overall effect
 
of the Rights may
 
be to render
 
more difficult or
 
discourage any
attempt to
 
acquire us.
 
Because our
 
board of
 
directors approve
 
a redemption
 
of the
 
Rights or
 
a permitted
 
offer,
 
the
Rights should not interfere with a merger or other business combination
 
approved by our board of directors.
We have summarized the material terms and conditions of the
 
Rights Agreement and the Rights below. Fora complete
description of
 
the Rights, we
 
encourage you
 
to read the
 
Rights Agreement,
 
which we have
 
filed as an
 
exhibit to
 
the
registration statement filed with the Commission on February 2, 2024.
 
Detachment of the Rights
The
 
Rights
 
are
 
attached
 
to all
 
certificates
 
representing
 
our
 
currently
 
outstanding
 
common
 
stock,
 
or,
 
in
 
the case
 
of
uncertificated common shares registered in book entry form, which
 
we refer to as "book entry shares, “by notation in
book entry accounts
 
reflecting ownership, and
 
will attach to all
 
common stock certificates
 
and book entry
 
shares we
issue prior to the Rights distribution date that we describe below.
 
The Rights are not exercisable until after the Rights
distribution
 
date and
 
will expire
 
at the
 
close of
 
business on
 
January 14,2026,
 
unless we
 
redeem
 
or exchange
 
them
earlier as we
 
describe below.
 
The Rights will
 
separate from
 
the common
 
stock and a
 
Rights distribution
 
date would
occur, subject to specified exceptions, on
 
the earlier of the following two dates:
●
the 10th day after public announcement that a person or group has acquired ownership of 15%or more of the
Company's common stock; or
●
the 10th business
 
day (or such
 
later date as determined
 
by the Company's
 
board of directors)
 
after a person
or group
 
announces a
 
tender or
 
exchange offer
 
which would
 
result in
 
that person
 
or group
 
holding 15%
 
or
more of the Company's common stock.
"Acquiring person" is generally defined in
 
the Rights Agreement as any
 
person, together with all affiliate’s associates,
who beneficially owns 15% or more of the Company's common
 
stock. However, the Company,
 
any subsidiary of the
Company or any employee benefit plan
 
of the Company or of any subsidiary
 
of the Company,
 
or any person holding
shares of common stock for
 
or pursuant to the terms of any
 
such plan, are excluded from
 
the definition of "acquiring
person." In
 
addition, persons
 
who beneficially
 
own 15%
 
or more
 
of the
 
Company's common
 
stock on
 
the effective
date of
 
the Rights
 
Agreement are
 
excluded from
 
the definition
 
of "acquiring
 
person" unless
 
and until
 
such time
 
as
such Person shall become the Beneficial Owner of an aggregate of 18.5% or
 
more of the Company’s then outstanding
Common Stock, (excluding shares acquired pursuant to a grant under a Company equity incentive plan, a dividend or
distribution paid or
 
made by the
 
Company on the
 
outstanding shares of
 
Common Stock in
 
shares of Common
 
Stock
or securities convertible
 
into shares of Common
 
Stock or pursuant to
 
a split or subdivision
 
of the outstanding
 
shares
of Common
 
Stock), and provided
 
further, that
 
Tuscany Shipping
 
Corp. individually or
 
together with one
 
or more of
its Affiliates shall not be or become an “Acquiring Person” as defined
 
herein.
Our board of
 
directors may defer
 
the Rights
 
distribution date in
 
some circumstances, and
 
some inadvertent acquisitions
will not result in a person becoming an acquiring person if the person promptly divests itself of sufficient number of Until the Rights distribution date:
shares of common stock.
 
 
 
 
 
 
●
our
 
common
 
stock
 
certificates
 
and
 
book
 
entry
 
shares
 
will
 
evidence
 
the
 
Rights,
 
and
 
the
 
Rights
 
will
 
be
transferable only with those certificates; and
●
any new common
 
stock will be
 
issued with Rights
 
and new certificates
 
or book entry
 
shares, as applicable,
will contain a notation incorporating the Rights Agreement by reference.
As soon as practicable after the Rights distribution date, the
 
Rights agent will mail certificates representing the Rights
to holders
 
of record
 
of common
 
stock at
 
the close
 
of business
 
on that
 
date. After
 
the Rights
 
distribution date,
 
only
separate Rights certificates will represent the Rights.
We will not issue Rights with
 
any shares of common
 
stock we issue after
 
the Rights distribution date,
 
except our board
of directors may otherwise determine.
Flip-In Event
A
 
"flip-in
 
event"
 
will
 
occur
 
under
 
the
 
Rights
 
Agreement
 
when
 
a
 
person
 
becomes
 
an
 
acquiring
 
person
 
other
 
than
pursuant to certain
 
kinds of permitted
 
offers. An offer is
 
permitted under the
 
Rights Agreement if
 
a person will
 
become
an
 
acquiring
 
person
 
pursuant
 
to
 
a
 
merger
 
or
 
other
 
acquisition
 
agreement
 
that
 
has
 
been
 
approved
 
by
 
our
 
board
 
of
directors prior to that person becoming an acquiring person.
If a flip-in event occurs and we
 
have not previously redeemed the Rights as described
 
under the heading “Redemption
of Rights" below or,
 
if the acquiring person
 
acquires less than 50%
 
of our outstanding
 
common stock and we
 
do not
exchange the
 
Rights as
 
described under
 
the heading
 
"Exchange of
 
Rights" below,
 
each Right,
 
other than
 
any Right
that has
 
become void,
 
as we
 
describe below,
 
will become
 
exercisable at
 
the time
 
it is
 
no longer
 
redeemable for
 
the
number of shares
 
of common stock, or, in
 
some cases, cash,
 
property or other of
 
our securities, having a
 
current market
price equal to two times the exercise price of such right.
When a
 
flip-in event
 
occurs, all
 
Rights that
 
then are,
 
or in
 
some circumstances
 
that were,
 
beneficially owned
 
by or
transferred
 
to
 
an
 
acquiring
 
person
 
or
 
specified
 
related
 
parties
 
will
 
become
 
void
 
in
 
the
 
circumstances
 
the
 
Rights
Agreement specifies.
Transfer of Shares
The Board of Directors has the power and authority to make such rules and regulations
 
as they may deem expedient
concerning the issuance, registration and transfer of shares of the Company’s
 
stock, and may appoint transfer agents
and registrars thereof.
Comparison of Marshall Island Law to Delaware Law
Marshall Islands
Delaware
Shareholder Meetings
Held at a time and place as designated in the
bylaws.
Special meetings of the shareholders may be called
by the board of directors or by such person or
persons as may be authorized by the articles of
incorporation or by the bylaws.
May be held at such time or place as
designated in the certificate of incorporation.
or the bylaws, or if not so designated, as
determined by the board of directors. Special
meetings of the shareholders may be called by
 
the board of directors or by such person or
persons as may be authorized by the
certificate of incorporation or by the bylaws.
May be held within or without the Marshall
Islands.
May be held within or without Delaware.
 
 
 
 
 
 
 
 
 
Notice:
Whenever shareholders are required to take any
action at a meeting, written notice of the meeting
shall be given which shall state the place, date and
hour of the meeting and, unless it is an annual
meeting, indicate that it
is being issued by or at the direction of the person
calling the meeting. Notice of a
special meeting shall also state the purpose for
which the meeting is called.
A copy of the notice of any meeting shall be given
personally, sent by mail
 
or by
electronic mail not less than 15 nor more than 60
days before the meeting.
Notice:
Whenever shareholders are required to take any action
at a meeting, a written notice of the meeting shall be
given which shall state the place, if any,
 
date and hour
of the meeting, and the means of remote
communication, if any.
Written notice shall be given not less than 10nor
 
more
than 60 days before the meeting.
Shareholders’ Voting
 
Rights
Unless otherwise provided in the articles of
incorporation,
 
any action required to be taken at a
meeting of shareholders may be taken without a
meeting, without prior notice and without a vote, if
a consent in writing, setting forth the action so
taken, is signed by all the shareholders entitled to
vote with respect to the subject matter thereof, or if
the articles of incorporation so provide, by the
holders of outstanding shares having not less than
the minimum number of votes that would be
necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon
were present and voted.
Any person authorized to vote may authorize
another person or persons to act for him by proxy.
Unless otherwise provided in the articles of
incorporation or bylaws, a majority of shares
entitled to vote constitutes a quorum. In no event
shall a quorum consist of fewer than one-third of
the shares entitled to vote at a meeting.
When a quorum is once present to organize a
meeting,
 
it is not broken by the subsequent
withdrawal of any shareholders.
The articles of incorporation may provide for
cumulative voting in the election of directors.
Any action required to be taken at a meeting of
shareholders may be taken without a meeting if a
consent for such action is inwriting and is signed by
shareholders having not fewer than the minimum
number of votes that would be necessary to authorize
or take
such action at a meeting at which all shares
entitled to vote thereon were present and
voted.
 
Any person authorized to vote may authorize
another person or persons to act for him by
proxy.
For stock corporations, the certificate of
incorporation or bylaws may specify the
number of shares required to constitute a
quorum but in no event shall a quorum consist
of less than one-third of shares entitled to vote
at a meeting. In the absence of such
specifications, a majority of shares entitled to
vote shall constitute a quorum.
When a quorum is once present to organize a
meeting, it is not broken by the subsequent
withdrawal of any shareholders.
The certificate of incorporation may provide
for cumulative voting in the election of
directors.
Marshall Islands Merger or Consolidation
Any two or more domestic corporations may
merge into a single corporation if approved by the
board and if authorized by a majority vote of the
holders of outstanding shares at shareholder
meeting.
Any two or more corporations existing under the laws
of the state may merge into a single corporation
pursuant to a board resolution and upon the majority
vote by shareholders of each constituent corporation at
an annual or special meeting.
 
 
 
 
 
 
 
 
 
Any sale, lease, exchange or other disposition of
all or substantially all the assets of a corporation, if
not made in the corporation’s usual
 
or regular
course of business, once approved by the board,
shall be authorized by the affirmative vote of two-
thirds of the shares of those entitled to vote at a
shareholder meeting.
Every corporation may at any meeting of the board
sell, lease or exchange all or substantially all of its
property and assets board deems expedient and for the
best interests of the corporation when so authorized by
a resolution adopted by the holders of a majority of the
outstanding stock of the corporation entitled to vote.
Any domestic corporation owning at least
90% of the outstanding shares of each class of
another domestic corporation may merge such
other corporation into itself without the
authorization of the shareholders of any
corporation.
Any mortgage, pledge of or creation of a
security interest in all or any part of the
corporate property may be authorized without
the vote or consent of the shareholders, unless
otherwise provided for in the articles of
incorporation.
Any corporation owning at least 90% of the
outstanding shares of each class of another corporation
may merge the other corporation into itself and assume
all of its obligations without the vote or consent of
shareholders; however, in case the parent
 
corporation is
not the surviving corporation, the proposed merger
shall be approved by a majority of the outstanding
stock of the parent corporation entitled to vote at a duly
called shareholder meeting. Any mortgage or pledge of
a corporation’s property and assets may be
 
authorized
without the vote or consent of shareholders, except to
the extent that the certificate of incorporation otherwise
provides.
Directors
The board of directors must consist of at least
one member.
The board of directors must consist of at least
one member.
The number of board members may be
changed by an amendment to the bylaws, by
the shareholders, or by action of the board
under the specific provisions of a bylaw.
If the board is authorized to change the
number of directors, it can only do so by a
majority of the entire board and so long as no
decrease in the number shall shorten the term
of any incumbent director.
The number of board members shall be fixed
by, or in a manner provided
 
by, the bylaws,
unless the certificate of incorporation fixes
the number of directors, in which case a
change in the number shall be made only by
an amendment to the certificate of
incorporation.
If the number of directors is fixed by the
certificate of incorporation, a change in the
number shall be made only by an amendment
of the certificate.
Removal:
Any or all of the directors may be removed
for cause by vote of the shareholders.
If the articles of incorporation or the bylaws
so provide, any or all of the directors may be
removed without cause by vote of the
shareholders.
Removal:
Any or all of the directors may be removed,
with or without cause, by the holders of a
majority of the shares entitled to vote unless
the certificate of incorporation otherwise
provides.
In the case of a classified board, shareholders
may effect removal of any or all directors
only for cause.
 
Appraisal rights shall be available for the
shares of any class or series of stock of a
corporation in a merger or consolidation,
subject to limited exceptions, such as a merger or
consolidation of corporations listed
on a national securities exchange in which listed stock is offered for consideration is (I)
 
 
listed on a national securities exchange or (ii)
held of record by more than 2,000 holders.
Dissenters’ Rights of Appraisal
Shareholders have a right to dissent from any
plan of merger, consolidation or
 
sale of all or
substantially all assets not made in the usual
course of business, and receive payment of
the fair value of their shares. However, the
right of a dissenting shareholder under the
BCA to receive payment of the appraised fair
value of his shares shall not be available for
the shares of any class or series of stock,
which shares or depository receipts in respect
thereof, at the record date fixed to determine
the shareholders entitled to receive notice of
and to vote at the meeting of the shareholders
to act upon the agreement of merger or
consolidation, were either (i) listed on a
securities exchange or admitted for trading on
an interdealer quotation system or (ii) held of
record by more than 2,000 holders. The right
of a dissenting shareholder to receive
payment of the fair value of his or her shares
shall not be available for any shares of stock
of the constituent corporation surviving a
merger if the merger did not require for its
approval the vote of the shareholders of the
surviving corporation.
In any derivative suit instituted by a
shareholder of a corporation, it shall be
averred in the complaint that the plaintiff was
a shareholder of the corporation at the time of
the transaction of which he complains or that
such shareholder’s stock thereafter devolved
upon such shareholder by operation of law.
Other requirements regarding derivative suits
have been created by judicial decision,
including that a shareholder may not bring a
derivative suit unless he or she first demands
that the corporation sue on its own behalf and
that demand is refused (unless it is shown that
such demand would have been futile).
A holder of any adversely affected shares
who does not vote on or consent in writing to
an amendment to the articles of incorporation
has the right to dissent and to receive
payment for such shares if the amendment:
• Alters or abolishes any preferential
right of any outstanding shares having
preference; or
• Creates, alters, or abolishes any
provision or right in respect to the
redemption of any outstanding shares; or
• Alters or abolishes any preemptive
right of such holder to acquire shares
or other securities; or
• Excludes or limits the right of such
holder to vote on any matter, except
as such right may be limited by the
voting rights given to new shares then
being authorized of any existing or An action may be brought in the right of a
new class.
 
Shareholder’s Derivative Actions
corporation to procure a judgment in its favor,
by a holder of shares or of voting trust
certificates or of a beneficial interest in such
shares or certificates. It shall be made to
appear that the plaintiff is such a holder at the
time of bringing the action and that he was
such a holder at the time of the transaction of
which he complains, or that his shares or his
interest therein devolved upon him by
operation of law.
 
A complaint shall set forth
with particularity the efforts of the plaintiff
 
to
secure the initiation of such action by the
board or the reasons for not making such
effort.
Such action shall not be discontinued,
compromised or settled, without the approval
of the High Court of the Republic of the
Marshall Islands.
Reasonable expenses including attorney’s
fees may be awarded if the action is
successful.
A corporation may require a plaintiff bringing
a derivative suit to give security for
reasonable expenses if the plaintiff owns less
than 5% of any class of outstanding shares or
holds voting trust certificates or a beneficial
interest in shares representing less than 5% of
any class of such shares and the shares, voting
trust certificates or beneficial interest of such
plaintiff has a fair value of $50,000 or less SUBSIDIARIES AS AT DECEMBER 31, 2024
EX-8.1 8 exhibit81.htm EX-8.1 exhibit81
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subsidiary
Country of Incorporation
Aerik Shipping Company Inc.
The Republic of the Marshall Islands
Arorae Shipping Company Inc.
The Republic of the Marshall Islands
Aster Shipping Company Inc.
The Republic of the Marshall Islands
Beru Shipping Company Inc.
The Republic of the Marshall Islands
Bikati Shipping Company Inc.
The Republic of the Marshall Islands
 
Bikini Shipping Company Inc.
The Republic of the Marshall Islands
Bonriki Shipping Company Inc.
The Republic of the Marshall Islands
Bulk Carriers (USA) LLC
United States (State of Delaware)
Cebu Shipping Company Inc.
The Republic of the Marshall Islands
Cerada International S.A.
Republic of Panama
Diana Energize Inc.
The Republic of the Marshall Islands
Diana General Partner Inc.
The Republic of the Marshall Islands
Diana Ship Management Inc.
The Republic of the Marshall Islands
Diana Shipping Services S.A.
Republic of Panama
Ebadon Shipping Company Inc.
The Republic of the Marshall Islands
Ejite Shipping Company Inc.
The Republic of the Marshall Islands
Erikub Shipping Company Inc.
The Republic of the Marshall Islands
Fayo Shipping Company Inc.
The Republic of the Marshall Islands
Gala Properties Inc.
The Republic of the Marshall Islands
Guam Shipping Company Inc.
The Republic of the Marshall Islands
Jabat Shipping Company Inc.
The Republic of the Marshall Islands
Jabwot Shipping Company Inc.
The Republic of the Marshall Islands
Jemo Shipping Company Inc.
The Republic of the Marshall Islands
Kaben Shipping Company Inc.
The Republic of the Marshall Islands
Kili Shipping Company Inc.
The Republic of the Marshall Islands
Kiribati Shipping Company Inc.
The Republic of the Marshall Islands
Komi Shipping Company Inc.
The Republic of the Marshall Islands
Lae Shipping Company Inc.
The Republic of the Marshall Islands
Lakeba Shipping Company Inc.
The Republic of the Marshall Islands
Lelu Shipping Company Inc.
The Republic of the Marshall Islands
Lib Shipping Company Inc.
The Republic of the Marshall Islands
Majuro Shipping Company Inc.
The Republic of the Marshall Islands
Makur Shipping Company Inc.
The Republic of the Marshall Islands
Manra Shipping Company Inc.
The Republic of the Marshall Islands
Mejato Shipping Company Inc.
The Republic of the Marshall Islands
Monu Shipping Company Inc.
The Republic of the Marshall Islands
Namorik Shipping Company Inc.
The Republic of the Marshall Islands
Namu Shipping Company Inc.
The Republic of the Marshall Islands
Palau Shipping Company Inc.
The Republic of the Marshall Islands
Pulap Shipping Company Inc.
The Republic of the Marshall Islands
Rairok Shipping Company Inc.
The Republic of the Marshall Islands
Rakaru Shipping Company Inc.
The Republic of the Marshall Islands
Silver Chandra Shipping Company Limited
Republic of Cyprus
Tamana Shipping
 
Company Inc.
The Republic of the Marshall Islands
Taongi Shipping
 
Company Inc.
The Republic of the Marshall Islands
Taroa Shipping
 
Company Inc.
The Republic of the Marshall Islands
Toku Shipping
 
Company Inc.
The Republic of the Marshall Islands
Tuvalu Shipping Company Inc.
The Republic of the Marshall Islands
Ujae Shipping Company Inc.
The Republic of the Marshall Islands
Wake Shipping
 
Company Inc.
The Republic of the Marshall Islands
 
 
 
 
 
 
Weno Shipping
 
Company Inc.
The Republic of the Marshall Islands
Wotho Shipping
 
Company Inc.
The Republic of the Marshall Islands
EX-11.1 9 exhibit111.htm EX-11.1 exhibit111
CODE OF ETHICS
The Board of Directors of Diana Shipping Inc. (the "Company") has adopted
 
this Code of
Ethics
 
(the
 
"Code")
 
for
 
all
 
of
 
the
 
Company's
 
employees,
 
directors,
 
officers
 
and
 
agents
("Employees"). All Employees are
 
required to be
 
familiar with the
 
Code, comply with its
provisions and
 
report any
 
suspected violations
 
as described
 
below in
 
the section
 
entitled
"Internal Reporting".
This Code outlines
 
the ethical
 
principles that
 
are to
 
govern the decisions
 
and behavior
 
of
the Company’s
 
Employees and is designed to
 
help Employees conduct business honestly,
respectfully and
 
with integrity.
 
This Code
 
outlines the
 
core values
 
of the
 
Company,
 
with
respect to
 
how Employees are
 
generally supposed to
 
approach problems.
 
For the avoidance
of doubt, this Code does not purport to describe all of the Company’s policies in detail.
 
I. Conflicts of Interest
A conflict
 
of interest
 
occurs when
 
an Employee's
 
private interests
 
interfere, or
 
even appears
to
 
interfere,
 
with
 
the
 
interests
 
of
 
the
 
Company
 
as
 
a
 
whole.
 
While
 
it
 
is
 
not
 
possible
 
to
describe every
 
situation in
 
which a
 
conflict of
 
interest may
 
arise, Employees
 
must never
use or attempt
 
to use their
 
position with the
 
Company to obtain
 
improper personal benefits.
Any Employee who is aware of a conflict of
 
interest, or is concerned that a conflict might
develop, should discuss
 
the matter with
 
the Audit Committee
 
or counsel to
 
the Company
immediately.
II. Corporate Opportunities
Employees
 
owe
 
a
 
duty
 
to
 
advance
 
the
 
legitimate
 
interests
 
of
 
the
 
Company
 
when
 
the
opportunities
 
to
 
do
 
so
 
arise.
 
Employees
 
may
 
not
 
take
 
for
 
themselves
 
personally
opportunities
 
that
 
are
 
discovered
 
through
 
the
 
use
 
of
 
corporate
 
property,
 
information
 
or
position.
III. Confidentiality and Personal Data Privacy
It
 
is
 
important
 
that
 
Employees
 
protect
 
the
 
confidentiality
 
of
 
Company
 
information.
Employees
 
may
 
have
 
access
 
to
 
proprietary
 
and
 
confidential
 
information
 
concerning
 
the
Company's business,
 
clients and
 
suppliers.
 
Confidential information
 
includes such
 
items
as
 
non-public
 
information
 
concerning
 
the
 
Company's
 
business,
 
financial
 
results
 
and
prospects
 
and
 
potential
 
corporate
 
transactions.
 
Employees
 
are
 
required
 
to
 
keep
 
such
information confidential during employment as well as thereafter, and not to use,
 
disclose,
or communicate
 
that confidential information
 
other than
 
in the course
 
of employment.
 
The
consequences to the
 
Company and
 
the Employee
 
concerned can
 
be severe where
 
there is
unauthorized disclosure of any non-public, privileged or proprietary information.
 
To
 
ensure
 
the
 
confidentiality
 
of
 
any
 
personal
 
information
 
collected
 
and
 
to
 
comply
 
with
applicable laws,
 
any Employee in
 
possession of non-public,
 
personal information about
 
the
Company's
 
customers,
 
potential
 
customers,
 
or
 
Employees,
 
must
 
maintain
 
the
 
highest
degree
 
of
 
confidentiality
 
and
 
must
 
not
 
disclose
 
any
 
personal
 
information
 
unless
authorization is obtained.
The Company respects and takes
 
seriously the protection of the
 
personal data of all natural
persons who
 
use the
 
Company’s facilities, services
 
and websites.
 
The Company
 
also strives
to
 
take
 
all
 
appropriate
 
technical
 
and
 
organizational
 
measures
 
required
 
to
 
protect
 
the
personal data it collects and processes.
The
 
restriction
 
on
 
disclosing
 
confidential
 
information
 
is
 
not
 
intended
 
to
 
prevent
 
any
Employee from reporting
 
to the Company’s senior
 
management or directors,
 
a government
body
 
or
 
a
 
regulator,
 
concerns
 
of
 
any
 
known
 
or
 
suspected
 
violation
 
of
 
this
 
Code,
 
or
 
to
prevent any Employee from reporting retaliation for reporting such concerns. It is also not
this Code’s
 
intention to prevent any
 
Employee from responding
 
truthfully to questions
 
or
requests from a government body, a regulator or as required by applicable law.
IV.
 
Honest and Fair Dealing
Employees
 
must
 
endeavor
 
to
 
deal
 
honestly,
 
ethically
 
and
 
fairly
 
with
 
the
 
Company's
customers, suppliers, competitors and other
 
Employees.
 
No Employee should take unfair
advantage of anyone through manipulation, concealment, abuse of
 
privileged information,
misrepresentation of material facts, or
 
any other unfair-dealing practice. Honest conduct is
considered to
 
be conduct
 
that is
 
free from
 
fraud or
 
deception.
 
Ethical conduct
 
is considered
to be conduct conforming to accepted professional standards of conduct.
 
V.
 
Freedom from discrimination and harassment
Our Company is committed to creating
 
an environment in which all individuals
 
are able to
make
 
the
 
best
 
of
 
their
 
skills,
 
free
 
from
 
discrimination
 
or
 
harassment
 
and
 
bullying.
 
The
Company
 
is
 
committed
 
to
 
providing
 
a
 
working
 
environment
 
free
 
from
 
discrimination
against staff on the basis of
 
sex or sexual orientation, marital
 
or civil partner status, gender
reassignment, race (which
 
includes colour,
 
nationality,
 
ethnic or national origin),
 
religion
or
 
belief,
 
disability,
 
age
 
and
 
pregnancy
 
or
 
maternity
 
(collectively
 
known
 
as
 
“protected
characteristics”), as
 
well as
 
one where harassment
 
and bullying
 
does not
 
occur.
 
It should
be noted that all
 
Employees are required to
 
work in a manner
 
that facilitates the fostering
of such
 
a working
 
environment and
 
to report
 
any known
 
or suspected
 
breaches or
 
violations
as described
 
below in the
 
section entitled "Internal
 
Reporting". Discrimination, harassment
and
 
bullying
 
are
 
violations
 
of
 
the
 
Company’s
 
ethical
 
principles,
 
and
 
may
 
subject
 
the
Company and any Employee
 
guilty of such behaviors
 
to liability,
 
both criminal and civil.
Complaints
 
of
 
discrimination,
 
harassment
 
and
 
bullying
 
will
 
be
 
investigated
 
promptly,
sensitively and confidentially.
VI. Health and Safety
The Company strives to provide its Employees with a safe
 
and healthy work environment.
Each
 
Employee
 
has
 
the
 
responsibility
 
to
 
maintain
 
a
 
safe
 
and
 
healthy
 
workplace
 
for
 
all
Employees by following all
 
applicable safety and health
 
rules, regulations and laws
 
and by
reporting accidents, injuries and unsafe equipment, practices or conditions.
 
Threats
 
or
 
acts
 
of
 
violence
 
and
 
physical
 
intimidation
 
are
 
not
 
permitted.
 
As
 
further
explained
 
in
 
the
 
section
 
below,
 
the
 
use
 
of
 
illegal
 
drugs
 
in
 
the
 
workplace
 
will
 
not
 
be
tolerated.
VII. Drugs and Alcohol
Company
 
policy
 
prohibits
 
the
 
illegal
 
use,
 
sale,
 
purchase,
 
transfer,
 
possession
 
or
consumption of controlled substances, other than medically prescribed
 
drugs, while on the
Company
 
premises.
 
Company
 
policy
 
also
 
prohibits
 
the
 
use,
 
sale,
 
purchase,
 
transfer
 
or
possession of
 
alcoholic beverages
 
by Employees
 
while on
 
Company premises,
 
except as
authorized by the Company. This policy requires
 
the Company to abide
 
by applicable laws
and regulations relative
 
to the use of
 
alcohol or other
 
controlled substances. The Company,
in its
 
discretion, reserves
 
the right
 
to randomly
 
test Employees
 
for the
 
use
 
of alcohol
 
or
other controlled substances unless prohibited by prevailing local law.
VIII. Modern Slavery
Modern Slavery involves
 
the deprivation of
 
a person’s
 
liberty by another
 
to exploit
 
them
for gain either personally or commercially. The Company
 
is committed to a zero tolerance
approach towards modern slavery in its business dealings and relationships.
IX. Environmental Compliance
All
 
Employees
 
hereby
 
agree
 
to
 
comply
 
with
 
the
 
Company’s
 
policy
 
for
 
environmental
compliance
 
and
 
to
 
work
 
towards
 
achieving
 
continual
 
environmental
 
protection
improvement. No violation of prevailing
 
local or national environmental rules, regulations
or laws whatsoever is
 
to the benefit
 
of the Company
 
and therefore the Company
 
has zero
tolerance against any such violations.
X. Anti-corruption, Gifts and Hospitality
The
 
Company
 
is
 
committed
 
to
 
complying
 
with
 
all
 
applicable
 
anti-corruption
 
laws,
 
to
denying any
 
form of
 
bribery and
 
to conducting
 
its worldwide
 
business in
 
an ethical,
 
fair
and transparent manner.
It is strictly
 
prohibited for
 
Employees to
 
offer to
 
pay,
 
pay,
 
authorize payment
 
or promise
to
 
pay
 
money
 
or
 
anything
 
of
 
value,
 
directly
 
or
 
indirectly,
 
to
 
a
 
government
 
official,
 
an
existing or potential business partner or any other party, when such payment is intended to unethical or illegal behavior or a breach of duty.
influence
 
latter’s
 
act
 
or
 
decision,
 
to
 
award
 
or
 
retain
 
business,
 
or
 
to
 
induce
 
or
 
reward
Employees are
 
not to
 
request, receive,
 
solicit, agree
 
to receive,
 
directly or
 
indirectly, money
or anything of
 
value that may
 
reasonably be regarded
 
as a bribe
 
or as an
 
improper incentive
for the Company’s business activities.
Gifts
 
and
 
hospitality
 
must
 
never
 
be
 
offered
 
or
 
provided
 
with
 
a
 
purpose
 
of
 
trying
 
to
improperly influence business conduct.
XI. Protection and Proper Use of Company Assets
The
 
Company's
 
assets
 
are
 
only
 
to
 
be
 
used
 
for
 
legitimate
 
business
 
purposes
 
and
 
only
 
by
authorized
 
Employees
 
or
 
their
 
designees.
 
This
 
applies
 
to
 
tangible
 
assets
 
(such
 
as
 
office
equipment, telephone, copy machines,
 
etc.) and intangible assets
 
(such as trade secrets and
confidential information). Employees
 
have a responsibility
 
to protect
 
the Company's assets
from theft and loss and
 
to ensure their efficient
 
use.
 
Theft, carelessness and waste have
 
a
direct impact
 
on the
 
Company's profitability. If
 
you become
 
aware of
 
theft, waste
 
or misuse
of the Company's assets you should report this to your manager.
XII. Compliance with Laws, Rules and Regulations
It is the Company's
 
policy to comply
 
with all applicable laws,
 
rules and regulations.
 
It is
the
 
personal
 
responsibility
 
of
 
each
 
Employee
 
to
 
adhere
 
to
 
the
 
standards
 
and
 
restrictions
imposed by those
 
laws, rules
 
and regulations,
 
and in particular,
 
those relating to
 
accounting
and auditing matters.
Any
 
Employee
 
who
 
is
 
unsure
 
whether
 
a
 
situation
 
violates
 
any
 
applicable
 
law,
 
rule,
regulation or Company policy should contact the Company's outside legal counsel.
XIII. Corporate communications policy
Only
 
certain
 
designated
 
Employees
 
may
 
discuss
 
the
 
Company
 
with
 
the
 
news
 
media,
securities analysts
 
and investors.
 
All inquiries
 
from regulatory
 
authorities or
 
government
representatives
 
should
 
be
 
referred
 
to
 
the
 
appropriate
 
designated
 
Employee.
 
Employees
exposed to media contact during
 
their course of employment
 
must not comment on
 
rumors
or speculation regarding the Company’s activities.
XIV.
 
Electronic communication
“Electronic
 
communications”
 
include
 
all
 
aspects
 
of
 
voice,
 
video,
 
and
 
data
communications,
 
such
 
as
 
voice
 
mail,
 
e-mail,
 
fax,
 
and
 
Internet.
 
Employees
 
should
 
use
electronic communications
 
for business
 
purposes and
 
refrain from
 
personal use
 
while on
Company premises or when performing
 
Company duties. Among other things, Employees
should
 
not
 
participate
 
in
 
any
 
online
 
forum
 
where
 
the
 
business
 
of
 
the
 
Company
 
or
 
its
customers or suppliers
 
is discussed;
 
such participation
 
may give
 
rise to
 
a violation
 
of the
Company’s
 
confidentiality policy or
 
subject the Company
 
to legal action
 
for defamation.
The Company reserves the right to inspect all electronic communications involving the use of the Company’s equipment, software, systems, or other facilities (“Systems”) within the
confines of applicable local law and Employees should not have an expectation of privacy
when using Company Systems.
XV.
 
Securities Trading
Because
 
we
 
are
 
a
 
public
 
company
 
we
 
are
 
subject
 
to
 
a
 
number
 
of
 
laws
 
concerning
 
the
purchase
 
of
 
our
 
shares
 
and
 
other
 
publicly
 
traded
 
securities.
 
Company
 
policy
 
prohibits
Employees
 
and
 
their
 
family
 
members
 
from
 
trading
 
securities
 
while
 
in
 
possession
 
of
material, non-public
 
information relating
 
to the
 
Company or
 
any other
 
Company, including
a customer or supplier that has a significant relationship with the Company.
Information is "material"
 
when there is
 
a substantial likelihood
 
that a reasonable
 
investor
would
 
consider
 
the
 
information
 
important
 
in
 
deciding
 
whether
 
to
 
buy,
 
hold
 
or
 
sell
securities.
 
In short, any information
 
that could reasonably
 
affect the price
 
of securities is
material.
 
Information is
 
considered to
 
be "public"
 
only when
 
it
 
has
 
been
 
released to
 
the
public through appropriate channels and enough
 
time has elapsed to permit the investment
market to
 
absorb and
 
evaluate the
 
information.
 
If you
 
have any
 
doubt as
 
to whether
 
you
possess material
 
nonpublic information,
 
you should
 
contact a
 
manager and
 
the advice
 
of
legal counsel may be sought.
XVI. Disclosure
Employees
 
are
 
responsible
 
for
 
ensuring
 
that
 
the
 
disclosure
 
in
 
the
 
Company's
 
periodic
reports is full, fair, accurate,
 
timely and understandable.
 
In doing so,
 
Employees shall take
such action
 
as is
 
reasonably appropriate
 
to (i)
 
establish and
 
comply with
 
disclosure controls
and
 
procedures
 
and
 
accounting
 
and
 
financial
 
controls
 
that
 
are
 
designed
 
to
 
ensure
 
that
material information relating to the Company is made
 
known to them; (ii) confirm that the
Company's
 
periodic
 
reports
 
comply
 
with
 
applicable
 
law,
 
rules
 
and
 
regulations;
 
and
 
(iii)
ensure that
 
information contained
 
in the
 
Company's periodic
 
reports fairly
 
presents in
 
all
material respects the financial condition and results of operations of the Company.
Employees will
 
not knowingly
 
(i) make,
 
or permit
 
or direct
 
another to
 
make, materially
false or misleading
 
entries in the
 
Company's, or any
 
of its subsidiaries,
 
financial statements
or
 
records;
 
(ii)
 
fail
 
to
 
correct
 
materially
 
false
 
and
 
misleading
 
financial
 
statements
 
or
records; (iii)
 
sign, or
 
permit another
 
to sign,
 
a document
 
containing materially
 
false and
misleading information; or
 
(iv) falsely respond,
 
or fail to
 
respond, to specific
 
inquiries of
the Company's independent auditor or outside legal counsel.
XVII. Procedures Regarding Waivers
Because of the importance of the matters involved in this Code, waivers will be granted Employees or other Company personnel that violate this Code.
only
 
in
 
limited
 
circumstances
 
and
 
where
 
such
 
circumstances
 
would
 
support
 
a
waiver.
 
Waivers
 
of
 
the
 
Code
 
may
 
only
 
be
 
made
 
by
 
the
 
Audit
 
Committee
 
and
 
will
 
be
disclosed by the Company.
XVIII. Internal Reporting
Employees
 
shall
 
take
 
all
 
appropriate
 
action
 
to
 
stop
 
any
 
known
 
misconduct
 
by
 
fellow
Employees shall report any
known or
 
suspected misconduct to
 
the Chairman
 
of the
 
Audit Committee or
 
the Company's
outside legal counsel.
 
The Company will not
 
retaliate or allow retaliation
 
for reports made
in good faith.
XIX. Ethics Hotline and Whistleblower Program
Employees may
 
call the
 
following number
 
+30-210-9470195 and
 
leave a
 
voice message
with
 
our
 
whistleblower
 
hotline
 
answering
 
service
 
if
 
they
 
wish
 
to
 
ask
 
questions,
 
seek
guidance on specific situations or
 
report violations of this Code,
 
including but not limited
to
 
accounting,
 
internal
 
controls
 
and
 
auditing
 
matters.
 
Employees
 
may
 
choose
 
to
 
remain
anonymous
 
but
 
even
 
if
 
they
 
identify
 
themselves,
 
their
 
contact
 
with
 
the
 
whistleblower
hotline will remain strictly confidential.
Employees
 
may
 
also
 
report
 
violations
 
in
 
writing
 
to
 
the
 
following
 
email
 
address
whistleblower@dianashippinginc.com
 
or
 
through
 
the
 
Company’s
 
Whistleblowing
Channel, on its website
.
Employees may choose to be anonymous, however,
 
it will not be
possible
 
to
 
obtain
 
follow-up
 
details
 
necessary
 
to
 
investigate
 
the
 
matter.
 
In
 
either
 
case,
employee information will be kept strictly confidential, thus there should be no fear of any Policies and Procedures to Detect and Prevent
form
 
of
 
retaliation.
 
The
 
whistleblower
 
hotline
 
answering
 
service
 
and
 
email
 
will
 
be
accessible
 
only
 
to
 
the
 
Chairman
 
of
 
the
 
Audit
 
Committee
 
and
 
the
 
Company’s
 
Internal
Auditor.
EX-11.2 10 exhibit112.htm EX-11.2 exhibit112
Insider Trading
DIANA SHIPPING INC.
FOURTH AMENDED AND RESTATED
POLICIES AND PROCEDURES TO DETECT AND
PREVENT INSIDER TRADING
REVISED AS OF NOVEMBER 20,
 
2024
GENERAL
The Securities
 
Exchange Act
 
of 1934
 
prohibits the
 
misuse of
 
material, non-public
 
information. In
order
 
to
 
avoid
 
even
 
the
 
appearance
 
of
 
impropriety,
 
the
 
Company
 
has
 
instituted
 
procedures
 
to
prevent the misuse of non-public information.
Although "insider trading"
 
is not
 
defined in the
 
securities laws, it
 
is generally thought
 
to be
 
described
as trading
 
either personally
 
or on
 
behalf of
 
others on
 
the basis
 
of material
 
non-public information
or communicating material non-public information to others
 
in violation of the law.
This policy (the "Policy")
 
will be administered and
 
supervised by the Company’s
 
Chief Accounting
Officer. Please
 
pay special attention to the "Blackout"
 
and "Trading Window" policies
 
discussed in
this memorandum.
WHOM DOES THE POLICY COVER?
The Policy
 
covers all
 
of the
 
Company’s officers,
 
directors and
 
employees ("insiders"),
 
as well
 
as
any transactions in any Company securities (“securities”) participated in by family members, trusts
or
 
corporations
 
directly
 
or
 
indirectly
 
controlled
 
by
 
insiders.
 
In
 
addition,
 
the
 
Policy
 
applies
 
to
transactions engaged in by
 
corporations in which the
 
insider is an
 
officer, director or 10% or greater
stockholder and a partnership
 
of which the insider
 
is a partner,
 
unless the insider
 
has no direct or
indirect control over the partnership.
The Company forbids
 
any insider from
 
trading, either
 
for his or
 
her personal account
 
or on behalf
of others, while
 
in possession
 
of material
 
non-public information,
 
or communicating
 
material non-
public information
 
to others
 
in violation
 
of the
 
law.
 
This prohibited
 
conduct is
 
often referred
 
to as
"insider trading".
●
 
The
 
Policy
 
extends
 
to
 
each
 
insider’s
 
activities
 
within
 
and
 
outside
 
his/her
 
duties
 
at
 
the
Company. Each
 
insider must read and retain this statement.
●
 
Failure
 
to
 
comply
 
with
 
the
 
Policy
 
may
 
cause
 
an
 
employee
 
to
 
be
 
subject
 
to
 
disciplinary
action.
WHAT IS INSIDER TRADING?
The term "insider trading" generally
 
is used to refer to trading while
 
in possession of material non-
public information
 
(whether or
 
not one
 
is an
 
"insider") and/or
 
to communications
 
of material
 
non-
public information to
 
others. The law
 
in this area
 
is generally understood
 
to prohibit, among
 
other
things:
●
trading by an insider while in possession of material non -public information; trading by a non-insider while in possession of material non-public information, where the
●
information either was disclosed
 
to the non-insider in violation
 
of an insider’s duty to keep
it confidential or the information was misappropriated;
●
 
trading while
 
in possession
 
of material
 
non-public
 
information
 
concerning
 
a tender
 
offer;
and
●
 
wrongfully communicating, or "tipping", material
 
non-public information to others or making
any
 
recommendations
 
or
 
expressing
 
opinions
 
on
 
the
 
basis
 
of
 
material
 
non-public
information
 
as
 
to
 
trading
 
in
 
Company
 
securities
 
unless
 
such
 
disclosure
 
is
 
made
 
in
accordance
 
with
 
Company
 
policies
 
regarding
 
the
 
protection
 
or
 
authorized
 
external
disclosure of
 
information. This
 
prohibition applies
 
whether or
 
not the
 
insider receives
 
any
benefit from the use of that information by the other person
 
or entity.
THE INSIDER CONCEPT
As a general guide for our directors, officers and employees,
 
components of what amounts to
"insider trading" are described below:
Who is an insider?
The
 
concept
 
of
 
"insider"
 
is
 
broad.
 
It
 
includes
 
officers,
 
directors,
 
trustees,
 
and
 
employees
 
of
 
a
company.
 
In
 
addition,
 
a
 
person
 
can
 
be
 
a
 
"temporary
 
insider"
 
if
 
he
 
or
 
she
 
enters
 
into
 
a
 
special
confidential relationship
 
in the
 
conduct of
 
a company’s
 
affairs
 
and as
 
a result
 
is given
 
access to
information solely for
 
the company’s
 
purposes. A
 
temporary insider
 
can include,
 
among others,
 
a
company’s attorneys, accountants, consultants, bank lending officers, and the employees of those
organizations.
What information is material?
Trading on information that
 
is "material" is
 
prohibited. Information generally is
 
considered "material"
if:
●
 
there is a substantial
 
likelihood that a
 
reasonable investor
 
would consider the
 
information
important in making an investment decision, or
●
 
the
 
information
 
is
 
reasonably
 
certain
 
to
 
have
 
a
 
substantial
 
effect
 
on
 
the
 
price
 
of
 
the
Company’s securities.
Information that should be considered material includes: dividend changes, earnings
 
estimates not
previously disseminated,
 
material changes
 
in previously
 
-released earnings
 
estimates,
 
significant
merger
 
or
 
acquisition
 
proposals
 
or
 
agreements,
 
major
 
litigation,
 
liquidity
 
problems,
 
and
extraordinary management developments.
What information is non-public?
Information
 
is
 
non-public
 
until
 
it
 
has
 
been
 
effectively
 
communicated
 
to
 
the
 
market
 
place.
 
For
example, information
 
found
 
in a
 
report filed
 
with
 
the U.S.
 
Securities
 
and
 
Exchange
 
Commission
(the
 
“SEC”),
 
or
 
appearing
 
in
 
Dow
 
Jones,
 
Reuters,
 
The
 
Wall
 
Street
 
Journal,
 
on
 
Bloomberg
 
or
 
in
other publications of
 
general circulation ordinarily would
 
be considered public.
 
In addition, in
 
certain
circumstances, information disseminated to certain
 
segments of the investment community
 
may be
deemed
 
"public",
 
for
 
example,
 
research
 
communicated
 
through
 
institutional
 
information
dissemination services such as First Call. (However, the fact that research has been disseminated
through such a service
 
does not automatically
 
mean that it is
 
public.) Remember,
 
it takes time for
information
 
to
 
become
 
public.
 
The
 
amount
 
of
 
time
 
since
 
the
 
information
 
was
 
first
 
disseminated
ordinarily is a factor regarding whether the information
 
is considered "public".
PENALTIES FOR INSIDER TRADING
Penalties
 
for
 
insider
 
trading
 
are
 
severe
 
both
 
for
 
the
 
individuals
 
involved
 
as
 
well
 
as
 
for
 
their
employers. A person
 
can be subject
 
to some or
 
all of the penalties
 
listed below,
 
even if he or
 
she
does not personally benefit from the violation. Penalties
 
may include:
●
 
Jail sentences;
●
 
Civil injunctions;
●
 
Civil treble (3x) damages;
●
 
Disgorgement of profits;
●
 
Criminal
 
fines
 
of
 
up
 
to
 
three
 
times
 
the
 
profit
 
gained
 
or
 
loss
 
avoided, whether
 
or
 
not
 
the
person actually benefited; and
●
 
Fines for the
 
employers or other
 
controlling person of
 
up to the
 
greater of $1
 
million or three
times the amount of the profit gained or loss avoided.
Clearly, it is in the Company’s and
 
your best interests for the
 
Company to put into
 
place procedures
to prevent improper trading by its insiders.
PROCEDURES TO PREVENT INSIDER TRADING
The following procedures have been established to aid
 
in the prevention of insider trading. Every
insider must follow these procedures or risk sanctions,
 
including: dismissal, substantial personal
liability and criminal penalties.
Questions to Ask
Prior
 
to
 
trading
 
in
 
the
 
Company’s
 
securities,
 
and
 
if
 
you
 
think
 
you
 
may
 
have
 
material
 
non-public
information, ask yourself the following questions:
●
 
Is the information material?
 
- Is this information
 
that an investor
 
would consider important
in making
 
an investment
 
decision? Would
 
you take
 
it into
 
account in
 
deciding whether
 
to
buy or
 
sell? Is
 
this information that
 
would affect the
 
market price
 
of the
 
securities if generally
disclosed?
●
 
Is the information
 
non-public -
 
To
 
whom has
 
this information
 
been provided?
 
Has it been
effectively communicated to the marketplace? Has
 
enough time gone by?
Action Required
If you are at all uncertain as to whether any information you have is "inside information", you must:
●
 
Immediately report the matter to the Chief Accounting Officer;
●
 
Refrain from purchasing or selling the securities;
 
and
●
 
Not communicate the information inside or outside the
 
Company.
After the employee
 
and the Chief
 
Accounting Officer
 
have reviewed
 
the issue
 
and consulted with
outside counsel to
 
the extent appropriate,
 
the insider
 
will be instructed
 
as to whether
 
he/she may
trade and/or communicate that information.
Blackout Policy and Trading
 
Window
To assure compliance with the Policy and applicable securities laws, the Company requires that all securities other than during the period commencing at the open of the New York Stock Exchange
insiders
 
refrain
 
from
 
conducting
 
transactions
 
involving
 
the
 
purchase
 
or
 
sale
 
of
 
the
 
Company's
 
 
 
 
 
trading market on
 
the second business
 
day following the
 
date of public
 
disclosure of the
 
financial
results for
 
a particular
 
fiscal quarter
 
or year
 
and continuing
 
until the
 
close of
 
the New
 
York
 
Stock
Exchange on the fourteenth
 
(14
th
) day
 
after the
 
last day of
 
the current fiscal
 
quarter (the "Trading
Window").
 
In addition,
 
from
 
time to
 
time material
 
non-public
 
information
 
regarding
 
the Company
may be pending. While
 
such information is pending, the
 
Company may impose a
 
special "blackout"
period during which the same prohibitions and recommendations
 
shall apply.
Remember:
 
Even
 
during
 
the
 
Trading
 
Window,
 
any
 
person
 
possessing
 
material
 
non-public
information
 
concerning
 
the
 
Company,
 
should
 
not
 
engage
 
in
 
any
 
transactions
 
in
 
the
 
Company's
securities until such information has been made public and
 
absorbed by the market.
Trading According to a Pre-established Plan (10b5
 
-1)
The
 
SEC
 
has
 
adopted
 
Rule
 
10b5-1,
 
as
 
amended,
 
under
 
which
 
insider
 
trading
 
liability
 
can
 
be
avoided
 
if
 
insiders
 
follow
 
very
 
specific
 
procedures.
 
In
 
general,
 
such
 
procedures
 
involve
 
trading
according
 
to
 
pre-established
 
instructions,
 
plans
 
or
 
programs
 
(a
 
“10b5-1
 
Plan”)
 
after
 
a
 
required
“cooling off” period described below.
 
10b5-1 Plans must:
●
Be documented
 
by a
 
contract,
 
written plan,
 
or formal
 
instruction which
 
provides that
 
the
trade
 
take
 
place
 
in
 
the
 
future:
 
For
 
example,
 
an
 
insider
 
can
 
contract
 
to
 
sell
 
his
 
or
 
her
securities on a specific date, or simply
 
delegate such decisions to an investment manager,
401(k) plan administrator or
 
similar third party. This documentation must be
 
provided to the
Company’s Chief Financial Officer and Corporate
 
Secretary;
●
Include
 
in
 
its
 
documentation
 
the
 
specific
 
amount,
 
price
 
and
 
timing
 
of
 
the
 
trade,
 
or
 
the
formula for determining the
 
amount, price and timing
. For example, the insider
 
can buy or
sell securities
 
in a
 
specific amount
 
and on
 
a specific
 
date each
 
month, or
 
according to
 
a
pre-established percentage (of
 
the insider’s salary,
 
for example) each
 
time that the
 
share
price falls or rises to
 
pre-established levels. In the case where
 
trading decisions have been
delegated (i.e., to
 
a third party
 
broker or money
 
manager), the specific
 
amount, price and
timing need not be provided;
●
Be
 
implemented
 
at
 
a
 
time
 
when
 
the
 
insider
 
does not possess
 
material
 
non-public
information.
 
As a
 
practical
 
matter,
 
for restricted
 
insiders
 
this means
 
that
 
the insider
 
may
set up 10b5-1
 
Plans, or delegate
 
trading discretion, only during
 
an open Trading
 
Window
and outside a “blackout” period (discussed
 
above), assuming the restricted insider is not
 
in
possession of material non-public information;
●
Remain beyond
 
the scope
 
of the
 
insider’s influence
 
after implementation
. In general,
 
the
insider must allow
 
the 10b5-1 Plan
 
to be executed
 
without changes to
 
the accompanying
instructions,
 
and
 
the
 
insider
 
cannot
 
later
 
execute
 
a
 
hedge
 
transaction
 
that
 
modifies
 
the
effect of the 10b5-1
 
Plan. Insiders should be
 
aware that the termination
 
or modification of
a 10b5-1 Plan after trades have been undertaken under such plan could negate the 10b5-
1
 
affirmative
 
defense
 
afforded
 
by
 
such
 
program
 
for
 
all
 
such
 
prior
 
trades.
 
As
 
such,
termination or modification of a 10b-5
 
Plan should only be undertaken in consultation
 
with
your legal counsel.
 
If the insider
 
has delegated decision
 
-making authority
 
to a third
 
party,
the insider
 
cannot subsequently
 
influence the
 
third party
 
in any
 
way and
 
such third
 
party
must not possess material non-public information at the time of
 
any of the trades;
●
Be subject to
 
a “cooling off” period.
 
Rule 10b5-1 contains a
 
“cooling-off period” for directors
and officers that prohibit such insiders from trading in a
 
10b5-1 Plan until the later of (i) 90
days following
 
the plan’s
 
adoption or
 
modification
 
or (ii)
 
two business
 
days following
 
the
Company’s disclosure
 
(via a report
 
filed with the
 
SEC) of its
 
financial results for
 
the fiscal
quarter in which the plan was adopted or modified; and Contain Insider certifications.
●
 
Directors and
 
officers are
 
required to
 
include a
 
certification
in their 10b5-1 Plans to certify
 
that at the time the plan
 
is adopted or modified: (i) they
 
are
not aware
 
of material
 
non-public information
 
about the
 
Company or
 
its securities
 
and (ii)
they are
 
adopting
 
the
 
10b5-1
 
Plan in
 
good faith
 
and
 
not
 
as part
 
of
 
a plan
 
or scheme
 
to
evade the anti-fraud provisions of the U.S. Securities Exchange
 
Act of 1934.
In addition, insiders are
 
prohibited from having multiple overlapping
 
10b5-1 Plans or more
 
than one
plan in
 
any given
 
year and
 
a modification
 
relating to
 
amount, price
 
and timing
 
of trades
 
under a
10b5-1 Plan is
 
deemed a plan
 
termination and the
 
adoption of a
 
new 10b5-1 Plan
 
which requires
a new cooling off period.
Pre-Clearance of Trades
 
and 10b5-1 Plans
All
 
insiders
 
must
 
refrain
 
from
 
trading
 
in
 
Company
 
securities,
 
even
 
during
 
the
 
Trading
 
Window,
without
 
first
 
complying
 
with
 
the
 
Company's
 
"pre-clearance"
 
process.
 
Each
 
such
 
person
 
should
contact
 
the
 
Company's
 
Chief
 
Accounting
 
Officer
 
prior
 
to
 
commencing
 
any
 
trade.
 
The
 
Chief
Accounting
 
Officer
 
will
 
consult
 
as
 
necessary
 
with
 
senior
 
management
 
and/or
 
counsel
 
to
 
the
Company before clearing any proposed trade.
Each
 
insider
 
is
 
solely
 
responsible
 
for
 
compliance
 
with
 
all
 
applicable
 
securities
 
laws,
 
rules
 
and
regulations related to
 
any trading of
 
Company securities by such
 
insider, including without limitation
the timely filing
 
of any and
 
all forms, schedules
 
and other filings
 
required by Rule
 
144 of the
 
U.S.
Securities
 
Act
 
of
 
1933,
 
as
 
amended,
 
Sections
 
13
 
and
 
16,
 
as
 
applicable,
 
of
 
the
 
U.S.
 
Securities
Exchange Act
 
of 1934,
 
as amended,
 
and any
 
other applicable
 
securities laws.
 
The clearance
 
of
any
 
proposed
 
trade
 
may,
 
at
 
the
 
discretion
 
of
 
the
 
Company,
 
be
 
conditioned
 
on
 
the
 
Company’s
review and reasonable satisfaction with such filings or other compliance
 
requirements.
 
Additionally, Rule 10b5-1 Plans and any
 
amendments thereto must be
 
approved by the Company’s
Chief
 
Financial
 
Officer
 
or
 
Corporate
 
Secretary
 
and
 
meet
 
the
 
requirements
 
of
 
Rule
 
10b5-1
guidelines
 
detailed
 
in
 
this
 
Policy.
 
Any
 
Rule
 
10b5-1
 
Plan
 
must
 
be
 
submitted
 
for
 
approval
 
five
business days prior to the entry into the Rule 10b5-1 Plan.
 
QUESTIONS OR CONCERNS
Any questions
 
or concerns regarding
 
the Company’s Policies
 
and Procedures to
 
detect and prevent
insider trading should be directed to the Chief Accounting Officer, or, if such questions or concerns
involve the Chief Accounting Officer,
 
to the Chief Financial Officer.
 
The Chief Accounting Officer’s
personal trading activity will be reviewed by the Chief Financial
 
Officer.
 
EX-12.1 11 exhibit121.htm EX-12.1 exhibit121
Exhibit 12.1
CERTIFICATION OF
 
THE PRINCIPAL
 
EXECUTIVE OFFICER
I, Semiramis Paliou, certify that:
1.
 
I have reviewed this annual report on Form 20-F of Diana Shipping Inc. for the year ended December
31, 2024;
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
 
in light of the circumstances under
which such statements were made, not misleading with respect
 
to the period covered by this report;
3.
 
Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial
 
condition, results of operations and cash
flows of the company as of, and for,
 
the periods presented in this report;
4.
 
The company’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange
 
Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exch
 
ange Act Rules 13a-15(f) and 15d-15(f)) for
the company and have:
(a)
 
Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure
 
that material information relating to the
company, including
 
its consolidated subsidiaries, is made known to us by
 
others within those entities,
particularly during the period in which this report is being prepared;
(b)
 
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide
 
reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
 
for external purposes in
accordance with generally accepted accounting principles;
(c)
 
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness
 
of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
 
evaluation; and
(d)
 
Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report
 
that has materially affected, or is reasonably
likely to materially affect, the company’s
 
internal control over financial reporting; and
5.
 
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the company’s
 
auditors and the audit committee of the
company’s board of directors (or persons performing
 
the equivalent functions):
(a)
 
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely
 
affect the company’s ability to record,
process, summarize and report financial information; and
(b)
 
Any fraud, whether or not material, that involves management or other employees who have a
significant role in the company’s internal control
 
over financial reporting.
Date: March 21, 2025
/s/ Semiramis Paliou
 
Semiramis Paliou
Chief Executive Officer (Principal Executive Officer)
EX-12.2 12 exhibit122.htm EX-12.2 exhibit122
 
 
Exhibit 12.2
CERTIFICATION OF
 
THE PRINCIPAL FINANCIAL
 
OFFICER
I, Maria Dede, and I, Ioannis Zafirakis, each a Co-Chief
 
Financial Officer of the Company certify that:
1.
 
I have reviewed this
 
annual report on Form
 
20-F of Diana Shipping
 
Inc. for the year
 
ended December
31, 2024;
2.
 
Based on my knowledge, this report does not contain any untrue statement of a
 
material fact or omit to
state a material fact
 
necessary to make the
 
statements made, in light
 
of the circumstances under which
such statements were made, not misleading with respect
 
to the period covered by this report;
3.
 
Based on
 
my knowledge,
 
the financial
 
statements, and
 
other financial
 
information included in
 
this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
company as of, and for, the
 
periods presented in this report;
4.
 
The
 
company’s
 
other
 
certifying
 
officer(s)
 
and
 
I
 
are
 
responsible
 
for
 
establishing
 
and
 
maintaining
disclosure controls
 
and procedures (as
 
defined in Exchange
 
Act Rules 13a-15(e)
 
and 15d-15(e)) and
internal control over financial reporting (as
 
defined in Exchange Act Rules 13a-15(f)
 
and 15d-15(f)) for
the company and have:
(a)
 
Designed such disclosure controls
 
and procedures, or
 
caused such disclosure controls
 
and procedures
to
 
be
 
designed
 
under
 
our
 
supervision,
 
to
 
ensure
 
that
 
material
 
information
 
relating
 
to
 
the
 
company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b)
 
Designed such
 
internal control
 
over financial
 
reporting, or
 
caused such
 
internal control
 
over financial
reporting
 
to
 
be
 
designed
 
under
 
our
 
supervision,
 
to
 
provide
 
reasonable
 
assurance
 
regarding
 
the
reliability
 
of
 
financial
 
reporting
 
and
 
the
 
preparation
 
of
 
financial
 
statements
 
for
 
external
 
purposes
 
in
accordance with generally accepted accounting principles;
(c)
 
Evaluated the effectiveness of the company’s disclosure controls
 
and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of
 
the end
of the period covered by this report based on such evaluation;
 
and
(d)
 
Disclosed
 
in
 
this
 
report
 
any
 
change
 
in
 
the
 
company’s
 
internal
 
control
 
over
 
financial
 
reporting
 
that
occurred during the
 
period covered
 
by the annual
 
report that has
 
materially affected,
 
or is reasonably
likely to materially affect, the company’s
 
internal control over financial reporting; and
5.
 
The company’s other certifying officer(s) and
 
I have disclosed, based on our most recent evaluation of
internal
 
control
 
over
 
financial
 
reporting,
 
to
 
the
 
company’s
 
auditors
 
and
 
the
 
audit
 
committee
 
of
 
the
company’s board of directors (or persons performing
 
the equivalent functions):
(a)
 
All significant deficiencies
 
and material weaknesses
 
in the design or
 
operation of internal
 
control over
financial
 
reporting
 
which
 
are
 
reasonably
 
likely
 
to
 
adversely
 
affect
 
the
 
company’s
 
ability
 
to
 
record,
process, summarize and report financial information; and
(b)
 
Any
 
fraud,
 
whether
 
or
 
not
 
material,
 
that
 
involves
 
management
 
or
 
other
 
employees
 
who
 
have
 
a
significant role in the company’s internal control
 
over financial reporting.
Date: March 21, 2025
/s/ Maria Dede
Maria Dede
 
Co-Chief Financial Officer (Co-Principal Financial
 
Officer)
/s/ Ioannis Zafirakis
Ioannis Zafirakis
 
Co-Chief Financial Officer (Co-Principal Financial
 
Officer)
EX-13.1 13 exhibit131.htm EX-13.1 exhibit131
 
 
Exhibit 13.1
PRINCIPAL EXECUTIVE
 
OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350
In connection
 
with this
 
Annual Report
 
of Diana
 
Shipping Inc.
 
(the “Company”)
 
on Form
 
20-F for
 
the year
ended December 31, 2024 as filed with the Securities
 
and Exchange Commission (the “SEC”) on or about
the
 
date
 
hereof
 
(the
 
“Report”),
 
I,
 
Semiramis
 
Paliou,
 
Chief
 
Executive
 
Officer
 
of
 
the
 
Company,
 
certify,
pursuant
 
to
 
18
 
U.S.C.
 
Section
 
1350,
 
as
 
adopted
 
pursuant
 
to
 
Section
 
906
 
of
 
the
 
Sarbanes-Oxley
 
Act
 
of
2002, that:
(1)
 
The
 
Report
 
fully
 
complies
 
with
 
the
 
requirements
 
of
 
Section
 
13(a)
 
or
 
15(d)
 
of
 
the
 
Securities
Exchange Act of 1934; and
(2)
 
The
 
information
 
contained
 
in
 
the
 
Report
 
fairly
 
presents,
 
in
 
all
 
material
 
respects,
 
the
 
financial
condition and results of operations of the Company.
A signed original
 
of this
 
written statement
 
has been
 
provided to
 
the Company
 
and will be
 
retained by
 
the
Company and furnished to the SEC or its staff
 
upon request.
Date: March 21, 2025
/s/ Semiramis Paliou
Semiramis Paliou
Chief Executive Officer (Principal Executive Officer)
EX-13.2 14 exhibit132.htm EX-13.2 exhibit132
 
Exhibit 13.2
PRINCIPAL FINANCIAL
 
OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350
In connection
 
with this
 
Annual Report
 
of Diana
 
Shipping Inc.
 
(the “Company”)
 
on Form
 
20-F for
 
the year
ended December 31, 2024 as filed with the Securities
 
and Exchange Commission (the “SEC”) on or about
the date hereof (the “Report”),
 
I, Maria Dede, and I, Ioannis
 
Zafirakis,
 
each a Co-Chief Financial
 
Officer of
the
 
Company,
 
certify,
 
pursuant
 
to
 
18
 
U.S.C.
 
Section
 
1350,
 
as
 
adopted
 
pursuant
 
to
 
Section
 
906
 
of
 
the
Sarbanes-Oxley Act of 2002, that:
(1)
 
The
 
Report
 
fully
 
complies
 
with
 
the
 
requirements
 
of
 
Section
 
13(a)
 
or
 
15(d)
 
of
 
the
 
Securities
Exchange Act of 1934; and
(2)
 
The
 
information
 
contained
 
in
 
the
 
Report
 
fairly
 
presents,
 
in
 
all
 
material
 
respects,
 
the
 
financial
condition and results of operations of the Company.
A
signed original
 
of this
 
written statement
 
has been
 
provided to
 
the Company
 
and will be
 
retained by
 
the
Company and furnished to the SEC or its staff
 
upon request.
Date: March 21, 2025
/s/ Maria Dede
Maria Dede
Co-Chief Financial Officer (Co-Principal Financial
 
Officer)
/s/ Ioannis Zafirakis
 
Ioannis Zafirakis
 
Co-Chief Financial Officer (Co-Principal Financial
 
Officer)
EX-15.1 15 exhibit151.htm EX-15.1 exhibit151
CONSENT OF INDEPENDENT REGISTERED
 
PUBLIC ACCOUNTING FIRM
We consent to the incorporation
 
by reference in the
 
Registration Statement
 
s
 
Nos. 333-280693 and 333-266999 on Form
F-3 of our reports dated March 21, 2025, relating
 
to the consolidated financial statements
 
of Diana Shipping Inc. and the
effectiveness of Diana Shipping
 
Inc.’s
 
internal control over
 
financial reporting,
 
appearing in this Annual Report on Form
20-F for the year ended December 31, 2024.
 
/s/ Deloitte Certified Public Accountants
 
S.A.
Athens, Greece
March 21, 2025
EX-15.2 16 exhibit152.htm EX-15.2 exhibit152
 
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference
 
in the following Registration Statements:
 
 
(1) Registration Statement (Form F-3 No. 333-280693)
 
of Diana Shipping Inc., and
(2) Registration Statement (Form F-3 No. 333-266999) of Diana Shipping Inc.;
of our report dated April 4, 2024, with respect to the consolidated financial statements of Diana Shipping
Inc., included in this Annual Report (Form 20-F) of Diana Shipping Inc. for the year ended December 31, 100 F Street, N.E.
2024.
/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.
Athens, Greece
 
March 21, 2025
 
EX-16.1 17 exhibit161.htm EX-16.1 exhibit161
Exhibit 16.1
March 21, 2025
Securities and Exchange Commission
Washington, DC 20549
Commissioners:
We have read Item 16F of Form 20-F dated March 21, 2025, of Diana Shipping
 
Inc. and are in agreement
with the statements contained in paragraphs two and four therein. We have no basis to agree or disagree
with other statements of the registrant contained therein.
/s/ Ernst & Young (Hellas) Certified
 
Auditors Accountants S.A.
Athens, Greece
EX-4.09 18 exhibit409.htm EX-4.09 exhibit409
 
 
STEAMSHIP SHIPBROKING ENTERPRISES INC.
 
 
THIS
 
AGREEMENT
dated
 
this
 
25
th
 
day
 
of
 
February
 
2025
 
by
 
and
 
between
 
Diana
 
Shipping
 
Inc.,
 
a
Marshall Islands
 
company
 
having
 
its registered
 
office
 
at
 
Trust Company
 
Complex, Ajeltake
 
Road, Ajeltake
Island,
 
Majuro,
 
Marshall
 
Islands
 
MH96960
 
(the
 
"Company")
 
and
 
Steamship
 
Shipbroking
 
Enterprises
 
Inc.
a
Marshall Islands
 
company
 
having
 
its registered
 
office
 
at
 
Trust Company
 
Complex, Ajeltake
 
Road, Ajeltake
Island, Majuro, Marshall Islands MH96960 (the
 
"Broker").
 
BY
 
WHICH,
 
in
 
consideration
 
of
 
the
 
mutual
 
covenants
 
and
 
agreements
 
set
 
forth
 
herein,
 
the
 
parties
hereto agree as follows:
1.
 
The Company.
 
Diana Shipping
 
Inc. is a
 
leading global
 
provider of
 
shipping transportation
services
 
through
 
its
 
ownership
 
of
 
dry
 
bulk
 
vessels.
 
The
 
Company’s
 
vessels
 
are
 
employed
 
primarily
 
on
medium
 
to
 
long-term
 
time
 
charters
 
and
 
transport
 
a
 
range
 
of
 
dry
 
bulk
 
cargoes,
 
including
 
such
commodities as iron ore, coal,
 
grain and other materials along
 
worldwide shipping routes.
 
2.
 
Engagement.
The Company
 
hereby engages
 
the Broker
 
to act
 
as broker
 
for the
 
Company
and
 
for
 
any
 
of
 
its
 
affiliated
 
companies
 
that
 
own
 
vessels
 
managed
 
by
 
Diana
 
Shipping
 
Services
 
S.A.
 
as
directed
 
by
 
the
 
Company
 
to
 
assist
 
the
 
Company
 
in
 
the
 
provision
 
of
 
the
 
Services
 
by
 
providing
 
to
 
the
Company
 
or
 
to
 
an
 
entity
 
designated
 
by
 
the
 
Company
 
from
 
time
 
to
 
time,
 
brokerage
 
services
 
relating
 
to
 
the
purchase, sale
 
or chartering
 
of vessels,
 
brokerage services
 
relating to
 
the repairs
 
and other
 
maintenance of
vessels, and
 
any relevant
 
consulting services
 
permitted by
 
Greek laws
 
or the
 
Broker's Law
 
27/1975 license
(collectively the “Brokerage Services”), and the
 
Broker hereby accepts such appointment.
3.
 
Duration.
The
 
duration
 
of
 
the
 
engagement
 
shall
 
be
 
for
 
a
 
term
 
of
 
twelve
 
(12)
 
months
commencing the
 
1
st
 
day of January 2025 and ending (unless
 
terminated
 
earlier on the basis
 
of
 
any
 
other
provision of this
 
Agreement) on the
 
31
st
day
 
of December 2025 (the said period
 
as it may be extended
being hereinafter referred
 
to as
 
the "Term").
4.
 
Representations
 
of
 
Broker.
The Broker represents
 
that
 
it
 
has
 
personnel
 
fully
 
qualified,
without the benefit
 
of any further
 
training or
 
experience and has
 
obtained all necessary
 
permits and
 
licenses,
to perform the Brokerage Services. The duties of the
 
Broker shall be offered on a
 
worldwide basis. Broker's
duties
 
and responsibilities
 
hereunder
 
shall
 
always
 
be subject
 
to
 
the
 
policies
 
and
 
directives
 
of the
 
board
of
 
directors
 
of
 
the
 
Company
 
as
 
communicated
 
from time to time
 
to the Broker.
 
Subject to the above, the
precise duties, responsibilities and
 
authority of the Broker may be
 
expanded, limited or modified, from time to
time, at the discretion of the
 
board of directors of the Company.
 
5.
 
Commission.
Because of
 
their permanent
 
relation the
 
Company shall
 
pay the
 
Broker
a
lump
sum
 
commission
 
in
 
the
 
amount
 
of
 
United
 
States
 
Dollars
 
$325,000
 
per
 
month,
 
starting
 
on
 
the
 
1
st
 
day
 
of
January 2025
 
payable quarterly
 
in advance,
 
subject to required deductions
 
and withholdings. Commissions
on a percentage basis for
 
specific deals may be agreed
 
by separate agreements in writing.
6.
Expenses
.
 
The
 
Company
 
shall
 
pay
 
or
 
reimburse
 
the
 
Broker
 
for
 
any
 
out-of
 
pocket
expenses as such expenses
 
are not included in
 
the commission paid to the
 
Broker.
7.
 
Termination.
This
 
Agreement,
 
unless
 
otherwise
 
agreed
 
in
 
writing
 
between
 
the
 
parties,
shall be terminated as follows:
(a)
At the end of the Term
 
,
 
unless extended by mutual agreement
 
in writing.
(b)
The parties, by mutual agreement,
 
may terminate this Agreement at any
 
time.
(c)
Either
 
party
 
may
 
terminate
 
this
 
Agreement
 
for
 
any
 
material
 
breach
 
by
 
the
 
other
 
party
 
of
 
their
respective obligations under this Agreement.
8.
Change of Control.
(a)
 
In the event
 
of a "Change
 
in Control" (as
 
defined herein)
 
within
 
the duration
 
of this
 
Agreement,
the
 
Broker
 
has
 
the
 
option
 
to
 
terminate
 
this
 
Agreement
 
within six
 
(6) months
 
following such Change in
Control, and
 
shall be
 
eligible to
 
receive the
 
payment specified
 
in sub-paragraph
 
(c), below,
 
provided that
 
the
conditions of said paragraph are
 
satisfied.
(b)
 
For purposes of this Agreement, the term "Change of Control" shall
 
mean the:
(i)
 
acquisition
 
by
 
any
 
individual,
 
entity
 
or
 
group
 
of
 
beneficial
 
ownership
 
of
 
twenty-five
percent
 
(25%)
 
or
 
more
 
of
 
either
 
(A)
 
the
 
then-outstanding
 
shares
 
of
 
common
 
stock
 
of
 
the
Company
 
(B)
the
 
combined
 
voting
 
power
 
of
 
the
 
then-outstanding
 
voting
 
securities
 
of
 
the
Company entitled
 
to vote
 
generally
in the
 
election of
 
directors; provided, however,
 
that this
Clause 8(b)(i) shall
 
not apply to an individual, entity or
 
group that beneficially owns twenty-five
percent
 
(25%)
 
or
 
more
 
as
 
of
 
the
 
date
 
the
 
Company's
 
common
 
shares
 
are
 
approved
 
for
listing on the NYSE.
(ii)
 
consummation of a
 
reorganization, merger
 
or consolidation
 
of the Company
 
or the
sale or other disposition
 
of all or substantially
 
all of the assets
 
of the Company and/or of the
Affiliates; or
(iii)
 
approval
 
by
 
the
 
shareholders
 
of
 
the
 
Company
 
of
 
a
 
complete
 
liquidation
 
or
dissolution of the Company.
(c)
 
If
 
the
 
Broker
 
terminates
 
this
 
Agreement
 
within
 
six
 
(6)
 
months
 
following
 
a
 
Change
 
of
Control, the
 
Broker shall
 
receive a
 
payment equal
 
to five
 
(5) years'
annual
 
commission.
 
Receipt
 
of
the foregoing
 
shall be
 
contingent upon
 
the
Broker's execution and
 
non-revocation of a
 
Release of
Claims
 
in
 
favor
 
of
 
the
 
Company
 
and
 
the
 
Affiliates
 
in
 
a
 
form
 
that
 
is
 
reasonably
 
satisfactory
 
to
 
the
Company and its counsel.
9.
Notices
.
Every
 
notice,
 
request,
 
demand
 
or
 
other
 
communication
 
under
 
this
Agreement shall:
(a)
 
be in writing delivered
 
personally or by courier
 
or by fax or
 
shall be served through
 
a process
server;
(b)
 
be deemed to have been received,
 
subject as otherwise provided
 
in this Agreement in the
case
 
of
 
fax
 
upon
 
receipt
 
of
 
a
 
successful
 
transmission
 
report
 
(or
 
—if
 
sent
 
after
 
business hours—
 
the
following business day) and in the case of a letter when delivered personally or through courier or served
 
at
the address below; and
(c)
 
be
 
sent:
(i)
If to
 
the Company,
 
to:
c/o Diana Shipping Services S.A.
 
Pendelis 16, Palaio Faliro, 175 64
 
Athens, Greece
Telephone:
 
+30 210
 
9470000
Telefax: +30 210 9424975
Attn: Director and President
 
(ii)
If to
 
the Broker,
 
to:
c/o Steamship Shipbroking Enterprises Inc.
Pendelis 26, Palaio Faliro, 175 64
Athens, Greece
Telephone:
 
+30 210 9485360
 
Telefax:
 
+30 210 9401810
 
Attn: Director and President
or to
 
such other
 
person, address or
 
telefax, as
 
is notified
 
by the
 
relevant Party to
 
the other
 
Party to
 
this
Agreement
 
and
 
such
 
notification
 
shall
 
not
 
become
 
effective
 
until
 
notice
 
of
 
such
 
change
 
is
 
actually
received
 
by
 
the
 
other
 
Party.
 
Until
 
such
 
change
 
of
 
person
 
or
 
address is
 
notified, any
 
notification to
 
the
above addresses and fax numbers are agreed to be validly effected
 
for the purposes of this Agreement.
10.
 
Entire
 
Agreement.
This
 
Agreement
 
supersedes
 
all
 
prior
 
agreements
 
written
 
or
 
oral,
 
with
respect thereto.
11.
Amendments.
This Agreement may
 
be amended, superseded, canceled,
 
renewed or
extended
and the terms hereof may be waived, only by a written instrument signed by the
 
parties.
12.
 
Independent Contractor.
All services provided hereunder shall be provided by the
Broker as an
independent
 
contractor.
 
No
 
employment
 
contract,
 
partnership
 
or
 
joint
 
venture
 
between
 
the
 
Broker
 
and
 
the
Company has
 
been created
 
in or by this
 
Agreement
 
or as a result
 
of services
 
provided
 
hereunder.
13.
 
Assignment.
This Agreement,
 
and the
 
Broker's rights
 
and obligations
 
hereunder, may
not
 
be assigned
 
by the
 
Broker;
 
any
 
purported
 
assignment
 
in
 
violation
 
hereof
 
shall be
 
null and
 
void.
 
This
Agreement,
 
and
 
the
 
Company's
 
rights
 
and
 
obligations
 
hereunder,
 
may
 
not
 
be
 
assigned
 
by
 
the
 
Company;
provided,
 
however,
 
that in
 
the event of any sale, transfer or other disposition of all or substantially all of the
Company's
 
assets and
 
business,
 
whether by
 
merger, consolidation
 
or otherwise,
 
the Company shall
 
assign
this Agreement and its rights hereunder to the successor to its assets and business.
14.
 
Binding Effect.
This Agreement shall be
 
binding upon and inure
 
to the benefit of
 
the parties
and their respective successors,
 
permitted assigns, heirs, executors and
 
legal representative.
15.
 
Counterparts.
This
 
Agreement
 
may
 
be
 
executed
 
by
 
the
 
parties
 
hereto
 
in
 
separate
counterparts,
 
each of which when
 
so executed
 
and delivered
 
shall be an original
 
but all such
 
counterparts
together
 
shall
 
constitute
 
one
 
and
 
the
 
same
 
instrument.
 
Each
 
counterpart may consist of
 
two copies
hereof each signed by one of the parties
 
hereto.
16.
 
Headings.
The headings
 
in this
 
Agreement are
 
for reference
 
only and
 
shall not
 
affect the
interpretation of this Agreement.
17.
 
Governing Law and Jurisdiction.
(a)
 
This Agreement shall
 
be governed by and
 
construed in accordance
 
with English Law.
(b)
 
Any dispute arising out of or in
 
connection with this Agreement
 
shall be referred to
 
arbitration
in London in accordance with
 
the Arbitration Act 1996 or any
 
statutory modification or re-enactment thereof
save to the extent necessary to give effect to the provisions of this clause.
 
 
IN WITNESS WHEREOF, the parties
 
hereto have signed their names
 
as of the day
 
and year first above written.
DIANA SHIPPING INC.
___________________________
By: Anastasios Margaronis
Title: Director and President
STEAMSHIP SHIPBROKING ENTERPRISES INC.
___________________________
By:
 
Symeon Palios
Title: Director and President
EX-4.12 19 exhibit412.htm EX-4.12 exhibit412
Dated [●] 2024
MEJATO
 
SHIPPING COMPANY INC.
RAKARU SHIPPING COMPANY INC.
EBADON SHIPPING COMPANY INC.
PULAP SHIPPING COMPANY INC.
WENO SHIPPING COMPANY INC.
ERIKUB SHIPPING COMPANY INC.
WOTHO SHIPPING COMPANY INC.
as joint and several Borrowers
and
DIANA SHIPPING INC.
as Parent Guarantor
and
DANISH SHIP FINANCE A/S
as Original Lender
AMENDMENT AND RESTATEMENT
 
AGREEMENT
relating to a facility agreement dated 12 April 2023
relating to(i) the refinancing of the Existing Indebtedness secured on
 
m.vs. "PHAIDRA", "ELECTRA", "ASTARTE", "P.
 
S. PALIOS" and "G. P.
 
ZAFIRAKIS",
(ii) the refinancing of the Borrowers' equity in respect of m.vs "CRYSTALIA"
 
and "ATALANDI"
 
and (iii) the provision to the Borrowers
 
of working capital for their general corporate purposes
Index
Clause
 
Page
Schedules
Execution
Appendices
THIS AGREEMENT
is made on [●] 2024
PARTIES
(1)
MEJATO
SHIPPING COMPANY INC.
, a corporation incorporated and
 
existing under the
 
laws of
 
the
Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro MH96960, The Marshall Islands as a borrower ("
Borrower A
")
(2)
RAKARU
SHIPPING COMPANY INC.
, a corporation incorporated and existing under
 
the laws of the
Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro MH96960, The Marshall Islands as a borrower ("
Borrower B
")
(3)
EBADON
SHIPPING COMPANY INC.
, a
 
corporation incorporated and existing
 
under the
 
laws of
 
the
Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro MH96960, The Marshall Islands as a borrower ("
Borrower C
")
(4)
PULAP
SHIPPING COMPANY INC.
, a corporation incorporated
 
and existing under the laws of
 
the
Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro MH96960, The Marshall Islands as a borrower ("
Borrower D
")
(5)
WENO
SHIPPING COMPANY
 
INC.
, a corporation
 
incorporated and
 
existing under the
 
laws of the
the
 
Republic
 
of
 
The
 
Marshall
 
Islands
 
whose
 
registered
 
address
 
is
 
at
 
Trust
 
Company
 
Complex,
Ajeltake Road,
 
Ajeltake Island, Majuro MH96960,
 
The Marshall Islands as
 
a borrower ("
Borrower
E
")
(6)
ERIKUB
SHIPPING COMPANY INC.
, a corporation incorporated
 
and existing under the laws of the
Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro MH96960, The Marshall Islands as a borrower ("
Borrower F
")
(7)
WOTHO
SHIPPING COMPANY INC.
, a corporation incorporated and existing under the laws of the
Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro MH96960, The Marshall Islands as a borrower ("
Borrower G
")
(8)
DIANA SHIPPING INC.
, a corporation incorporated
 
and existing under the laws
 
of the Republic of
The
 
Marshall
 
Islands
 
whose
 
registered
 
address
 
is
 
at
 
Trust
 
Company
 
Complex,
 
Ajeltake
 
Road,
Ajeltake Island, Majuro MH96960, The Marshall Islands as guarantor (the "
Parent Guarantor
")
(9)
DANISH SHIP
 
FINANCE A/S
of Sankt
 
Annae Plads
 
3, Dk-1250
 
Copenhagen K,
 
Denmark as
 
lender
(the "
Original
Lender
")
BACKGROUND
(A)
By a facility agreement dated
 
12 April 2023
 
and made among
 
(i) the Borrowers as
 
joint and several
borrowers,
 
(ii) the Parent Guarantor as guarantor
 
and (ii) the Original Lender,
 
the Original Lender
agreed to make available to
 
the Borrowers a facility
 
of (originally) up
 
to $100,000,000 out
 
of which
the amount of $80,191,652 is outstanding at the date of this Agreement.
(B)
The Parties have agreed
 
to amend and
 
restate the Facility Agreement as
 
set out in
 
this Agreement.
OPERATIVE PROVISIONS
1
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:
"
Amended
 
and
 
Restated
 
Facility
 
Agreement
"
 
means
 
the
 
Facility
 
Agreement,
 
as
 
amended
 
and
restated by this Agreement, in the form set out in the Appendix.
"
Effective
 
Date
"
 
means
 
18
 
October
 
2024
 
subject
 
to
 
Original
 
Lender’s
 
confirmation
 
that
 
all
 
the
conditions precedent in Clause 3 (
Conditions precedent
) have been satisfied.
"
Facility Agreement
" means the facility agreement referred to in Recital (A).
"
Mortgage Amendment
" means, in relation to a Ship, an amendment to that Mortgage in agreed
form.
"
Party
" means a party to this Agreement.
"
Supplemental
 
Account
 
Security
"
 
means,
 
in
 
relation
 
to
 
each
 
Account
 
Security
 
a
 
document
creating second priority Security over the Accounts of the relevant Borrower in agreed form.
"Supplemental General
 
Assignment"
 
means, in
 
relation
 
to a
 
Ship, a
 
document creating
 
second
priority
 
Security
 
over
 
(inter
 
alia)
 
that
 
Ship's
 
Earnings,
 
its
 
Insurances,
 
any
 
Requisition
Compensation, any Charter and any Charter Guarantee in relation to that Ship in agreed form.
"
Supplemental
 
Manager’s
 
Undertaking
”
 
means
 
in
 
relation
 
to
 
a
 
Ship,
 
a
 
supplemental
 
letter
 
of
undertaking
 
from
 
its
 
Approved
 
Technical
 
Manager
 
and
 
its
 
Approved
 
Commercial
 
Manager,
 
(i)
confirming
 
that
 
the
 
subordination
 
effected
 
by
 
virtue
 
of
 
the
 
original
 
Manager's
 
Undertaking
continues to
 
have full
 
force and
 
effect and
 
extends to
 
the Secured Liabilities
 
as amended by
 
the
Amendment and Restatement Agreement and (ii) creating second priority security over the
 
rights
and
 
interests
 
of
 
such
 
Approved
 
Technical
 
Manager
 
and
 
such
 
Approved
 
Commercial
 
Manager
respectively in the Insurances, in agreed form.
"
Supplemental Security Document
" means:
(a)
any Mortgage Amendment;
(b)
any Supplemental Account Security;
(c)
any Supplemental General Assignment;
(d)
any Supplemental Manager’s Undertaking; and
 
(e)
any Supplemental Shares Security.
"Supplemental Shares
 
Security"
 
means, in
 
relation to
 
a Borrower,
 
a document
 
creating second
priority Security over the issued shares of that Borrower in agreed form.
1.2
Defined expressions
Defined expressions
 
in the
 
Facility
 
Agreement and
 
the other
 
Finance Documents
 
shall have
 
the
same
 
meanings
 
when
 
used
 
in
 
this
 
Agreement
 
unless
 
the
 
context
 
otherwise
 
requires
 
or
 
unless
otherwise defined in this Agreement.
1.3
Application of construction and interpretation provisions of Facility Agreement
Clauses 1.2 (
construction
) to 1.5
 
(
third party rights
) (inclusive) of
 
the Facility Agreement
 
apply to
this Agreement as if they were expressly incorporated in it with any necessary modifications.
1.4
Agreed forms of new, and supplements to, Finance Documents
References
 
in
 
Clause
 
(
Definitions
)
 
to
 
any
 
document
 
being
 
in
 
"agreed
 
form"
 
are
 
to
 
that
document:
(a)
in
 
a
 
form
 
attached
 
to
 
a
 
certificate
 
dated
 
the
 
same
 
date
 
as
 
this
 
Agreement
 
(and
 
signed
 
by
 
the
Borrowers and the Lender); or
(b)
in any other form agreed in writing between the Borrowers and the Lender.
1.5
Designation as a Finance Document
The Obligors and the Lender designate this Agreement as a Finance Document.
1.6
Third party rights
(a)
Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has
no
 
right
 
under
 
the
 
Third
 
Parties
 
Act
 
to
 
enforce
 
or
 
to
 
enjoy
 
the
 
benefit
 
of
 
any
 
term
 
of
 
this
Agreement.
(b)
Notwithstanding any term of any Finance
 
Document, the consent of
 
any person who is not
 
a Party
is not required to rescind or vary this Agreement at any time.
2
CONDITIONS PRECEDENT
(a)
The Effective
 
Date cannot
 
occur unless
 
the Lender
 
has received
 
(or waived
 
receipt of)
 
all of
 
the
documents and other evidence listed in
 
(
Conditions Precedent
) in form and substance
satisfactory
 
to the
 
Lender on
 
or before
 
the Effective
 
Date or
 
such later
 
date as
 
the Lender
 
may
agree with the Borrowers.
(b)
The Lender shall
 
notify the Borrowers
 
promptly upon being satisfied
 
as to the
 
satisfaction of
 
the
conditions precedent referred to in paragraph (a) above.
3
REPRESENTATIONS
 
3.1
Facility Agreement representations
Each Obligor
 
that is a
 
party to the
 
Facility Agreement
 
makes the
 
representations and
 
warranties
set out in clause 19 (
representations
) of the Facility Agreement, as amended and restated by this Agreement and updated with appropriate modifications to refer to this Agreement and, where
appropriate,
 
the relevant
 
Supplemental Security
 
Documents, by
 
reference
 
to the
 
circumstances
then existing on the date of this Agreement and on the Effective Date.
3.2
Finance Document representations
 
Each Obligor makes
 
the representations and
 
warranties set out
 
in the Finance Documents (other
than the Facility Agreement)
 
to which it is
 
a party, as amended and
 
restated and/or supplemented
by this
 
Agreement and
 
updated with
 
appropriate modifications
 
to refer
 
to this
 
Agreement and,
where appropriate,
 
the relevant
 
Mortgage Amendment,
 
by reference
 
to the
 
circumstances then
existing on the date of this Agreement and on the Effective Date.
4
AMENDMENT AND RESTATEMENT OF FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS
 
4.1
Specific amendments to the Facility Agreement
With effect on and from the Effective Date, the Facility Agreement shall
 
be amended and
 
restated
in the
 
form of
 
the Amended and
 
Restated
 
Facility Agreement
 
and, as
 
so amended and
 
restated,
the Facility Agreement shall continue to be binding on each of the parties to it in accordance with
its terms as so amended and restated.
4.2
Amendments to Finance Documents
With effect on and
 
from the Effective Date,
 
each of the
 
Finance Documents (other
 
than the Facility
Agreement and
 
each Mortgage
 
which is
 
amended and
 
supplemented by
 
the relevant
 
Mortgage
Amendment) shall be, and shall be deemed by this Agreement to be, amended as follows:
(a)
the
 
definition
 
of,
 
and
 
references
 
throughout
 
each
 
of
 
the
 
Finance
 
Documents
 
to
 
the
 
"Facility
Agreement" and
 
any of
 
the other Finance
 
Documents shall be
 
construed as
 
if the same
 
referred
to,
 
respectively:
(i)
the Amended and Restated Facility Agreement; and
(ii)
the
 
other
 
Finance
 
Documents
 
as
 
amended
 
and
 
supplemented
 
by
 
this
 
Clause
 
4.2
(
Amendments to
 
Finance Documents
) and
 
by such
 
further or consequential
 
modification
as may be necessary to give full effect to the terms of this Agreement;
(b)
the definition of, and
 
references throughout each of the Finance Documents to,
 
a Mortgage shall
be
 
construed
 
as
 
if
 
the
 
same
 
referred
 
to
 
that
 
Mortgage
 
as
 
amended
 
and
 
supplemented
 
by
 
the
relevant Mortgage Amendment;
(c)
by construing
 
references
 
throughout each
 
of the
 
Finance Documents
 
to "this
 
Agreement", "this
Agreement",
 
"hereunder"
 
and
 
other
 
like
 
expressions
 
as
 
if
 
the
 
same
 
referred
 
to
 
those
 
Finance
Documents as amended and/or supplemented by this Agreement;
 
and
(d)
all cross
 
references
 
in the
 
Facility Agreement
 
will be
 
updated accordingly
 
to reflect
 
the relevant
clauses in the Amended and Restated Facility Agreement.
 
4.3
Obligor Confirmation
On the Effective Date, each Obligor:
(a)
confirms its acceptance of the Amended and Restated Facility Agreement;
(b)
agrees that it is
 
bound as an
 
Obligor (as defined
 
in the
 
Amended and Restated Facility Agreement);
(c)
confirms that the definition of, and references throughout each of the Finance Documents to, the
Facility
 
Agreement
 
and
 
any
 
of
 
the
 
other
 
Finance
 
Documents
 
shall
 
be
 
construed
 
as
 
if
 
the
 
same
referred to the Facility Agreement and those
 
Finance Documents as amended
 
and restated by this
Agreement;
(d)
(if it is a Parent Guarantor) confirms that its guarantee and indemnity:
(i)
continues to have full force and effect on the terms of the Amended and Restated Facility
Agreement; and
(ii)
extends
 
to
 
the
 
obligations
 
of
 
the
 
relevant
 
Obligors
 
under
 
the
 
Finance
 
Documents
 
as
amended and restated by this Agreement.
4.4
Security confirmation
On the Effective Date, each Obligor confirms that:
(a)
any Security created by it under the
 
Finance Documents extends to the
 
obligations of the relevant
Obligors under the Finance Documents as amended and restated by this Agreement;
(b)
the obligations of the relevant
 
Obligors under the Amended and Restated
 
Facility Agreement are
included in the
 
Secured Liabilities (as
 
defined in the
 
Security Documents to
 
which it is
 
a party); and
(c)
the Security created under the Finance Documents continues in full force and effect on the terms
of the respective Finance Documents.
 
4.5
Finance Documents to remain in full force and effect
The Finance Documents shall remain in full force and effect and from the Effective Date:
(a)
in the
 
case of
 
the Facility
 
Agreement
 
as amended
 
and restated
 
pursuant
 
to
 
Clause
.1 (
Specific
amendments to the Facility Agreement
);
(b)
in the case of the
 
other Finance Documents as amended pursuant
 
to Clause
 
(
Amendments to
Finance Documents
) and the relevant Mortgage Amendment;
 
and
(c)
the Facility Agreement and the
 
applicable provisions of this
 
Agreement will be read
 
and construed
as one document;
 
and
(d)
except to the extent expressly waived by the amendments effected
 
by this Agreement, no waiver
is given by this Agreement and the Lender expressly reserves all its
 
rights and remedies in respect
of any breach of or other Default under the Finance Documents.
5
FURTHER ASSURANCE
Clause
 
22.22
 
(
further
 
assurance
)
 
of
 
the
 
Facility
 
Agreement,
 
as
 
amended
 
and
 
restated
 
by
 
this
Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary
modifications.
6
FEES
The
 
Borrowers
 
shall
 
pay
 
to
 
Lender
 
on
 
or
 
before
 
the
 
Effective
 
Date
 
an
 
amendment
 
fee
 
of
$200,479.13.
7
COSTS AND EXPENSES
Clause
 
16.2
 
(
amendment
 
costs
)
 
of
 
the
 
Facility
 
Agreement,
 
as
 
amended
 
and
 
restated
 
by
 
this
Agreement,
 
applies to this Agreement as if it were expressly incorporated in it with any necessary
modifications.
8
NOTICES
Clause 34 (
notices
) of the
 
Facility Agreement, as amended
 
and restated by this Agreement,
 
applies
to this Agreement as if it were expressly incorporated in it with any necessary modifications.
9
COUNTERPARTS
This Agreement may be
 
executed in any
 
number of counterparts, and this has the
 
same effect as
if the signatures on the counterparts were on a single copy of this Agreement.
10
GOVERNING LAW
This
 
Agreement
 
and
 
any
 
non-contractual
 
obligations
 
arising out
 
of
 
or
 
in
 
connection
 
with
 
it
 
are
governed by English law.
11
ENFORCEMENT
11.1
Jurisdiction
(a)
The
 
courts
 
of
 
England
 
have
 
exclusive
 
jurisdiction
 
to
 
settle
 
any
 
dispute
 
arising
 
out
 
of
 
or
 
in
connection
 
with
 
this
 
Agreement
 
(including
 
a
 
dispute
 
regarding
 
the
 
existence,
 
validity
 
or
termination of
 
this Agreement
 
or any
 
non-contractual obligation
 
arising out
 
of or
 
in connection
with this Agreement) (a "
Dispute
").
(b)
The Obligors accept that the courts of England
 
are the most appropriate and convenient courts to
settle Disputes and accordingly no Obligor will argue to the contrary.
(c)
To
 
the extent
 
allowed by
 
law,
 
this Clause
 
(
Jurisdiction
) is
 
for the
 
benefit of the
 
Lender only.
 
As a result, the Lender shall be not be prevented
 
from taking proceedings relating to a Dispute
 
in
any other courts with jurisdiction.
 
To
 
the extent allowed by
 
law,
 
the Lender may take
 
concurrent
proceedings in any number of jurisdictions.
11.2
Service of process
(a)
Without
 
prejudice
 
to
 
any
 
other
 
mode
 
of
 
service
 
allowed
 
under
 
any
 
relevant
 
law,
 
each
 
Obligor
(other than an Obligor incorporated in England and Wales):
(i)
irrevocably
 
appoints
 
Hill
 
Dickinson
 
Services (London)
 
Ltd
 
at
 
its
 
registered
 
office
 
for
 
the
time
 
being
 
at
 
The
 
Broadgate
 
Tower,
 
20
 
Primrose
 
Street,
 
London
 
EC2A
 
2EW,
 
United
Kingdom
 
as
 
its
 
agent
 
for
 
service
 
of
 
process
 
in
 
relation
 
to
 
any
 
proceedings
 
before
 
the
English courts in connection with any Finance Document; and
(ii)
agrees that failure by a process agent to notify the relevant Obligor
 
of the process will not
invalidate the proceedings concerned.
(b)
If any person appointed as an agent for service of process is unable for any reason to act as agent
for service of process, the Borrowers
 
(on behalf of all the Obligors) must immediately (and in any
event within three days of such event taking place) appoint another agent on
 
terms acceptable to
the Lender. Failing
 
this, the Lender may appoint another agent for this purpose.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
 
 
SCHEDULE
 
1
CONDITIONS PRECEDENT
1
Obligors
1.1
A copy of the constitutional documents of each Obligor.
1.2
A copy of a resolution of the board of directors of each Obligor (other than the Parent Guarantor)
and a copy of a resolution of the executive committee of the Parent Guarantor:
(a)
evidencing corporate benefit;
(b)
approving the terms of, and the transactions
 
contemplated by, this Agreement and (as applicable)
each
 
Supplemental
 
Security
 
Document
 
to
 
which
 
it
 
is
 
a
 
party
 
and
 
(as
 
applicable)
 
the
 
Mortgage
Amendment to which it
 
is a party and
 
resolving that it execute this Agreement,
 
(if applicable) each
Supplemental
 
Security
 
Document
 
to
 
which
 
it
 
is
 
a
 
party
 
and
 
(if
 
applicable)
 
the
 
Mortgage
Amendment to which it is a party;
(c)
authorising
 
a
 
specified
 
person
 
or
 
persons
 
to
 
execute
 
this
 
Agreement
 
and
 
(as
 
applicable)
 
each
Supplemental
 
Security
 
Document
 
and
 
each
 
Mortgage
 
Amendment
 
to
 
which
 
it
 
is
 
a
 
party
 
on
 
its
behalf; and
(d)
authorising a specified
 
person or persons,
 
on its behalf, to
 
sign and/or despatch
 
all documents and
notices (including, if relevant,
 
a Utilisation Request)
 
to be signed
 
and/or despatched by
 
it under,
or in
 
connection with,
 
this Agreement, each
 
Supplemental Security
 
Document to
 
which it
 
is a
 
party,
each Mortgage Amendment to which it is a party
 
and any other Finance Document to which
 
it is a
party.
1.3
An original
 
of the
 
power of
 
attorney of
 
any Obligor
 
authorising a
 
specified person
 
or persons
 
to
execute
 
this
 
Agreement
 
and
 
(as
 
applicable)
 
each
 
Supplemental
 
Security
 
Document
 
and
 
each
Mortgage Amendment to which it is a party.
1.4
A specimen of the
 
signature of each person authorised
 
by the resolutions referred to in paragraph
1.2 above.
1.5
A copy of
 
a resolution signed by
 
the Parent
 
Guarantor as the
 
holder of the
 
issued shares in
 
each
Borrower,
 
approving the terms of, and the transactions contemplated
 
by, this Agreement
 
and (as
applicable) each Supplemental Security Document and each Mortgage Amendment to which that
Borrower is a party.
1.6
An up-to-date copy of a goodstanding certificate in respect of each
 
Obligor issued not earlier than
90 days from the Effective Date
 
.
2
Agreement and Security
2.1
A duly executed original of this Agreement signed by all Parties to it.
2.2
A duly executed original of the Amended and Restated Facility Agreement.
2.3
A
 
duly
 
executed
 
original
 
of
 
each
 
Supplemental
 
Security
 
Document
 
(and
 
any
 
other
 
document
required thereunder).
2.4
A
 
duly
 
executed
 
original
 
of
 
each
 
Mortgage
 
Amendment
 
and
 
evidence
 
that
 
such
 
Mortgage
Amendment
 
has
 
been
 
duly
 
registered
 
as
 
a
 
valid
 
addendum
 
to
 
the
 
Mortgage
 
in
 
respect
 
of
 
the
relevant Ship in accordance with the laws of the jurisdiction of its applicable Approved Flag.
3
Legal opinions
3.1
A legal opinion of Watson Farley & Williams,
 
Greece, legal advisers to the Lender in England.
3.2
If an Obligor is incorporated in a jurisdiction other than England and Wales,
 
a legal opinion of the
legal advisers to the Lender in the relevant jurisdiction.
3.3
Legal opinions of the
 
legal advisers to
 
the Lender in the jurisdiction of
 
the Approved Flag of
 
each
Ship and such other relevant jurisdictions as the Lender may require.
4
Other documents and evidence
4.1
A copy
 
of a
 
certificate signed
 
by an
 
officer of
 
each Borrower
 
confirming that
 
as at
 
the Effective
Date and the date of this Agreement:
(a)
the Repeating Representations and all other representations are true and accurate;
(b)
no Default has occurred
 
and is continuing or
 
is reasonably likely
 
to result from
 
the occurrence of
the Effective Date; or
(c)
no event
 
described in clause 7.1
 
(
Illegality
), 7.2 (
Change of control
), 7.5 (
mandatory prepayment
on
 
sale
 
or
 
Total
 
Loss
)
 
and
 
7.6
 
(
Mandatory
 
prepayment
 
on
 
Sanctions
 
Event
)
 
of
 
the
 
Facility
Agreement has occurred.
4.2
Draft cover notes and certificates of
 
the relevant P&I Club in respect of each Ship evidencing that
each
 
Ship is
 
insured
 
in
 
accordance
 
with
 
the provisions
 
of
 
the Facility
 
Agreement
 
together
 
with
draft letters
 
of undertaking by
 
the Approved
 
Brokers
 
in accordance
 
with paragraph
 
(b) of
 
clause
23.6 (
Copies of
 
policies; letters
 
of undertaking
) of
 
the Facility
 
Agreement,
 
in each
 
case in
 
forms
acceptable to the Lender.
4.3
A
 
copy
 
of
 
any
 
other
 
Authorisation
 
or
 
other
 
document,
 
opinion
 
or
 
assurance
 
which
 
the
 
Lender
considers to
 
be necessary or desirable
 
in connection with the
 
entry into and
 
performance of the
transactions
 
contemplated
 
by
 
this
 
Agreement,
 
each
 
Mortgage
 
Amendment
 
and
 
each
Supplemental Security Document
 
or for
 
the validity and
 
enforceability of
 
any Finance Document
as
 
amended,
 
restated
 
and/or
 
supplemented
 
by
 
this
 
Agreement,
 
each
 
Supplemental
 
Security
Document or each Mortgage Amendment.
4.4
Such evidence as the Lender may require to be able to satisfy each of their "know your customer" ) has accepted its appointment.
or
 
similar
 
identification
 
procedures
 
in
 
relation
 
to
 
the
 
transactions
 
contemplated
 
by
 
this
Agreement.
 
 
4.5
Documentary
 
evidence
 
that
 
the
 
agent
 
for
 
service
 
of
 
process
 
named
 
in
 
Clause
 
11.2
 
(
Service
 
of
process
4.6
Evidence
 
that
 
the
 
fees,
 
costs
 
and
 
expenses
 
then
 
due from
 
the Borrower
 
s
 
pursuant
 
to
 
Clause
(
Costs and Expenses
) and clause 16.2
 
(
amendment costs
) of the Facility
 
Agreement and pursuant
to Clause 6 (
Fees
) of this Agreement have been paid or will be paid by the Effective Date.
4.7
Such documentation and
 
information as the
 
Lender deem necessary and/or
 
advisable to comply
with:
 
(a)
relevant sanction regulations
 
including the Lender's sanction compliance
 
procedures with a
 
view
to carry out relevant sanctions'
 
screenings; and
(b)
customer
 
due
 
diligence
 
measures
 
for
 
purposes
 
of
 
AML/CTF
 
checks
 
as
 
required
 
by
 
the
 
Danish
Consolidating Act no. 1022 of 13
th
 
of August 2013 on Measures to Prevent Money Laundering and
Financing of Terrorism (as amended and supplemented) including, without limitation:
(i)
Ownership and structure: evidence satisfactory
 
to the Lender of the complete ownership
and
 
control
 
structure
 
of
 
the
 
Customers
 
including
 
the
 
ownership
 
stake
 
belonging
 
to
beneficial owners meaning the
 
natural person(s) who ultimately owns
 
or controls through
direct or indirect ownership of more than 20 per cent. of the shares
 
or voting rights in the
Customers (except for beneficial owners in companies listed on a regulated market that is
subject
 
to
 
disclosure
 
requirements
 
consistent
 
with
 
EU
 
law
 
or
 
equivalent
 
international
standards,
 
provided that
 
if only
 
part of
 
such companies
 
shares are
 
listed,
 
the beneficial
owners,
 
if
 
any,
 
of
 
such
 
remaining
 
unlisted
 
shares
 
shall
 
be
 
subject
 
to
 
the
 
disclosure
requirements)
 
or,
 
if
 
no
 
such
 
person(s)
 
are
 
identified
 
or
 
if
 
there
 
is
 
any
 
doubt
 
that
 
the
person(s)
 
identified
 
are
 
the
 
beneficial
 
owner(s),
 
the
 
natural
 
person(s)
 
who
 
hold
 
the
position of senior management in the Parent Guarantor;
(ii)
Verification:
 
copies
 
of
 
proof
 
of
 
identity
 
and
 
country
 
of
 
residence
 
(which
 
may
 
be
documented
 
by
 
copy
 
of
 
bank
 
statement,
 
utility
 
bills,
 
lease
 
contracts
 
or
 
other
 
official
documents from a reliable and independent source) no older than 3 Months from date of
receipt,
 
in
 
Roman
 
Latin
 
letters
 
(
 
i.e.
 
not
 
Hebrew,
 
Greek,
 
Arabic
 
or
 
Russian
 
letters
 
in
readable form)
 
of the Customers
 
and any beneficial
 
owner (except
 
for beneficial owners
in listed
 
companies as
 
described in sub-paragraph
 
(a) above)
 
or,
 
if no such
 
person(s) are
identified or if there is any doubt that the person(s) identified
 
are the beneficial owner(s),
in
 
addition
 
to
 
the so
 
identified
 
beneficial
 
owner(s),
 
the
 
natural
 
person(s)
 
who
 
hold
 
the
position
 
of
 
senior management
 
officials
 
in the
 
Parent
 
Guarantor
 
and of
 
any
 
signatories
shall be verified in the following manner:
(A)
in
 
relation
 
to
 
natural
 
persons
 
(e.g.
 
beneficial
 
owner(s)
 
or
 
senior
 
management
officials): proof
 
of identity
 
shall include
 
name, date
 
of birth
 
and civil
 
registration
number
 
verified
 
on
 
the
 
basis
 
of
 
copies
 
of
 
passports
 
or
 
driver's
 
licenses,
 
other
government issued documents, lawyer's statements or a legal opinion; and
(B)
in
 
relation
 
to
 
legal
 
persons
 
(e.g. Customers
 
and/or
 
any
 
listed
 
parent
 
company):
proof of identity shall include registered name, country of
 
incorporation, business
registration number,
 
tax identification number (TIN), legal entity identifier (LEI)
 
or
similar government issued identification number verified on the basis of transcript Alternatively, bank statements, lawyer's statements, legal opinion or confirmation
 
 
from
 
companies
 
house
 
or
 
companies
 
registry,
 
Articles
 
of
 
Association
 
and
Memorandum
 
of
 
Association,
 
or
 
other
 
government
 
issued
 
documents.
from the Danish Consulate in the country
 
of
the registered office of the Customer
or listed parent company confirming name or business identification number;
 
(iii)
Signing authority and verification:
 
(A)
Authorised
 
signatory:
 
copies
 
of
 
Articles
 
of
 
Association
 
and
 
Memorandum
 
of
Association, Board Resolution,
 
or legal opinion.
 
Proof of
 
identity of the
 
signatory
shall be verified
 
on the basis
 
of passport, identity
 
card issued
 
by a governmental
authority or
 
driver's license
 
in relation
 
to the
 
signing of
 
authority of
 
any person
executing a document on behalf of the Customers; and
(B)
Attorneys
 
in
 
fact:
 
copies
 
of
 
any
 
powers
 
of
 
attorney,
 
documentation
 
evidencing
general
 
authority
 
or
 
legal
 
opinion
 
in
 
relation
 
to
 
the
 
signing
 
authority
 
of
 
any
attorney-in-fact
 
executing a
 
document on
 
behalf of
 
the Customers,
 
in each
 
case
no
 
older
 
than
 
3
 
months.
 
The
 
proof
 
of
 
identity
 
of
 
any
 
attorney-in-fact
 
shall
 
be
verified on the basis of passport, identity
 
card issued by a governmental authority
or
 
driver's
 
license.
 
Alternatively,
 
if
 
the
 
attorney-in-fact
 
is
 
an
 
attorney-at-law
qualified in
 
a EU/EEA
 
member state,
 
a print-out
 
of the
 
webpage of
 
the relevant
law
 
firm
 
with
 
whom
 
the
 
attorney-at-law
 
is
 
employed
 
evidencing
 
such
employment; and
(iv)
a
 
statement
 
from
 
the
 
Customers
 
confirming
 
that
 
the
 
documents,
 
data
 
or
 
information
previously provided
 
to the
 
Lender under
 
paragraphs
 
(ii) and
 
above is
 
up-to-date,
or,
 
alternatively, any relevant
 
updated documents, data or information.
 
EXECUTION PAGES
EXECUTED AS A DEED
 
)
by Margarita Veniou
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
MEJATO
 
SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
EXECUTED AS A DEED
 
)
by Margarita Veniou
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
RAKARU SHIPPING COMPANY INC.
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
EXECUTED AS A DEED
 
)
by Margarita Veniou
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
EBADON SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
EXECUTED AS A DEED
 
)
by Margarita Veniou
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
PULAP SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
EXECUTED AS A DEED
 
)
by Margarita Veniou
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
WENO SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
EXECUTED AS A DEED
 
)
by Margarita Veniou
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
ERIKUB SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
EXECUTED AS A DEED
 
)
by Margarita Veniou
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
WOTHO SHIPPING COMPANY INC.
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
PARENT GUARANTOR
EXECUTED AS A DEED
 
)
by Margarita Veniou
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
DIANA SHIPPING INC.
 
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
ORIGINAL LENDER
EXECUTED AS A DEED
 
)
by
 
)
duly authorised attorney-in fact
 
)
for and on behalf of
 
)
DANISH SHIP FINANCE A/S
 
)
in the presence of:
 
)
Witness' signature:
 
)
Witness' name:
 
)
Witness' address:
 
)
 
COUNTERSIGNED
 
this _____ day of October 2024 for and on
 
behalf of the following corporation which by
its execution hereof confirms and acknowledges that:
 
1
it has read and understood the terms and conditions of the above Agreement;
2
it agrees in all respects to the same;
 
3
any Security created by it under the
 
Finance Documents extends to the
 
obligations of the relevant
Obligors under the Finance Documents as amended and supplemented by the above Agreement;
 
4
the
 
obligations
 
of
 
the
 
relevant
 
Obligors
 
under
 
the
 
Finance
 
Documents
 
as
 
amended
 
and
supplemented by
 
the above
 
Agreement are
 
included in the
 
Secured Liabilities (as
 
defined in
 
the
Security Documents to which it is a party); and
5
the Security created under the Finance Documents continues in full force and effect on the terms
of the respective Finance Documents.
________________________________
Director
for and on behalf of
 
Diana Shipping Services S.A.
(as approved manager)
APPENDIX
FORM OF AMENDED AND RESTATED
 
FACILITY AGREEMENT (MARKED TO INDICATE
 
AMENDMENTS)
Amendments are indicated as follows:
1
 
additions are indicated by [underlined text in blue];
 
2
 
deletions are shown by [strike-through text in red];
 
and
3
moved wording is indicated by [underlined text in green].
[Append marked-up version]
EX-4.13 20 exhibit413.htm EX-4.13 exhibit413
Dated [
●
] 2024
MANRA SHIPPING COMPANY INC.
 
JABWOT SHIPPING COMPANY
 
INC.
 
ARORAE SHIPPING COMPANY INC.
 
TAMANA SHIPPING COMPANY
 
INC.
 
BERU SHIPPING COMPANY INC.
 
BONRIKI SHIPPING COMPANY INC.
 
TAONGI SHIPPING COMPANY
 
INC.
 
EJITE SHIPPING COMPANY INC.
 
GUAM SHIPPING COMPANY INC.
PALAU SHIPPING COMPANY
 
INC.
as joint and several Borrowers
and
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
and
NORDEA BANK ABP
as Swap Bank
and
NORDEA BANK ABP,
 
FILIAL I NORGE
as Agent, Bookrunner, Security Trustee and Lead Arranger relating to a term loan facility of up to $167,263,025
LOAN AGREEMENT
relating to
Index
Clause
 
Page
Schedules
THIS AGREEMENT
is made on [
●
] 2024
PARTIES
(1)
MANRA
 
SHIPPING
 
COMPANY
 
INC.
,
 
JABWOT
 
SHIPPING
 
COMPANY
 
INC.
,
 
ARORAE
 
SHIPPING
COMPANY
 
INC.
,
 
TAMANA
 
SHIPPING COMPANY
 
INC.
,
 
BERU SHIPPING COMPANY
 
INC.
,
 
BONRIKI
SHIPPING COMPANY
 
INC.
,
 
TAONGI
 
SHIPPING COMPANY
 
INC.
,
 
EJITE SHIPPING
 
COMPANY
 
INC.,
GUAM
 
SHIPPING
 
COMPANY
 
INC.,
and
 
PALAU
 
SHIPPING
 
COMPANY
 
INC.
as
 
joint
 
and
 
several
borrowers (collectively,
 
the "
Borrowers
")
(2)
THE BANKS AND FINANCIAL INSTITUTIONS
listed in
, as Lenders
(3)
NORDEA BANK ABP,
as Swap Bank
(4)
NORDEA BANK ABP,
 
FILIAL I NORGE,
as Agent
(5)
NORDEA BANK ABP,
 
FILIAL I NORGE,
as Bookrunner
(6)
NORDEA BANK ABP,
 
FILIAL I NORGE,
as Lead Arranger
(7)
NORDEA BANK ABP,
 
FILIAL I NORGE,
as Security Trustee
BACKGROUND
(A)
The Lenders have agreed to
 
make available to
 
the Borrowers,
 
on a joint and several basis,
 
a term
loan facility of
 
up to
 
the lesser
 
of (i)
 
$167,263,025 and
 
(ii) 60%
 
of the aggregate
 
Initial Market Value
of the Ships, for the purpose of re-financing the Existing Indebtedness.
(B)
The Swap Bank has agreed to
 
enter into interest
 
rate swap transactions
 
with the Borrowers from
time to time to
 
hedge the Borrowers' exposure under
 
this Agreement to interest rate fluctuations.
(C)
The Lenders and
 
the Swap Bank
 
have agreed
 
to share pari
 
passu in the
 
security to be
 
granted to
the Security Trustee pursuant to this Agreement.
OPERATIVE
PROVISIONS
1
INTERPRETATION
 
1.1
Definitions
Subject to Clause
 
(
General interpretation
), in this Agreement:
"
Accounts Pledges
" means,
 
together,
 
the Earnings
 
Account Pledges
 
in the
 
Agreed Form
 
and, in
the singular, means any of them.
"
Agency and
 
Trust Deed
" means
 
the agency
 
and trust
 
deed dated
 
the same
 
date as
 
this Agreement
and made between the same parties.
"
Agent
"
 
means
 
Nordea
 
Bank
 
Abp,
 
filial
 
i
 
Norge,
 
acting
 
in
 
such
 
capacity
 
through
 
its
 
office
 
at
Essendrops
 
gate
 
7,
 
Postboks
 
1166,
 
Sentrum,
 
0107
 
Oslo,
 
920058817
 
MVA,
 
Norway,
 
or
 
any
successor of it appointed under clause 5 of the Agency and Trust Deed.
"
Agreed Form
" means in
 
relation to any
 
document, that
 
document in the
 
form approved in
 
writing
by the Agent
 
(acting on
 
the instructions of
 
all the Lenders)
 
or as otherwise
 
approved in accordance
with any other approval procedure specified in any relevant provision of any Finance Document.
"
Annex VI
" means
 
Annex VI
 
of the
 
Protocol
 
of 1997
 
to amend
 
the International
 
Convention
 
for
the Prevention of Pollution
 
from Ships 1973 (Marpol),
 
as modified by
 
the Protocol of 1978
 
relating
thereto.
"
Arorae
" means Arorae Shipping
 
Company Inc., a corporation
 
incorporated and existing under
 
the
laws
 
of
 
the
 
Republic
 
of
 
the
 
Marshall
 
Islands
 
whose
 
registered
 
address
 
is
 
at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Approved
 
Broker
"
 
means
 
Arrow
 
Sale
 
&
 
Purchase
 
(UK)
 
Limited,
 
Breamar
 
Seascope
 
Limited,
 
H.
Clarkson
 
&
 
Company
 
Limited,
 
Fearnleys
 
AS,
 
Maersk
 
Brokers
 
K.S.,
 
Simpson
 
Spence
 
&
 
Young
(London)
 
Ltd.
 
and
 
VesselsValue.Com
 
or
 
any
 
other
 
any
 
reputable
 
sale
 
and
 
purchase
 
broker
approved and appointed by the Agent subject to the prior written consent of the Borrowers.
"
Approved
 
Flag
" means
 
the Marshall
 
Islands flag
 
or any
 
other flag
 
that the
 
Agent may
 
approve
that the Ship is registered (such approval not to be unreasonably withheld or delayed).
 
"
Approved Flag State
" means the Republic of the Marshall Islands or any other
 
state in which the
Agent may,
 
at the request of
 
the Borrowers, approve
 
that a Ship is
 
registered (such approval
 
not
to be unreasonably withheld or delayed).
"
Approved Manager
" means, in relation to each Ship:
 
(a)
Diana
 
Shipping
 
Services
 
S.A.,
 
a
 
company
 
incorporated
 
and
 
existing
 
under
 
the
 
laws
 
of
Panama having its
 
registered office at
 
Edificio Universal, Piso 12,
 
Avenida Federico Boyd,
Panama, Republic of
 
Panama and maintaining
 
offices at 16
 
& 18 Pendelis
 
Street, 175 64,
Palaio Faliro, Greece; or
(b)
in relation to any Ship in respect of which the
 
relevant Borrower exercises its rights
 
under
Clause
 
(
Change of Approved Manager
), Diana Wilhelmsen Management Limited, a company incorporated and existing under the laws of the Republic of Cyprus having its
registered office
 
at 21 Vasili
 
Michailidi Street, 3026
 
Limassol, Cyprus and
 
maintaining an
office at 350 Syngrou Avenue, Kalithea, Greece; or
(c)
any other company which the Agent may,
 
with the authorisation of the Lenders, approve
from
 
time
 
to
 
time
 
as
 
the
 
technical
 
and/or
 
commercial
 
manager
 
of
 
each
 
Ship
 
(such
approval not to be unreasonably withheld or delayed).
"
Article
 
55
 
BRRD
"
 
means
 
Article
 
55
 
of
 
Directive
 
2014/59/EU
 
establishing
 
a
 
framework
 
for
 
the
recovery and resolution of credit institutions and investment firms.
"
Authorisation
" means an authorisation, consent, approval, resolution, licence,
 
exemption, filing,
notarisation, legalisation or registration.
"
Availability Period
" means the
 
period commencing
 
on the date
 
of this Agreement
 
and ending
 
on:
(a)
8 August 2024 (or
 
such later date as the
 
Agent may, with the authorisation of
 
the Lenders,
agree with the Borrowers); or
(b)
if
 
earlier,
 
the
 
date
 
on
 
which
 
the
 
Total
 
Commitments
 
are
 
fully
 
borrowed,
 
cancelled
 
or
terminated.
"
Bail-In Action
" means the exercise of any Write-down and Conversion Powers.
"
Bail-In Legislation
" means:
(a)
in
 
relation
 
to
 
an
 
EEA
 
Member
 
Country
 
which
 
has
 
implemented,
 
or
 
which
 
at
 
any
 
time
implements, Article 55 BRRD, the relevant implementing
 
law or regulation as described in
the EU Bail-In Legislation Schedule from time to time;
 
(b)
in relation to any state other than such
 
an EEA Member Country and
 
the United Kingdom,
any analogous law or regulation from time
 
to time which requires contractual recognition
of any Write-down and Conversion Powers contained
 
in that law or regulation; and
in relation to the United Kingdom, the UK Bail
-In Legislation.
"
Balloon
 
Instalment
"
 
means
 
any
 
balloon
 
instalment
 
referred
 
to
 
in
 
Clause
 
8.1
 
(
Amount
 
of
repayment instalments
).
"
Basel III
" means, together:
(a)
the
 
agreements
 
on
 
capital
 
requirements,
 
a
 
leverage
 
ratio
 
and
 
liquidity
 
standards
contained in "Basel
 
III: A
 
global regulatory framework
 
for more resilient
 
banks and
 
banking
systems",
 
"Basel
 
III:
 
International
 
framework
 
for
 
liquidity
 
risk
 
measurement,
 
standards
and
 
monitoring"
 
and
 
"Guidance
 
for
 
national
 
authorities
 
operating
 
the
 
countercyclical
capital
 
buffer"
 
published by
 
the Basel
 
Committee
 
on
 
Banking
 
Supervision in
 
December
2010, each as amended, supplemented or restated; - Rules text" published by the Basel Committee on Banking Supervision in
(b)
the
 
rules
 
for
 
global
 
systemically
 
important
 
banks
 
contained
 
in
 
"Global
 
systemically
important
 
banks:
 
assessment
 
methodology
 
and
 
the
 
additional
 
loss
 
absorbency
requirement
November 2011, as amended, supplemented or restated; and
(c)
any
 
further
 
guidance
 
or
 
standards
 
published
 
by
 
the
 
Basel
 
Committee
 
on
 
Banking
Supervision relating to "Basel III".
"
Beru
" means
 
Beru Shipping
 
Company Inc.,
 
a corporation
 
incorporated and existing
 
under the
 
laws
of the
 
Republic of
 
the Marshall
 
Islands whose
 
registered
 
address is
 
at Trust
 
Company Complex,
Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Bonriki
" means
 
Bonriki Shipping
 
Company
 
Inc., a
 
corporation
 
incorporated
 
and existing
 
under
the laws
 
of
 
the Republic
 
of the
 
Marshall
 
Islands whose
 
registered
 
address
 
is at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Bookrunner
" means Nordea Bank Abp,
 
filial i Norge, acting in
 
such capacity through its office
 
at
Essendrops gate 7, Postboks 1166,
 
Sentrum, 0107 Oslo,
 
920058817 MVA,
 
Norway.
 
"
Borrower
" means
 
each of
 
Manra,
 
Jabwot, Arorae,
 
Tamana,
 
Beru, Bonriki,
 
Taongi,
 
Ejite,
 
Guam
and Palau and in the plural means, all of them.
"
Break Costs
" means the amount (if any) by which:
(a)
the interest which
 
a Lender should have
 
received for the period
 
from the date
 
of receipt
of all
 
or any
 
part of
 
its participation in
 
the Loan or
 
an Unpaid Sum
 
to the
 
last day
 
of the
current Interest Period in
 
relation to the
 
Loan, the relevant
 
part of
 
the Loan or
 
that Unpaid
Sum, had the principal amount or Unpaid Sum
 
received been paid on the last
 
day of that
Interest Period
exceeds
(b)
the amount which that Lender would be able
 
to obtain by placing an amount equal to
 
the
principal amount or Unpaid
 
Sum received by it on
 
deposit with a
 
leading bank for a
 
period
starting on
 
the Business Day
 
following receipt
 
or recovery
 
and ending on
 
the last
 
day of
the current Interest Period.
"
Business
 
Day
"
 
means
 
a
 
day
 
(other
 
than
 
a
 
Saturday
 
or
 
Sunday)
 
on
 
which
 
banks
 
are
 
open
 
for
general business in London, Athens and Oslo; and
(a)
New York;
 
and
(b)
(in relation to the fixing of an interest rate) which is a US Government Securities Business
Day.
"
Change of Control
" means the occurrence of
 
any of the following
 
acts, events or circumstances
without the prior written consent of the Agent:
 
(a)
a change in
 
the ownership of
 
any Borrower
 
from the date
 
of this Agreement
 
resulting in
such
 
Borrower
 
not being
 
a direct
 
or
 
indirect
 
wholly-owned subsidiary
 
of
 
the
 
Corporate
Guarantor;
 
and/or
(b)
the Palios
 
Family (either
 
directly or indirectly
 
through companies
 
legally and beneficially
owned)
 
ceases
 
to
 
own
 
at
 
least
 
12.5
 
per
 
cent.
 
of
 
the
 
common
 
stock
 
in
 
the
 
Corporate
Guarantor;
 
and/or
(c)
the Palios
 
Family (either
 
directly or indirectly
 
through companies
 
legally and beneficially
owned) ceases
 
to control at
 
least 25 per
 
cent. of
 
the maximum
 
number of
 
votes that might
be
 
cast
 
in
 
respect
 
of
 
any
 
matter
 
submitted
 
to
 
the
 
vote
 
of
 
the
 
shareholders
 
of
 
the
Corporate Guarantor;
 
and/or
(d)
Semiramis
 
Paliou
 
ceases
 
to
 
hold
 
Chief
 
Executive
 
Officer
 
position
 
in
 
the
 
Corporate
Guarantor and
 
active role
 
in the decision making
 
in respect of
 
the Corporate
 
Guarantor;
and/or
(e)
the shares of the Corporate Guarantor cease to be listed
 
on the New York Stock Exchange
or any other stock exchange acceptable to the Agent.
"
Charter
" means,
 
in relation
 
to each
 
Ship, any
 
time charter
 
or other
 
contract of
 
employment in
respect
 
of
 
that
 
Ship
 
with
 
a
 
duration
 
exceeding
 
(or
 
capable
 
of
 
exceeding)
 
24
 
months
 
or
 
any
bareboat charter in respect of such Ship and, in the plural, means all of them.
"
Charterer
" means any entity
 
which has entered into, or
 
will enter into,
 
a Charter with a
 
Borrower
in respect of the Ship owned by it.
"
Charterparty Assignment
" means,
 
in relation
 
to each
 
Charter,
 
a specific deed
 
of assignment
 
of
the
 
rights
 
of
 
the
 
Borrower
 
who
 
is
 
a
 
party
 
to
 
that
 
Charter
 
executed
 
or
 
to
 
be
 
executed
 
by
 
that
Borrower in favour
 
of the
 
Security Trustee in
 
the Agreed
 
Form and,
 
in the
 
plural, means
 
all of
 
them.
"
Code
" means the US Internal Revenue Code of 1986.
"
Commitment
" means,
 
in relation
 
to a
 
Lender,
 
the amount
 
set opposite
 
its name in
,
or,
 
as
 
the
 
case
 
may
 
require,
 
the
 
amount
 
specified
 
in
 
the
 
relevant
 
Transfer
 
Certificate,
 
as
 
that
amount may be reduced, cancelled or terminated in accordance
 
with this Agreement (and "
Total
Commitments
" means the aggregate of the Commitments of all the Lenders).
"
Confirmation
"
 
and
 
"
Early
 
Termination
 
Date
",
 
in
 
relation
 
to
 
any
 
continuing
 
Designated
Transaction, have the meanings given in the Master Agreement.
"
Contractual Currency
" has the meaning given in Clause
 
(
Currency indemnity
).
"
Contribution
" means, in relation to a Lender, the part of the Loan which is owing to that Lender.
"
Corporate Guarantee
" means a
 
corporate guarantee
 
of the obligations
 
of the Borrowers
 
under
this Agreement, the Master Agreement and the other Finance Documents.
"
Corporate Guarantor
" mean Diana Shipping Inc., a corporation domesticated and existing under
the laws
 
of
 
the Republic
 
of the
 
Marshall
 
Islands whose
 
registered
 
address
 
is at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
CRD IV
" means:
(a)
Regulation (EU)
 
No 575/2013
 
of the
 
European Parliament
 
and of
 
the Council
 
of 26
 
June
2013
 
on
 
prudential
 
requirements
 
for
 
credit
 
institutions
 
and
 
investment
 
firms
 
and
amending regulation (EU) No. 648/2012,
 
as amended by Regulation (EU) 2019/876;
(b)
Directive 2013/36/EU of the
 
European Parliament and
 
of the Council of 26
 
June 2013 on
access
 
to
 
the
 
activity
 
of
 
credit
 
institutions
 
and
 
the
 
prudential
 
supervision
 
of
 
credit
institutions
 
and
 
investment
 
firms,
 
amending
 
Directive
 
2002/87/EC
 
and
 
repealing
Directives 2006/48/EC and 2006/49/EC, as amended by Directive (EU) 2019/878;
 
and
(c)
any other law or regulation which implements Basel III.
"
Creditor Party
" means the
 
Agent, the Lead
 
Arranger,
 
the Bookrunner,
 
the Security Trustee,
 
the
Swap Bank or any Lender, whether as at the date of this Agreement or at any later time.
"
Designated Transaction
" means a Transaction which fulfils the following requirements:
(a)
it is
 
entered into by
 
the Borrowers pursuant
 
to the
 
Master Agreement with
 
the Swap
 
Bank;
(b)
its purpose is the hedging
 
of all or part of
 
the Borrowers'
 
exposure to fluctuations in Term
SOFR under this Agreement for a period expiring no later than the Termination Date;
 
and
(c)
it is designated by the Borrowers, by delivery
 
by the Borrowers to the Agent of a notice
 
of
designation
 
in
 
the
 
form
 
set
 
out
 
in
 
(
Designation
 
Notice
),
 
as
 
a
 
Designated
Transaction for the purposes of the Finance Documents.
"
Dollars
" and "
$
" means the lawful currency for the time being of the United States of America.
"
Drawdown Date
" means
 
the date
 
requested by
 
the Borrowers
 
for the
 
Loan to
 
be made,
 
or (as
the context requires) the date on which the Loan is actually made.
"
Drawdown Notice
" means a
 
notice in
 
the form
 
set out
 
in
 
(
Drawdown Notice
) (or in
any other form which the Agent approves or reasonably requires).
"
Earnings
" means, in
 
relation to a
 
Ship, all moneys
 
whatsoever which are
 
now,
 
or later
 
become,
payable (actually
 
or contingently)
 
to the
 
Borrower owning
 
that Ship
 
or the
 
Security Trustee
 
and
which arise out of the use or operation of that Ship, including (but not limited to):
(a)
except to the extent that they fall within paragraph
(i)
all freight, hire and passage moneys;
(ii)
compensation
 
payable
 
to
 
a
 
Borrower
 
or
 
the
 
Security
 
Trustee
 
in
 
the
 
event
 
of
requisition of a Ship for hire;
(iii)
remuneration for salvage and towage services;
(iv)
demurrage and detention moneys;
(v)
damages for breach
 
(or payments for
 
variation or
 
termination) of
 
any charterparty
or other contract for the employment of a Ship; and
(vi)
all moneys which are at any
 
time payable under any Insurances in
 
respect of loss
of hire; and
(b)
if
 
and
 
whenever
 
a
 
Ship
 
is
 
employed
 
on
 
terms
 
whereby
 
any
 
moneys
 
falling
 
within
paragraphs
 
to
 
are pooled or
 
shared with any other
 
person, that proportion
 
of the
net receipts
 
of the
 
relevant pooling
 
or sharing
 
arrangement which
 
is attributable
 
to the
Ship.
"
Earnings Account
" means an
 
account in the
 
name of each
 
Borrower with the
 
Agent designated
"[
name
 
of the
 
Borrower
] -
 
Earnings
 
Account",
 
or
 
any
 
other
 
account
 
which
 
is designated
 
by
 
the
Agent as an Earnings Account for the purposes of this Agreement.
"
Earnings Account Pledge
" means, in
 
respect of each Earnings
 
Account, a deed
 
creating security
in the Agreed Form.
 
"
EEA Member Country
" means any
 
member state of
 
the European Union,
 
Iceland, Liechtenstein
and Norway.
"
Ejite
" means Ejite
 
Shipping Company Inc.,
 
a corporation incorporated and existing
 
under the laws
of the
 
Republic of
 
the Marshall
 
Islands whose
 
registered
 
address is
 
at Trust
 
Company Complex,
Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Environmental
 
Approval
"
 
means
 
any
 
present
 
or
 
future
 
permit,
 
ruling,
 
variance
 
or
 
other
Authorisation required under Environmental Law.
"
Environmental Claim
" means any claim by any
 
governmental, judicial or regulatory
 
authority or
any
 
other
 
person
 
which
 
arises
 
out
 
of
 
an
 
Environmental
 
Incident
 
or
 
an
 
alleged
 
Environmental
Incident or which relates to any Environmental Law and, for this
 
purpose, "
claim
" includes a claim
for damages, compensation, contribution, injury, fines, losses
 
and penalties or
 
any other payment
of any kind, including
 
in relation to clean-up and
 
removal, whether or not similar
 
to the foregoing;
an order
 
or direction
 
to take,
 
or not
 
to take,
 
certain action
 
or to
 
desist from
 
or suspend
 
certain
action; and any
 
form of
 
enforcement or
 
regulatory action,
 
including the arrest
 
or attachment
 
of
any asset.
"
Environmental Incident
" means:
(a)
any
 
release,
 
emission,
 
spill
 
or
 
discharge
 
of
 
Environmentally
 
Sensitive
 
Material
 
whether
within a Ship
 
or from
 
a Ship into
 
any other
 
vessel or
 
into or
 
upon the air,
 
water,
 
land or
soils (including the seabed) or surface water; or
(b)
any incident
 
in which
 
Environmentally
 
Sensitive Material
 
is released,
 
emitted, spilled
 
or
discharged into or
 
upon the
 
air, water,
 
land or
 
soils (including
 
the seabed)
 
or surface water
from
 
a vessel
 
other than
 
any
 
Ship and
 
which involves
 
a collision
 
between
 
any Ship
 
and
such
 
other
 
vessel
 
or
 
some
 
other
 
incident
 
of
 
navigation
 
or
 
operation,
 
in
 
either
 
case,
 
in
connection
 
with
 
which
 
a
 
Ship
 
is
 
actually
 
or
 
potentially
 
liable
 
to
 
be
 
arrested,
 
attached,
detained or injuncted
 
and/or a Ship
 
and/or any Borrower and/or
 
any operator or manager
of a
 
Ship is at
 
fault or allegedly
 
at fault
 
or otherwise liable
 
to any
 
legal or
 
administrative
action; or
(c)
any other
 
incident in
 
which Environmentally Sensitive
 
Material is
 
released, emitted,
 
spilled
or discharged
 
into or
 
upon the air,
 
water,
 
land or
 
soils (including the
 
seabed) or surface
water
 
otherwise
 
than
 
from
 
a
 
Ship
 
and
 
in
 
connection
 
with
 
which
 
a
 
Ship
 
is
 
actually
 
or
potentially
 
liable
 
to
 
be
 
arrested
 
and/or
 
where
 
any
 
Borrower
 
and/or
 
any
 
operator
 
or
manager
 
of
 
a
 
Ship
 
is
 
at
 
fault
 
or
 
allegedly
 
at
 
fault
 
or
 
otherwise
 
liable
 
to
 
any
 
legal
 
or
administrative action.
"
Environmental
 
Law
"
 
means
 
any
 
present
 
or
 
future
 
law
 
relating
 
to
 
vessel
 
disposal,
 
energy
efficiency,
 
carbon
 
reduction,
 
emissions,
 
emissions
 
trading,
 
pollution
 
or
 
protection
 
of
 
human
health or the environment,
 
to conditions in the
 
workplace, to the carriage,
 
generation, handling,
storage, use,
 
release or spillage
 
of Environmentally
 
Sensitive Material or
 
to actual or
 
threatened
releases of Environmentally Sensitive Material.
"
Environmentally Sensitive Material
" means and
 
includes all contaminants, oil,
 
oil products, toxic
substances and
 
any other
 
substance (including
 
any chemical,
 
gas or
 
other hazardous
 
or noxious
substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
"
EU Bail-In
 
Legislation Schedule
" means
 
the document
 
described as
 
such and
 
published by
 
the
Loan Market Association (or any successor organisation) from time to time.
"
EU Ship Recycling Regulation
" means Regulation (EU)
 
No 1257/2013 of
 
the European Parliament
and
 
of
 
the
 
Council
 
of
 
20
 
November
 
2013
 
on
 
ship
 
recycling
 
and
 
amending
 
Regulation
 
(EC)
 
No
1013/2006 and Directive 2009/16/EC.
 
"
Event of Default
" means any of
 
the events or circumstances
 
described in Clause
 
(
Events of
Default
).
"
Executive Order
"
means an order issued by the president of the United States of America.
"
Existing Facility
 
Agreements
" means
 
each of
 
Existing Facility
 
Agreement A
 
and Existing
 
Facility
Agreement B.
 
"
Existing Facility Agreement A
" means the loan agreement dated 20 June 2023 and made among
(i) Guam, Palau and the
 
other entities listed therein as
 
joint and several
 
borrowers, (ii) the banks
and financial
 
institutions listed
 
therein, as
 
lenders, (iii)
 
Nordea Bank
 
Abp as
 
swap bank
 
and (iv)
Nordea Bank Abp, Filial i Norge Branch as agent, lead arranger and security trustee in respect of
 
a
loan
 
facility
 
of
 
(originally)
 
up
 
to
 
$22,500,000,
 
as
 
such
 
loan
 
agreement
 
may
 
have
 
been
 
further
amended, supplemented, novated and/or restated from time to time.
"
Existing Facility Agreement
 
B
" means the loan
 
agreement dated 30
 
September 2022 and made
among (i) Manra, Jabwot,
 
Arorae, Tamana, Beru, Bonriki, Ejite, Taongi and the other
 
entities listed
therein as
 
joint and
 
several borrowers,
 
(ii) the
 
banks and
 
financial institutions
 
listed therein,
 
as
lenders,
 
(iii) Nordea
 
Bank Abp
 
as swap
 
bank and
 
(iv) Nordea
 
Bank Abp,
 
Filial i
 
Norge
 
Branch as
agent,
 
lead
 
arranger
 
and
 
security
 
trustee
 
in
 
respect
 
of
 
a
 
loan
 
facility
 
of
 
(originally)
 
up
 
to
$200,000,000, as such loan agreement may have been further amended, supplemented, novated
and/or restated from time to time.
"
Existing Indebtedness
" means,
 
as at
 
any date, (i)
 
the outstanding Financial
 
Indebtedness of
 
Guam
and Palau under the Existing Facility Agreement A, amounting to $18,000,000 as at the date of this Beru, Bonriki, Ejite and Taongi under the Existing Facility Agreement B amounting to $149,263,025
Agreement
 
and
 
(ii) the
 
outstanding
 
Financial Indebtedness
 
of
 
Manra,
 
Jabwot,
 
Arorae,
 
Tamana,
in total as at the date of this Agreement,
 
as the context may require.
 
"
Existing
 
Security
 
Interests
"
 
means
 
any
 
Security
 
Interests
 
created
 
to
 
secure
 
the
 
Existing
Indebtedness under each Existing Facility Agreement.
"
Facility Office
" means
 
the office
 
or offices
 
notified by
 
a Lender
 
to the
 
Agent in
 
writing on
 
or before
the date it becomes a Lender (or,
 
following that date, by not less than five Business Days'
 
written
notice) as the office or offices through which it will perform its obligations under this Agreement.
"
Fallback Interest Period
" means one Month.
"
FATCA
"
means:
(a)
sections 1471 to 1474 of the Code or any associated regulations;
(b)
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental
agreement between the
 
US and
 
any other jurisdiction,
 
which (in
 
either case)
 
facilitates the
implementation of any law or regulation referred to in paragraph
 
above; or
(c)
any agreement pursuant
 
to the implementation of
 
any treaty,
 
law or regulation referred
to in paragraphs
 
or
 
above with the
 
US Internal Revenue Service,
 
the US government
or any governmental or taxation authority in any other jurisdiction.
"
FATCA
 
Deduction
" means
 
a deduction
 
or withholding
 
from a payment
 
under a
 
Finance Document
required by FATCA.
"
FATCA
 
Exempt Party
" means
 
a Party
 
that is
 
entitled to
 
receive payments
 
free from
 
any FATCA
Deduction.
"
Finance Documents
" means:
 
(a)
this Agreement;
(b)
the Agency and Trust Deed;
(c)
the Master Agreement;
(d)
the Master Agreement Assignment;
(e)
the Corporate Guarantee;
(f)
the General Assignments;
(g)
the Mortgages;
(h)
the Accounts Pledges;
(i)
the Shares Pledges;
(j)
the Manager's Undertakings;
 
(k)
any Charterparty Assignment; and
(l)
any other document (whether
 
creating a Security Interest or
 
not) which is
 
executed at any
time
 
by
 
any
 
Borrower,
 
the
 
Corporate
 
Guarantor,
 
the
 
Approved
 
Manager
 
or
 
any
 
other
person as security for, or to establish any form of subordination or priorities arrangement
in
 
relation
 
to,
 
any
 
amount
 
payable
 
to
 
the
 
Lenders
 
and/or
 
the
 
Swap
 
Bank
 
under
 
this
Agreement or any of the other documents referred to in this definition.
"
Financial Indebtedness
" means, in relation to a person (the "
debtor
"), a liability of the debtor:
 
(a)
for
 
principal, interest
 
or
 
any
 
other
 
sum
 
payable
 
in
 
respect of
 
any
 
moneys
 
borrowed
 
or
raised by the debtor;
 
(b)
under any loan stock, bond, note or other security issued by the debtor;
 
(c)
under
 
any
 
acceptance
 
credit,
 
guarantee
 
or
 
letter
 
of
 
credit
 
facility
 
or
 
dematerialised
equivalent made available to the debtor;
 
(d)
under
 
a
 
financial
 
lease,
 
a
 
deferred
 
purchase
 
consideration
 
arrangement
 
or
 
any
 
other
agreement having the
 
commercial effect of
 
a borrowing
 
or raising of
 
money by the
 
debtor;
 
(e)
under any foreign
 
exchange transaction, any
 
interest or currency
 
swap or any other
 
kind
of derivative transaction entered into by the debtor or, if the agreement under which any
such transaction
 
is entered
 
into
 
requires netting
 
of mutual
 
liabilities, the
 
liability of
 
the
debtor for the net amount; or
 
(f)
under a guarantee,
 
indemnity or similar obligation
 
entered into
 
by the debtor
 
in respect
of
 
a
 
liability
 
of
 
another
 
person
 
which
 
would
 
fall
 
within
 
paragraphs
 
to
 
if
 
the
references to the debtor referred
 
to the other person.
"
Financial Year
" means,
 
in relation to
 
the Corporate Guarantor, each period
 
of 1
 
year commencing
on 1 January in respect of which its annual audited accounts are or ought to be prepared.
"
Fleet Vessels
" means all of the
 
vessels (including, but not
 
limited to, the Ships) from time
 
to time
wholly owned by members of the Group (each a "
Fleet Vessel
").
"
Funding
 
Rate
"
 
means
 
any
 
individual
 
rate
 
notified
 
by
 
a
 
Lender
 
to
 
the
 
Agent
 
pursuant
 
to
 
sub-
paragraph
 
of paragraph
 
of Clause
 
(
Cost of funds
).
"
GAAP
"
 
means,
 
at
 
any
 
time,
 
the
 
most
 
recent
 
and
 
updated
 
generally
 
accepted
 
accounting
principles in the United States of America.
"
General Assignment
" means,
 
in relation
 
to each
 
Ship, a first
 
priority general
 
assignment of
 
the
Earnings, the Insurances and any Requisition Compensation in the Agreed Form and, in the plural, " means the Corporate Guarantor and all its subsidiaries (including, but not limited to, the
means all of them.
"
Group
Borrowers)
 
from
 
time
 
to
 
time
 
during the
 
Security Period
 
and
 
"
member of
 
the Group
"
 
shall
 
be
construed accordingly.
 
"
Guam
" means Guam Shipping Company
 
Inc., a corporation incorporated
 
and existing under the
laws
 
of
 
the
 
Republic
 
of
 
the
 
Marshall
 
Islands
 
whose
 
registered
 
address
 
is
 
at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Hong
 
Kong
 
Convention
"
 
means
 
the
 
International
 
Maritime
 
Organization's
 
convention
 
for
 
the
Safe and Environmentally Sound Recycling
 
of Ships, 2009
 
together with the
 
guidelines to be
 
issued
by the International Maritime Organization in connection with such convention.
"
IACS
" means the International Association of Classification Societies.
 
"
Initial
 
Market
 
Value
"
 
means,
 
in
 
respect
 
of
 
a
 
Ship,
 
the
 
Market
 
Value
 
as
 
determined
 
by
 
the
valuations referred to in paragraph 5 of Part
 
B of Schedule 3 (
Conditions precedent documents
).
 
"
Insurances
" means, in relation to a Ship:
(a)
all policies and contracts of
 
insurance, including entries of such
 
Ship in any protection and
indemnity
 
or
 
war
 
risks
 
association,
 
effected
 
in
 
respect
 
of
 
such
 
Ship,
 
its
 
Earnings
 
or
otherwise in relation to such
 
Ship whether before, on or after the
 
date of this Agreement;
and
 
(b)
all rights and other assets relating to, or derived from, any of the foregoing, including any
rights to a return of
 
a premium and any rights in
 
respect of any claim whether or not
 
the
relevant
 
policy,
 
contract of
 
insurance or
 
entry has
 
expired on
 
or before
 
the date
 
of this
Agreement.
"
Interest Period
" means, in relation to the Loan
 
or any part of the Loan, each
 
period determined
in
 
accordance
 
with
 
Clause
 
6
 
(
Interest
 
Periods
)
 
and,
 
in
 
relation
 
to
 
an
 
Unpaid
 
Sum,
 
each
 
period
determined in accordance with Clause
 
(
Default interest
).
"
Interpolated
 
Term
 
SOFR
"
 
means,
 
in
 
relation
 
to
 
the
 
Loan
 
or
 
any
 
part
 
of
 
the
 
Loan,
 
the
 
rate
(rounded to
 
the same number of
 
decimal places as Term
 
SOFR) which results
 
from interpolating
on a linear basis between:
(a)
either
(i)
the
 
applicable Term
 
SOFR (as
 
of
 
the
 
Quotation
 
Day)
 
for
 
the longest
 
period (for
which Term SOFR is available) which is less than
 
the Interest Period of the Loan
 
or
that part of the Loan; or
(ii)
if no such
 
Term SOFR is available for a
 
period which is
 
less than the
 
Interest Period
of the Loan
 
or that part
 
of the
 
Loan, SOFR for
 
the day which
 
is two US
 
Government
Securities Business Days before the Quotation Day;
 
and
(b)
the
 
applicable
 
Term
 
SOFR (as
 
of
 
the
 
Quotation
 
Day)
 
for
 
the
 
shortest
 
period (for
 
which
Term
 
SOFR is available) which exceeds
 
the Interest Period
 
of the Loan or that
 
part of the
Loan.
"
Inventory
 
of
 
Hazardous
 
Material
"
 
means,
 
in
 
relation
 
to
 
each
 
Ship, an
 
inventory
 
certificate
 
or
statement
 
of
 
compliance
 
(as
 
applicable)
 
issued
 
by
 
such
 
Ship's
 
classification
 
society
 
which
 
is
supplemented by a
 
list of any
 
and all materials
 
known to be
 
potentially hazardous utilised
 
in the
construction of such Ship pursuant to the requirements of the EU Ship Recycling Regulation.
 
"
ISM
 
Code
"
 
means
 
the
 
International
 
Safety
 
Management
 
Code
 
(including
 
the
 
guidelines
 
on
 
its
implementation),
 
adopted
 
by
 
the
 
International
 
Maritime
 
Organisation,
 
as
 
the
 
same
 
may
 
be
amended
 
or
 
supplemented
 
from
 
time
 
to
 
time
 
(and
 
the
 
terms
 
"
safety
 
management
 
system
",
"
Safety Management Certificate
" and "
Document of
 
Compliance
" have the
 
same meanings
 
as are
given to them in the ISM Code).
"
ISPS
 
Code
"
 
means
 
the
 
International
 
Ship
 
and
 
Port
 
Facility
 
Security
 
Code
 
as
 
adopted
 
by
 
the
International Maritime
 
Organisation, as
 
the same may
 
be amended or
 
supplemented from
 
time
to time.
"
ISSC
" means
 
a valid
 
and current
 
International Ship
 
Security Certificate
 
issued under
 
the ISPS
 
Code.
 
"
Jabwot
" means
 
Jabwot
 
Shipping Company
 
Inc., a
 
corporation
 
incorporated
 
and existing
 
under
the laws
 
of
 
the Republic
 
of the
 
Marshall
 
Islands whose
 
registered
 
address
 
is at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Lead Arranger
" means Nordea Bank
 
Abp, filial i Norge,
 
acting in such capacity through
 
its office
at Essendrops gate 7, Postboks 1166,
 
Sentrum, 0107 Oslo,
 
920058817 MVA,
 
Norway.
 
"
Lender
" means
 
a bank
 
or financial
 
institution listed
 
in
 
(
Lenders and
 
Commitments
)
and
 
acting
 
through
 
its
 
branch
 
indicated
 
in
 
(
Lenders
 
and Commitments
)
 
(or
 
through
another
 
branch
 
notified
 
to
 
the
 
Agent
 
under
 
Clause
 
(
Change
 
of
 
Facility
 
Office
))
 
or
 
its
transferee, successor or assign and, in the plural, means all of them.
"
Loan
" means
 
the aggregate
 
principal amount outstanding
 
under this Agreement
 
and a "
part of
the Loan
" means any part of the Loan as the context may require.
"
Major Casualty
" means,
 
in relation
 
to a
 
Ship, any
 
casualty to
 
that Ship
 
in respect
 
of which
 
the
claim
 
or
 
the
 
aggregate
 
of
 
the
 
claims
 
against
 
all
 
insurers,
 
before
 
adjustment
 
for
 
any
 
relevant
franchise or deductible, exceeds $1,000,000 or the equivalent in any other currency.
 
"
Majority Lenders
" means:
 
(a)
before
 
the
 
Loan
 
has
 
been
 
made,
 
a
 
Lender
 
or
 
Lenders
 
whose
 
Commitments
 
aggregate
more than 66.67 per cent. of the Total Commitments; and
 
(b)
at any
 
other time,
 
a Lender or
 
Lenders whose
 
Contributions aggregate
 
more than
 
66.67
per cent. of the Loan.
"
Management Agreement
" means,
 
in relation
 
to each
 
Ship, an
 
agreement made
 
or to
 
be made
between the Borrower who is
 
the owner of such
 
Ship and the
 
Approved Manager in respect
 
of the
commercial and technical management of such Ship in the Agreed Form and, in the
 
plural, means
all of them.
"
Manager's Undertaking
" means, in relation
 
to each Ship, a
 
letter of undertaking executed
 
or to
be
 
executed
 
by
 
the
 
Approved
 
Manager
 
in
 
favour
 
of
 
the
 
Security
 
Trustee
 
in
 
the
 
Agreed
 
Form
agreeing certain matters in relation
 
to the management of that Ship and subordinating the rights
of the Approved
 
Manager against
 
that Ship and
 
the Borrower
 
which is the
 
owner thereof to
 
the
rights of the Security Trustee under the Finance Documents and, in the plural, means all of them.
"
Manra
" means Manra Shipping Company Inc.,
 
a corporation incorporated and existing under the
laws
 
of
 
the
 
Republic
 
of
 
the
 
Marshall
 
Islands
 
whose
 
registered
 
address
 
is
 
at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Margin
" means 2.00 per cent. per annum.
"
Market Disruption Rate
" means the Reference Rate.
"
Market Value
" means,
 
in relation
 
to each
 
Ship (and
 
each other
 
Fleet Vessel),
 
the market
 
value
thereof determined in accordance with Clause
 
(
Valuation of Ships
).
"
Master
 
Agreement(s)
"
 
means
 
each
 
master
 
agreement
 
(on
 
the
 
2002
 
ISDA
 
Master
 
Agreement
form) in the Agreed Form made or to be made between (i) any of the Borrowers and (ii) the
 
Swap
Bank
 
and
 
includes
 
all
 
Designated
 
Transactions
 
from
 
time
 
to
 
time
 
entered
 
into,
 
and
 
all
Confirmations of such Designated Transactions
 
from time to time exchanged,
 
under such master
agreements.
"
Master Agreement Assignment
" means the assignment of the Master Agreement in the Agreed
Form.
"
Material
 
Adverse
 
Effect
" means
 
in
 
the
 
reasonable opinion
 
of
 
the Majority
 
Lenders
 
a material
adverse effect on:
(a)
the business,
 
operations,
 
property,
 
condition (financial
 
or
 
otherwise) of
 
the Borrowers,
the Corporate Guarantor,
 
any Approved Manager which is a member of the Group or the
Group as a whole; or
(b)
the ability of
 
any Borrower
 
or the
 
Corporate Guarantor
 
to perform
 
its obligations
 
under
any Finance Document; or
(c)
the validity
 
or enforceability
 
of,
 
or the
 
effectiveness or
 
ranking of
 
any Security
 
Interests
granted or intended
 
to be granted
 
pursuant to any
 
of, the Finance
 
Documents or
 
the rights
or remedies of any Creditor Party under any of the Finance Documents.
"
Month
" means a period starting
 
on one day in a
 
calendar month and ending on the
 
numerically
corresponding day in the next calendar month, except that:
(a)
(subject to
 
paragraph
 
below) if
 
the numerically
 
corresponding
 
day
 
is not
 
a Business
Day,
 
that period shall end on the next
 
Business Day in that calendar month
 
in which that
period is to
 
end if there
 
is one, or
 
if there is
 
not, on the immediately
 
preceding Business
Day;
(b)
if there is no numerically corresponding day in the calendar month
 
in which that period is
to end, that period shall end on the last Business Day in that calendar month; and
(c)
if an
 
Interest
 
Period
 
begins on
 
the last
 
Business Day
 
of
 
a calendar
 
month, that
 
Interest
Period
 
shall
 
end
 
on
 
the last
 
Business Day
 
in
 
the calendar
 
month
 
in which
 
that
 
Interest
Period is to end.
The above rules will only apply to the last Month of any period.
"
Mortgage
" means, in
 
relation to a Ship,
 
the first preferred Marshall Islands
 
ship mortgage on
 
that
Ship in the Agreed Form and, in the plural, means all of them.
"
Namorik
" means Namorik
 
Shipping Company Inc., a
 
corporation incorporated and existing under
the laws
 
of
 
the Republic
 
of the
 
Marshall
 
Islands whose
 
registered
 
address
 
is at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Notifying Lender
" has
 
the meaning
 
given in
 
Clause
Illegality
) or
 
Clause
Increased costs
)
as the context requires.
"
Palau
" means
 
Palau Shipping
 
Company Inc.,
 
a corporation
 
incorporated and
 
existing under
 
the
laws
 
of
 
the
 
Republic
 
of
 
the
 
Marshall
 
Islands
 
whose
 
registered
 
address
 
is
 
at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"Palios Family"
means, together,
 
each of the following:
(a)
Mr.
 
Simeon Palios;
 
(b)
all the lineal descendants in direct line of Mr. Simeon Palios;
(c)
a husband or wife or widower or widow of any of the above persons;
(d)
the
 
estates,
 
trusts
 
or
 
legal
 
representatives
 
of
 
which
 
any
 
of
 
the
 
above
 
persons
 
are
 
the
beneficiaries; and
(e)
each company legally
 
or beneficially owned or
 
(as the case may
 
be) controlled by one
 
or
more
 
of
 
the
 
persons
 
or
 
entities
 
which
 
would
 
fall
 
within
 
paragraphs
 
(a)
 
to
 
(d)
 
of
 
this
definition,
and each one of the above shall be referred to as "
a member of the Palios Family
";
"
Participating
Member
State
" means any member state of the European Union that has the euro
as its
 
lawful currency in
 
accordance with
 
legislation of the
 
European Union relating
 
to Economic
and Monetary Union.
"
Party
"
means a party to this Agreement.
"
Payment Currency
" has the meaning given in Clause
 
(
Currency indemnity
).
"
Permitted Security Interests
" means:
(a)
Security Interests created by the Finance Documents;
(b)
until the Drawdown Date, the Existing Security Interests;
(c)
liens for unpaid master's and crew's wages in accordance with usual maritime practice;
(d)
liens for salvage;
(e)
liens arising
 
by operation
 
of law
 
for not
 
more than
 
two months'
 
prepaid hire
 
under any
charter in relation to a Ship not prohibited by this Agreement;
(f)
liens for master's disbursements incurred in the ordinary course
 
of trading and any other
lien arising
 
by operation of
 
law or
 
otherwise in
 
the ordinary
 
course of the
 
operation, repair
or maintenance of a
 
Ship, provided such liens do not
 
secure amounts more than
 
30 days
overdue (unless the overdue amount is being contested by the
 
relevant Borrower in good
faith by appropriate
 
steps) and subject, in
 
the case of liens
 
for repair or
 
maintenance, to
Clause
 
(
Restriction on chartering, appointment of managers etc.
);
(g)
any
 
Security Interest
 
created
 
in favour
 
of a
 
plaintiff or
 
defendant in
 
any proceedings
 
or
arbitration as security for costs and expenses where a Borrower is actively prosecuting or
defending such proceedings or arbitration in good faith; and
(h)
Security Interests arising by operation of
 
law in respect of
 
taxes which are not overdue for
payment or in
 
respect of taxes
 
being contested in
 
good faith by appropriate
 
steps and in
respect of which appropriate reserves have been made.
"
Pertinent Document
" means:
(a)
any Finance Document;
(b)
any policy or
 
contract of insurance
 
contemplated by or
 
referred to in Clause
Insurance
)
or any other provision of this Agreement or another Finance Document;
(c)
any other document contemplated by or referred to in any Finance Document; and
(d)
any
 
document
 
which
 
has
 
been
 
or
 
is
 
at
 
any
 
time
 
sent
 
by
 
or
 
to
 
a
 
Servicing
 
Bank
 
in
contemplation of or
 
in connection with any
 
Finance Document or any
 
policy, contract
 
or
document falling within paragraphs
 
or
"
Pertinent Jurisdiction
", in relation to a company, means:
(a)
England and Wales;
(b)
the country under the laws of which the company is incorporated or formed;
(c)
a
 
country
 
in
 
which
 
the
 
company
 
has
 
the
 
centre
 
of
 
its
 
main
 
interests
 
or
 
in
 
which
 
the
company's central management and control is or has recently been exercised;
(d)
a country
 
in which
 
the overall
 
net income
 
of the
 
company is
 
subject to
 
corporation tax,
income tax or any similar tax;
(e)
a
 
country
 
in which
 
assets of
 
the company
 
(other than
 
securities issued
 
by,
 
or
 
loans to,
related
 
companies)
 
having
 
a
 
substantial
 
value
 
are
 
situated,
 
in
 
which
 
the
 
company
maintains a branch or
 
permanent place of
 
business, or in
 
which a Security
 
Interest created
by the company must
 
or should be
 
registered in order to
 
ensure its validity
 
or priority; and
(f)
a country
 
the courts
 
of which
 
have jurisdiction
 
to make
 
a winding
 
up, administration
 
or
similar
 
order
 
in
 
relation
 
to
 
the
 
company,
 
whether
 
as
 
main
 
or
 
territorial
 
or
 
ancillary
proceedings, or which would have
 
such jurisdiction if their assistance
 
were requested
 
by
the courts of a country referred to in paragraphs
 
or
"
Pertinent Matter
" means:
(a)
any
 
transaction
 
or
 
matter
 
contemplated
 
by,
 
arising
 
out
 
of,
 
or
 
in
 
connection
 
with
 
a
Pertinent Document; or
(b)
any statement relating to
 
a Pertinent
 
Document or
 
to a transaction
 
or matter falling
 
within
paragraph
and covers
 
any such
 
transaction, matter
 
or statement,
 
whether entered
 
into, arising
 
or made at
any time before the signing of this Agreement or on or at any time after that signing.
"
Poseidon
 
Principles
"
 
means
 
the
 
financial
 
industry
 
framework
 
for
 
assessing
 
and
 
disclosing
 
the
climate alignment of ship finance portfolios published in June 2019
 
as the same may be amended
or replaced from time to time.
"
Potential Event of Default
" means an event or
 
circumstance which, with the
 
giving of any notice,
the lapse of
 
time, a determination of
 
the Lenders and/or
 
the satisfaction of
 
any other condition,
would constitute an Event of Default.
"
Quotation Day
" means, in relation to
 
any period for which
 
an interest rate
 
is to be determined,
two
 
US
 
Government
 
Securities Business
 
Days
 
before
 
the
 
first
 
day
 
of
 
that
 
period unless
 
market
practice
 
differs
 
in the
 
relevant
 
syndicated
 
loan market
 
in which
 
case the
 
Quotation Day
 
will be
determined
 
by
 
the
 
Agent
 
in
 
accordance
 
with
 
that
 
market
 
practice
 
(and
 
if
 
quotations
 
would
normally be given on more than one day, the Quotation Day will be the last of those days).
"
Reference Rate
" means, in relation to the Loan or any part of the Loan:
(a)
the applicable Term
 
SOFR as of the Quotation Day and for a
 
period equal in length to the
Interest Period of the Loan or that part of the Loan; or
(b)
as otherwise determined pursuant to Clause
 
(
Unavailability of Term SOFR
),
and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero Government Securities.
.
"
Relevant
 
Market
"
 
means
 
the
 
market
 
for
 
overnight
 
cash
 
borrowing
 
collateralised
 
by
 
US
"
Relevant Nominating
 
Body
" means
 
any applicable
 
central bank,
 
regulator or
 
other supervisory
authority or
 
a group
 
of
 
them, or
 
any
 
working
 
group or
 
committee
 
sponsored
 
or
 
chaired
 
by,
 
or
constituted at the request of, any
 
of them or the Financial Stability Board.
"
Relevant Person
" has the meaning given in Clause
 
(
Relevant Persons
).
"
Repayment
Date
" means
 
a date
 
on which
 
a repayment
 
is required
 
to be
 
made under
 
Clause
(
Repayment and Prepayment
).
"
Repayment Instalment
" means any
 
repayment instalment
 
referred to
 
in Clause
 
(
Amount of
repayment instalments
).
"
Requisition Compensation
" includes all
 
compensation or other
 
moneys payable by reason
 
of any
act or event such as is referred to in paragraph
 
of the definition of "
Total Loss
".
"
Resolution
 
Authority
"
 
means
 
any
 
body
 
which
 
has
 
authority
 
to
 
exercise
 
any
 
Write-down
 
and
Conversion Powers.
"
Restricted Party
" means a person:
(a)
that
 
is listed
 
on
 
any
 
Sanctions List
 
(whether designated
 
by
 
name or
 
by reason
 
of
 
being
included in a class of person);
(b)
located, organised or resident in a country
 
or territory that is the target of Sanctions that
broadly
 
prohibit
 
dealings
 
with
 
that
 
country
 
or
 
territory
 
(currently,
 
Crimea,
 
Cuba,
 
Iran,
North Korea, Syria, Donetsk and Luhansk); or
(c)
that is directly
 
or indirectly owned or
 
controlled by a
 
person referred
 
to in (a) and/or
 
(b)
above; or
(d)
with which any
 
Lender is prohibited
 
from dealing or
 
otherwise engaging in a
 
transaction
with by any Sanctions.
"
Sanctions Authority
" means the Norwegian State,
 
the United Nations, the European
 
Union, the
member states of the European
 
Union, the United Kingdom,
 
the United States of America
 
and any
authority,
 
official
 
institution
 
or
 
agency
 
acting
 
on
 
behalf
 
of
 
any
 
of
 
them
 
in
 
connection
 
with
Sanctions.
"
Sanctions
"
 
means
 
the
 
economic
 
or
 
financial
 
Sanctions
 
and/or
 
regulations,
 
trade
 
embargoes,
prohibitions,
 
restrictive
 
measures,
 
decisions,
 
Executive
 
Orders
 
or
 
notices
 
from
 
regulators
implemented,
 
adapted,
 
imposed,
 
administered,
 
enacted
 
and/or
 
enforced
 
by
 
any
 
Sanctions
Authority.
"
Sanctions List
" means a
 
list of
 
persons or
 
entities published in
 
connection with Sanctions
 
by or
on behalf of any Sanctions Authority.
"
Secured
 
Liabilities
"
 
means
 
all
 
liabilities
 
which
 
the
 
Borrowers,
 
the
 
Corporate
 
Guarantor,
 
the
Security Parties or any
 
of them have, at
 
the date of this Agreement
 
or at any
 
later time or times,
under
 
or
 
in
 
connection
 
with
 
any
 
Finance
 
Document
 
or
 
any
 
judgment
 
relating
 
to
 
any
 
Finance
Document; and for this purpose, there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, which is effected
 
by, or
 
in connection with, any bankruptcy,
liquidation, arrangement or other procedure under
 
the insolvency laws of any country.
"
Security Interest
" means:
 
(a)
a mortgage, charge (whether
 
fixed or floating)
 
or pledge, any
 
maritime or
 
other lien
 
or any
other security interest of any kind;
 
(b)
the security rights of a plaintiff under an action
in rem
; and
 
(c)
any
 
arrangement
 
entered
 
into
 
by
 
a
 
person
 
(A)
 
the
 
effect
 
of
 
which
 
is
 
to
 
place
 
another
person
 
(B)
 
in a
 
position which
 
is
 
similar,
 
in economic
 
terms,
 
to
 
the
 
position in
 
which
 
B
would have been had he held a security interest over an asset of A; but this paragraph
does not apply to a right of set off or
 
combination of accounts conferred by the
 
standard
terms of business of a bank or financial institution.
"
Security Party
" means
 
the Corporate
 
Guarantor,
 
the Approved
 
Manager and
 
any other
 
person
(except
 
a
 
Creditor
 
Party)
 
who,
 
as
 
a
 
surety
 
or
 
mortgagor,
 
as
 
a
 
party
 
to
 
any
 
subordination
 
or
priorities
 
arrangement,
 
or
 
in
 
any
 
similar
 
capacity,
 
executes
 
a
 
document
 
falling
 
within
 
the
 
last
paragraph of the definition of "
Finance Documents
".
"
Security Period
" means the
 
period commencing
 
on the date
 
of this Agreement
 
and ending on
 
the
date on which
 
the Agent notifies
 
the Borrowers, the
 
Security Parties and
 
the other
 
Creditor Parties
that:
 
(a)
all amounts which have become due for
 
payment by the Borrowers
 
or any Security Party
under the Finance Documents have been paid;
(b)
no amount is owing
 
or has accrued (without yet
 
having become due for
 
payment) under
any Finance Document;
(c)
neither
 
a
 
Borrower
 
nor
 
any
 
Security
 
Party
 
has
 
any
 
future
 
or
 
contingent
 
liability
 
under
Clause
 
(
Fees and expenses
),
 
(
Indemnities
) or
 
(
No set-off or Tax Deduction
) below
or any other provision of this Agreement or another Finance Document; and
(d)
the Agent,
 
the Security Trustee
 
and the Majority
 
Lenders do not
 
consider that there
 
is a
significant risk that
 
any payment or
 
transaction under a Finance
 
Document would be
 
set
aside,
 
or
 
would
 
have
 
to
 
be
 
reversed
 
or
 
adjusted,
 
in
 
any
 
present
 
or
 
possible
 
future
bankruptcy
 
of
 
the
 
Borrowers
 
or
 
a
 
Security
 
Party
 
or
 
in
 
any
 
present
 
or
 
possible
 
future
proceeding relating to
 
a Finance Document or
 
any asset covered
 
(or previously covered)
by a Security Interest created by a Finance Document.
"
Security Trustee
" means Nordea Bank Abp, filial i Norge, acting in such capacity through its office " means a notice substantially in the form set out in Schedule 6 (
at
 
Essendrops
 
gate
 
7,
 
Postboks
 
1166,
 
Sentrum,
 
0107
 
Oslo,
 
920058817
 
MVA,
 
Norway,
 
or
 
any
successor of it appointed under clause 5 of the Agency and Trust Deed.
"
Selection Notice
Selection Notice
)
given in accordance with Clause 6 (
Interest Periods
).
"
Servicing Bank
" means the Agent or the Security Trustee.
"
Shares
 
Pledge
"
 
means,
 
in
 
relation
 
to
 
each
 
Borrower,
 
a
 
deed
 
executed
 
by
 
the
 
Corporate
Guarantor,
 
creating security over the equity interests of
 
that Borrower in the Agreed Form and,
 
in
the plural, means all of them.
"
Ship
 
A
"
 
means
 
the
 
2015-built
 
Ultaramax
 
bulk
 
carrier
 
vessel
 
of
 
60,508
 
deadweight
 
tonnage
registered in the name of Manra under the
 
Approved Flag under IMO No.
 
9747390 with the name
"DSI PEGASUS".
"
Ship
 
B
"
 
means
 
the
 
2017-built
 
Ultaramax
 
bulk
 
carrier
 
vessel
 
of
 
60,456
 
deadweight
 
tonnage
registered in the name
 
of Jabwot under
 
the Approved Flag
 
under IMO No.
 
9738337 with the
 
name
"DSI PHOENIX".
"
Ship
 
C
"
 
means
 
the
 
2016-built
 
Ultaramax
 
bulk
 
carrier
 
vessel
 
of
 
60,309
 
deadweight
 
tonnage
registered in the name of Arorae under
 
the Approved Flag under
 
IMO No. 9749269 with
 
the name
"DSI AQUARIUS".
"
Ship
 
D
"
 
means
 
the
 
2015-built
 
Ultaramax
 
bulk
 
carrier
 
vessel
 
of
 
60,446
 
deadweight
 
tonnage
registered in the
 
name of
 
Tamana under the
 
Approved Flag
 
under IMO
 
No. 9747405
 
with the
 
name
"DSI POLLUX".
"
Ship
 
E
"
 
means
 
the
 
2018-built
 
Ultaramax
 
bulk
 
carrier
 
vessel
 
of
 
60,362
 
deadweight
 
tonnage
registered in
 
the name of Beru
 
under the Approved
 
Flag under IMO
 
No. 9800635 with the
 
name
"DSI PYXIS".
"
Ship
 
F
"
 
means
 
the
 
2015-built
 
Ultaramax
 
bulk
 
carrier
 
vessel
 
of
 
60,309
 
deadweight
 
tonnage
registered in the name of
 
Bonriki under the
 
Approved Flag under IMO
 
No. 9729362 with
 
the name
"DSI AQUILA".
"
Ship
 
G
"
 
means
 
the
 
2018-built
 
Ultaramax
 
bulk
 
carrier
 
vessel
 
of
 
60,404
 
deadweight
 
tonnage
registered in
 
the name of
 
Ejite under the
 
Approved Flag under
 
IMO No. 9738349
 
with the name
"DSI POLARIS".
"
Ship
 
H
"
 
means
 
the
 
2016-built
 
Ultaramax
 
bulk
 
carrier
 
vessel
 
of
 
60,309
 
deadweight
 
tonnage
registered in the name of Taongi under the Approved Flag
 
under IMO No. 9749245
 
with the name
"DSI ALTAIR
 
".
"
Ship
 
I
"
 
means
 
the
 
2012-built Post
 
-Panamax
 
bulk
 
carrier
 
vessel
 
of
 
98,697
 
deadweight
 
tonnage
registered in the name of Guam under the Approved Flag under IMO No. 9599157 with the name
of "AMPHITRITE".
"
Ship
 
J
" means
 
the 2012-built
 
Post-Panamax
 
bulk carrier
 
vessel
 
of
 
98,704 deadweight
 
tonnage
registered in the name of Palau under the Approved Flag under IMO No. 9598660 with the name " means, together, Ship A, Ship B, Ship C, Ship D, Ship E, Ship F, Ship G, Ship H, Ship I and
of "POLYMNIA".
"
Ships
Ship J and, in the singular, means any of them.
"
SOFR
" means the
 
secured overnight
 
financing rate
 
(SOFR) administered by
 
the Federal
 
Reserve
Bank of New
 
York (or any other person which
 
takes over the administration of
 
that rate) published
(before any correction, recalculation or
 
republication by the
 
administrator) by the
 
Federal Reserve
Bank of New York (or any other person which takes over the publication of that rate).
"
Statement
 
of Compliance
"
 
means
 
a
 
Statement
 
of
 
Compliance related
 
to
 
fuel oil
 
consumption
pursuant to regulations 6.6 and 6.7 of Annex VI.
"
Swap Bank
" means Nordea Bank Abp.
"
Swap Exposure
" means, as
 
at any
 
relevant date,
 
the amount certified
 
by the
 
Swap Bank
 
to the
Agent to be the aggregate net amount in Dollars which would be payable by the
 
Borrowers to the
Swap Bank
 
under (and
 
calculated in
 
accordance with)
 
section 6(e)
 
(
Payments on Early
 
Termination
)
of
 
the
 
Master
 
Agreement
 
if
 
an
 
Early
 
Termination
 
Date
 
had
 
occurred
 
on
 
the
 
relevant
 
date
 
in
relation to all outstanding Designated Transactions
 
.
"
Tamana
" means Tamana
 
Shipping Company Inc., a corporation
 
incorporated and existing
 
under
the laws
 
of
 
the Republic
 
of the
 
Marshall
 
Islands whose
 
registered
 
address
 
is at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Taongi
" means Taongi Shipping
 
Company Inc., a
 
corporation incorporated and existing
 
under the
laws
 
of
 
the
 
Republic
 
of
 
the
 
Marshall
 
Islands
 
whose
 
registered
 
address
 
is
 
at
 
Trust
 
Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
"
Termination
 
Date
"
 
means
 
the
 
date
 
falling
 
on
 
the
 
sixth
 
anniversary
 
of
 
the
 
Drawdown
 
Date
 
in
respect of the Loan.
"
Term
 
SOFR
"
 
means
 
the
 
term
 
SOFR
 
reference
 
rate
 
administered
 
by
 
CME
 
Group
 
Benchmark
Administration Limited (or any other person which
 
takes over the administration
 
of that rate) for
the
 
relevant
 
period
 
published
 
(before
 
any
 
correction,
 
recalculation
 
or
 
republication
 
by
 
the
administrator) by CME Group
 
Benchmark Administration Limited
 
(or any other
 
person which takes
over the publication of that rate).
"
Total Loss
" means, in relation to a Ship
(a)
actual, constructive, compromised, agreed or arranged total loss of such Ship;
(b)
any
 
expropriation,
 
confiscation,
 
requisition or
 
acquisition of
 
such
 
Ship, whether
 
for
 
full
consideration,
 
a
 
consideration
 
less
 
than
 
its
 
proper
 
value,
 
a
 
nominal
 
consideration
 
or
without any consideration, which is effected by any government
 
or official authority or
 
by
any person
 
or persons
 
claiming to
 
be or
 
to represent
 
a government
 
or official
 
authority
(excluding a requisition
 
for hire for
 
a fixed period not
 
exceeding 1 year
 
without any right
to
 
an
 
extension)
 
unless
 
it
 
is
 
within
 
one
 
month
 
redelivered
 
to
 
the
 
full
 
control
 
of
 
the
Borrower owning that Ship;
(c)
any condemnation of such Ship by any tribunal or by any person or person claiming to be
a tribunal; and
(d)
any
 
arrest,
 
capture,
 
seizure
 
or
 
detention
 
of
 
such
 
Ship (including
 
any
 
hijacking or
 
theft)
unless it is
 
within 30 days redelivered
 
to the full
 
control of the Borrower
 
owning such Ship.
"
Total Loss Date
" means, in relation to a Ship:
(a)
in
 
the
 
case
 
of
 
an
 
actual
 
loss
 
of
 
such
 
Ship,
 
the
 
date
 
on
 
which
 
it
 
occurred
 
or,
 
if
 
that
 
is
unknown, the date when such Ship was last heard of;
(b)
in the case of
 
a constructive, compromised, agreed
 
or arranged total loss of
 
such Ship, the
earliest of:
(i)
the date on which a notice of abandonment is given to the insurers; and
(ii)
the date of any compromise, arrangement or agreement made by or on behalf of
the
 
Borrower
 
owning
 
such
 
Ship
 
with
 
such
 
Ship's
 
insurers
 
in
 
which
 
the
 
insurers
agree to treat such Ship as a total loss; and
(c)
in the case of any other type of
 
total loss, on the date (or the most likely date) on which it
appears to the Agent that the event constituting the total loss occurred.
 
"
Transaction
" has the meaning given in the Master Agreement.
"
Transfer Certificate
" has the meaning given in Clause
 
(
Transfer by a Lender
).
 
"
Trust Property
" has the meaning given in clause 3.1 of the Agency and Trust Deed.
 
"
UK Bail-In Legislation
" means Part 1 of the United Kingdom Banking Act 2009 and any other law
or
 
regulation
 
applicable
 
in
 
the
 
United
 
Kingdom
 
relating
 
to
 
the
 
resolution
 
of
 
unsound or
 
failing
banks,
 
investment
 
firms
 
or
 
other
 
financial
 
institutes
 
or
 
their
 
affiliates
 
(otherwise than
 
through
liquidation, administration or other insolvency proceedings).
"
Unpaid Sum
" means any sum due and payable but unpaid by a Security Party under
 
the Finance
Documents.
"
US
" means the United States of America.
"
US Government Securities Business Day
" means any day other than:
(a)
a Saturday or a Sunday; and
(b)
a day on
 
which the Securities
 
Industry and Financial
 
Markets Association (or
 
any successor
organisation) recommends
 
that the fixed
 
income departments of
 
its members be
 
closed
for the entire day for purposes of trading in US Government securities.
"
US Tax Obligor
" means:
(a)
a person which is resident for tax purposes in the US; or
(b)
a person some or all of
 
whose payments under the Finance Documents
 
are from sources
within the US for US federal income tax purposes.
"
Write-down and Conversion Powers
" means:
(a)
in relation to
 
any Bail-In Legislation described
 
in the EU Bail-In Legislation
 
Schedule from
time to time, the powers described as such in relation to that Bail-In Legislation in the EU
Bail-In Legislation Schedule;
(b)
in relation
 
to the
 
UK Bail-In
 
Legislation, any
 
powers under
 
that UK
 
Bail-In Legislation
 
to
cancel, transfer
 
or dilute
 
shares issued
 
by a
 
person that
 
is a
 
bank or
 
investment
 
firm or
other
 
financial
 
institution
 
or
 
affiliate
 
of
 
a
 
bank,
 
investment
 
firm
 
or
 
other
 
financial
institution, to cancel, reduce, modify or
 
change the form of a liability of
 
such a person or
any contract
 
or instrument under
 
which that liability
 
arises, to convert
 
all or part
 
of that
liability into shares,
 
securities or
 
obligations of that
 
person or any
 
other person, to
 
provide
that any such
 
contract or instrument
 
is to have
 
effect as if
 
a right
 
had been
 
exercised under
it or to suspend any
 
obligation in respect of that
 
liability or any of the powers
 
under that
UK Bail-In Legislation that are related to or ancillary to any of those powers; and
(c)
in relation to any other applicable Bail-In Legislation:
(i)
any powers under
 
that Bail-In
 
Legislation to
 
cancel, transfer or
 
dilute shares
 
issued
by
 
a
 
person
 
that
 
is
 
a
 
bank
 
or
 
investment
 
firm
 
or
 
other
 
financial
 
institution
 
or
affiliate of a bank,
 
investment firm or
 
other financial institution,
 
to cancel, reduce,
modify
 
or
 
change
 
the
 
form
 
of
 
a
 
liability
 
of
 
such
 
a
 
person
 
or
 
any
 
contract
 
or
instrument under which
 
that liability arises,
 
to convert
 
all or part
 
of that liability
into shares, securities
 
or obligations of
 
that person
 
or any
 
other person,
 
to provide
that
 
any
 
such
 
contract
 
or
 
instrument
 
is
 
to
 
have
 
effect
 
as
 
if
 
a
 
right
 
had
 
been
exercised under it or to suspend
 
any obligation in respect of
 
that liability or any of
the powers under that Bail-In Legislation
 
that are related to or
 
ancillary to any of
those powers; and
(ii)
any similar or analogous powers under that Bail-In Legislation.
1.2
Construction of certain terms
In this Agreement:
"
administration
 
notice
"
 
means
 
a
 
notice
 
appointing
 
an
 
administrator,
 
a
 
notice
 
of
 
intended
appointment and
 
any other notice
 
which is required
 
by law
 
(generally or
 
in the case
 
concerned)
to be filed with the court or given to a person
 
prior to, or in connection with, the appointment of
an administrator.
 
"
approved
" means, for the purposes of Clause
 
(
Insurance
), approved in writing by the Agent.
"
asset
" includes
 
every kind
 
of property,
 
asset, interest
 
or right,
 
including any
 
present, future
 
or
contingent right to any revenues or other payment.
(i)
a Lender's "
cost of funds
" in relation to
 
its participation in
 
the Loan or
 
any part of
 
the Loan
is a reference
 
to the average
 
cost (determined either on an actual
 
or a notional basis) which that
Lender would
 
incur if
 
it were to
 
fund, from
 
whatever source(s) it
 
may reasonably select,
 
an amount
equal to the amount of that participation in the Loan
 
or that part of the Loan for a period equal
 
in
length to the Interest Period of the Loan or that part of the Loan.
"
company
" includes any partnership, joint venture and unincorporated association.
"
consent
"
 
includes
 
an
 
authorisation,
 
consent,
 
approval,
 
resolution,
 
licence,
 
exemption,
 
filing,
registration, notarisation and legalisation.
"
contingent liability
" means
 
a liability
 
which is
 
not certain
 
to arise
 
and/or the
 
amount of
 
which
remains unascertained.
"
document
" includes a deed; also a letter or fax.
"
excess risks
" means, in
 
relation to
 
a Ship, the
 
proportion of claims
 
for general
 
average,
 
salvage
and salvage charges not recoverable under the hull and machinery policies in
 
respect of such Ship
in consequence of its
 
insured value being less
 
than the value at which
 
such Ship is assessed
 
for the
purpose of such claims.
"
expense
"
 
means
 
any
 
kind
 
of
 
cost,
 
charge
 
or
 
expense
 
(including
 
all
 
legal
 
costs,
 
charges
 
and
expenses) and any applicable value added or other tax.
"
law
" includes any order or
 
decree, any form
 
of delegated legislation, any
 
treaty or international
convention and any
 
regulation or resolution of
 
the Council of the European
 
Union, the European
Commission, the United Nations or its Security Council.
"
legal or administrative action
" means any legal proceeding or arbitration and any administrative
or regulatory action or investigation.
"
liability
" includes
 
every kind
 
of debt or
 
liability (present or
 
future, certain or
 
contingent), whether
incurred as principal or surety or otherwise.
"
obligatory insurances
" means,
 
in relation
 
to a
 
Ship, all
 
insurances effected, or
 
which the
 
Borrower
owning such
 
Ship is
 
obliged to
 
effect,
 
under Clause
 
(
Insurance
) or
 
any other
 
provision of
 
this
Agreement or another Finance Document.
"
parent company
" has the meaning given in Clause
 
(
Meaning of "subsidiary"
).
"
person
" includes any
 
company; any
 
state, political
 
sub-division of a state
 
and local or municipal
authority; and any international organisation.
"
policy
",
 
in
 
relation
 
to
 
any
 
insurance,
 
includes
 
a
 
slip,
 
cover
 
note,
 
certificate
 
of
 
entry
 
or
 
other
document evidencing the contract of insurance or its terms.
"
protection
 
and indemnity
 
risks
" means
 
the usual
 
risks covered
 
by a
 
protection and
 
indemnity
association managed in
 
London, including pollution risks
 
and the proportion
 
(if any) of
 
any sums
payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International
Hull Clauses (1/11/02
 
or 1/11/03), clause
 
8 of the
 
Institute Time Clauses
 
(Hulls) (1/11/95)
 
or clause
8 of
 
the Institute Time
 
Clauses (Hulls) (1/10/83)
 
or the Institute
 
Amended Running Down
 
Clause
(1/10/71) or any equivalent provision.
"
regulation
" includes any regulation,
 
rule, official directive, request
 
or guideline (either
 
having the
force of law or compliance
 
with which is reasonable
 
in the ordinary
 
course of business of
 
the party
concerned) whether
 
or
 
not having
 
the force
 
of law
 
of any
 
governmental,
 
intergovernmental
 
or
supranational
 
body,
 
agency,
 
department
 
or
 
regulatory,
 
self-regulatory
 
or
 
other
 
authority
 
or
organisation.
"
subsidiary
" has the meaning given in Clause
 
(
Meaning of "subsidiary"
).
 
"
successor
" includes
 
any person
 
who is
 
entitled (by
 
assignment, novation,
 
merger or
 
otherwise)
to
 
any person's
 
rights under
 
this Agreement
 
or any
 
other Finance
 
Document (or
 
any interest
 
in
those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights;
and in particular references to a successor include a person to whom those rights (or any interest
in those
 
rights) are
 
transferred
 
or pass
 
as a
 
result of
 
a merger,
 
division, reconstruction
 
or other
reorganisation of it or any other person.
 
"
tax
" includes any present or future tax, duty, impost, levy or charge of any kind
 
which is imposed
by any state, any political sub-division of a state or any
 
local or municipal authority (including any
such imposed in connection with exchange controls), and any connected penalty, interest or
 
fine.
"
war
 
risks
"
 
includes
 
the
 
risk
 
of
 
mines
 
and
 
all
 
risks
 
excluded
 
by
 
clauses
 
29,
 
30
 
or
 
31
 
of
 
the
International Hull Clauses (1/11/02),
 
clauses 29 or 30 of
 
the International Hull Clauses (1/11/03),
clauses 24, 25
 
or 26 of
 
the Institute Time
 
Clauses (Hulls) (1/11/95) or
 
clauses
 
23, 24 or
 
25 of the
Institute Time Clauses (Hulls) (1/10/83) or any equivalent provision.
1.3
Meaning of "subsidiary"
A company (S) is a subsidiary of another company (P) if:
(a)
a majority of
 
the issued shares
 
in S (or
 
a majority of the
 
issued shares in
 
S which carry
 
unlimited
rights to capital and income distributions) are directly owned by P or are indirectly attributable to
P; or
(b)
P has direct
 
or indirect control
 
over a majority of
 
the voting rights
 
attaching to
 
the issued shares
of S; or
(c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
(d)
P
 
otherwise
 
has
 
the
 
direct
 
or
 
indirect
 
power
 
to
 
ensure
 
that
 
the
 
affairs
 
of
 
S
 
are
 
conducted
 
in
accordance with the wishes of P,
and any company of which S is a subsidiary is a parent company of S.
1.4
General Interpretation
In this Agreement:
(a)
references to,
 
or to a provision of,
 
a Finance Document or any other
 
document are references
 
to
it as amended or supplemented, whether before the date of this Agreement or otherwise;
(b)
references
 
to, or
 
to a
 
provision of,
 
any law
 
include any amendment,
 
extension, re-enactment
 
or
replacement, whether made before the date of this Agreement or otherwise;
 
(c)
words denoting the singular number shall include the plural and vice versa; and
(d)
Clauses
 
(
Definitions
)
 
to
 
(
General
 
interpretation
)
 
apply
 
unless
 
the
 
contrary
 
intention
appears.
1.5
Headings
In interpreting a Finance Document or any provision
 
of a Finance Document, all
 
clause, sub-clause
and other headings in that and any other Finance Document shall be entirely disregarded.
2
FACILITY
 
2.1
Amount of facility
Subject
 
to
 
the
 
other
 
provisions
 
of
 
this
 
Agreement,
 
the
 
Lenders
 
shall
 
make
 
available
 
to
 
the
Borrowers,
 
in
 
one
 
advance,
 
a
 
senior
 
secured
 
term
 
loan
 
facility
 
of
 
up
 
to
 
the
 
lesser
 
of
 
(i)
$167,263,025 and (ii)
 
60% of the
 
aggregate Initial Market Value of the Ships, for
 
the purpose of
 
re-
financing the Existing Indebtedness.
 
2.2
Lenders' participations in the Loan
Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the
proportion which, as at the Drawdown Date, its Commitment bears to the Total
 
Commitments.
2.3
Purpose of the Loan
The Borrowers undertake
 
with each Creditor Party to use
 
the Loan only for the purpose stated
 
in
the preamble to this Agreement.
3
POSITION OF THE LENDERS, THE SWAP BANK AND THE MAJORITY LENDERS
3.1
Interests of Lenders and Swap Bank several
The rights of
 
the Lenders and
 
the Swap Bank under
 
this Agreement and the
 
Master Agreement are
several; accordingly:
(a)
each Lender
 
shall be
 
entitled to
 
sue for
 
any amount
 
which has
 
become due
 
and payable
 
by the
Borrowers to it under this Agreement; and
(b)
the Swap Bank shall be entitled to sue for any amount which has become due and payable by the
Borrowers to it under the Master Agreement,
without joining the Agent,
 
the Security Trustee, any other Lender and
 
the Swap Bank as additional
parties in the proceedings.
3.2
Proceedings by individual Lender or Swap Bank
However,
 
without the
 
prior consent of
 
the Majority Lenders,
 
no Lender
 
nor the Swap
 
Bank may
bring proceedings in respect of:
(a)
any
 
other
 
liability or
 
obligation
 
of
 
any
 
Borrower
 
or a
 
Security Party
 
under or
 
connected
 
with
 
a
Finance Document; or
(b)
any misrepresentation or breach of warranty by any
 
Borrower or a Security Party in or connected
with a Finance Document.
3.3
Obligations several
The obligations
 
of the
 
Lenders and
 
the Swap
 
Bank under
 
this Agreement
 
and of
 
the Swap
 
Bank
under the Master
 
Agreement are several;
 
and a failure
 
of a Lender
 
or the Swap
 
Bank to perform
its
 
obligations
 
under
 
this
 
Agreement
 
or
 
of
 
the
 
Swap
 
Bank
 
to
 
perform
 
its obligations
 
under
 
the
Master Agreement shall not result in:
(a)
the obligations of the other Lenders or (as the case may be) the Swap Bank being increased; nor
(b)
any Borrower, any Security Party or any other Creditor Party being
 
discharged (in whole
 
or in part)
from its obligations under any Finance Document,
and in
 
no circumstances
 
shall a
 
Lender or
 
the Swap
 
Bank have
 
any responsibility
 
for a
 
failure of
another Lender or the
 
Swap Bank to
 
perform its obligations
 
under this Agreement or
 
the Master
Agreement.
3.4
Parties bound by certain actions of Majority Lenders
Every Lender,
 
the Swap Bank, each Borrower and each Security Party shall be bound by:
(a)
any determination made,
 
or action
 
taken, by the
 
Majority Lenders
 
under any
 
provision of
 
a Finance
Document;
(b)
any instruction or authorisation
 
given by the
 
Majority Lenders to the
 
Agent or the
 
Security Trustee
under
 
or
 
in
 
connection
 
with
 
any
 
Finance
 
Document (subject
 
always
 
to
 
Clause
 
(
Variations,
waivers etc. by Majority Lenders)
);
(c)
any
 
action
 
taken
 
(or
 
in
 
good
 
faith
 
purportedly
 
taken)
 
by
 
the
 
Agent
 
or
 
the
 
Security
 
Trustee
 
in
accordance with such an instruction or authorisation.
3.5
Reliance on action of Agent
However,
 
each Borrower and each Security Party:
(a)
shall
 
be
 
entitled
 
to
 
assume
 
that
 
the
 
Majority
 
Lenders
 
have
 
duly
 
given
 
any
 
instruction
 
or
authorisation which,
 
under any
 
provision
 
of
 
a Finance
 
Document, is
 
required
 
in relation
 
to
 
any
action which the Agent has taken or is about to take; and
(b)
shall not
 
be entitled
 
to require
 
any evidence
 
that such
 
an instruction
 
or authorisation
 
has been
given.
3.6
Construction
In Clauses
 
(
Parties bound by certain actions of Majority Lenders
) and
 
(
Reliance on action of
Agent
)
 
references
 
to
 
action
 
taken
 
include
 
(without
 
limitation)
 
the
 
granting
 
of
 
any
 
waiver
 
or
consent, an approval of any document and an agreement to any matter.
4
DRAWDOWN
 
4.1
Request for the Loan
Subject to the following conditions, the Borrowers
 
may request the Loan to
 
be made by ensuring
that the Agent receives a completed
 
Drawdown Notice not later than 11.00
 
a.m. (Oslo time) three
Business Days (or such shorter period as the
 
Agent may,
 
in its absolute discretion, agree) prior to
the intended Drawdown Date.
4.2
Availability
The conditions referred to in Clause
 
(
Request for the Loan
) are that:
(a)
the Drawdown Date has to be a Business Day during the Availability Period;
 
(b)
the amount of the Loan shall not exceed the lesser of (i) the Existing Indebtedness and (ii) 60% of
the aggregate Initial Market Value of the Ships;
 
(c)
the Loan shall not exceed the Total Commitments;
 
and
(d)
the Borrowers may not deliver more than one Drawdown Notice for the Loan.
4.3
Notification to Lenders of receipt of the Drawdown Notice
The Agent
 
shall promptly
 
notify the Lenders
 
that it
 
has received
 
the Drawdown
 
Notice and shall
inform each Lender of:
(a)
the amount of the Loan to be utilised and the Drawdown Date;
(b)
the amount of that Lender's participation in the Loan; and
(c)
the duration of the first Interest Period.
4.4
Drawdown Notice irrevocable
The
 
Drawdown
 
Notice
 
must
 
be
 
signed
 
by
 
an
 
officer
 
or
 
an
 
authorised
 
representative
 
of
 
each
Borrower; and
 
once served, the
 
Drawdown Notice
 
cannot be revoked
 
without the prior
 
consent
of the Agent, acting on the authority of the Majority Lenders.
4.5
Lenders to make available Contributions
Subject to
 
the provisions
 
of this
 
Agreement, each
 
Lender shall,
 
on and
 
with value
 
on the
 
Drawdown
Date,
 
make
 
available
 
to
 
the Agent
 
for
 
the account
 
of the
 
Borrowers
 
the amount
 
due from
 
that
Lender on the Drawdown Date under Clause
 
(
Lenders' participations
 
in the Loan
).
4.6
Disbursement of the Loan
Subject to
 
the provisions
 
of this
 
Agreement,
 
the Agent
 
shall on
 
the Drawdown
 
Date
 
pay
 
to the
Borrowers the
 
amounts which the Agent
 
receives from the
 
Lenders under Clause
 
(
Lenders to
make available Contributions
); and that payment to the Borrowers shall be made:
(a)
to the account which the Borrowers specify in the Drawdown Notice; and
(b)
in the like funds as the Agent received the payments from the Lenders.
4.7
Disbursement of the Loan to third party
The payment by
 
the Agent
 
under Clause
Disbursement of
 
the Loan
) shall
 
constitute the making
of the Loan
 
and the Borrowers shall
 
at that time
 
become indebted, as
 
principal and
 
direct obligors,
to each Lender in an amount equal to that Lender's Contribution.
4.8
Designated Transactions under the Master Agreement
(a)
The Borrowers
 
may at
 
any time
 
conclude Designated Transactions
 
with the Swap
 
Bank pursuant
to
 
the
 
Master
 
Agreement
 
for
 
the
 
purpose
 
of
 
swapping
 
their
 
interest
 
payment
 
obligations
 
and
managing
 
exposure
 
to
 
interest
 
rate
 
fluctuations
 
and
 
currency
 
risk
 
under
 
this
 
Agreement.
 
The
Borrowers
 
agree
 
that
 
signature
 
of
 
the
 
Master
 
Agreement
 
does
 
not
 
commit
 
the
 
Swap
 
Bank
 
to
conclude
 
Designated
 
Transactions,
 
or
 
even
 
to
 
offer
 
terms
 
for
 
doing
 
so,
 
but
 
does
 
provide
 
a
contractual
 
framework
 
within
 
which
 
Designated
 
Transactions
 
may
 
be
 
concluded
 
and
 
secured,
assuming that mutually acceptable terms can be agreed at the relevant time.
(b)
The
 
Lenders
 
agree
 
that,
 
to
 
enable
 
the
 
Borrowers
 
to
 
secure
 
their
 
obligations
 
to
 
the
 
Swap
 
Bank
under the
 
Master Agreement,
 
the security
 
of the
 
other Finance
 
Documents shall
 
be held
 
by the
Security Trustee
 
not only to secure the Borrowers' obligations
 
under this Agreement but also the
Borrowers' obligations under the
 
Master Agreement on
 
the terms set
 
out in Clause
Application
of receipts
).
5
INTEREST
 
5.1
Calculation of interest
The rate of interest on the Loan or any part of the Loan for each Interest Period is the percentage
rate per annum which is the aggregate of the applicable:
(a)
Margin; and
(b)
Reference Rate.
5.2
Payment of interest
(a)
The Borrowers
 
shall pay
 
accrued interest
 
on the
 
Loan or
 
any part
 
of the
 
Loan on the
 
last day
 
of
each Interest Period.
(b)
If
 
an
 
Interest
 
Period
 
is
 
longer
 
than
 
three
 
Months,
 
the
 
Borrowers
 
shall
 
also
 
pay
 
interest
 
then
accrued on the
 
Loan or the
 
relevant part of the
 
Loan on the
 
dates falling at three
 
Monthly intervals
after the first day of the Interest Period.
5.3
Default interest
(a)
If a Security Party
 
fails to pay any amount payable by
 
it under a Finance
 
Document on its due
 
date,
interest shall accrue on the Unpaid
 
Sum from the due date up
 
to the date of actual
 
payment (both
before
 
and after
 
judgment) at
 
a rate
 
which, subject to
 
paragraph
 
below,
 
is two
 
per cent. per
annum higher
 
than the
 
rate which
 
would have
 
been payable
 
if the
 
Unpaid Sum
 
had, during
 
the
period
 
of
 
non-payment,
 
constituted
 
part
 
of
 
the
 
Loan
 
in
 
the
 
currency
 
of
 
the
 
Unpaid
 
Sum
 
for
successive Interest Periods, each of a duration selected by
 
the Agent.
 
Any interest accruing under
this Clause
Default interest
) shall be
 
immediately payable by the
 
Borrowers on demand by the
Agent.
(b)
If an Unpaid Sum consists of all or part
 
of the Loan which became due on a day which
 
was not the
last day of an Interest Period relating to the Loan or that part of the Loan:
(i)
the first Interest
 
Period for that Unpaid Sum shall have
 
a duration equal to the unexpired
portion of the current Interest Period relating to the Loan or that part of the Loan; and
(ii)
the rate
 
of interest
 
applying to that
 
Unpaid Sum during that
 
first Interest
 
Period shall be
two
 
per cent.
 
per annum
 
higher than
 
the rate
 
which would
 
have
 
applied if
 
that Unpaid
Sum had not become due.
 
(c)
Default interest (if unpaid) arising on an Unpaid Sum will
 
be compounded with the Unpaid
 
Sum at
the end
 
of each
 
Interest Period
 
applicable to
 
that Unpaid
 
Sum but
 
will remain
 
immediately due
and payable.
(d)
For the avoidance
 
of doubt,
 
this Clause
Default interest
) does
 
not apply
 
to any
 
amount payable
under the Master Agreement in respect of any continuing Designated Transaction as to which the
relevant provisions of the Master Agreement shall apply.
5.4
Notification of rates of interest
(a)
The Agent shall promptly
 
notify the Lenders and
 
the Borrowers
 
of the determination of
 
a rate of
interest under this Agreement.
(b)
The Agent shall promptly notify the Borrowers
 
of each Funding Rate relating to the Loan, any part
of the Loan or any Unpaid Sum.
6
INTEREST PERIODS
 
6.1
Selection of Interest Periods
(a)
The Borrowers
 
may
 
select the
 
Interest
 
Period
 
for
 
the Loan
 
in the
 
Drawdown
 
Notice. Subject
 
to
paragraphs (f) and
 
(h) below, the Borrowers may select
 
each subsequent Interest
 
Period in respect
of the Loan in a Selection Notice.
(b)
Each Selection Notice is
 
irrevocable and must be
 
delivered to the Agent
 
by the Borrowers
 
not later
than five Business Days before the expiry of the preceding Interest Period.
(c)
If
 
the
 
Borrowers
 
fail
 
to
 
select
 
an
 
Interest
 
Period
 
in
 
the
 
Drawdown
 
Notice
 
or
 
fail
 
to
 
deliver
 
a
Selection
 
Notice
 
to
 
the
 
Agent
 
in
 
accordance
 
with
 
paragraphs
 
and
 
above,
 
the
 
relevant
Interest Period,
 
subject to paragraphs (f) and (h) below will be three Months.
(d)
Subject to this
 
Clause 6 (
Interest Periods
), the Borrowers
 
may select
 
an Interest Period
 
of one or
three Months
 
or any
 
other period
 
agreed between
 
the Borrowers
 
and the
 
Agent (acting
 
on the
instructions of all the Lenders).
(e)
An
 
Interest
 
Period
 
in
 
respect
 
of
 
the
 
Loan
 
or
 
any
 
part
 
of
 
the
 
Loan
 
shall
 
not
 
extend
 
beyond
 
the
Termination Date
 
.
(f)
The first Interest Period
 
for the Loan shall start on the Drawdown
 
Date and, subject to paragraph
(g) below,
 
each subsequent
 
Interest
 
Period
 
shall start
 
on
 
the last
 
day
 
of
 
the preceding
 
Interest
Period.
 
(g)
If
 
the
 
Borrowers
 
have
 
selected
 
an
 
Interest
 
Period
 
which
 
ends
 
on
 
a
 
day
 
which is
 
after
 
the
 
next
Repayment
 
Date,
 
the
 
Agent
 
may
 
shorten
 
the
 
Interest
 
Period
 
as
 
necessary
 
to
 
ensure
 
that
 
the
Interest Period ends on the relevant Repayment Date
 
.
(h)
The Loan shall have one Interest Period only at any time.
6.2
Non-Business Days
If an Interest
 
Period would otherwise
 
end on a
 
day which
 
is not a
 
Business Day, that Interest Period
will instead end on the next Business Day in that calendar
 
month (if there is one) or the preceding
Business Day (if there is not).
7
CHANGES TO THE CALCULATION OF INTEREST
7.1
Unavailability of Term SOFR
(a)
Interpolated Term
 
SOFR
:
 
If no
 
Term
 
SOFR is
 
available for
 
the Interest
 
Period of
 
the Loan
 
or any
part of the Loan,
 
the applicable Reference
 
Rate shall be the
 
Interpolated Term
 
SOFR for a
 
period
equal in length to the Interest Period of the Loan or that part of the Loan.
(b)
Shortened Interest Period
:
 
If no Term
 
SOFR is available for
 
the Interest Period
 
of the Loan or any
part of the Loan and it is
 
not possible to calculate the Interpolated Term SOFR, the Interest Period
of the Loan
 
or that part
 
of the Loan
 
shall (if it
 
is longer than
 
the applicable Fallback Interest Period)
be shortened to the applicable Fallback Interest Period and the
 
applicable Reference Rate for that
shortened Interest Period shall be determined pursuant to the definition of "
Reference Rate
".
(c)
Cost
 
of
 
funds
:
 
If
 
paragraph
 
above
 
applies
 
but
 
no
 
Term
 
SOFR
 
is
 
available
 
for
 
the
 
applicable
Fallback
 
Interest
 
Period
 
or
 
the
 
Interest
 
Period
 
is
 
shorter
 
than
 
the
 
applicable
 
Fallback
 
Interest
Period, there shall be
 
no Reference Rate
 
for the Loan or that
 
part of the Loan (as applicable)
 
and
Clause
 
(
Cost of funds
) shall apply to the Loan or that part of the Loan for that Interest Period.
7.2
Market disruption
If before
 
close of
 
business in
 
London on
 
the Quotation
 
Day for
 
the relevant
 
Interest Period
 
,
 
the
Agent
 
receives
 
notification
 
from
 
a
 
Lender
 
or
 
Lenders
 
(whose
 
participations
 
in
 
the
 
Loan
 
or
 
the
relevant part of the Loan exceed
 
50 per cent. of the Loan or that part of the Loan as appropriate)
that its cost
 
of funds relating
 
to its participation
 
in the Loan or
 
that part of
 
the Loan would
 
be in
excess of the Market Disruption Rate
 
then Clause
 
(
Cost of funds
) shall apply
 
to the Loan
 
or that
part of the Loan (as applicable) for the relevant Interest Period.
7.3
Cost of funds
(a)
If this Clause
 
(
Cost of funds
) applies, the rate of interest on each Lender's share of the Loan or
the
 
relevant
 
part
 
of
 
the
 
Loan
 
for
 
the
 
relevant
 
Interest
 
Period
 
shall
 
be
 
the
 
percentage
 
rate
 
per
annum which is the sum of:
(i)
the Margin; and
(ii)
the
 
weighted
 
average
 
of
 
the
 
rates
 
notified
 
to
 
the
 
Agent
 
by
 
each
 
Lender
 
as
 
soon
 
as
practicable and
 
in any
 
event before
 
interest
 
is due
 
to be
 
paid in
 
respect of
 
that Interest
Period to be
 
that which expresses
 
as a percentage
 
rate per annum its
 
cost of funds
 
relating
to its participation in the Loan or that part of the Loan.
(b)
If this Clause
 
(
Cost of funds
) applies and the
 
Agent or the Borrowers
 
so requires, the Agent and
the Borrowers
 
shall enter into negotiations (for a period of not more than 30 days) with a view to
agreeing
 
a
 
substitute
 
basis
 
for
 
determining
 
the
 
rate
 
of
 
interest
 
or
 
(as
 
the
 
case
 
may
 
be)
 
an
alternative basis for funding.
(c)
Subject
 
to
 
Clause
 
(
Changes
 
to
 
reference
 
r
ates
),
 
any
 
substitute
 
or
 
alternative
 
basis
 
agreed
pursuant to paragraph
 
above shall, with
 
the prior consent
 
of all the
 
Lenders and the
 
Borrowers,
be binding on all Parties.
(d)
If paragraph (e) below does not apply and any
 
rate notified to the Agent under sub-paragraph
of paragraph
 
above is less than zero, the relevant rate shall be deemed to be zero.
(e)
If this Clause
 
(
Cost of funds
) applies pursuant to Clause 7.2 (
Market disruption
) and:
(i)
a Lender's Funding Rate is less than the Market Disruption Rate; or
(ii)
a Lender does not notify a rate by the time specified in sub-paragraph that Lender's cost of funds relating to its participation in the Loan or the relevant part of the Loan
 
of paragraph
above,
for that Interest Period
 
shall be
 
deemed, for
 
the purposes
 
of paragraph
 
above, to be
 
the Market
Disruption Rate.
(f)
If this Clause
 
(
Cost of funds
) applies but any Lender does not notify a rate
 
to the Agent by the
time specified in sub-paragraph
 
of paragraph
 
above the rate of
 
interest shall be calculated
on the basis of the rates notified by the remaining Lenders.
7.4
Break Costs
(a)
The Borrowers
 
shall, within
 
three Business
 
Days of demand
 
by a
 
Creditor Party, pay to
 
that Creditor
Party its
 
Break Costs
 
attributable to
 
all or any
 
part of the
 
Loan or Unpaid
 
Sum being paid
 
by the
Borrowers
 
on a day prior to the
 
last day of an Interest Period for the Loan, the
 
relevant part of the
Loan or that Unpaid Sum.
(b)
Each
 
Lender
 
shall,
 
as
 
soon
 
as
 
reasonably
 
practicable
 
after
 
a
 
demand
 
by
 
the
 
Agent,
 
provide
 
a
certificate
 
confirming the
 
amount
 
of its
 
Break Costs
 
for
 
any
 
Interest
 
Period
 
in
 
respect of
 
which
they become or may become payable.
8
REPAYMENT
 
AND PREPAYMENT
 
8.1
Amount of repayment instalments
(a)
The Borrowers shall repay the Loan by:
 
(b)
23 equal
 
consecutive quarterly
 
instalments
 
(each, a
 
"
Repayment
 
Instalment
" and,
 
in the
 
plural
means, all of them) each in an amount equal to $4,453,749; and
 
(c)
a balloon instalment in an amount of $64,826,798 (the "
Balloon Instalment
");
8.2
Repayment Dates
The first
 
Repayment
 
Instalment
 
in respect
 
of
 
the Loan
 
shall be
 
repaid
 
on
 
the date
 
falling
 
three
Months after the Drawdown Date, each subsequent Repayment Instalment in respect of the Loan
shall be repaid at quarterly intervals
 
thereafter and the Balloon Instalment shall be repaid
 
on the
Termination Date.
8.3
Final Repayment Date
On the final Repayment Date, the Borrowers shall additionally pay to the Agent for the account of
the Creditor Parties all other sums then accrued or owing under any Finance Document.
8.4
Voluntary prepayment
Subject to the following conditions, the Borrowers
 
may prepay the whole or
 
any part of the Loan
on the last day of an Interest Period.
8.5
Conditions for voluntary prepayment
The conditions referred to in Clause
 
(
Voluntary prepayment
) are that:
(a)
a partial prepayment shall be $500,000 or a higher integral multiple of $500,000;
(b)
the Agent
 
has received
 
from the
 
Borrowers at
 
least five
 
days' prior
 
written notice
 
specifying the
amount to be prepaid and the date on which the prepayment is to be made;
 
(c)
the Borrowers have provided evidence satisfactory to the Agent that any consent required by any
Borrower or any Security
 
Party in connection
 
with the
 
prepayment has been
 
obtained and remains
in force,
 
and that
 
any regulation
 
relevant
 
to this
 
Agreement which
 
affects
 
any Borrower
 
or any
Security Party has been complied with; and
(d)
the Borrowers have complied with
 
Clause
 
(
Unwinding of Designated
 
Transactions
) on or
 
prior
to the date of prepayment.
8.6
Effect of notice of prepayment
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given
with the
 
authorisation of
 
the Majority
 
Lenders, and
 
the amount
 
specified in
 
the prepayment notice
shall
 
become
 
due
 
and
 
payable
 
by
 
the
 
Borrowers
 
on
 
the
 
date
 
for
 
prepayment
 
specified
 
in
 
the
prepayment notice.
8.7
Notification of notice of prepayment
The Agent shall
 
notify the
 
Lenders promptly upon
 
receiving a
 
prepayment notice, and
 
shall provide
any
 
Lender which
 
so
 
requests
 
with a
 
copy
 
of
 
any
 
document
 
delivered
 
by
 
the
 
Borrowers
 
under
Clause 8.5(c) (
Conditions for voluntary prepayment
).
8.8
Mandatory prepayment
(a)
The
 
Borrowers
 
shall
 
be
 
obliged
 
to
 
prepay
 
the
 
Relevant
 
Amount
 
of
 
the Loan
 
if a
 
Ship is
 
sold
 
or
becomes a Total Loss:
(i)
in the case of
 
a sale, on
 
or before the date on
 
which the Mortgage on
 
that Ship is released;
or
(ii)
in the case
 
of a Total
 
Loss, on the
 
earlier of the
 
date falling
 
180 days
 
after the Total
 
Loss
Date and the date of receipt by the Security Trustee
 
of the proceeds of insurance relating
to such Total Loss.
(b)
In this Clause
 
(
Mandatory prepayment
) "
Relevant Amount
" means, in
 
relation to
 
a Ship that
has been sold or become
 
a Total
 
Loss, the amount achieved
 
by dividing the Market
 
Value of
 
that
Ship by the aggregate of the
 
Market Value of all the Ships (including
 
the Ship that has been
 
sold or
become a Total
 
Loss) and multiplying it by the Loan on the date that such Ship is sold or becomes
a Total
 
Loss.
8.9
Mandatory prepayment upon Change of Control
 
(a)
If a Change of Control occurs:
(b)
the Borrower shall promptly notify the Agent upon becoming aware of that event; and
(c)
if the Majority Lenders so require,
 
the Agent shall, by not
 
less than 10 Business Days' notice
 
to the
Borrowers, cancel
 
the Total
 
Commitments and declare
 
the Loan, together
 
with accrued interest,
and
 
all
 
other
 
amounts
 
accrued
 
under
 
the
 
Finance
 
Documents
 
immediately
 
due
 
and
 
payable,
whereupon
 
the
 
Total
 
Commitments
 
will
 
be
 
cancelled
 
and
 
the
 
Loan
 
and
 
all
 
such
 
outstanding
interest and other amounts will become immediately due and payable.
8.10
Amounts payable on prepayment
A prepayment shall be
 
made together with
 
accrued interest (and any
 
other amount payable under
Clause
 
(
Indemnities
) or otherwise) in respect of the amount prepaid
 
and, subject to any Break
Costs without premium or penalty.
 
8.11
Application of partial prepayment
(a)
Each partial prepayment
 
made pursuant to
 
Clause
Voluntary prepayment
) shall be
 
applied pro
rata against the then outstanding Repayment Instalments
 
and the Balloon Instalment.
(b)
Each partial prepayment made pursuant
 
to Clauses
 
(
Mandatory prepayment
) shall be applied
pro rata against the then outstanding Repayment Instalments
 
and the Balloon Instalment.
8.12
No re-borrowing
No amount prepaid may be re-borrowed.
8.13
Unwinding of Designated Transactions
On
 
or
 
prior to
 
any
 
repayment
 
or
 
prepayment
 
of
 
the Loan
 
under this
 
Clause
 
(
Repayment
 
and
prepayment
)
 
or
 
any
 
other
 
provision
 
of
 
this
 
Agreement,
 
each
 
Borrower
 
shall
 
wholly
 
or
 
partially
reverse,
 
offset,
 
unwind
 
or
 
otherwise
 
terminate
 
one
 
or
 
more
 
of
 
the
 
continuing
 
Designated
Transactions
 
so
 
that
 
the
 
notional
 
principal
 
amount
 
of
 
the
 
continuing
 
Designated
 
Transactions
thereafter
 
remaining
 
does
 
not
 
and
 
will
 
not
 
in
 
the
 
future
 
(taking
 
into
 
account
 
the
 
scheduled
amortisation) exceed
 
the amount of the
 
Loan as reducing from
 
time to time
 
thereafter pursuant
to Clause
 
(
Amount of repayment instalments
).
9
CONDITIONS PRECEDENT
 
9.1
Documents, fees and no default
Each Lender's obligation
 
to contribute to
 
the Loan is
 
subject to the
 
following conditions precedent:
 
(a)
that, on or before the service of the Drawdown Notice, the Agent receives:
(i)
the documents described in
 
of
 
(
Condition precedent documents
) in form
and substance satisfactory to the Agent and its lawyers; and
(ii)
the arrangement fee referred to in Clause
 
(a) (
Fees
);
(b)
that, on or before the Drawdown Date, the Agent receives or is satisfied that it will receive on the
advance
 
of
 
the
 
Loan
 
the
 
documents
 
described
 
in
 
of
 
(
Condition
 
precedent
documents
) in form and substance satisfactory to it and its lawyers;
(c)
that,
 
on
 
or
 
before
 
the
 
service
 
of
 
the
 
Drawdown
 
Notice,
 
the
 
Agent
 
receives
 
payment
 
of
 
any
expenses payable pursuant to Clause
Costs of negotiation,
 
preparation etc
.) which is
 
due and
payable on the Drawdown Date;
(d)
that both at the date of the Drawdown Notice and at the Drawdown Date:
(i)
no Event
 
of Default
 
or Potential
 
Event
 
of Default
 
has occurred
 
or would
 
result from
 
the
borrowing of the Loan;
 
(ii)
the representations and warranties in Clause
 
(
General
) and those of any Borrower or
any Security
 
Party which
 
are set
 
out in
 
the other
 
Finance Documents would
 
be true and
not
 
misleading
 
if
 
repeated
 
on
 
each of
 
those
 
dates
 
with reference
 
to
 
the
 
circumstances
then existing;
 
(iii)
none of the
 
circumstances contemplated
 
by Clause
 
(
Market disruption
) has occurred
and is continuing; and
(iv)
there has
 
been no
 
material adverse
 
change in
 
the financial
 
condition, state
 
of affairs
 
or
prospects
 
of
 
the
 
Borrowers
 
(or
 
any
 
of
 
them),
 
the
 
Corporate
 
Guarantor
 
or
 
any
 
other
Security Party
 
since 9 June
 
2024 in
 
the light
 
of which the
 
Agent considers
 
that there
 
is a
significant risk that the Borrowers, the
 
Corporate Guarantor or any other Security
 
Party is,
or
 
will later
 
become, unable
 
to
 
discharge
 
its liabilities
 
under the
 
Finance Documents
 
to
which it is a party as they fall due;
(e)
that, if
 
the ratio
 
set out
 
in Clause
Minimum required
 
security cover
) were
 
applied immediately
following
 
the
 
making
 
of
 
the
 
Loan,
 
the
 
Borrowers
 
would
 
not
 
be
 
obliged
 
to
 
provide
 
additional
security or prepay part of the Loan under that Clause; and
(f)
that
 
the
 
Agent
 
has
 
received,
 
and
 
found
 
to
 
be
 
acceptable
 
to
 
it,
 
any
 
further
 
opinions,
 
consents,
agreements and documents
 
in connection
 
with the Finance
 
Documents which
 
the Agent may, with
the
 
authorisation
 
of
 
the
 
Majority
 
Lenders,
 
request
 
by
 
notice
 
to
 
the
 
Borrowers
 
prior
 
to
 
the
Drawdown Date.
9.2
Waiver of conditions precedent
If the Majority Lenders, at
 
their discretion, permit the Loan
 
to be borrowed before
 
certain of the
conditions referred to in Clause
 
(
Documents, fees and no default
) are satisfied, the Borrowers
shall ensure that those
 
conditions are satisfied within
 
five Business Days after the
 
Drawdown Date
(or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
10
REPRESENTATIONS
 
AND WARRANTIES
10.1
General
Each Borrower represents and warrants to each Creditor Party as follows.
10.2
Status
(a)
Each Borrower is duly incorporated and validly
 
existing and in good standing under
 
the laws of the
Marshall Islands.
10.3
Shares and ownership
(a)
Each Borrower is authorised to issue five hundred
 
(500) registered shares with par value of $0.01
each.
(b)
The legal title and beneficial ownership
 
of all those shares is held, free
 
of any Security Interest or
other claim, by the Corporate Guarantor.
10.4
Corporate power
Each
 
Borrower
 
has
 
the
 
corporate
 
capacity,
 
and
 
has
 
taken
 
all
 
corporate
 
action and
 
obtained
 
all
consents necessary for it:
(a)
to register permanently the Ship owned by it in its name under the Approved Flag;
(b)
to execute the Finance Documents to which that Borrower is a party; and
(c)
to
 
borrow
 
under
 
this
 
Agreement,
 
to
 
enter
 
into
 
Designated
 
Transactions
 
under
 
the
 
Master
Agreement
 
and to
 
make
 
all the
 
payments
 
contemplated
 
by,
 
and to
 
comply with,
 
those Finance
Documents to which it is a party.
10.5
Consents in force
All
 
the
 
consents
 
referred
 
to
 
in
 
Clause
 
(
Corporate
 
power
)
 
remain
 
in
 
force
 
and
 
nothing
 
has
occurred which makes any of them liable to revocation.
10.6
Legal validity; effective Security Interests
The Finance
 
Documents to
 
which each
 
Borrower is
 
a party,
 
do now or,
 
as the
 
case may
 
be, will,
upon execution
 
and delivery
 
(and, where
 
applicable, registration
 
as provided
 
for in
 
the Finance
Documents):
 
(a)
constitute that
 
Borrower's legal, valid
 
and binding obligations
 
enforceable against
 
that Borrower
in accordance with their respective terms; and
(b)
create legal,
 
valid and binding
 
Security Interests
 
enforceable in
 
accordance with their
 
respective
terms over all the assets to which they, by their terms, relate;
subject to any relevant insolvency laws affecting creditors' rights generally.
10.7
No third party Security Interests
Without limiting
 
the generality
 
of Clause
 
(
Legal validity;
 
effective Security
 
Interests
), at
 
the
time of the execution and delivery of each Finance Document to which a Borrower is a party:
 
(a)
each
 
Borrower
 
which
 
is
 
a
 
party
 
to
 
that
 
Finance
 
Document
 
will
 
have
 
the
 
right
 
to
 
create
 
all
 
the
Security Interests which that Finance Document purports to create; and
(b)
no third party will have any
 
Security Interest (except for Permitted Security Interests) or any other
interest, right
 
or claim over,
 
in or in
 
relation to
 
any asset to
 
which any
 
such Security Interest,
 
by
its terms, relates.
10.8
No conflicts
The execution
 
by each Borrower
 
of each Finance Document
 
to which it
 
is a party,
 
the borrowing
by the Borrowers
 
of the
 
Loan (or
 
any part thereof)
 
and its
 
compliance with
 
each Finance
 
Document
to which it is a party will not involve or lead to a contravention of:
(a)
any law or regulation; or
(b)
the constitutional documents of that Borrower; or
(c)
any contractual
 
or other obligation
 
or restriction
 
which is binding
 
on that
 
Borrower or
 
any of
 
its
assets.
10.9
No withholding taxes
All payments which each Borrower is liable to make under the Finance Documents to which it is a
party may be made without deduction or withholding for or on account
 
of any tax payable
 
under
any law of any Pertinent Jurisdiction.
10.10
No default
No Event of Default or Potential Event
 
of Default has occurred.
10.11
Information
All information which
 
has been
 
provided in
 
writing by
 
or on
 
behalf of
 
the Borrowers or
 
any Security
Party to
 
any Creditor
 
Party in connection
 
with any Finance
 
Document satisfied the requirements
of Clause
 
(
Information provided
 
to be
 
accurate
); all
 
audited and
 
unaudited accounts
 
which
have been
 
so provided
 
satisfied the
 
requirements of
 
Clause
 
(
Form of
 
financial statements
);
and there has
 
been no material adverse
 
change in the financial
 
position or state
 
of affairs
 
of any
Borrower or the Corporate Guarantor from that disclosed in the latest of those accounts.
10.12
No litigation
No legal or
 
administrative action involving
 
any Borrower
 
(including action relating to
 
any alleged
or
 
actual
 
breach
 
of
 
the
 
ISM
 
Code
 
or
 
the
 
ISPS
 
Code)
 
has
 
been
 
commenced
 
or
 
taken
 
or,
 
to
 
any
Borrower's knowledge, is likely to be commenced or taken.
10.13
Compliance with certain undertakings
At the date of this Agreement, the Borrowers
 
are in compliance with Clauses
 
(
Title; negative
pledge
),
No other
 
liabilities or
 
obligations to
 
be incurred
),
Consents
) and
Principal
place of business
).
10.14
Taxes
 
paid
Each Borrower
 
has paid all taxes
 
applicable to, or
 
imposed on or in
 
relation to that
 
Borrower,
 
its
business or the Ship owned by it.
10.15
ISM Code and ISPS Code compliance
All requirements of the
 
ISM Code and
 
the ISPS Code
 
as they relate to the
 
Borrowers, the Approved
Manager and the Ships have been complied with.
10.16
No money laundering
Without
 
prejudice
 
to
 
the
 
generality
 
of
 
Clause
 
(
Purpose
 
of
 
the
 
Loan
),
 
in
 
relation
 
to
 
the
borrowing by the Borrowers
 
of the Loan, the performance
 
and discharge of their obligations
 
and
liabilities under the Finance
 
Documents, and the transactions and
 
other arrangements affected or
contemplated by
 
the Finance Documents
 
to which
 
a Borrower
 
is a party,
 
the Borrowers
 
confirm
(i) that
 
they are
 
acting for their
 
own account;
 
(ii) that they
 
will use the
 
proceeds of
 
the Loan for
their own benefit, under their
 
full responsibility and exclusively
 
for the purposes specified
 
in this
Agreement; (iii)
 
that no
 
Borrower and
 
no Security
 
Party nor
 
any of
 
their respective
 
subsidiaries,
directors, or officers, or, to the best of the Borrowers'
 
knowledge, any affiliate, agent or employee
thereof has
 
engaged
 
in any
 
activity or
 
conduct which
 
would violate
 
any
 
applicable anti-bribery,
anti-corruption
 
or
 
anti-money
 
laundering
 
laws
 
or
 
regulations
 
in
 
any
 
applicable
 
jurisdiction
 
and
each
 
Borrower
 
and
 
each
 
Security
 
Party
 
has
 
instituted
 
and
 
maintains
 
policies
 
and
 
procedures
designated to prevent
 
violation of such laws regulations
 
and rules and (iv) that the
 
foregoing will
not involve or lead
 
to a contravention of
 
any law, official requirement or other
 
regulatory measure
or
 
procedure
 
implemented
 
to
 
combat
 
"money
 
laundering"
 
(as
 
defined
 
in
 
Article
 
1
 
of
 
Directive
2005/60/EC of the European Parliament and of the Council).
 
10.17
No immunity
No Borrower,
 
nor any
 
of their
 
assets are
 
entitled to
 
immunity on
 
the grounds
 
of sovereignty
 
or
otherwise
 
from
 
any
 
legal
 
action
 
or
 
proceeding
 
(which
 
shall
 
include,
 
without
 
limitation,
 
suit
attachment prior to judgement, execution or other enforcement).
10.18
Sanctions
(a)
Each
 
Borrower,
 
Security
 
Party
 
and
 
member
 
of
 
the
 
Group
 
and
 
their
 
respective
 
subsidiaries,
directors,
 
officers,
 
employees,
 
and
 
to
 
the
 
best
 
of
 
each
 
Borrower's
 
knowledge,
 
their
 
respective
agents or representatives has been and is in compliance with Sanctions.
(b)
No Borrower, Security Party or member of the Group, none of their subsidiaries and none of their
respective directors, officers,
 
employees, and to the best of
 
each Borrower's knowledge, none of
their respective agents or representatives:
(i)
is a Restricted Party,
 
or is involved in any
 
transaction through which it is likely
 
to become
a Restricted
 
Party or
 
result in
 
the imposition of
 
Sanctions against
 
any party
 
to a
 
Finance
Document; or
(ii)
is
 
subject to
 
or
 
involved
 
in
 
any
 
inquiry,
 
claim,
 
action,
 
suit,
 
proceedings
 
or
 
investigation
against it with respect to Sanctions by any Sanctions Authority.
10.19
Compliance with applicable laws
Each Borrower is at all times in compliance with all applicable laws or regulations.
10.20
Compliance with Environmental Laws
All Environmental
 
Laws relating
 
to the
 
ownership, operation
 
and management
 
of each
 
Ship and
the business of
 
each member of
 
the Group
 
(as now conducted
 
and as
 
reasonably anticipated
 
to
be conducted
 
in the
 
future) and
 
the terms
 
of
 
all Environmental
 
Approvals
 
have
 
been complied
with.
10.21
No Environmental Claim
No Environmental
 
Claim has been
 
made or threatened
 
against any
 
member of the
 
Group or any
Ship which might reasonably be expected to have a Material Adverse Effect.
10.22
No Environmental Incident
No
 
Environmental
 
Incident
 
has
 
occurred
 
and
 
no
 
person
 
has
 
claimed
 
that
 
an
 
Environmental
Incident has occurred.
11
GENERAL UNDERTAKINGS
 
11.1
General
Each Borrower undertakes with each
 
Creditor Party to comply with
 
the following provisions of
 
this
Clause
 
(
General undertakings
) at all times during the Security Period except as the Agent
 
may,
with the authorisation of the Majority Lenders, otherwise permit.
11.2
Title; negative pledge
Each Borrower will:
(a)
hold the legal
 
title to, and
 
own the entire
 
beneficial interest in
 
the Ship
 
owned by it,
 
the Insurances
and Earnings, free
 
from all Security
 
Interests and
 
other interests
 
and rights of
 
every kind, except
for
 
those
 
created
 
by
 
the
 
Finance
 
Documents
 
and
 
the
 
effect
 
of
 
assignments
 
contained
 
in
 
the
Finance Documents and except for Permitted Security Interests; and
(b)
not create
 
or permit
 
to arise
 
any Security
 
Interest (except
 
for Permitted
 
Security Interests)
 
over
any other asset, present or future (including, but not limited
 
to, that Borrower's rights against the
Swap
 
Bank
 
under
 
the
 
Master
 
Agreement
 
or
 
all
 
or
 
any
 
part
 
of
 
that
 
Borrower's
 
interest
 
in
 
any
amount payable to that Borrower by the Swap Bank under the Master Agreement).
11.3
No disposal of assets
No Borrower will transfer,
 
lease or otherwise dispose of:
(a)
all
 
or
 
a
 
substantial
 
part
 
of
 
its
 
assets,
 
whether
 
by
 
one
 
transaction
 
or
 
a
 
number of
 
transactions,
whether related or not; or
(b)
any debt payable to it
 
or any other
 
right (present, future
 
or contingent right) to
 
receive a payment,
including any right to damages or compensation,
but paragraph
 
does not apply to any charter of a Ship as to
 
which Clause
 
(
Restriction on
chartering, appointment of managers etc.
) applies.
11.4
No other liabilities or obligations to be incurred
No Borrower will incur any liability or obligation except:
(a)
under the Finance Documents to which it is a party;
 
(b)
liabilities
 
or
 
obligations
 
reasonably
 
incurred
 
in
 
the
 
ordinary
 
course
 
of
 
owning,
 
operating
 
and
chartering the Ship owned by it;
 
(c)
in respect of the Designated Transactions; and
(d)
until the
 
Drawdown Date,
 
any liabilities
 
incurred under
 
the Existing
 
Facility Agreement
 
to which
such Borrower is a party.
11.5
Information provided to be accurate
All financial
 
and other information
 
which is provided
 
in writing
 
by or
 
on behalf
 
of a Borrower
 
under
or in connection with any Finance
 
Document will be true and
 
not misleading and will
 
not omit any
material fact or consideration.
11.6
Provision of financial statements
Each Borrower will deliver or procure that the Corporate Guarantor shall deliver to the Agent:
(a)
as soon as possible, but in no event later than 180 days after the end of
 
each Financial Year of the
Corporate
 
Guarantor
 
the
 
audited
 
annual
 
consolidated
 
financial
 
statements
 
of
 
the
 
Corporate
Guarantor
 
for
 
that
 
Financial
 
Year
 
of
 
the
 
Corporate
 
Guarantor
 
(commencing
 
with
 
the
 
financial
statements for the year that ended on 31 December 2023);
 
(b)
as soon as possible, but in no
 
event later than 90
 
days after the end of
 
each Financial Year
 
of the
Corporate
 
Guarantor
 
the
 
unaudited
 
annual
 
consolidated
 
financial
 
statements
 
of
 
the
 
Corporate
Guarantor
 
for
 
that
 
Financial
 
Year
 
of
 
the
 
Corporate
 
Guarantor
 
(commencing
 
with
 
the
 
financial
statements for the year that ended on 31 December 2023);
(c)
as soon as possible, but
 
in no event later
 
than 90 days after
 
30 June in each Financial Year
 
of the
Corporate
 
Guarantor
 
the
 
unaudited
 
semi-annual
 
consolidated
 
financial
 
statements
 
of
 
the
Corporate Guarantor for the
 
first six-month period
 
of such
 
Financial Year and
 
in the
 
form published
in the relevant
 
press release
 
(commencing with the financial statements
 
for the 6-month period
ended
 
on
 
30
 
June
 
2024)
 
certified
 
as
 
to
 
their
 
correctness
 
by
 
the
 
chief
 
financial
 
officer
 
of
 
the
Corporate Guarantor; and
(d)
promptly after a request by
 
the Agent, such further
 
financial or other
 
information in respect of
 
the
Borrowers, the
 
Ships, the Corporate
 
Guarantor,
 
the other Security
 
Parties, the
 
Fleet Vessels
 
and
the Group (including, but not limited to, charter arrangements, Financial Indebtedness, operating
expenses) as the Agent may reasonably require.
11.7
Form of financial statements
All accounts delivered under Clause
 
(
Provision of financial statements
) will:
(a)
be prepared in accordance with all applicable laws and GAAP consistently applied;
(b)
give a true
 
and fair view
 
of the state
 
of affairs
 
of the Group
 
at the date
 
of those accounts
 
and of
its profit for the period to which those accounts relate; and
(c)
fully disclose or provide for all significant liabilities of the Group.
11.8
Shareholder and creditor notices
Each
 
Borrower
 
will
 
send
 
the
 
Agent,
 
at
 
the
 
same
 
time
 
as
 
they
 
are
 
despatched,
 
copies
 
of
 
all
communications which
 
are despatched
 
to that
 
Borrower's shareholders
 
or creditors
 
or any
 
class
of them.
11.9
Consents
Each
 
Borrower
 
will
 
maintain
 
in
 
force
 
and
 
promptly
 
obtain
 
or
 
renew,
 
and
 
will
 
promptly
 
send
certified copies to the Agent of, all consents required:
(a)
for that Borrower to perform its obligations under any Finance Document to which it is a party;
 
(b)
for the validity or enforceability of any Finance Document to which it is a party; and
(c)
for that Borrower to continue to own and operate the Ship owned by it,
and that Borrower will comply with the terms of all such consents.
11.10
Maintenance of Security Interests
Each Borrower will:
(a)
at its own cost, do all that is necessary to ensure that any Finance Document to which it is a party
validly creates the obligations and the Security Interests which it purports to create; and
(b)
without limiting the generality
 
of paragraph
, at its
 
own cost, promptly
 
register,
 
file, record or
enrol
 
any
 
Finance
 
Document
 
with
 
any
 
court
 
or
 
authority
 
in
 
all
 
Pertinent
 
Jurisdictions, pay
 
any
stamp, registration or similar tax in all Pertinent Jurisdictions in respect of
 
any Finance Document,
give
 
any
 
notice or
 
take
 
any
 
other
 
step
 
which,
 
in
 
the opinion
 
of
 
the Majority
 
Lenders,
 
is
 
or
 
has
become necessary or
 
desirable for
 
any Finance Document
 
to be
 
valid, enforceable
 
or admissible
in evidence or to ensure or protect the priority of any Security Interest which it creates.
 
11.11
Notification of litigation
Each Borrower
 
will provide
 
the Agent
 
with details
 
of any
 
legal or
 
administrative action
 
involving
that Borrower, any Security Party,
 
the Approved Manager or the Ship
 
owned by it, the Earnings or
the Insurances as soon as such action is instituted
 
or it becomes apparent to that Borrower that it
is
 
likely
 
to
 
be
 
instituted,
 
unless
 
it
 
is
 
clear
 
that
 
the
 
legal
 
or
 
administrative
 
action
 
cannot
 
be
considered material in the context of any Finance Document.
 
11.12
No amendment to Master Agreement
No
 
Borrower
 
will
 
agree
 
to
 
any
 
amendment
 
or
 
supplement
 
to,
 
or
 
waive
 
or
 
fail
 
to
 
enforce,
 
the
Master Agreement or any of its provisions.
11.13
Principal place of business
No Borrower will establish,
 
or do anything
 
as a result
 
of which it
 
would be deemed
 
to have, a place
of business any country other than Greece.
11.14
Confirmation of no default
Each Borrower will, within
 
two Business Days after
 
service by the
 
Agent of a
 
written request, serve
on the Agent a notice which is signed by a senior officer of that Borrower and which:
(a)
states that no Event of Default or Potential
 
Event of Default has occurred; or
(b)
states that
 
no Event
 
of Default
 
or Potential
 
Event of
 
Default has
 
occurred, except
 
for a
 
specified
event or matter,
 
of which all material details are given.
The Agent may
 
serve requests under
 
this Clause
 
(
Confirmation of no
 
default
) from time
 
to
time but only
 
if asked to do
 
so by a
 
Lender or
 
Lenders having Contributions
 
exceeding ten per
 
cent.
of the Loan or (if the Loan has not been made) Commitments
 
exceeding ten per cent. of the Total
Commitments; and this Clause
 
(
Confirmation of no default
) does not
 
affect the
 
Borrowers'
obligations under Clause
 
(
Notification of default
).
11.15
Notification of default
Each Borrower will notify the Agent as soon as that Borrower becomes aware of:
(a)
the occurrence of an Event of Default or a Potential Event of Default; or
(b)
any
 
matter
 
which
 
indicates
 
that
 
an
 
Event
 
of
 
Default
 
or
 
a
 
Potential
 
Event
 
of
 
Default
 
may
 
have
occurred,
and will keep the Agent fully up to date with all developments.
11.16
Provision of further information
Each Borrower will, as soon as practicable after receiving the request, provide the Agent with any
additional financial or other information relating:
(a)
to the
 
Borrowers,
 
the Group,
 
the Corporate
 
Guarantor,
 
the Ships,
 
the other
 
Fleet Vessels,
 
their
Insurances
 
or
 
their
 
Earnings
 
(including,
 
but
 
not
 
limited
 
to,
 
any
 
sales
 
or
 
purchases
 
of
 
any
 
Fleet
Vessels,
 
the
 
incurrence
 
of
 
Financial
 
Indebtedness
 
by
 
members
 
of
 
the
 
Group,
 
details
 
of
 
the
employment of the Fleet Vessels) as the Agent may require; or
(b)
to any other matter relevant to, or to any
 
provision of, a Finance Document,
which may be requested
 
by the Agent,
 
the Security Trustee,
 
the Swap Bank or
 
any Lender at any
time.
11.17
Provision of copies and translation of documents
Each Borrower will supply the Agent with
 
a sufficient number of copies
 
of the documents referred
to above
 
to provide
 
one copy
 
for each
 
Creditor Party;
 
and if
 
the Agent
 
so requires
 
in respect
 
of
any of
 
those documents, the
 
Borrowers will
 
provide a certified
 
English translation prepared
 
by a
translator approved by the Agent.
11.18
Know your customer
Promptly
 
upon
 
the
 
Agent's
 
request
 
each
 
Borrower
 
will
 
supply,
 
or
 
procure
 
the
 
supply
 
of,
 
such
documentation
 
and
 
other
 
evidence
 
as
 
is
 
reasonably
 
requested
 
by
 
the
 
Agent
 
in
 
order
 
for
 
each
Creditor Party to
 
carry out and be satisfied with
 
the results of all necessary "know your
 
client" or
other checks which it is
 
required to carry out
 
in relation to the
 
transactions contemplated by
 
the
Finance
 
Documents
 
and
 
to
 
the
 
identity
 
of
 
any
 
parties
 
to
 
the
 
Finance
 
Documents
 
(other
 
than
Creditor Parties) and their directors and officers.
11.19
Payment of taxes
Each Borrower shall pay
 
when due all taxes
 
applicable to, or imposed on,
 
its business or the Ship
owned by it.
11.20
Bribery and anti-corruption laws
(a)
No Borrower shall use the
 
proceeds of the Loan for
 
any purpose which would breach
 
the Bribery
Act 2010,
 
the United
 
States
 
Foreign
 
Corrupt Practices
 
Act of
 
1977 or
 
other similar
 
legislation in
other jurisdictions.
(b)
Each Borrower shall
 
(and shall procure that
 
each other Security Party
 
and each other member of
the Group shall):
(i)
conduct its businesses in compliance with applicable anti-corruption laws; and
(ii)
maintain policies and procedures designed to promote and achieve compliance with such
laws.
11.21
Sanctions
(a)
Each Borrower
 
shall ensure that
 
none of them or
 
the Security Parties
 
nor any of
 
their respective
subsidiaries or any member of the Group, their respective directors, officers, employees, agents or representatives or any other persons acting on any of their behalf, is or will become a Restricted
Party.
(b)
Each Borrower
 
shall supply to the
 
Agent, promptly upon
 
becoming aware of
 
them, the details
 
of
any inquiry, claim, action, suit, proceeding or
 
investigation pursuant to Sanctions by any Sanctions
Authority against a Borrower, any Security Party,
 
any of their respective direct or indirect owners,
their respective
 
subsidiaries or
 
any
 
member of
 
the Group,
 
any
 
of their
 
joint ventures
 
or any
 
of
their respective
 
directors, officers,
 
employees, agents
 
or representatives,
 
as well
 
as information
on what steps are being taken with regards to answer or oppose such.
(c)
Each Borrower shall (and shall procure that the other members of the Group will) implement and
maintain in effect
 
policies and procedures
 
designed to promote
 
and ensure compliance
 
by them
and their
 
respective directors,
 
officers and
 
employees acting
 
on their
 
behalf with
 
Sanctions and
anti-corruption laws and regulations.
11.22
Use of proceeds
(a)
No proceeds of
 
the Loan or any
 
part of the Loan
 
shall be made available,
 
directly or indirectly
 
to
or for the benefit of a Restricted Party nor shall they be otherwise directly
 
or indirectly, applied in
a manner or
 
for a
 
purpose prohibited by
 
Sanctions or could
 
result in the
 
imposition of sanctions
against any party to any Finance Document.
(b)
The Borrowers shall not repay or prepay the
 
Loan or any part thereof
 
or fund all or
 
any part of any
payment
 
under
 
this
 
Agreement
 
(i)
 
out
 
of
 
proceeds
 
from
 
funds
 
or
 
assets
 
that
 
(A)
 
constitute
property of, or that are beneficially owned directly or indirectly by,
 
any Restricted Party or (B) are
obtained or
 
derived from
 
transactions with
 
or relating
 
to any
 
Restricted Party
 
or transactions
 
in
violation
 
of
 
Sanctions
 
or
 
(ii)
 
in
 
any
 
manner
 
that
 
would
 
cause
 
any
 
Lender
 
to
 
be
 
in
 
violation
 
of
Sanctions.
12
CORPORATE UNDERTAKINGS
 
12.1
General
Each Borrower
 
also undertakes
 
with each Creditor
 
Party to
 
comply with the
 
following provisions
of this Clause
 
(
Corporate Undertakings
) at all times during the Security Period except as the
Agent may,
 
with the authorisation of the Majority Lenders, otherwise permit.
12.2
Maintenance of status
(a)
Each Borrower will
 
maintain its separate
 
corporate existence
 
and remain in good standing
 
under
the
 
laws
 
of
 
the
 
Marshall
 
Islands
 
and
 
will,
 
and
 
shall
 
procure
 
that
 
any
 
other
 
Security
 
Party
 
(as
applicable)
 
will,
 
comply
 
in
 
all
 
respects
 
with
 
the
 
Republic
 
of
 
the
 
Marshall
 
Islands
 
Economic
Substance Regulations 2018 (as amended from time to time).
12.3
Negative undertakings
No Borrower will:
(a)
carry on any
 
business other than
 
the ownership,
 
chartering and operation
 
of the Ship
 
owned by
that Borrower; or
 
(b)
if a Potential Event of Default or an Event of Default
 
has occurred and is continuing, or if an Event
of Default would
 
result therefrom declare,
 
make or pay
 
any dividends or return
 
any capital to
 
its
equity holders
 
or
 
authorize
 
or make
 
any
 
other distribution,
 
payment
 
or
 
delivery of
 
property or
cash to its equity holders, or redeem, retire,
 
purchase or otherwise acquire, directly or indirectly,
for value,
 
any interest of any class or series of its
 
equity interests (or acquire any rights, options
 
or
warrants relating thereto but not including convertible debt) now or hereafter outstanding; or
(c)
provide any form of credit or financial assistance to:
(i)
a person who is directly
 
or indirectly interested in that Borrower's share or
 
loan capital; or
(ii)
any
 
company
 
in
 
or
 
with
 
which
 
such
 
a
 
person
 
is
 
directly
 
or
 
indirectly
 
interested
 
or
connected,
or enter
 
into any
 
transaction with or
 
involving such a
 
person or company
 
on terms which
 
are, in
any respect, less favourable
 
to that Borrower than
 
those which it could obtain in
 
a bargain made
at arms' length; or
(d)
open or
 
maintain any account
 
with any bank
 
or financial
 
institution except accounts
 
with the
 
Agent
and the Security Trustee for the purposes of the Finance Documents; or
(e)
purchase, cancel,
 
redeem or
 
retire any
 
of its
 
issued shares
 
or increase
 
or reduce
 
the number
 
of
shares that it is authorised to issue or change the
 
par value of such shares or create any new class
of shares or issue
 
any additional shares
 
except to the Corporate Guarantor and
 
provided such new
shares are made subject to the terms of the Shares Pledge applicable to that Borrower; or
(f)
acquire any shares or
 
other securities other
 
than US or
 
UK Treasury bills and certificates
 
of deposit
issued by major
 
North American or European
 
banks, or enter
 
into any transaction
 
in a derivative
other than the Designated Transactions; or
(g)
enter
 
into
 
any
 
form
 
of
 
amalgamation,
 
merger
 
or
 
de-merger
 
or
 
any
 
form
 
of
 
reconstruction
 
or
reorganisation.
13
INSURANCE
 
13.1
General
Each Borrower
 
also undertakes
 
with each Creditor
 
Party to
 
comply with the
 
following provisions
of this Clause
 
(
Insurance
) at all times during the Security Period except as the Agent may,
 
with
the authorisation of the Majority Lenders, otherwise permit.
13.2
Maintenance of obligatory insurances
Each Borrower shall keep the Ship owned by it insured at the expense of that Borrower against:
(a)
fire and usual marine risks (including hull and machinery and excess risks);
(b)
war risks (including terrorism, piracy and confiscation);
(c)
protection and indemnity risks (other than loss of hire or political risks); and
(d)
any other risks against which the Security Trustee
 
considers, having regard to practices and other
circumstances prevailing
 
at the
 
relevant time,
 
it would
 
in the
 
opinion of
 
the Security
 
Trustee
 
be
reasonable for that
 
Borrower to insure
 
and which are specified
 
by the Security Trustee
 
by notice
to that Borrower.
13.3
Terms of obligatory
 
insurances
Each Borrower shall effect such insurances:
(a)
in Dollars;
(b)
in the case of fire and
 
usual marine risks and
 
war risks, (including hull
 
interest and freight interest)
in such amount as shall from time to time be approved
 
by the Security Trustee but in any event in
an amount
 
not less
 
than the
 
greater
 
of (i)
 
an amount
 
which when
 
aggregated
 
with the
 
insured
value of
 
the other
 
Ships then
 
subject to
 
a Mortgage,
 
120 per
 
cent. of
 
the aggregate
 
of the
 
Loan
and the Swap Exposure of each Swap Bank and (ii) the Market Value of the Ship owned by it;
 
(c)
in the
 
case of
 
hull and
 
machinery policy
 
at an
 
agreed insured
 
value
 
(excluding hull
 
interest
 
and
freight interest) in an amount of not less
 
than an amount which when
 
aggregated with the agreed
insured values under all
 
the other hull and machinery policies
 
for the other Ships then
 
subject to
a Mortgage is not less
 
than the principal amount
 
of the Loan and
 
the Swap Exposure of each
 
Swap
Bank
Provided that
 
the Borrowers
 
are in
 
compliance with
 
their obligations
 
under paragraph
above at all times;
 
(d)
in the case
 
of oil pollution
 
liability risks,
 
for an aggregate
 
amount equal
 
to the highest
 
level of cover
from
 
time
 
to
 
time
 
available
 
under
 
basic
 
protection
 
and
 
indemnity
 
club
 
entry
 
and
 
in
 
the
international marine insurance market;
(e)
in relation to protection and indemnity risks in respect
 
of the full tonnage of the Ship
 
owned by it;
(f)
on approved terms; and
(g)
through approved brokers and with approved insurance companies
 
and/or underwriters or, in the
case of
 
war
 
risks and
 
protection
 
and indemnity
 
risks, in
 
approved
 
war
 
risks and
 
protection
 
and
indemnity risks associations.
13.4
Further protections for the Creditor Parties
In addition
 
to
 
the terms
 
set out
 
in Clause
 
(
Terms
 
of obligatory
 
insurances
), each
 
Borrower
shall procure that the obligatory insurances effected by it shall:
(a)
subject always to
 
paragraph
, name
 
that Borrower as
 
the sole
 
named assured
 
unless the
 
interest
of every other named assured is limited:
(i)
in respect of any obligatory insurances for hull and machinery and war risks;
(A)
to any
 
provable out-of-pocket
 
expenses that it
 
has incurred and which
 
form part
of any recoverable claim on underwriters; and
 
(B)
to any
 
third party
 
liability claims
 
where cover
 
for
 
such claims
 
is provided
 
by the
policy (and then only in respect of discharge of any claims made against it); and
 
(ii)
in
 
respect
 
of
 
any
 
obligatory
 
insurances
 
for
 
protection
 
and
 
indemnity
 
risks,
 
to
 
any
recoveries it is entitled to make by way of reimbursement following discharge of
 
any third
party liability claims made specifically against it
and every other named assured has undertaken in writing
 
to the Security Trustee (in such form as
it
 
requires)
 
that
 
any
 
deductible
 
shall
 
be
 
apportioned
 
between
 
that
 
Borrower
 
and
 
every
 
other
named assured in proportion to
 
the gross claims made or
 
paid by each of them
 
and that it shall
 
do
all things necessary
 
and provide all
 
documents, evidence and
 
information to
 
enable the Security
Trustee
 
to
 
collect
 
or
 
recover
 
any
 
moneys
 
which
 
at
 
any
 
time
 
become
 
payable
 
in
 
respect
 
of
 
the
obligatory insurances;
(b)
whenever the
 
Security Trustee
 
requires, name (or
 
be amended to
 
name) the Security Trustee
 
as
additional named assured for its rights
 
and interests, warranted
 
no operational interest
 
and with
full waiver of rights
 
of subrogation against
 
the Security Trustee,
 
but without the Security Trustee
thereby being
 
liable to pay
 
(but having the
 
right to pay)
 
premiums, calls or
 
other assessments in
respect of such insurance;
(c)
name the Security Trustee as
 
loss payee with such directions for payment
 
as the Security Trustee
may specify;
(d)
provide that
 
all payments
 
by or
 
on behalf of
 
the insurers
 
under the obligatory
 
insurances to
 
the
Security
 
Trustee
 
shall
 
be
 
made
 
without
 
set-off,
 
counterclaim
 
or
 
deductions
 
or
 
condition
whatsoever;
(e)
provide that such obligatory
 
insurances shall be primary without right of contribution from
 
other
insurances which may be carried by the Security Trustee or any other Creditor Party; and
(f)
provide that the Security Trustee may make
 
proof of loss if that Borrower fails to do so.
13.5
Renewal of obligatory insurances
Each Borrower shall:
(a)
at least 21 days before the expiry of any obligatory insurance effected
 
by it:
(i)
notify
 
the
 
Security
 
Trustee
 
of
 
the
 
brokers
 
(or
 
other
 
insurers)
 
and
 
any
 
protection
 
and
indemnity
 
or
 
war
 
risks
 
association
 
through
 
or
 
with
 
whom
 
that
 
Borrower
 
proposes
 
to
renew that obligatory insurance and of the proposed terms of renewal; and
(ii)
obtain the Security Trustee's approval to the matters
 
referred to in paragraph
(b)
at least 14 days
 
before the expiry of
 
any obligatory insurance,
 
renew that obligatory insurance
 
in
accordance with the Security Trustee's approval pursuant to paragraph
; and
(c)
procure that the
 
approved brokers and/or the war
 
risks and
 
protection and indemnity
 
associations
with which such a renewal is effected shall promptly after the renewal notify the Security Trustee
in writing of the terms each conditions of the renewal.
13.6
Copies of policies; letters of undertaking
Each Borrower shall ensure that all approved brokers provide the Security Trustee with pro forma
copies of all policies relating to the obligatory insurances which they are to effect or renew and of
a
 
letter
 
or
 
letters
 
of
 
undertaking
 
in
 
a
 
form
 
required
 
by
 
the
 
Security
 
Trustee
 
and
 
including
undertakings by the approved brokers that:
(a)
they will have endorsed
 
on each policy, immediately upon
 
issue, a loss
 
payable clause and
 
a notice
of assignment
 
complying with
 
the provisions
 
of Clause
 
(
Further protections
 
for the
 
Creditor
Parties
);
 
(b)
they will hold
 
such policies,
 
and the benefit
 
of such insurances,
 
to the order
 
of the Security
 
Trustee
in accordance with the said loss payable clause;
 
(c)
they
 
will
 
advise
 
the
 
Security
 
Trustee
 
immediately
 
of
 
any
 
material
 
change
 
to
 
the
 
terms
 
of
 
the
obligatory insurances;
 
(d)
they
 
will
 
notify the
 
Security
 
Trustee,
 
not
 
less
 
than
 
14
 
days
 
before
 
the
 
expiry
 
of
 
the
 
obligatory
insurances,
 
in
 
the
 
event
 
of
 
their
 
not
 
having
 
received
 
notice
 
of
 
renewal
 
instructions
 
from
 
that
Borrower or its agents
 
and, in the
 
event of their receiving
 
instructions to renew, they will promptly
notify the Security Trustee of the terms of the instructions; and
(e)
they will not set
 
off against any
 
sum recoverable
 
in respect of a
 
claim relating to the
 
Ship owned
by that Borrower under
 
such obligatory insurances any
 
premiums or other amounts due to them
or
 
any
 
other
 
person
 
whether
 
in
 
respect
 
of
 
that
 
Ship
 
or
 
otherwise,
 
they
 
waive
 
any
 
lien
 
on
 
the
policies, or any sums received under them, which they
 
might have in respect of such premiums or
other amounts, and they will
 
not cancel such obligatory
 
insurances by reason of
 
non-payment of
such premiums or other amounts, and will arrange for a separate policy to be issued in respect of
that Ship forthwith upon being so requested by the Security Trustee.
13.7
Copies of certificates of entry
Each
 
Borrower
 
shall ensure
 
that
 
any
 
protection
 
and indemnity
 
and/or
 
war
 
risks
 
associations
 
in
which the Ship owned by it is entered provides the Security Trustee with:
(a)
a certified copy of the certificate of entry for that Ship ;
(b)
a letter or letters of undertaking in such form as may be required by the Security Trustee;
 
and
(c)
a
 
certified
 
copy
 
of
 
each
 
certificate
 
of
 
financial
 
responsibility
 
for
 
pollution
 
by
 
oil
 
or
 
other
Environmentally
 
Sensitive Material
 
issued by
 
the relevant
 
certifying authority
 
in relation
 
to that
Ship.
13.8
Deposit of original policies
Each
 
Borrower
 
shall
 
ensure
 
that
 
all
 
policies
 
relating
 
to
 
obligatory
 
insurances
 
effected
 
by
 
it
 
are
deposited with the approved brokers through which the insurances are effected or renewed.
13.9
Payment of premiums
Each Borrower shall
 
punctually pay
 
all premiums
 
or other
 
sums payable in
 
respect of
 
the obligatory
insurances
 
effected
 
by
 
it
 
and
 
produce
 
all
 
relevant
 
receipts
 
when
 
so
 
required
 
by
 
the
 
Security
Trustee.
13.10
Guarantees
Each Borrower
 
shall ensure
 
that any
 
guarantees
 
required by
 
a protection
 
and indemnity
 
or war
risks association are promptly issued and remain in full force and effect.
13.11
Restrictions on employment
No Borrower shall employ its Ship, nor shall permit it to be employed, outside the cover provided
by any obligatory insurances.
13.12
Compliance with terms of insurances
No Borrower
 
shall do nor
 
omit to
 
do (nor permit
 
to be
 
done or not
 
to be
 
done) any
 
act or thing
which would or might render any obligatory insurance invalid,
 
void, voidable or unenforceable or
render
 
any
 
sum
 
payable
 
under
 
an
 
obligatory
 
insurance
 
repayable
 
in
 
whole
 
or
 
in
 
part;
 
and,
 
in
particular:
(a)
each Borrower
 
shall take
 
all necessary action
 
and comply with
 
all requirements
 
which may
 
from
time
 
to
 
time
 
be
 
applicable
 
to
 
the
 
obligatory
 
insurances,
 
and
 
(without
 
limiting
 
the
 
obligation
contained in Clause
 
(
Copies of policies; letters
 
of undertaking
)) ensure that
 
the obligatory
insurances are not made subject
 
to any exclusions
 
or qualifications to which the Security
 
Trustee
has not given its prior approval;
(b)
no
 
Borrower
 
shall
 
make
 
any
 
changes
 
relating
 
to
 
the
 
classification
 
or
 
classification
 
society
 
or
manager
 
or
 
operator
 
of
 
the
 
Ship
 
owned
 
by
 
it
 
approved
 
by
 
the
 
underwriters
 
of
 
the
 
obligatory
insurances;
(c)
each
 
Borrower
 
shall
 
make
 
(and
 
promptly
 
supply
 
copies
 
to
 
the
 
Agent
 
of)
 
all
 
quarterly
 
or
 
other
voyage declarations
 
which may
 
be required
 
by the
 
protection and
 
indemnity risks association
 
in
which the Ship
 
owned by it
 
is entered to
 
maintain cover for trading
 
to the United
 
States of America
and Exclusive Economic
 
Zone (as defined in the
 
United States Oil Pollution
 
Act 1990 or any
 
other
applicable legislation); and
(d)
no Borrower
 
shall employ
 
the Ship
 
owned by
 
it, nor
 
allow it
 
to be
 
employed, otherwise
 
than in
conformity with the terms and conditions of the obligatory insurances, without
 
first obtaining the
consent of the insurers and complying with any requirements (as
 
to extra premium or otherwise)
which the insurers specify.
13.13
Alteration to terms of insurances
(a)
No Borrower shall make
 
nor agree to any
 
alteration to the
 
terms of any
 
obligatory insurance nor
waive any right relating to any obligatory insurance.
 
(b)
Without limiting
 
the generality
 
of the
 
foregoing,
 
no Borrower
 
shall either
 
make or
 
agree to
 
any
alteration
 
to
 
the
 
terms
 
of
 
any
 
war
 
risks
 
and
 
allied
 
perils
 
coverage
 
(including
 
piracy
 
coverage)
whereby
 
trading
 
to
 
conditional
 
(excluded)
 
areas
 
not
 
declared
 
on
 
the
 
annual
 
policy
 
would
 
be
altered without the consent of the Agent.
13.14
Settlement of claims
No Borrower
 
shall settle,
 
compromise or
 
abandon any
 
claim under
 
any obligatory
 
insurance for
Total
 
Loss or
 
for
 
a Major
 
Casualty,
 
and shall
 
do all
 
things necessary
 
and provide
 
all documents,
evidence and information
 
to enable the Security
 
Trustee
 
to collect or
 
recover any moneys
 
which
at any time become payable in respect of the obligatory insurances.
13.15
Provision of copies of communications
Each Borrower shall provide the Security Trustee, at the time of each
 
such communication, copies
of all written communications between a Borrower and:
(a)
the approved brokers;
 
(b)
the approved protection and indemnity and/or war risks associations; and
(c)
the approved insurance companies and/or underwriters, which relate directly or indirectly to:
(i)
that
 
Borrower's
 
obligations
 
relating
 
to
 
the
 
obligatory
 
insurances
 
including,
 
without
limitation, all requisite declarations and payments of additional premiums or calls; and
 
(ii)
any credit arrangements made between that Borrower and any of
 
the persons referred to
in paragraphs
 
or
 
relating
 
wholly or
 
partly to
 
the effecting
 
or maintenance
 
of the
obligatory insurances.
13.16
Provision of information
In addition,
 
each Borrower
 
shall promptly
 
provide the
 
Security Trustee
 
(or any
 
persons which
 
it
may designate) with any
 
information which the Security
 
Trustee
 
(or any such designated
 
person)
requests for the purpose of:
(a)
obtaining
 
or
 
preparing
 
any
 
report
 
from
 
an
 
independent
 
marine
 
insurance
 
broker
 
as
 
to
 
the
adequacy of the obligatory insurances effected or proposed to be effected; and/or
(b)
effecting,
 
maintaining
 
or
 
renewing
 
any
 
such
 
insurances
 
as
 
are
 
referred
 
to
 
in
 
Clause
(
Mortgagee's interest insurances
) below or dealing with or considering any matters relating to any and the Borrowers shall, forthwith upon demand, indemnify the Security Trustee in respect of all
such insurances,
fees and other expenses incurred by or for the account of the Security Trustee in connection with
any such report as is referred to in paragraph
13.17
Mortgagee's interest insurances
The
 
Security
 
Trustee
 
shall
 
be
 
entitled
 
from
 
time
 
to
 
time
 
to
 
effect,
 
maintain
 
and
 
renew
 
a
mortgagee's
 
interest
 
marine
 
insurance
 
policy
 
in
 
such
 
amounts,
 
on
 
such
 
terms,
 
through
 
such
insurers
 
and
 
generally
 
in
 
such manner
 
as the
 
Security Trustee
 
may
 
from
 
time to
 
time consider
appropriate and each Borrower shall upon demand fully indemnify the Creditor Parties in respect
of
 
all
 
premiums
 
and
 
other
 
expenses
 
which
 
are
 
incurred
 
in
 
connection
 
with
 
or
 
with
 
a
 
view
 
to
effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter
arising out of any such insurance.
 
13.18
Review of insurance requirements
The Agent shall be entitled to review
 
the requirements of this Clause
 
(
Insurance
) from time to
time in
 
order to
 
take
 
account of
 
any changes
 
in circumstances
 
after the
 
date of
 
this Agreement
which the Agent
 
reasonably considers significant
 
and capable
 
of affecting the Borrowers,
 
the Ships
and
 
their
 
Insurances
 
(including,
 
without
 
limitation,
 
changes
 
in
 
the
 
availability
 
or
 
the
 
cost
 
of
insurance
 
coverage
 
or
 
the
 
risks
 
to
 
which
 
each
 
Borrower
 
may
 
be
 
subject),
 
and
 
may
 
appoint
insurance consultants in relation to this review at the cost of that Borrower.
13.19
Modification of insurance requirements
The Agent shall notify the Borrowers of any proposed modification under Clause
 
(
Review of
insurance
 
requirements
)to
 
the
 
requirements
 
of
 
this
 
Clause
 
(
Insurance
)
 
which
 
the
 
Agent
reasonably considers appropriate in the circumstances, and such modification shall take effect on
and from the date
 
it is notified
 
in writing to the
 
relevant Borrower as an
 
amendment to this
 
Clause
 
(
Insurance
) and shall bind that Borrower accordingly.
13.20
Compliance with mortgagee's instructions
The Agent shall
 
be entitled
 
(without prejudice
 
to or limitation
 
of any other
 
rights which
 
it may have
or acquire under
 
any Finance Document)
 
to require a Ship
 
to remain at any
 
safe port or to
 
proceed
to
 
and
 
remain
 
at
 
any
 
safe
 
port
 
designated
 
by
 
the
 
Agent
 
until
 
the
 
Borrower
 
owning
 
that
 
Ship
implements
 
any
 
amendments
 
to
 
the
 
terms
 
of
 
the
 
obligatory
 
insurances
 
and
 
any
 
operational
changes
 
required
 
as
 
a
 
result
 
of
 
a
 
notice
 
served
 
under
 
Clause
 
(
Modification
 
of
 
insurance
requirements
).
14
SHIP COVENANTS
 
14.1
General
Each Borrower
 
also undertakes
 
with each Creditor
 
Party to
 
comply with the
 
following provisions
of this Clause
 
(
Ship covenants
) at all times during the Security Period except as the Agent, with
the authorisation of the Majority Lenders, may
 
otherwise permit (and in the case of Clauses
(
Ship's name and registration
) and
 
(
Restrictions on chartering, appointment of managers
etc
.), such permission not to be unreasonably withheld).
14.2
Ship's name and registration
Each Borrower shall
 
keep the Ship
 
owned by it
 
registered in its
 
name under an
 
Approved Flag; shall
not do,
 
omit to
 
do or
 
allow to
 
be done
 
anything as
 
a result
 
of which
 
such registration
 
might be
cancelled or imperilled; and shall not change the name or port
 
of registry of the Ship owned by it.
14.3
Repair and classification
Each Borrower shall keep the Ship owned by it in a good and safe condition and state of repair:
(a)
consistent with first class ship ownership and management practice;
(b)
so
 
as
 
to
 
maintain
 
the
 
highest
 
class
 
free
 
of
 
overdue
 
recommendations
 
and
 
conditions
 
with
 
a
classification society which is a member of IACS acceptable to the Agent; and
(c)
so
 
as
 
to
 
comply
 
with
 
all
 
laws
 
and
 
regulations
 
applicable
 
to
 
vessels
 
registered
 
at
 
ports
 
in
 
the
applicable
 
Approved
 
Flag State
 
or
 
to
 
vessels
 
trading
 
to
 
any
 
jurisdiction to
 
which that
 
Ship may
trade from time to time, including but not limited to the ISM Code and the ISPS Code.
14.4
Classification society undertaking
Each
 
Borrower
 
shall
 
instruct
 
the
 
classification
 
society
 
referred
 
to
 
in
 
Clause
 
(
Repair
 
and
classification
):
(a)
to send to
 
the Security Trustee,
 
following receipt of
 
a written request
 
from the Security
 
Trustee,
certified true copies of
 
all original class records
 
held by the classification
 
society in relation
 
to its
Ship;
(b)
to
 
allow the
 
Security Trustee
 
(or
 
its agents),
 
at
 
any
 
time and
 
from
 
time to
 
time, to
 
inspect the
original class and related
 
records of its
 
Ship at the offices of
 
the classification society and to
 
take
copies of them;
(c)
to notify the Security Trustee immediately in writing if the classification society:
(i)
receives notification
 
from that
 
Borrower or
 
any other person
 
that its Ship's
 
classification
society is to be changed; or
(ii)
becomes aware of
 
any facts or matters
 
which may result in
 
or have resulted
 
in a change,
suspension, discontinuance,
 
withdrawal
 
or expiry
 
of that
 
Ship's class
 
under the
 
rules or
terms
 
and
 
conditions
 
of
 
that
 
Borrower's
 
or
 
its
 
Ship's
 
membership
 
of
 
the
 
classification
society; and
(d)
following receipt of a written request from the Security Trustee:
(i)
to confirm that
 
a Borrower is
 
not in default
 
of any of
 
its contractual obligations
 
or liabilities
to the
 
classification society and,
 
without limiting the
 
foregoing, that
 
it has paid
 
in full all
fees or other charges due and payable to the classification society; or
(ii)
if
 
a
 
Borrower
 
is
 
in
 
default
 
of
 
any
 
of
 
its
 
contractual
 
obligations
 
or
 
liabilities
 
to
 
the
classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period
agreed or allowed by the classification society.
14.5
Modification
No Borrower shall make any modification or repairs to, or replacement
 
of, the Ship owned by it or
equipment
 
installed
 
on
 
that
 
Ship
 
which
 
would
 
or
 
might
 
materially
 
alter
 
the
 
structure,
 
type
 
or
performance characteristics of that Ship or materially reduce its value.
14.6
Removal of parts
No Borrower
 
shall remove
 
any material
 
part of
 
the Ship
 
owned by
 
it, or
 
any item
 
of equipment
installed on, that Ship unless the part or
 
item so removed is forthwith
 
replaced by a suitable part
or item which
 
is in the
 
same condition as
 
or better condition than
 
the part or
 
item removed, is
 
free
from any Security Interest or any right in favour of any
 
person other than the Security
 
Trustee and
becomes on
 
installation
 
on that
 
Ship the
 
property of
 
that Borrower
 
and subject
 
to the
 
security
constituted by the relevant Mortgage
Provided that
 
a Borrower may install equipment owned by
a third party
 
if the equipment can
 
be removed without any
 
risk of damage to
 
the Ship owned by
it.
14.7
Surveys
Each Borrower shall submit the Ship owned by it regularly to all periodical or other surveys which
may be required for classification purposes and, if so required by the Security Trustee provide the
Security Trustee, with copies of all survey reports.
14.8
Inspection
Each Borrower shall permit the
 
Security Trustee (by surveyors or other persons appointed
 
by it for
that purpose) to
 
board the Ship owned
 
by it at
 
all reasonable times to
 
inspect its condition or
 
to
satisfy themselves about
 
proposed or executed repairs
 
and shall afford all
 
proper facilities for such
inspections.
14.9
Prevention of and release from arrest
Each Borrower shall promptly discharge:
(a)
all liabilities which give
 
or may give
 
rise to maritime or
 
possessory liens on or claims enforceable
against the Ship owned by it, the Earnings or the Insurances;
(b)
all taxes, dues and other amounts
 
charged in respect of the Ship owned by
 
it, the Earnings or the
Insurances; and
(c)
all other outgoings whatsoever in respect of the Ship owned by it, the Earnings or the Insurances,
and, forthwith
 
upon receiving notice
 
of the
 
arrest of
 
the Ship
 
owned by
 
it, or of
 
its detention
 
in
exercise
 
or
 
purported
 
exercise
 
of
 
any
 
lien
 
or
 
claim,
 
that
 
Borrower
 
shall
 
procure
 
its
 
release
 
by
providing bail or otherwise as the circumstances may require.
14.10
Compliance with laws etc.
Each Borrower shall:
(a)
comply,
 
or
 
procure
 
compliance
 
with
 
the
 
ISM
 
Code,
 
the
 
ISPS
 
Code,
 
all
 
Environmental
 
Laws,
 
all
Sanctions
 
and
 
all
 
other
 
laws
 
or
 
regulations
 
relating
 
to
 
the
 
Ship
 
owned
 
by
 
it,
 
its
 
ownership,
operation and management or to the business of that Borrower;
(b)
not employ the Ship owned by
 
it nor allow its employment
 
in any manner contrary
 
to any law
 
or
regulation in any relevant jurisdiction
 
including but not
 
limited to the ISM
 
Code, the ISPS
 
Code and
all Sanctions; and
(c)
in the event
 
of hostilities in
 
any part of
 
the world (whether
 
war is
 
declared or not),
 
not cause or
permit the
 
Ship owned
 
by it
 
to enter
 
or trade
 
to any
 
zone which
 
is declared
 
a war
 
zone by
 
any
government
 
or
 
by
 
the Ship's
 
war
 
risks
 
insurers
 
unless the
 
prior written
 
consent
 
of
 
the Security
Trustee
 
has been given and that
 
Borrower has (at
 
its expense) effected
 
any special, additional or
modified insurance cover which the Security Trustee may require.
14.11
Environmental
compliance
Each Borrower shall, and shall procure that the Corporate Guarantor will:
(a)
comply with all Environmental Laws applicable to it;
(b)
obtain, maintain and ensure compliance with all requisite Environmental Approvals;
(c)
implement
 
procedures
 
to
 
monitor
 
compliance
 
with
 
and
 
to
 
prevent
 
liability
 
under
 
any
Environmental Law applicable to it,
(d)
where failure to do so has or is reasonably likely to have a Material Adverse Effect
 
.
14.12
Environmental Claims
Each
 
Borrower
 
shall,
 
and
 
shall
 
procure
 
that
 
the
 
Corporate
 
Guarantor
 
shall
 
promptly
 
upon
becoming aware of the same, inform the Agent in writing of:
(a)
any
 
Environmental
 
Claim
 
against
 
any
 
member
 
of
 
the
 
Group
 
which
 
is
 
current,
 
pending
 
or
threatened; and
(b)
any facts or circumstances which are
 
reasonably likely to result in any
 
Environmental Claim being
commenced or threatened against any member of the Group,
(c)
where the
 
claim, if
 
determined against
 
that member
 
of the
 
Group, has
 
or is
 
reasonably
likely to have a Material Adverse Effect
 
.
14.13
Provision of information
Each Borrower shall promptly provide the Security Trustee with any information which it requests
regarding:
(a)
the Ship owned by it, its employment, position and engagements;
(b)
the Earnings and payments and amounts due to the master and crew of the Ship owned by it;
 
(c)
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or
repair of the Ship owned by it and any payments made in respect of that Ship;
(d)
any towages and salvages; and
(e)
its compliance, the Approved
 
Manager's compliance and the compliance
 
of the Ship owned
 
by it
with the ISM Code, the ISPS Code and all Sanctions,
and,
 
upon
 
the
 
Security
 
Trustee's
 
request,
 
provide
 
copies
 
of
 
any
 
current
 
charter
 
and
 
charter
guarantee
 
relating
 
to
 
the
 
Ship
 
owned
 
by
 
it
 
and
 
copies
 
of
 
that
 
Borrower's
 
or
 
the
 
Approved
Manager's Document of Compliance.
14.14
Notification of certain events
Each Borrower shall immediately notify the Security Trustee by fax, confirmed forthwith, by letter
of:
(a)
any casualty which is or is likely to be or to become a Major Casualty;
(b)
any occurrence as a result of which the Ship owned by it
 
has become or is, by the passing of time
or otherwise, likely to become a Total Loss;
(c)
any
 
requirement
 
or
 
recommendation
 
made
 
by
 
any
 
insurer
 
or
 
classification
 
society
 
or
 
by
 
any
competent authority which is not immediately complied with;
(d)
any arrest or detention
 
of the Ship owned by it, any
 
exercise or purported exercise
 
of any lien on
that Ship or its Earnings or any requisition of that Ship for hire;
(e)
any intended dry docking of the Ship owned by it;
(f)
any Environmental Claim made against that Borrower or in connection with the Ship owned by it,
or any Environmental Incident;
(g)
any
 
claim
 
for
 
breach of
 
the ISM
 
Code or
 
the
 
ISPS Code
 
being made
 
against
 
that
 
Borrower,
 
the
Approved Manager or otherwise in connection with the Ship owned by it; or
(h)
any other matter,
 
event or incident, actual or threatened, the effect of which will or could lead to
the ISM Code or the ISPS Code not being complied with
and that Borrower shall keep the Security Trustee advised in writing on
 
a regular basis and in such
detail
 
as
 
the
 
Security Trustee
 
shall
 
require
 
of
 
that
 
Borrower's,
 
the
 
Approved
 
Manager's
 
or
 
any
other person's response to any of those events or matters.
14.15
Restrictions on chartering, appointment of managers etc.
No Borrower shall, in relation to the Ship owned by it:
(a)
let that Ship on demise charter for any period;
(b)
enter into any time
 
or consecutive voyage charter
 
in respect of
 
that Ship for
 
a term which
 
exceeds,
or which by virtue of any optional extensions may exceed, 24 months;
(c)
enter
 
into any
 
charter in
 
relation to
 
that Ship
 
under which
 
more than
 
two months'
 
hire (or
 
the
equivalent) is payable in advance;
(d)
charter that
 
Ship otherwise
 
than on
 
bona fide
 
arm's length
 
terms at
 
the time
 
when that
 
Ship is
fixed;
(e)
appoint a
 
manager of
 
that Ship
 
other than
 
the Approved
 
Manager or
 
agree to
 
any alteration
 
to
the terms of the Approved Manager's appointment;
(f)
de activate or lay-up that Ship; or
(g)
put that Ship into
 
the possession of any person
 
for the purpose of work
 
being done upon it in an
amount exceeding or likely to
 
exceed $1,000,000 (or the equivalent in any other currency) unless
that
 
person
 
has
 
first
 
given
 
to
 
the
 
Security
 
Trustee
 
and
 
in
 
terms
 
satisfactory
 
to
 
it
 
a
 
written
undertaking not
 
to exercise
 
any lien
 
on that
 
Ship or
 
its Earnings
 
for the
 
cost of
 
such work
 
or for
any other reason.
14.16
Notice of Mortgage
Each
 
Borrower
 
shall
 
keep
 
the
 
Mortgage
 
registered
 
against
 
the
 
Ship owned
 
by
 
it as
 
a
 
valid
 
first
priority or preferred mortgage, carry on board
 
that Ship a certified
 
copy of the such
 
Mortgage and
place and maintain
 
in a conspicuous place
 
in the navigation
 
room and the
 
Master's cabin of
 
that
Ship a framed printed notice
 
stating that that Ship is mortgaged
 
by that Borrower to the
 
Security
Trustee.
14.17
Sharing of Earnings
No Borrower shall:
(a)
enter into any agreement or arrangement for the sharing of any Earnings;
 
(b)
enter into any
 
agreement or
 
arrangement for the
 
postponement of
 
any date on
 
which any
 
Earnings
are due; and
(c)
permit
 
the
 
reduction
 
of
 
the
 
amount
 
of
 
any
 
Earnings
 
or
 
otherwise
 
for
 
the
 
release
 
or
 
adverse
alteration of any right of that Borrower to any Earnings.
 
14.18
ISPS Code
Each Borrower shall comply with the ISPS Code and in particular, without limitation, shall:
(a)
procure that
 
the Ship
 
owned by
 
it and
 
the company
 
responsible for
 
that Ship's
 
compliance with
the ISPS Code comply with the ISPS Code;
 
(b)
maintain for that Ship an ISSC; and
(c)
notify
 
the
 
Agent
 
immediately
 
in
 
writing
 
of
 
any
 
actual
 
or
 
threatened
 
withdrawal,
 
suspension,
cancellation or modification of the ISSC.
14.19
Charterparty Assignment
If a Borrower enters into any Charter (subject to obtaining
 
the consent of the Agent in
 
accordance
with Clause
 
(
Restrictions on
 
chartering, appointment
 
of managers
 
etc
.)), that
 
Borrower
shall
 
at
 
the
 
request
 
of
 
the
 
Agent
 
execute
 
in
 
favour
 
of
 
the
 
Security
 
Trustee
 
(and
 
register,
 
if
applicable) a Charterparty Assignment and shall:
(a)
serve
 
notices
 
of
 
the
 
Charterparty
 
Assignment on
 
the Charterer
 
and
 
procure
 
that
 
the
 
Charterer
acknowledges such notice in such form as the Agent may approve or require; and
 
(b)
deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4 and
5 of
 
of
 
(
Conditions precedent documents
), as the Agent may require.
14.20
Poseidon Principles
Each Borrower shall, upon the request by a Lender and at the cost of the Borrowers, on or before
31st July in each calendar year,
 
supply or procure the supply by the relevant
 
classification society
to the
 
Agent of
 
all information
 
necessary in order
 
for such
 
Lender to
 
comply with its
 
obligations
under the
 
Poseidon Principles
 
in respect
 
of the
 
preceding year,
 
including, without
 
limitation, all
ship fuel
 
oil consumption
 
data required to
 
be collected
 
and reported
 
in accordance
 
with Regulation
22A of Annex
 
VI and any
 
Statement of
 
Compliance, in each case
 
relating to
 
the Ship owned by
 
it
for the preceding
 
calendar year
 
provided always that,
 
for the avoidance
 
of doubt,
 
such information
shall be
 
confidential information
 
but each
 
Borrower acknowledges
 
that, in
 
accordance with
 
the
Poseidon Principles,
 
such information
 
will form
 
part of
 
the information
 
published regarding
 
the
relevant Lender's portfolio climate alignment and that a Lender may disclose such information: (i)
either
 
to
 
any
 
classification
 
society
 
or
 
other
 
entity
 
which
 
a
 
Lender
 
has
 
engaged
 
to
 
make
 
the
calculations
 
necessary to
 
enable that
 
Lender to
 
comply with
 
its reporting
 
obligations
 
under the
Poseidon
 
Principles
 
(such
 
calculations
 
to
 
be
 
made
 
at
 
the
 
cost
 
of
 
the
 
relevant
 
Lender)
 
or
 
(ii)
 
as
otherwise permitted under the terms of this Agreement.
14.21
Inventory of Hazardous Material
Each Borrower shall procure that, on the date falling 18 months after the date of this Agreement,
its Ship has obtained an Inventory of Hazardous Material, which shall be maintained until the end
of the Security Period.
 
14.22
Sustainable and socially responsible dismantling of ships
(a)
Each Borrower
 
shall (and shall procure
 
that each other
 
member of the Group
 
shall) procure that
for the duration of the Security Period:
(b)
the Ship owned by it or any other
 
Fleet Vessel shall be recycled at a recycling yard which conducts
its recycling business
 
in a socially
 
and environmentally responsible
 
manner, in accordance with the
provisions of the Hong Kong
 
Convention (in the event
 
that the Approved
 
Flag State is not
 
an EEA
Member Country) or the EU Ship Recycling
 
Regulation (in the event
 
that the Approved Flag State
is an EEA Member Country); or
(c)
where the
 
Ship owned by
 
it or any
 
other Fleet Vessel
 
is sold
 
to an
 
intermediary (whether or
 
not
with
 
the
 
intention
 
of
 
being
 
recycled),
 
it
 
shall
 
provide
 
the
 
intermediary
 
with
 
any
 
ship-relevant
information in its possession which it considers necessary for the development of a ship recycling
plan in accordance with the EU Ship Recycling Regulation.
14.23
Sanctions provisions
 
Without limiting Clause
 
(
Compliance with laws etc.
), each Borrower:
(a)
shall, and shall procure that
 
the Ship owned by it and each
 
Security Party shall, and, in respect of
any
 
charterer,
 
shall use
 
all reasonable
 
endeavours
 
to
 
procure
 
that the
 
Charterer
 
and any
 
other
charterer in respect of its Ship
 
shall, comply in all respects
 
with all laws to which it
 
may be subject,
including, without limitation, all national and
 
international laws, derivatives, regulations, decrees,
rulings and such analogous rules, including, but not limited to, rules relating to Sanctions.
(b)
undertakes to make
 
the Charterer and all other charterers
 
and operators of the
 
Ship owned by it
aware of the requirements of this Clause and Clause
 
(
Sanctions
) and shall procure that they
act in accordance with these requirements.
14.24
Change of Approved Manager
(a)
Each
 
Borrower
 
may,
 
at
 
its
 
sole
 
discretion,
 
at
 
any
 
time
 
during
 
the
 
Security
 
Period,
 
change
 
the
Approved Manager
 
of its
 
Ship from
 
Diana Shipping
 
Services S.A.
 
to Diana
 
Wilhelmsen Management
Limited,
provided that
 
the Borrowers shall give the Agent five Business' Days
 
prior written notice
and shall provide the Agent no later than the date of such change with:
(b)
documents of
 
the kind specified
 
in paragraphs
,
,
, and
 
of
 
of
 
(
Condition
precedent documents
) in respect of Diana Wilhelmsen Management Limited;
(c)
the documents
 
referred to in
 
paragraph
 
of
 
of
Condition precedent
 
documents
);
and
(d)
any other documents that the Agent may reasonably require.
15
SECURITY COVER
15.1
Minimum required security cover
Clause
Provision of additional
 
security; prepayment
) applies if
 
at any relevant time
 
during the
Security Period, the Agent notifies the Borrowers that:
(i)
(a)
 
the aggregate of the Market Value of the Ships then subject to a Mortgage;
 
plus
(ii)
(b)
 
the net realisable value
 
of any additional
 
security previously provided under
 
this
Clause
 
(
Security cover
),
(b)
(the "
Security Cover Ratio
") is below:
(c)
(i)
 
154 per
 
cent.
 
of the
 
Loan, for
 
the period starting
 
on the
 
date of
 
this Agreement
and ending on the date falling six months after the Drawdown Date; or
(ii)
125 per cent.
 
of the Loan and
 
the Swap Exposure for the remainder
 
of the Security Period.
15.2
Provision of additional security; prepayment
If
 
the
 
Agent
 
serves
 
a
 
notice
 
on
 
the
 
Borrowers
 
under
 
Clause
 
(
Minimum
 
required
 
security
cover
):
 
(a)
in
 
the
 
case
 
of
 
Clause
(i)
 
(
Minimum
 
required
 
security
 
cover
)
 
the
 
Borrowers
 
shall
 
at
 
least
 
1
Business Day
 
before the date
 
falling one
 
month after the
 
date on
 
which the
 
Agent's notice
 
is served
under
 
Clause
 
(
Minimum
 
required
 
security
 
cover
)
 
(the
 
"
Prepayment
 
Date
")
 
have
 
provided
additional security which,
 
in the opinion
 
of the Majority
 
Lenders, has a net
 
realisable value at least
equal to the
 
shortfall and is
 
documented in such terms
 
as the Agent may,
 
with the authorisation
of the Majority Lenders, approve or require;
 
and
(b)
in the case
 
of Clause
(ii) (
Minimum required security
 
cover
) the
 
Borrowers shall
 
prepay such
part at least
 
of the Loan
 
as will eliminate
 
the shortfall on
 
or before
 
the Prepayment Date,
 
unless
at
 
least
 
1
 
Business
 
Day
 
before
 
the
 
Prepayment
 
Date
 
the
 
Borrowers
 
have
 
provided
 
additional
security which, in the opinion of the Majority Lenders,
 
has a net realisable value at
 
least equal to
the shortfall
 
and is
 
documented
 
in such
 
terms as
 
the Agent
 
may,
 
with the
 
authorisation of
 
the
Majority Lenders, approve or require.
 
15.3
Valuation of Ships
The Market
 
Value
 
of a
 
Ship (or
 
any other
 
Fleet Vessel)
 
at any
 
date during
 
the Security
 
Period is
that shown by a valuation to be prepared:
(a)
as at a date not more than 14 days previously;
(b)
by an Approved Broker (selected by the Borrowers and appointed by the Agent);
(c)
with or without physical inspection of the Ship (as the Agent may require);
(d)
on
 
the basis
 
of
 
a sale
 
for
 
prompt
 
delivery for
 
cash
 
on
 
normal
 
arm's length
 
commercial
terms as between a willing seller and a willing buyer,
 
free of any existing charter or other
contract of employment; and
(e)
after deducting the estimated amount
 
of the usual and
 
reasonable expenses which would
be incurred in connection with the sale,
Provided that
 
if the Agent
 
reasonably determines that
 
the Market
 
Value of
 
the Ship shown
 
by a
valuation
 
prepared in
 
accordance with
 
this Clause
 
(
Valuation
 
of Ships
) does
 
not accurately
reflect the value
 
of that
 
Ship, it
 
shall have the
 
right to
 
appoint (at
 
the Borrowers' expense)
 
a second
Approved
 
Broker
 
to
 
provide
 
a
 
valuation
 
of
 
that
 
Ship
 
addressed
 
to
 
the
 
Agent
 
and
 
prepared
 
in
accordance
 
with
 
the
 
terms
 
of
 
this
 
Agreement
 
and
 
the
 
Market
 
Value
 
of
 
that
 
Ship
 
shall
 
be
 
the
arithmetic average of the two valuations.
15.4
Value of additional security
The net realisable value of
 
any additional security which is
 
provided under Clause
 
(
Provision
of additional security; prepayment
) shall be determined as follows:
(a)
if it consists of a Security Interest over
 
a vessel shall be that shown by a valuation complying with
the requirements of Clause
 
(
Valuation of Ships
); and
(b)
if it consists of cash, the US Dollar amount thereof.
15.5
Valuations binding
Any valuation
 
under Clauses
 
(
Provision of
 
additional security; prepayment
),
 
(
Valuation
of
 
Ships
)
 
or
 
(
Value
 
of
 
additional
 
security
)
 
shall
 
be
 
binding
 
and
 
conclusive
 
as
 
regards
 
the
Borrowers, as
 
shall be any
 
valuation which
 
the Majority Lenders
 
make of
 
any additional security
which does not consist of or include a Security Interest.
15.6
Provision of information
The Borrowers
 
shall promptly
 
provide the
 
Agent and
 
the Approved
 
Broker
 
acting under
 
Clauses
 
(
Valuation
 
of
 
Ships
)
 
or
 
(
Value
 
of
 
additional security
)
 
with
 
any
 
information
 
which
 
the
Agent or the
 
Approved Broker may request
 
for the purposes
 
of the
 
valuation; and,
 
if the
 
Borrowers
fail to provide the information by the date specified in
 
the request, the valuation may be made on
any
 
basis
 
and
 
assumptions
 
which
 
the
 
Approved
 
Broker
 
or
 
the
 
Majority
 
Lenders
 
(or
 
the
 
expert
appointed by them)
 
consider prudent. For
 
the avoidance of
 
doubt, the Security Cover
 
Ratio shall
be tested on
 
the date
 
falling six
 
months after
 
the Drawdown Date
 
and thereafter
 
once per
 
calendar
year or at such other times as may be requested by the Agent.
 
15.7
Payment of valuation expenses
Without
 
prejudice
 
to
 
the
 
generality
 
of
 
the
 
Borrowers'
 
obligations
 
under
 
Clauses
 
(
Costs
 
of
negotiation, preparation etc
.),
 
(
Costs of variations, amendments, enforcement etc
.) and
(
Miscellaneous indemnities
), the
 
Borrowers
 
shall, on
 
demand, pay
 
the Agent
 
the amount
 
of the
fees and expenses of the Approved
 
Broker instructed by the Agent
 
under this Clause and all legal
and other
 
expenses incurred
 
by any
 
Creditor Party
 
in connection
 
with any
 
matter
 
arising out
 
of
this
 
Clause
 
(provided
 
that,
 
other
 
than
 
the
 
valuation(s)
 
obtained
 
for
 
the
 
purpose
 
of
 
testing
 
the
Security Cover Ratio
 
on the date
 
falling six months
 
after the Drawdown
 
Date) no
 
more than one
valuation per Ship subject to
 
a Mortgage per year and,
 
if required by the Agent pursuant
 
to Clause
 
(
Valuation of Ships
), one additional valuation
 
per such Ship per
 
year shall be payable
 
by the
Borrowers,
 
save
 
for
 
if
 
an
 
Event
 
of
 
Default
 
has
 
occurred
 
which
 
is
 
continuing
 
in
 
which
 
case
 
the
Borrowers
 
shall be liable to
 
pay for all
 
valuations that take
 
place during the period such
 
Event of
Default is continuing)
 
and all
 
legal and other
 
expenses incurred by
 
any Creditor Party in
 
connection
with any matter arising out of this Clause.
15.8
Application of prepayment
Clause
Application of partial
 
prepayment
) shall apply
 
in relation to any
 
prepayment pursuant
to Clause
 
(
Security cover
).
16
PAYMENTS
 
AND CALCULATIONS
 
16.1
Currency and method of payments
All payments to
 
be made by the
 
Lenders or by
 
any Borrower
 
under a Finance Document
 
shall be
made to the Agent or to the Security Trustee, in the case of an amount payable to it:
(a)
by not later than 11.00 a.m. (New York City time) on the due date;
(b)
in same day
 
Dollar funds
 
settled through the
 
New York Clearing House
 
Interbank Payments System
(or in
 
such other
 
Dollar funds
 
and/or settled
 
in such
 
other manner
 
as the
 
Agent shall
 
specify as
being
 
customary
 
at
 
the
 
time
 
for
 
the
 
settlement
 
of
 
international
 
transactions
 
of
 
the
 
type
contemplated by this Agreement);
 
(c)
in the case of
 
an amount payable
 
by a Lender to
 
the Agent or
 
by a Borrower
 
to the Agent or
 
any
Lender, to such account as the Agent
 
may from time to time
 
notify to the
 
Borrowers and the other
Creditor Parties; and
 
(d)
in the case of
 
an amount payable to
 
the Security Trustee,
 
to such account as
 
it may from
 
time to
time notify to the Borrowers and the other Creditor Parties.
16.2
Payment on non-Business Day
If any
 
payment
 
by any
 
Borrower
 
under a
 
Finance Document
 
would otherwise
 
fall
 
due on
 
a day
which is not a Business Day:
(a)
the due date shall be extended to the next succeeding Business Day; or
(b)
if the next succeeding
 
Business Day falls in
 
the next calendar
 
Month, the due
 
date shall be brought
forward to the immediately preceding Business Day,
and interest shall be payable during any extension under paragraph
 
at the rate payable on the
original due date.
16.3
Basis for calculation of periodic payments
All interest and commitment fee and any other payments under any Finance
 
Document which are
of an annual
 
or periodic nature
 
shall accrue from
 
day to day
 
and shall be calculated
 
on the basis
of the actual number of days elapsed and a 360 day year.
16.4
Distribution of payments to Creditor Parties
Subject to
 
Clauses
 
(
Permitted
 
deductions by
 
Agent
),
 
(
Agent only
 
obliged to
 
pay when
monies received
) and
 
(
Refund to Agent of monies not received
):
(a)
any amount received
 
by the Agent under
 
a Finance Document for
 
distribution or remittance
 
to a
Lender, the Swap Bank or
 
the Security
 
Trustee shall be made
 
available by the Agent
 
to that Lender,
the Swap
 
Bank or,
 
as the
 
case may
 
be, the
 
Security Trustee
 
by payment,
 
with funds
 
having the
same value as the funds received,
 
to such account as such Lender,
 
the Swap Bank or the Security
Trustee may
 
have notified to the Agent not less than five Business Days previously; and
(b)
amounts to be applied in satisfying amounts
 
of a particular category which are due
 
to the Lenders
and/or the
 
Swap Bank
 
generally shall
 
be distributed
 
by the
 
Agent to
 
each Lender
 
and the
 
Swap
Bank pro rata to the amount in that category which is due to it.
16.5
Permitted deductions by Agent
Notwithstanding any other
 
provision of this
 
Agreement or any
 
other Finance
 
Document, the Agent
may, before making an amount available to a Lender or the
 
Swap Bank, deduct and
 
withhold from
that amount
 
any sum which
 
is then due
 
and payable to
 
the Agent from
 
that Lender or
 
the Swap
Bank under any Finance Document
 
or any sum which the
 
Agent is then entitled under
 
any Finance
Document to require that Lender or the Swap Bank to pay on demand.
16.6
Agent only obliged to pay when monies received
Notwithstanding any other
 
provision of this
 
Agreement or any
 
other Finance
 
Document, the Agent
shall not be obliged
 
to make
 
available to
 
any Borrower or
 
any Lender or the
 
Swap Bank any
 
sum
which the
 
Agent
 
is expecting
 
to
 
receive
 
for
 
remittance
 
or
 
distribution to
 
that Borrower
 
or
 
that
Lender or the Swap Bank until the Agent has satisfied itself that it has received that sum.
16.7
Refund to Agent of monies not received
If and to the extent
 
that the Agent makes
 
available a sum to
 
a Borrower or a Lender or
 
the Swap
Bank, without first having received that sum, that Borrower or (as the case may be) the Lender or
the Swap Bank concerned shall, on demand:
(a)
refund the sum in full to the Agent; and
 
(b)
pay to
 
the Agent
 
the amount
 
(as certified
 
by the
 
Agent) which
 
will indemnify
 
the Agent
 
against
any funding or other loss, liability or expense incurred by the Agent as a result of making the sum
available before receiving it.
 
16.8
Agent may assume receipt
Clause
 
(
Refund to
 
Agent of
 
monies not received
) shall not
 
affect any
 
claim which the
 
Agent
has under
 
the law
 
of restitution,
 
and applies
 
irrespective of
 
whether the
 
Agent had
 
any form
 
of
notice that it had not received the sum which it made available.
16.9
Creditor Party accounts
Each
 
Creditor Party
 
shall maintain
 
accounts showing
 
the amounts
 
owing to
 
it by
 
the Borrowers
and
 
each
 
Security
 
Party
 
under
 
the
 
Finance
 
Documents
 
and
 
all
 
payments
 
in
 
respect
 
of
 
those
amounts made by the Borrowers and any Security Party.
16.10
Agent's memorandum account
The Agent shall maintain a memorandum account showing the amounts advanced
 
by the Lenders
and all other sums owing to the Agent, the Security Trustee
 
and each Lender from the Borrowers
and
 
each
 
Security
 
Party
 
under
 
the
 
Finance
 
Documents
 
and
 
all
 
payments
 
in
 
respect
 
of
 
those
amounts made by the Borrowers and any Security Party.
16.11
Accounts prima facie evidence
If
 
any
 
accounts
 
maintained
 
under
 
Clauses
 
(
Creditor
 
Party
 
accounts
)
 
and
 
(
Agent's
memorandum
 
account
)
 
show
 
an
 
amount
 
to
 
be
 
owing
 
by
 
a
 
Borrower
 
or
 
a
 
Security
 
Party
 
to
 
a
Creditor
 
Party,
 
those
 
accounts
 
shall
 
be
 
prima facie
 
evidence that
 
that
 
amount
 
is
 
owing
 
to
 
that
Creditor Party.
17
APPLICATION OF RECEIPTS
 
17.1
Normal order of application
Except
 
as
 
any
 
Finance
 
Document
 
may
 
otherwise
 
provide,
 
any
 
sums
 
which
 
are
 
received
 
or
recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
(a)
FIRST:
 
in
 
or
 
towards
 
satisfaction
 
of
 
any
 
amounts
 
then
 
due
 
and
 
payable
 
under
 
the
 
Finance
Documents in the following order and proportions:
(i)
first, in
 
or towards satisfaction
 
pro rata of
 
all amounts
 
then due
 
and payable
 
to the
 
Creditor
Parties under the Finance
 
Documents other than
 
those amounts referred to at
 
paragraphs
 
and
 
(including, but without limitation, all amounts payable by any Borrower under
Clauses
 
(
Fees and
 
expenses
),
 
(
Indemnities
) and
 
(
No set-off
 
or Tax
 
Deduction
) of
this
 
Agreement
 
or
 
by
 
any
 
Borrower
 
or
 
any
 
Security
 
Party
 
under
 
any
 
corresponding
 
or
similar provision in any other Finance Document);
(ii)
secondly,
 
in or towards satisfaction
 
pro rata of
 
any and all amounts of
 
interest or default
interest
 
payable
 
to
 
the
 
Creditor
 
Parties
 
under
 
the
 
Finance
 
Documents
 
(and,
 
for
 
this
purpose, the
 
expression "
interest
" shall
 
include any
 
net amount
 
which a
 
Borrower shall
have
 
become
 
liable
 
to
 
pay
 
or
 
deliver
 
under
 
section
 
2(e)
 
(
Obligations
)
 
of
 
the
 
Master
Agreement
 
but
 
shall
 
have
 
failed
 
to
 
pay
 
or
 
deliver
 
to
 
the
 
Swap
 
Bank
 
at
 
the
 
time
 
of
application or distribution under this Clause
 
(
Application of receipts
)); and
(iii)
thirdly, in or towards
 
satisfaction pro rata of the Loan and the Swap Exposure (in the case
of the latter, calculated as at the actual Early Termination Date applying to each particular
Designated
 
Transaction,
 
or
 
if
 
no
 
such
 
Early
 
Termination
 
Date
 
shall
 
have
 
occurred,
calculated
 
as
 
if
 
an
 
Early
 
Termination
 
Date
 
occurred
 
on
 
the
 
date
 
of
 
application
 
or
distribution hereunder);
(b)
SECONDLY:
 
in retention of
 
an amount equal
 
to any amount
 
not then due and
 
payable under any
Finance Document but which the
 
Agent, by notice to
 
the Borrowers, the
 
Security Parties and the
other Creditor Parties,
 
states in its
 
opinion will
 
either or
 
may become due
 
and payable in
 
the future
and,
 
upon
 
those
 
amounts
 
becoming
 
due
 
and
 
payable,
 
in
 
or
 
towards
 
satisfaction
 
of
 
them
 
in
accordance with the provisions of Clause
 
(
Normal order of application
); and
(c)
THIRDLY:
 
any surplus
 
shall be
 
paid to
 
the Borrowers or
 
to any
 
other person
 
appearing to
 
be entitled
to it.
17.2
Variation of order of application
The Agent
 
may,
 
with the
 
authorisation of the
 
Majority Lenders
 
and the
 
Swap Bank,
 
by notice
 
to
the Borrowers, the Security
 
Parties and the other Creditor
 
Parties provide for
 
a different manner
of application from that
 
set out in
 
Clause
Application of receipts
) either as
 
regards a specified
sum or sums or as regards sums in a specified category or categories.
17.3
Notice of variation of order of application
The Agent may
 
give notices
 
under Clause
Variation of order
 
of application
) from time
 
to time;
and such a notice may be stated to apply not only to sums which may be received or recovered in
the future, but
 
also to any
 
sum which
 
has been
 
received or recovered
 
on or after
 
the third Business
Day before the date on which the notice is served.
 
17.4
Appropriation rights overridden
This Clause
 
(
Application of
 
receipts
) and
 
any notice
 
which the
 
Agent gives
 
under Clause
(
Variation
 
of
 
order
 
of
 
application
)
 
shall
 
override
 
any
 
right
 
of
 
appropriation
 
possessed,
 
and
 
any
appropriation made, by any Borrower or any Security Party.
18
APPLICATION OF EARNINGS
18.1
Payment of Earnings
 
Each Borrower undertakes with
 
each Creditor Party to
 
ensure that, throughout
 
the Security
 
Period
(and subject only to the provisions of the
 
General Assignment to which it is a party)
 
all Earnings of
the Ship owned by it (including but not limited to any sale and/or insurance proceeds) are paid to
the Earnings Account for that Ship.
18.2
Location of accounts
Each Borrower shall promptly:
(a)
comply with any requirement
 
of the Agent as
 
to the location or
 
re location of its
 
Earnings Account;
and
(b)
execute any
 
documents which the Agent
 
specifies to create
 
or maintain in
 
favour of the
 
Security
Trustee
 
a Security Interest
 
over (and/or
 
rights of set-off,
 
consolidation or other
 
rights in relation
to) its Earnings Account.
18.3
Debits for expenses etc.
The
 
Agent
 
shall
 
be
 
entitled
 
(but
 
not
 
obliged)
 
from
 
time
 
to
 
time
 
to
 
debit
 
any
 
Earnings
 
Account
without prior notice in order
 
to discharge any
 
amount due and payable
 
under Clause
 
or
 
to
a Creditor
 
Party or
 
payment of
 
which any
 
Creditor Party
 
has become
 
entitled to
 
demand under
Clause
 
(
Fees and expenses
) or
 
(
Indemnities
).
18.4
Borrowers' obligations unaffected
The provisions of this Clause
 
(
Application of Earnings
) do not affect:
(a)
the liability of the Borrowers to make payments of principal and interest on the due dates; or
(b)
any
 
other
 
liability
 
or
 
obligation
 
of
 
the
 
Borrowers
 
or
 
any
 
Security
 
Party
 
under
 
any
 
Finance
Document.
 
18.5
Earnings Accounts balances
Subject
 
to
 
the
 
other
 
terms
 
of
 
this
 
Agreement
 
(including,
 
without
 
limitation,
 
the
 
terms
 
of
 
this
Clause
 
(
Application of Earnings
)), the monies on the Earnings
 
Account shall be freely available
to the Borrowers to be used in
 
accordance with and in compliance with the terms and conditions
of this
 
Agreement subject
 
to no
 
Event of Default
 
having occurred
 
which is
 
continuing and
 
the Agent
having given notice
 
to the Borrowers
 
that such monies shall
 
not be freely
 
available as a
 
result of
such Event of Default.
19
EVENTS OF DEFAULT
 
19.1
Events of Default
An Event of Default occurs if:
(a)
any Borrower
 
or any
 
Security Party
 
fails to
 
pay when
 
due or
 
(if so
 
payable) on
 
demand any
 
sum
payable under a Finance Document or under any document relating to a Finance Document; or
(b)
any
 
breach
 
occurs
 
of
 
Clauses
 
(
Waiver
 
of
 
conditions precedent
),
 
(
No
 
immunity
),
(
Sanctions
),
Title; negative
 
pledge
),
No disposal
 
of assets
),
Consents
),
Know
your
 
customer
),
 
11.20
 
(
Bribery
 
and
 
anti-corruption
 
laws
),
 
(
Sanctions
),
 
11.22
 
(
Use
 
of
proceeds
),
 
(
Maintenance
 
of
 
status)
,
 
(
Negative
 
undertakings
),
 
(
Maintenance
 
of
obligatory
 
insurances
),
 
(
Terms
 
of
 
obligatory
 
insurances
),
 
(
Minimum
 
required
 
security
cover
),
 
(
Provision
 
of
 
additional
 
security;
 
prepayment
)
 
and
 
12.4
 
(
Compliance
 
Check)
 
of
 
the
Corporate Guarantee; or
(c)
any breach by any
 
Borrower or any Security Party occurs
 
of any provision of a
 
Finance Document
(other
 
than
 
a
 
breach
 
covered
 
by
 
paragraphs
 
or
)
 
which,
 
in
 
the
 
opinion
 
of
 
the
 
Majority
Lenders,
 
is
 
capable
 
of
 
remedy,
 
and
 
such
 
default
 
continues
 
un-remedied
 
ten
 
days
 
after
 
written
notice from the Agent requesting action to remedy the same; or
(d)
(subject
 
to
 
any
 
applicable
 
grace
 
period
 
specified
 
in
 
the
 
Finance
 
Document)
 
any
 
breach
 
by
 
any
Borrower or any
 
Security Party
 
occurs of any
 
provision of
 
a Finance
 
Document (other
 
than a
 
breach
falling within paragraphs
,
 
or
); or
(e)
any representation, warranty or statement made or repeated by, or by an officer of, the Borrower
or
 
a
 
Security
 
Party
 
in
 
a
 
Finance
 
Document
 
or
 
in
 
the
 
Drawdown
 
Notice
 
or
 
any
 
other
 
notice
 
or
document relating
 
to a
 
Finance Document is
 
materially untrue
 
or misleading when
 
it is
 
made or
repeated; or
(f)
any of the
 
following occurs in
 
relation to any
 
Financial Indebtedness of a Relevant
 
Person (in
 
the
case
 
of
 
all
 
Relevant
 
Persons
 
(taken
 
as
 
a
 
whole)
 
exceeding
 
in
 
aggregate
 
$10,000,000
 
(or
 
the
equivalent in any other currency)
 
at any relevant time
Provided that
in the case of each Borrower, any Financial Indebtedness of a Relevant Person is not paid when due; or
individually,
 
any
 
Financial
 
Indebtedness
 
exceeding
 
$500,000
 
(or
 
the
 
equivalent
 
in
 
any
 
other
currency)):
(i)
(ii)
any Financial Indebtedness of
 
a Relevant Person
 
becomes due and payable
 
or capable of
being declared due and payable prior to
 
its stated maturity date as a consequence of
 
any
event of default; or
(iii)
a
 
lease,
 
hire
 
purchase
 
agreement
 
or
 
charter
 
creating
 
any
 
Financial
 
Indebtedness
 
of
 
a
Relevant
 
Person
 
is
 
terminated
 
by
 
the
 
lessor
 
or
 
owner
 
or
 
becomes
 
capable
 
of
 
being
terminated as a consequence of any termination event; or
(iv)
any overdraft,
 
loan, note issuance,
 
acceptance credit, letter
 
of credit, guarantee,
 
foreign
exchange or other facility, or any swap or
 
other derivative contract or transaction,
 
relating
to
 
any
 
Financial
 
Indebtedness
 
of
 
a
 
Relevant
 
Person
 
ceases
 
to
 
be
 
available
 
or
 
becomes
capable of being terminated as
 
a result of any event
 
of default, or cash cover
 
is required,
or becomes capable of being required, in respect of such a facility as a result of any event
of default; or
(v)
any Security
 
Interest
 
securing any
 
Financial Indebtedness
 
of a
 
Relevant Person
 
becomes
enforceable; or
(g)
any of the following occurs in relation to a Relevant Person:
(i)
a Relevant Person becomes, in
 
the opinion of
 
the Majority Lenders,
 
unable to pay its
 
debts
as they fall due; or
(ii)
any assets of a Relevant
 
Person are subject to
 
any form of execution,
 
attachment, arrest,
sequestration or
 
distress in
 
respect of
 
a sum
 
of,
 
or sums
 
exceeding, in
 
aggregate,
 
in the
case of all
 
Relevant Persons (taken as a whole)
 
$10,000,000 (or the
 
equivalent in any other
currency) at
 
any relevant
 
time
 
Provided that
 
in the case
 
of each
 
Borrower,
 
individually,
any
 
sum
 
of,
 
or
 
sums
 
exceeding,
 
in
 
aggregate
 
$500,000
 
(or
 
the
 
equivalent
 
in
 
any
 
other
currency);
(iii)
any administrative or other receiver is appointed over any asset of a Relevant Person;
 
or
(iv)
an administrator is appointed (whether
 
by the court or
 
otherwise) in respect
 
of a Relevant
Person; or
(v)
any formal declaration of
 
bankruptcy or any
 
formal statement to the
 
effect that a
 
Relevant
Person is
 
insolvent or
 
likely to
 
become insolvent
 
is made by
 
a Relevant
 
Person or
 
by the
directors
 
of a
 
Relevant
 
Person
 
or,
 
in any
 
proceedings, by
 
a lawyer
 
acting for
 
a Relevant
Person; or
 
(vi)
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is
made in relation
 
to a Relevant
 
Person or
 
a winding up resolution
 
is passed by a
 
Relevant
Person; or
 
(vii)
a resolution is passed, an administration notice is given or filed, an application or petition
to a court is made or presented
 
or any other step is
 
taken by (aa) a
 
Relevant Person, (bb)
the members
 
or directors
 
of a
 
Relevant Person,
 
(cc) a
 
holder of
 
Security Interests
 
which
together
 
relate
 
to
 
all
 
or
 
substantially
 
all
 
of
 
the
 
assets
 
of
 
a
 
Relevant
 
Person,
 
or
 
(dd)
 
a
government
 
minister
 
or
 
public or
 
regulatory
 
authority
 
of
 
a Pertinent
 
Jurisdiction for
 
or
with a view to the winding up of that or another Relevant Person or the appointment of a
provisional
 
liquidator or
 
administrator
 
in respect
 
of that
 
or another
 
Relevant
 
Person,
 
or
that or another
 
Relevant Person
 
ceasing or suspending business
 
operations or
 
payments
to
 
creditors,
 
save
 
that
 
this paragraph
 
does
 
not
 
apply to
 
a
 
fully
 
solvent
 
winding up
 
of
 
a
Relevant Person
 
other than a
 
Borrower or
 
the Corporate
 
Guarantor which
 
is, or is
 
to be,
effected
 
for the
 
purposes of
 
an amalgamation
 
or reconstruction
 
previously approved
 
by
the Majority Lenders and effected
 
not later than three months
 
after the commencement
of the winding up; or
(viii)
an administration
 
notice is given
 
or filed, an
 
application or petition
 
to a court
 
is made or
presented or any
 
other step is
 
taken by a
 
creditor of a
 
Relevant Person (other than
 
a holder
of
 
Security
 
Interests
 
which
 
together
 
relate
 
to
 
all
 
or
 
substantially
 
all
 
of
 
the
 
assets
 
of
 
a
Relevant
 
Person)
 
for
 
the
 
winding
 
up
 
of
 
a
 
Relevant
 
Person
 
or
 
the
 
appointment
 
of
 
a
provisional
 
liquidator
 
or
 
administrator
 
in
 
respect
 
of
 
a
 
Relevant
 
Person
 
in
 
any
 
Pertinent
Jurisdiction, unless
 
the proposed
 
winding up,
 
appointment of
 
a provisional
 
liquidator or
administration is being
 
contested in good
 
faith, on substantial grounds
 
and not
 
with a
 
view
to some
 
other insolvency
 
law procedure
 
being implemented
 
instead and
 
either (aa)
 
the
application
 
or
 
petition
 
is
 
dismissed
 
or
 
withdrawn
 
within
 
30
 
days
 
of
 
being
 
made
 
or
presented, or (bb) within 30
 
days of the administration
 
notice being given or filed, or the
other relevant steps being taken, other action is taken which will ensure that there
 
will be
no
 
administration
 
and
 
(in both
 
cases
 
(aa) or
 
(bb))
 
the
 
Relevant
 
Person
 
will
 
continue
 
to
carry on business in the ordinary way and without being
 
the subject of any actual, interim
or pending insolvency law procedure; or
(ix)
a
 
Relevant
 
Person
 
or
 
its
 
directors
 
take
 
any
 
steps
 
(whether
 
by
 
making
 
or
 
presenting
 
an
application or
 
petition to
 
a court,
 
or submitting
 
or presenting
 
a document
 
setting out
 
a
proposal or proposed terms, or otherwise) with
 
a view to obtaining, in relation
 
to that or
another Relevant
 
Person,
 
any
 
form of
 
moratorium,
 
suspension or
 
deferral
 
of payments,
reorganisation of debt
 
(or certain
 
debt) or
 
arrangement with all
 
or a
 
substantial proportion
(by
 
number
 
or
 
value)
 
of
 
creditors
 
or
 
of
 
any
 
class
 
of
 
them
 
or
 
any
 
such
 
moratorium,
suspension or
 
deferral
 
of payments,
 
reorganisation
 
or arrangement
 
is effected
 
by court
order,
 
by the filing of documents with a court, by means of a contract or in any other way
at all; or
(x)
any
 
meeting
 
of
 
the
 
members
 
or
 
directors,
 
or
 
of
 
any
 
committee
 
of
 
the
 
board
 
or
 
senior
management, of a Relevant Person is held or summoned for the purpose of considering a
resolution or
 
proposal to
 
authorise or
 
take
 
any action
 
of a
 
type described
 
in paragraphs
 
to
 
or a
 
step preparatory
 
to such
 
action, or
 
(with or
 
without such
 
a meeting)
 
the
members,
 
directors
 
or
 
such
 
a
 
committee
 
resolve
 
or
 
agree
 
that
 
such
 
an
 
action
 
or
 
step
should be taken or
 
should be taken if
 
certain conditions materialise or fail
 
to materialise;
or
(xi)
in
 
a
 
country
 
other
 
than
 
England,
 
any
 
event
 
occurs,
 
any
 
proceedings
 
are
 
opened
 
or
commenced or any step is taken which, in the
 
opinion of the Majority
 
Lenders is similar to
any of the foregoing; or
(h)
any Borrower
 
ceases or
 
suspends carrying
 
on its
 
business or
 
a part
 
of its
 
business which,
 
in the
opinion of the Majority Lenders, is material in the context of this Agreement; or
(i)
it becomes unlawful in any Pertinent Jurisdiction or impossible:
(i)
for any Borrower,
 
the Corporate Guarantor or any Security Party to discharge
 
any liability
under
 
a
 
Finance
 
Document
 
or
 
to
 
comply
 
with
 
any
 
other
 
obligation
 
which
 
the
 
Majority
Lenders consider material under a Finance Document;
(ii)
for the
 
Agent, the Security
 
Trustee,
 
the Lenders or
 
the Swap Bank
 
to exercise
 
or enforce
any right under, or to
 
enforce any Security Interest created by,
 
a Finance Document; or
(j)
any official consent necessary to enable any Borrower to own, operate or charter the Ship owned
by
 
it
 
or
 
to
 
enable
 
any
 
Borrower
 
or
 
any
 
Security Party
 
to
 
comply
 
with
 
any
 
provision
 
which
 
the
Majority Lenders consider
 
material of
 
a Finance Document
 
is not granted,
 
expires without
 
being
renewed,
 
is
 
revoked
 
or
 
becomes
 
liable to
 
revocation
 
or
 
any
 
condition
 
of
 
such a
 
consent
 
is
 
not
fulfilled; or
 
(k)
it
 
appears
 
to
 
the
 
Majority Lenders
 
that,
 
without
 
their
 
prior
 
consent,
 
a
 
change
 
has
 
occurred
 
or
probably has occurred after the date of this Agreement in the ownership of any of the shares in a
Borrower or the Approved Manager; or
(l)
any provision which the
 
Majority Lenders consider
 
material of a Finance
 
Document proves to have
been or becomes invalid
 
or unenforceable, or a
 
Security Interest created
 
by a Finance Document
proves
 
to
 
have
 
been or
 
becomes invalid
 
or unenforceable
 
or such
 
a Security
 
Interest
 
proves
 
to
have ranked
 
after,
 
or loses its priority to,
 
another Security Interest or
 
any other third party
 
claim
or interest; or
(m)
the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
(n)
without the prior consent
 
of the Lenders, the
 
shares of the Corporate Guarantor cease
 
to be listed
on the New York Stock Exchange; or
(o)
an Event of Default (as defined in section 14 of the Master Agreement) occurs; or
(p)
the Master
 
Agreement
 
is terminated,
 
cancelled, suspended,
 
rescinded or
 
revoked
 
or otherwise
ceases to remain in full force and effect for any reason except with the consent of the Swap Bank;
or
(q)
any other event occurs or any other circumstances arise or develop including, without limitation:
(i)
a change in the financial position, state of affairs or prospects of any Relevant Person; or
(ii)
any
 
accident
 
or
 
other
 
event
 
involving
 
any
 
Ship
 
or
 
another
 
vessel
 
owned,
 
chartered
 
or
operated by a Relevant Person, in the light of which the Majority Lenders consider that there is a significant risk that any Borrower
or Corporate Guarantor is,
 
or will later
 
become, unable
 
to discharge its
 
liabilities under
 
the Finance
Documents as they fall due.
19.2
Actions following an Event of Default
On, or at any time after, the occurrence of an Event
 
of Default:
(a)
the Agent may,
 
and if so instructed by the Majority Lenders, the Agent shall:
(i)
serve on
 
the Borrowers
 
a notice
 
stating
 
that all
 
or part
 
of the
 
Commitments and
 
of the
other obligations
 
of each
 
Lender to
 
the Borrowers
 
under this
 
Agreement
 
are cancelled;
and/or
(ii)
serve on the Borrowers a notice stating
 
that all or part of the Loan together with accrued
interest
 
and all
 
other amounts
 
accrued or
 
owing under
 
this Agreement
 
are immediately
due and payable or are due and payable on demand; and/or
(iii)
take any other action which, as a result of the Event of Default or any notice
 
served under
paragraph
 
or
, the Agent and/or
 
the Lenders are
 
entitled to take
 
under any Finance
Document or any applicable law; and/or
(b)
the Security
 
Trustee
 
may,
 
and if
 
so instructed
 
by the Agent,
 
acting with the
 
authorisation of
 
the
Majority
 
Lenders,
 
the
 
Security
 
Trustee
 
shall
 
take
 
any
 
action
 
which,
 
as
 
a
 
result
 
of
 
the
 
Event
 
of
Default or any
 
notice served under paragraph
 
or
, the Security Trustee,
 
the Agent and/or
the
 
Lenders
 
and/or
 
the
 
Swap
 
Bank
 
are
 
entitled
 
to
 
take
 
under
 
any
 
Finance
 
Document
 
or
 
any
applicable law.
19.3
Termination of Commitments
On
 
the
 
service
 
of
 
a
 
notice
 
under
 
Clause
 
(
Actions
 
following
 
an
 
Event
 
of
 
Default
),
 
the
Commitments and
 
all other
 
obligations
 
of each
 
Lender to
 
the Borrowers
 
under this
 
Agreement
shall be cancelled.
19.4
Acceleration of Loan
On the service of a notice
 
under Clause
 
(
Actions
 
following an Event of Default
), all or, as
the case may be, the
 
part of the Loan
 
specified in the notice
 
together with accrued interest and all
other amounts accrued or owing from the Borrowers
 
or any Security Party under this Agreement
and every other
 
Finance Document shall
 
become immediately due
 
and payable or, as the
 
case may
be, payable on demand.
19.5
Multiple notices; action without notice
The Agent
 
may serve
 
notices under
 
Clauses
 
and
Actions following
 
an Event of
 
Default
)
simultaneously
 
or
 
on
 
different
 
dates
 
and
 
it
 
and/or
 
the
 
Security
 
Trustee
 
may
 
take
 
any
 
action
referred to
 
in Clause
 
(
Actions following an Event
 
of Default
) if no such
 
notice is served or
simultaneously with or at any time after the service of both or either of such notices.
19.6
Notification of Creditor Parties and Security Parties
The Agent shall send to each Lender, the Swap Bank, the Security Trustee and each Security Party
a copy
 
or the
 
text of
 
any notice
 
which the
 
Agent serves
 
on the
 
Borrowers
 
under Clause
(
Actions following an Event of Default
); but the notice shall become effective when it is served on
the Borrowers, and no failure or delay by the Agent to send a copy or the text of the
 
notice to any
other person
 
shall invalidate
 
the notice
 
or provide
 
any Borrower
 
or any
 
Security Party
 
with any
form of claim or defence.
19.7
Creditor Party's rights unimpaired
Nothing in
 
this Clause
 
shall be
 
taken to impair
 
or restrict
 
the exercise of
 
any right given
 
to individual
Lenders or
 
the Swap
 
Bank under a
 
Finance Document or
 
the general
 
law; and,
 
in particular,
 
this
Clause is without prejudice to Clause
 
(
Interest of Lenders and Swap Bank several
).
 
19.8
Exclusion of Creditor Party liability
No Creditor Party,
 
and no receiver or
 
manager appointed by
 
the Security Trustee,
 
shall have any
liability to a Borrower or a Security Party:
(a)
for any
 
loss caused by
 
an exercise
 
of rights
 
under,
 
or enforcement
 
of a Security
 
Interest
 
created
by,
 
a Finance
 
Document or
 
by any
 
failure
 
or delay
 
to exercise
 
such a
 
right or
 
to enforce
 
such a
Security Interest; or
(b)
as mortgagee
 
in possession or
 
otherwise, for
 
any income
 
or principal
 
amount which might
 
have
been
 
produced
 
by
 
or
 
realised
 
from
 
any
 
asset
 
comprised
 
in
 
such
 
a
 
Security
 
Interest
 
or
 
for
 
any
reduction (however caused) in the value of such an asset,
except that this does not exempt a Creditor Party or a receiver or manager from liability
 
for losses
shown to have been directly
 
and mainly caused
 
by the dishonesty or
 
the wilful misconduct
 
of such
Creditor Party's own officers and employees
 
or (as the case may be) such receiver's
 
or manager's
own partners or employees and any other member of the Group.
19.9
Relevant Persons
In
 
this
 
Clause
 
(
Events
 
of
 
Default
),
 
a
 
"
Relevant
 
Person
"
 
means
 
a
 
Borrower,
 
the
 
Corporate
Guarantor or a Security Party,
 
and any company which is a subsidiary of the Corporate Guarantor
or
 
a
 
Security
 
Party
 
and
 
any
 
other
 
member
 
of
 
the
 
Group
 
but
 
excluding
 
any
 
company
 
which
 
is
dormant and the value of whose gross assets is $50,000 or less.
19.10
Interpretation
In
 
Clause
 
(
Events
 
of
 
Default
),
 
references
 
to
 
an
 
event
 
of
 
default
 
or
 
a
 
termination
 
event
include
 
any
 
event,
 
howsoever
 
described,
 
which
 
is
 
similar
 
to
 
an
 
event
 
of
 
default
 
in
 
a
 
facility
agreement
 
or
 
a
 
termination
 
event
 
in
 
a
 
finance
 
lease; and
 
in
 
Clause
 
(
Events
 
of
 
Default
),
"
petition
" includes an application.
19.11
Position of Swap Bank
Neither the Agent
 
nor the Security
 
Trustee
 
shall be obliged,
 
in connection with
 
any action
 
taken
or proposed to
 
be taken
 
under or pursuant to
 
the foregoing provisions
 
of this Clause
, to have
any regard to the
 
requirements of the Swap Bank except
 
to the extent that the Swap
 
Bank is also
a Lender.
20
FEES AND EXPENSES
 
20.1
Fees
The Borrowers shall pay to the Agent:
(a)
on the
 
date of
 
this Agreement,
 
a non-refundable
 
arrangement fee
 
computed at
 
the rate
 
of 0.70
per
 
cent.
 
of
 
the
 
Total
 
Commitments
 
for
 
distribution
 
among
 
the
 
Lenders
 
pro
 
rata
 
to
 
their
Commitments.
 
(b)
a commitment fee
 
at a rate
 
equal to
 
35 per
 
cent. of the
 
Margin per annum
 
on the
 
undrawn amount
of the Total
 
Commitments from time to time. The accrued commitment fee is payable on the last
day of
 
each successive
 
period of three
 
Months which ends
 
during the Availability
 
Period, on
 
the
last
 
day
 
of
 
the
 
Availability
 
Period
 
and,
 
if
 
cancelled,
 
on
 
the
 
cancelled
 
amount
 
of
 
the
 
relevant
Lender's Commitment at the time the cancellation is effective.
20.2
Costs of negotiation, preparation etc.
The Borrowers
 
shall pay
 
to the Agent
 
on its
 
demand the amount
 
of all expenses
 
incurred by
 
the
Agent
 
or
 
the
 
Security
 
Trustee
 
in
 
connection
 
with
 
the
 
negotiation,
 
preparation,
 
execution
 
or
registration
 
of
 
any
 
Finance
 
Document
 
or
 
any
 
related
 
document
 
or
 
with
 
any
 
transaction
contemplated by a Finance Document or a related document.
20.3
Costs of variations, amendments, enforcement etc.
The Borrowers shall
 
pay to the
 
Agent, on the
 
Agent's demand, for
 
the account of
 
the Creditor Party
concerned, the amount of all expenses incurred by a Creditor Party in connection with:
 
(a)
any
 
amendment
 
or
 
supplement
 
to
 
a
 
Finance
 
Document
 
(required
 
for
 
the
 
continuation
 
of
 
the
availability of the Loan or
 
as contemplated under Clause
 
(
Changes to reference rates
)), or any
proposal for such an amendment to be made;
 
(b)
any consent or waiver
 
by the Lenders, the Swap
 
Bank, the Majority Lenders or the Creditor
 
Party
concerned under or in connection with a Finance Document, or any request for such a consent or
waiver;
(c)
the valuation
 
of any
 
security provided
 
or offered
 
under Clause
 
(
Security Cover
) or
 
any other
matter relating to such security; or
(d)
where
 
the
 
Security
 
Trustee,
 
in
 
its
 
absolute
 
opinion,
 
considers
 
that
 
there
 
has
 
been
 
a
 
material
change to the
 
insurances in respect
 
of a Ship,
 
the review of
 
the insurances of
 
that Ship pursuant
to Clause
 
(
Review of insurance requirements
); and
(e)
any step
 
taken by
 
the Creditor
 
party concerned or
 
the Swap
 
Bank with a
 
view to
 
the protection,
exercise or enforcement of any right
 
or Security Interest created
 
by a Finance
 
Document or for
 
any
similar purpose.
There shall be
 
recoverable under paragraph
 
the full amount of
 
all legal expenses,
 
whether or
not such as would be allowed under rules of court or any taxation
 
or other procedure carried out
under such rules.
20.4
Extraordinary management time
The Borrowers
 
shall pay
 
to the
 
Agent on
 
its demand compensation
 
in respect
 
of the
 
reasonable
and documented
 
amount of
 
time which
 
the management
 
of either
 
Servicing Bank
 
has spent
 
in
connection with a matter covered
 
by Clause
 
(
Costs of variations, amendments, enforcement
etc.
) and which exceeds
 
the amount of time
 
which would ordinarily be spent
 
in the performance
of the relevant Servicing Bank's routine functions.
 
Any such compensation shall be based on such
reasonable daily or hourly rates as
 
the Agent may notify to the
 
Borrowers and is in addition to any
fee paid or payable to the relevant Servicing Bank.
20.5
Documentary taxes
The Borrowers
 
shall promptly pay
 
any tax
 
payable on or
 
by reference
 
to any
 
Finance Document,
and shall,
 
on the
 
Agent's demand,
 
fully indemnify
 
each Creditor
 
Party against any
 
claims, expenses,
liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.
20.6
Financial Services Authority fees
The
 
Borrowers
 
shall
 
pay
 
to
 
the
 
Agent,
 
on
 
the
 
Agent's
 
demand,
 
for
 
the
 
account
 
of
 
the
 
Lender
concerned the amounts
 
which the Agent
 
from time to
 
time notifies the Borrowers
 
that a Lender
has notified
 
the Agent
 
to be
 
necessary to
 
compensate it
 
for the cost
 
attributable to its
 
Contribution
resulting from the
 
imposition from time
 
to time under
 
or pursuant to
 
the Bank
 
of England
 
Act 1998
and/or by the
 
Bank of
 
England and/or
 
by the
 
Financial Services
 
Authority (or
 
other United
 
Kingdom
governmental
 
authorities
 
or
 
agencies)
 
of
 
a
 
requirement
 
to
 
pay
 
fees
 
to
 
the
 
Financial
 
Services
Authority calculated by reference to liabilities used to fund its Contribution.
20.7
Certification of amounts
A notice which is signed by two officers of
 
a Creditor Party,
 
which states that a specified amount,
or aggregate amount,
 
is due to that
 
Creditor Party under this
 
Clause
 
(
Fees and expenses
) and
which indicates
 
(without necessarily
 
specifying a
 
detailed breakdown)
 
the matters
 
in respect
 
of
which the amount, or aggregate amount, is due shall be prima facie evidence that the amount,
 
or
aggregate amount, is due.
21
INDEMNITIES
 
21.1
Indemnities regarding borrowing and repayment of Loan
The Borrowers
 
shall fully
 
indemnify the
 
Agent and
 
each Lender
 
on the
 
Agent's demand
 
and the
Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably
and with due diligence estimates that it will incur, as a result of or in connection with:
(a)
the Loan not being borrowed on the date
 
specified in the Drawdown Notice for any
 
reason other
than a default by the Lender claiming the indemnity;
 
(b)
the receipt or recovery of all or
 
any part of the Loan
 
or an overdue sum otherwise than
 
on the last
day of an Interest Period or other relevant period;
(c)
any failure (for
 
whatever reason) by the Borrowers
 
to make payment of
 
any amount due under a
Finance Document on
 
the due date or, if so
 
payable, on demand (after giving
 
credit for any default
interest paid by the Borrowers
 
on the amount
 
concerned under Clause
 
(
Default Interest
)) ; and
(d)
the occurrence
 
of an
 
Event of
 
Default or
 
a Potential
 
Event
 
of Default
 
and/or the
 
acceleration of
repayment of the Loan under Clause
 
(
Events of Default
),
and in respect of
 
any tax (other than tax
 
on its overall net income
 
or a FATCA Deduction) for which
a
 
Creditor
 
Party
 
is liable
 
in connection
 
with any
 
amount paid
 
or
 
payable
 
to
 
that
 
Creditor
 
Party
(whether for its own account or otherwise) under any Finance Document.
21.2
Miscellaneous indemnities
The Borrowers
 
shall fully indemnify each
 
Creditor Party
 
severally on
 
their respective demands in
respect
 
of
 
all
 
claims,
 
expenses,
 
liabilities
 
and
 
losses which
 
may
 
be made
 
or
 
brought
 
against
 
or
incurred by a Creditor Party,
 
in any country, as a result of or in connection with:
(a)
any action
 
taken,
 
or omitted
 
or neglected
 
to be
 
taken,
 
under or
 
in connection
 
with any
 
Finance
Document
 
by
 
the
 
Agent,
 
the
 
Security
 
Trustee
 
or
 
any
 
other
 
Creditor
 
Party
 
or
 
by
 
any
 
receiver
appointed under a Finance Document; or
(b)
any civil penalty or fine against, and
 
all reasonable costs and expenses (including reasonable fees
of counsel and
 
disbursements) incurred in
 
connection with or the
 
defence thereof
 
by,
 
the Agent
or
 
any
 
other
 
Creditor
 
Party
 
as
 
a
 
result
 
of
 
conduct
 
of
 
any
 
Borrower
 
or
 
any
 
of
 
their
 
partners,
directors, officers, employees, agents or advisors, that violates any Sanctions;
 
or
(c)
any other Pertinent Matter,
other
 
than
 
claims,
 
expenses,
 
liabilities
 
and
 
losses
 
which
 
are
 
shown
 
to
 
have
 
been
 
directly
 
and
mainly caused by the dishonesty or wilful misconduct of the officers or employees of the
 
Creditor
Party concerned.
Without prejudice to its
 
generality, this Clause
Miscellaneous indemnities
) covers any claims,
expenses, liabilities
 
and losses which
 
arise, or are
 
asserted, under or
 
in connection with
 
any law
relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law or any Sanctions.
21.3
Environmental Indemnity
Without
 
prejudice
 
to
 
its
 
generality,
 
Clause
 
(
Miscellaneous
 
indemnities
)
 
covers
 
any
Environmental
 
Claim
 
and
 
any
 
other
 
claims,
 
demands,
 
proceedings,
 
liabilities,
 
taxes,
 
losses
 
or
expenses of every kind
 
which arise, or are asserted,
 
under or in connection with any
 
law relating
to safety at sea, pollution or the protection of the environment, the ISM Code or the ISPS Code.
21.4
Currency indemnity
If
 
any
 
sum
 
due
 
from
 
any
 
Borrower
 
or
 
any
 
Security
 
Party
 
to
 
a
 
Creditor
 
Party
 
under
 
a
 
Finance
Document or
 
under any
 
order or
 
judgment relating
 
to a
 
Finance Document
 
has to
 
be converted
from
 
the
 
currency
 
in
 
which
 
the
 
Finance
 
Document
 
provided
 
for
 
the
 
sum
 
to
 
be
 
paid
 
(the
"Contractual Currency") into another currency (the "Payment Currency") for the purpose of:
(a)
making or
 
lodging any
 
claim or
 
proof against
 
any Borrower
 
or any
 
Security Party,
 
whether in
 
its
liquidation, any arrangement involving it or otherwise; or
(b)
obtaining an order or judgment from any court or other tribunal; or
(c)
enforcing any such order or judgment,
the
 
Borrowers
 
shall
 
indemnify
 
the
 
Creditor
 
Party
 
concerned
 
against
 
the
 
loss
 
arising
 
when
 
the
amount of the payment actually received by
 
that Creditor Party is converted
 
at the available rate
of exchange into the Contractual Currency.
In this Clause
 
(
Currency indemnity
), the "
available rate of exchange
" means the rate at
 
which
the Creditor Party concerned is able
 
at the opening of
 
business (London time)
 
on the Business Day
after
 
it
 
receives
 
the
 
sum
 
concerned
 
to
 
purchase
 
the
 
Contractual
 
Currency
 
with
 
the
 
Payment
Currency.
This Clause
 
(
Currency indemnity
) creates a separate liability
 
of the Borrowers which is
 
distinct
from
 
their other
 
liabilities under
 
the Finance
 
Documents and
 
which shall
 
not be
 
merged
 
in any
judgment or order relating to those other liabilities.
21.5
Application to Master Agreement
For the
 
avoidance of
 
doubt, Clause
 
(
Currency indemnity
) does
 
not apply
 
in respect
 
of sums
due from the Borrowers
 
to the Swap Bank under or
 
in connection with the Master Agreement
 
as
to which
 
sums the
 
provisions of
 
section 8 (
Contractual Currency
) of
 
the Master
 
Agreement shall
apply.
21.6
Mandatory Cost
Each Borrower
 
shall, on
 
demand by
 
the Agent,
 
pay to
 
the Agent
 
for the
 
account of
 
the relevant
Lender,
 
such
 
amount
 
which
 
any
 
Lender
 
certifies
 
in
 
a
 
notice
 
to
 
the
 
Agent
 
to
 
be
 
its
 
good
 
faith
determination of the amount necessary to compensate it for complying with:
(a)
in the case
 
of a Lender
 
lending from a
 
Facility Office in
 
a Participating Member
 
State, the minimum
reserve requirements (or other
 
requirements having the same
 
or similar purpose)
 
of the European
Central Bank (or any other
 
authority or agency which
 
replaces all or any of
 
its functions) in respect
of loans made from that Facility Office; and
(b)
in the case of
 
any Lender lending from
 
a Facility Office in
 
the United Kingdom, any
 
reserve asset,
special
 
deposit
 
or
 
liquidity
 
requirements
 
(or
 
other
 
requirements
 
having
 
the
 
same
 
or
 
similar
purpose) of the
 
Bank of England
 
(or any
 
other governmental
 
authority or agency)
 
and/or paying
any
 
fees
 
to
 
the Financial
 
Conduct Authority
 
and/or the
 
Prudential
 
Regulation
 
Authority (or
 
any
other governmental authority or agency which replaces all or any of their functions),
which, in each case, is referable to that Lender's participation in the Loan.
21.7
Certification of amounts
A notice which is signed by two officers of
 
a Creditor Party,
 
which states that a specified amount,
or aggregate
 
amount, is due to
 
that Creditor Party
 
under this Clause
 
(
Indemnities
) and which
indicates
 
(without necessarily
 
specifying a
 
detailed breakdown)
 
the matters
 
in respect
 
of which
the
 
amount,
 
or
 
aggregate
 
amount,
 
is
 
due
 
shall
 
be
 
prima
 
facie
 
evidence
 
that
 
the
 
amount,
 
or
aggregate amount, is due.
21.8
Sums deemed due to a Lender
For the purposes of this Clause
 
(
Indemnities
), a sum payable by the Borrowers
 
to the Agent or
the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
22
NO SET-OFF OR TAX
 
DEDUCTION
 
22.1
No deductions
All amounts due from the Borrowers under a Finance Document shall be paid:
(a)
without any form of set off, cross-claim or condition; and
(b)
free and clear of any tax deduction except a tax deduction which a Borrower is required by law to
make.
22.2
Grossing-up for taxes
If a Borrower is required by law to make a tax deduction from any payment:
(a)
that Borrower shall notify the Agent as soon as it becomes aware of the requirement;
(b)
that Borrower
 
shall pay
 
the tax
 
deducted to
 
the appropriate taxation
 
authority promptly,
 
and in
any event before any fine or penalty arises; and
(c)
the amount due in respect of the
 
payment shall be increased by the
 
amount necessary to ensure
that each Creditor Party receives and retains (free from any
 
liability relating to the tax deduction)
a net amount which, after the tax deduction, is equal to the full
 
amount which it would otherwise
have received.
22.3
Evidence of payment of taxes
Within one
 
month after
 
making any
 
tax
 
deduction, the
 
Borrower concerned
 
shall deliver
 
to the
Agent
 
documentary
 
evidence
 
satisfactory
 
to
 
the
 
Agent
 
that
 
the
 
tax
 
had
 
been
 
paid
 
to
 
the
appropriate taxation authority.
22.4
Exclusion of tax on overall net income
In
 
this
 
Clause
 
(
No
 
set-off
 
or
 
Tax
 
Deduction
)
 
"
tax
 
deduction
"
 
means
 
any
 
deduction
 
or
withholding for or on account of any present or future tax except
 
tax on a Creditor Party's overall
net income, other than a FATCA
 
Deduction.
22.5
Application to Master Agreement
For the
 
avoidance of doubt,
 
Clause
 
(
No set-off
 
or Tax
 
Deduction
) does not
 
apply in respect
 
of
sums
 
due
 
from
 
the
 
Borrowers
 
to
 
the
 
Swap
 
Bank
 
under
 
or
 
in
 
connection
 
with
 
the
 
Master
Agreement as to
 
which sums the provisions of
 
section 2(d) (
Deduction or Withholding for Tax
) of
the Master Agreement shall apply.
22.6
FATCA
 
Information
(a)
Subject to paragraph
 
below, each Party shall, within ten Business Days of a reasonable request
by another Party:
(i)
confirm to that other Party whether it is:
(A)
a FATCA
 
Exempt Party; or
(B)
not a FATCA
 
Exempt Party; and
(ii)
supply to
 
that other
 
Party such
 
forms, documentation
 
and other
 
information relating
 
to
its status
 
under FATCA
 
as that
 
other Party
 
reasonably requests
 
for the
 
purposes of
 
that
other Party's compliance with FATCA;
 
and
(iii)
supply to
 
that other
 
Party such
 
forms, documentation
 
and other
 
information relating
 
to
its status
 
as that
 
other Party
 
reasonably requests
 
for the
 
purposes of
 
that other
 
Party's
compliance with any other law, regulation or exchange
 
of information regime.
(b)
If a Party confirms to another Party pursuant to sub-paragraph
 
of paragraph
 
above that it is
a FATCA
 
Exempt
 
Party
 
and it
 
subsequently becomes
 
aware
 
that it
 
is not,
 
or has
 
ceased to
 
be a
FATCA
 
Exempt Party,
 
that Party shall notify that other Party reasonably promptly.
(c)
Paragraph
 
above shall not
 
oblige any
 
Creditor Party
 
to do
 
anything and sub-paragraph
 
of
paragraph
 
above shall
 
not oblige
 
any other
 
Party to
 
do anything
 
which would
 
or might
 
in its
reasonable opinion constitute a breach of:
(i)
any law or regulation;
(ii)
any fiduciary duty; or
(iii)
any duty of confidentiality.
(d)
If
 
a
 
Party
 
fails
 
to
 
confirm
 
whether
 
or
 
not
 
it
 
is
 
a
 
FATCA
 
Exempt
 
Party
 
or
 
to
 
supply
 
forms,
documentation
 
or
 
other
 
information
 
requested
 
in
 
accordance
 
with
 
sub-paragraphs
 
or
 
of
paragraph
 
above (including, for
 
the avoidance
 
of doubt,
 
where paragraph
 
above applies),
then such Party shall be treated for the purposes of the
 
Finance Documents (and payments under
them) as
 
if it
 
is not
 
a FATCA
 
Exempt Party
 
until such
 
time as
 
the Party
 
in question
 
provides the
requested confirmation, forms, documentation or other information.
(e)
If a Borrower is
 
a US Tax Obligor, or the Agent
 
reasonably believes that
 
its obligations under
 
FATCA
or any other applicable law
 
or regulation require it, each
 
Lender shall, within
 
ten Business Days of:
(i)
where a Borrower is a US Tax Obligor and the relevant Lender is a Lender as
 
of the date of
this Agreement, the date of this Agreement;
(ii)
where a Borrower is a US Tax
 
Obligor on a date where a transfer
 
is effected under Clause
 
(
Transfer
 
by a
 
Lender
) and
 
the relevant
 
Lender is
 
a Transferee
 
Lender,
 
the relevant
date on which such transfer is effected under Clause
 
(
Transfer by a Lender
); or
(iii)
where a Borrower is not a US Tax Obligor,
 
the date of a request from the Agent,
supply to the Agent:
(iv)
a withholding certificate on Form W-8, Form W-9 or any other relevant
 
form; or
(v)
any withholding statement or other
 
document, authorisation or waiver as the Agent may
require to certify or establish
 
the status of such Lender under
 
FATCA
 
or that other law or
regulation.
(f)
The
 
Agent
 
shall
 
provide
 
any
 
withholding
 
certificate,
 
withholding
 
statement,
 
document,
authorisation
 
or
 
waiver
 
it
 
receives
 
from
 
a
 
Lender
 
pursuant
 
to
 
paragraph
 
above
 
to
 
the
Borrowers.
(g)
If any withholding
 
certificate, withholding statement, document,
 
authorisation or
 
waiver provided
to the Agent by
 
a Lender pursuant to paragraph
 
above is or becomes materially
 
inaccurate or
incomplete, that
 
Lender shall
 
promptly update it
 
and provide
 
such updated
 
withholding certificate,
withholding statement,
 
document, authorisation or
 
waiver to
 
the Agent
 
unless it is
 
unlawful for
the Lender
 
to do
 
so (in
 
which case
 
the Lender
 
shall promptly
 
notify the
 
Agent).
 
The Agent
 
shall
provide
 
any
 
such
 
updated
 
withholding
 
certificate,
 
withholding
 
statement,
 
document,
authorisation or waiver to the Borrowers.
(h)
The
 
Agent
 
may
 
rely
 
on
 
any
 
withholding
 
certificate,
 
withholding
 
statement,
 
document,
authorisation or waiver
 
it receives from
 
a Lender pursuant to
 
paragraph
 
or
 
above without
further verification.
 
The Agent shall not be liable
 
for any action taken by it under or in connection
with paragraphs
,
 
or
 
above.
22.7
FATCA
 
Deduction
(a)
Each
 
Party
 
may
 
make
 
any FATCA
 
Deduction it
 
is required
 
to make
 
by FATCA,
 
and any
 
payment
required in connection with that FATCA
 
Deduction, and no Party shall be required to increase any
payment
 
in
 
respect
 
of
 
which
 
it
 
makes
 
such
 
a
 
FATCA
 
Deduction
 
or
 
otherwise
 
compensate
 
the
recipient of the payment for that FATCA
 
Deduction.
(b)
Each Party
 
shall promptly,
 
upon becoming
 
aware that
 
it must
 
make
 
a FATCA
 
Deduction (or
 
that
there is any change in the rate or the basis of such FATCA
 
Deduction), notify the Party to whom it
is making the
 
payment and, in
 
addition, shall notify each
 
Borrower and
 
the Agent and the
 
Agent
shall notify the other Creditor Parties.
23
ILLEGALITY AND SANCTIONS AFFECTING A LENDER
23.1
Illegality
This Clause
 
(
Illegality and Sanctions affecting a Lender
) applies if:
(a)
 
a Lender (the "
Notifying Lender
") notifies the Agent that it has become, or will with effect from a
specified date, become:
(i)
unlawful or prohibited
 
as a result
 
of the introduction of
 
a new law,
 
an amendment to an
existing law or a change in the manner in which an existing law is or will be
 
interpreted or
applied; or
 
(ii)
contrary to, or inconsistent with, any regulation or Sanctions,
for the Notifying Lender
 
to maintain or give
 
effect to
 
any of its
 
obligations under this Agreement
in the
 
manner contemplated
 
by this
 
Agreement or
 
to determine
 
or charge
 
interest
 
rates
 
based
upon Term SOFR; and
(b)
without
 
prejudice
 
to
 
any
 
of
 
the
 
express
 
obligations
 
of
 
the
 
Security
 
Parties
 
under
 
the
 
Finance
Documents, in the opinion of a Lender acting reasonably anything whatsoever is done or omitted
to be done
 
by a Security
 
Party which would
 
result in
 
that Lender
 
being in
 
breach of
 
or made
 
subject
to Sanctions, or at risk of being in breach of or made subject to Sanctions.
23.2
Notification of illegality
The Agent shall promptly
 
notify the Borrowers, the
 
Security Parties, the Security Trustee
 
and the
other
 
Lenders
 
of
 
the
 
notice
 
under
 
Clause
 
(
Illegality
)
 
which
 
the
 
Agent
 
receives
 
from
 
the
Notifying Lender.
23.3
Prepayment; termination of Commitment
On the Agent
 
notifying the Borrowers
 
under Clause
 
(
Notification of illegality
), the
 
Notifying
Lender's
 
Commitment
 
shall
 
terminate;
 
and
 
thereupon
 
or,
 
if
 
later,
 
on
 
the
 
date
 
specified
 
in
 
the
Notifying Lender's
 
notice under
 
Clause
 
(
Illegality
)
 
as
 
the date
 
on
 
which
 
the notified
 
event
would
 
become
 
effective
 
the
 
Borrowers
 
shall
 
prepay
 
the
 
Notifying
 
Lender's
 
Contribution
 
in
accordance with Clause
 
(
Repayment and prepayment
).
23.4
Mitigation
If
 
circumstances
 
arise
 
which
 
would
 
result
 
in
 
a
 
notification
 
under
 
Clause
 
(
Illegality
)
 
then,
without
 
in
 
any
 
way
 
limiting the
 
rights
 
of
 
the
 
Notifying Lender
 
under
 
Clause
 
(
Prepayment;
termination of Commitment
), the Notifying Lender shall
 
use reasonable endeavours to transfer its
obligations,
 
liabilities
 
and
 
rights
 
under
 
this
 
Agreement
 
and
 
the
 
Finance
 
Documents
 
to
 
another
office or financial institution not affected
 
by the circumstances but the Notifying Lender shall not
be under any obligation to take any such action if,
 
in its opinion, to do would or might:
(a)
have an adverse effect on its business, operations or financial condition; or
(b)
involve
 
it
 
in
 
any
 
activity
 
which
 
is
 
unlawful
 
or
 
prohibited
 
or
 
any
 
activity
 
that
 
is
 
contrary
 
to,
 
or
inconsistent with, any regulation; or
(c)
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
24
INCREASED COSTS
 
24.1
Increased costs
This Clause
 
(
Increased costs
) applies if a
 
Lender (the "
Notifying Lender
") notifies the
 
Agent that
the Notifying Lender considers that as a result of:
(a)
the introduction or alteration
 
after the date
 
of this Agreement of
 
a law or an
 
alteration after the
date of
 
this Agreement
 
in the manner
 
in which
 
a law
 
is interpreted
 
or applied
 
(disregarding any
effect which relates to the application to payments under this Agreement of a tax on the Lender's
overall net income); or
(b)
complying with
 
any regulation (including
 
any which
 
relates to capital
 
adequacy or
 
liquidity controls
or
 
which
 
affects
 
the
 
manner
 
in
 
which
 
the
 
Notifying
 
Lender
 
allocates
 
capital
 
resources
 
to
 
its
obligations
 
under
 
this
 
Agreement)
 
which
 
is
 
introduced,
 
or
 
altered,
 
or
 
the
 
interpretation
 
or
application of which is altered, after the date of this Agreement; or
(c)
complying with any regulation (including the "International Convergence of Capital Measurement
and
 
Capital
 
Standards,
 
a
 
Revised
 
Framework"
 
published
 
by
 
the
 
Basel
 
Committee
 
on
 
Banking
Supervision
 
in
 
June
 
2004,
 
in
 
the
 
form
 
existing
 
on
 
the
 
date
 
of
 
this
 
Agreement
 
and
 
any
 
other
regulation which
 
relates to
 
capital adequacy
 
or liquidity
 
controls or
 
which affects
 
the manner
 
in
which
 
the
 
Notifying Lender
 
allocates
 
capital
 
resources
 
to
 
its obligations
 
under this
 
Agreement)
which is introduced,
 
or altered, or
 
the interpretation
 
or application of
 
which is altered,
 
after the
date of this Agreement; or
(d)
the introduction, implementation, application, administration or compliance with Basel III or CRD
IV, or any law or regulation which implements or applies Basel III or
 
CRD IV (regardless of the date
on
 
which it
 
is enacted,
 
adopted
 
or
 
issued and
 
regardless
 
of whether
 
any
 
such implementation,
application or compliance is by a government, regulator,
 
the Creditor Party or any of its affiliates)
after the date of this Agreement,
the Notifying Lender (or a parent company of it) has incurred or will incur an "
increased
cost
".
24.2
Meaning of "increased costs"
In this Clause
 
(
Increased costs
), "
increased costs
" means, in relation to a Notifying Lender:
(a)
an additional or increased cost incurred
 
as a result of, or in connection with, the
 
Notifying
Lender having entered
 
into, or being a
 
party to, this Agreement
 
or a Transfer
 
Certificate,
of funding
 
or maintaining
 
its Commitment
 
or Contribution
 
or performing
 
its obligations
under this Agreement, or of having outstanding all
 
or any part of its Contribution or
 
other
unpaid sums;
 
(b)
a reduction in the amount of any
 
payment to the Notifying Lender under this Agreement
or in the effective
 
return which such a payment
 
represents to the Notifying Lender or on
its capital;
(c)
an
 
additional or
 
increased cost
 
of
 
funding all
 
or maintaining
 
all
 
or
 
any
 
of
 
the advances
comprised
 
in
 
a
 
class
 
of
 
advances
 
formed
 
by
 
or
 
including
 
the
 
Notifying
 
Lender's
Contribution or (as
 
the case may
 
require) the
 
proportion of that
 
cost attributable
 
to the
Contribution; or
(d)
a liability to
 
make a payment, or
 
a return foregone, which
 
is calculated by
 
reference to any
amounts received or receivable by the Notifying Lender under this Agreement,
but not
 
an item
 
attributable to
 
a change
 
in the
 
rate of tax
 
on the
 
overall net income
 
of the
 
Notifying
Lender (or a parent company of it)
 
or an item compensated for by any payment made pursuant
 
to
Clause
 
(
Mandatory
 
cost
)
 
or
 
an
 
item
 
covered
 
by
 
the
 
indemnity
 
for
 
tax
 
in
 
Clause
(
Indemnities
 
regarding
 
borrowing
 
and
 
repayment
 
of
 
Loan
)
 
or
 
by
 
Clause
 
(
No
 
set-off
 
or
 
Tax
Deduction
) or a FATCA
 
Deduction.
For the
 
purposes of
 
this Clause
 
(
Meaning of
 
"increased costs"
) the
 
Notifying Lender may
 
in
good faith allocate or spread costs and/or losses among its assets and liabilities
 
(or any class of its
assets and liabilities) on such basis as it considers appropriate.
24.3
Notification to Borrowers of claim for increased costs
The Agent
 
shall promptly
 
notify the
 
Borrowers
 
and the
 
Security Parties
 
of the
 
notice which
 
the
Agent received from the Notifying Lender under Clause
 
(
Increased costs
).
24.4
Payment of increased costs
The Borrowers
 
shall pay
 
to the
 
Agent, on
 
the Agent's
 
demand, for
 
the account
 
of the
 
Notifying
Lender the amounts which the Agent from
 
time to time notifies the Borrowers
 
that the Notifying
Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
24.5
Notice of prepayment
If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased
cost under
 
Clause
 
(
Payment of
 
increased costs
), the
 
Borrowers may
 
give the
 
Agent not
 
less
than 14 days' notice of its intention to prepay the
 
Notifying Lender's Contribution at
 
the end of an
Interest Period.
24.6
Prepayment; termination of Commitment
A notice under Clause
 
(
Notice of prepayment
) shall be irrevocable;
 
the Agent shall promptly
notify the Notifying Lender of the Borrowers' notice of intended prepayment; and:
(a)
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall
be cancelled; and
(b)
on the date specified in its notice of intended prepayment, the Borrowers shall prepay (subject to
any Break Costs, without premium
 
or penalty) the Notifying Lender's Contribution, together with
accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any).
24.7
Application of prepayment
Clause
 
(
Repayment and Prepayment
) shall apply in relation to the prepayment.
25
SET OFF
25.1
Application of credit balances
Each Creditor Party may without prior notice:
(a)
apply any balance (whether
 
or not then due)
 
which at any time stands
 
to the credit of any
 
account
in
 
the
 
name
 
of
 
a
 
Borrower
 
at
 
any
 
office
 
in
 
any
 
country
 
of
 
that
 
Creditor
 
Party
 
in
 
or
 
towards
satisfaction
 
of
 
any
 
sum
 
then
 
due
 
from
 
that
 
Borrower
 
to
 
that
 
Creditor
 
Party
 
under
 
any
 
of
 
the
Finance Documents; and
(b)
for that purpose:
(i)
break, or alter the maturity of, all or any part of a deposit of that Borrower;
(ii)
convert or translate all or any part of a deposit or other credit balance into Dollars; and
(iii)
enter into any other
 
transaction or make any
 
entry with regard to
 
the credit balance
 
which
the Creditor Party concerned considers appropriate.
 
25.2
Existing rights unaffected
No Creditor
 
Party shall
 
be obliged
 
to exercise
 
any of
 
its rights
 
under Clause
 
(
Application of
credit balances
); and those rights shall be without prejudice
 
and in addition to any right of set off,
combination of accounts, charge,
 
lien or other
 
right or remedy to
 
which a Creditor
 
Party is entitled
(whether under the general law or any document).
25.3
Sums deemed due to a Lender
For the purposes
 
of this Clause
 
(
Set-off
), a sum
 
payable by
 
the Borrowers
 
to the Agent
 
or the
Security Trustee
 
for distribution to,
 
or for the
 
account of,
 
a Lender shall be treated
 
as a sum due
to that
 
Lender; and
 
each Lender's
 
proportion of
 
a sum
 
so payable
 
for distribution
 
to,
 
or for
 
the
account of, the Lenders shall be treated as a sum due to such Lender.
25.4
No Security Interest
This Clause
 
(
Set-off
) gives the Creditor
 
Parties a contractual
 
right of set-off
 
only, and
 
does not
create any equitable charge or other Security Interest over any credit balance of any Borrower.
 
26
TRANSFERS AND CHANGES IN FACILITY OFFICES
26.1
Transfer by Borrowers
No Borrower may,
 
without the consent of
 
the Agent, given
 
on the instructions of
 
all the Lenders
transfer any of its rights, liabilities or obligations under any Finance Document.
26.2
Transfer by
 
a Lender
Subject to Clause
 
(
Effective Date
 
of Transfer
 
Certificate
), a Lender (the "
Transferor
 
Lender
")
may at any time cause:
 
(a)
its rights in respect of all or part of its Contribution; or
(b)
its obligations in respect of all or part of its Commitment; or
(c)
a combination of (a) and (b),
to be (in
 
the case of
 
its rights) transferred to, or
 
(in the case
 
of its obligations)
 
assumed by, another
bank
 
or
 
financial
 
institution
 
or
 
a
 
trust,
 
fund
 
or
 
other
 
entity
 
which
 
is
 
regularly
 
engaged
 
in
 
or
established for the
 
purpose of
 
making, purchasing
 
or investing in
 
loans, securities
 
or other
 
financial
assets (a "
Transferee
 
Lender
") by delivering
 
to the Agent
 
a completed certificate
 
in the form
 
set
out
 
in
 
with
 
any
 
modifications
 
approved
 
or
 
required
 
by
 
the
 
Agent
 
(a
 
"
Transfer
Certificate
") executed by the Transferor
 
Lender and the Transferee Lender.
 
However any
 
rights and
 
obligations of
 
the Transferor
 
Lender in
 
its capacity
 
as Agent
 
or Security
Trustee will have to
 
be dealt with separately in accordance with the Agency and Trust Deed.
A transfer pursuant to this Clause
 
(
Transfer by a Lender
) shall be effected:
(i)
without the consent of the Borrowers:
(A)
following the occurrence of an Event of Default which is continuing; and/or
(B)
if such transfer is to another Lender or an affiliate of a Lender;
(ii)
in
 
all
 
other
 
circumstances
 
with
 
the
 
consent
 
of
 
the
 
Borrowers
 
(such
 
consent
 
not
 
to
 
be
unreasonably withheld or delayed) and the Borrowers will be deemed to have given their
consent
 
five
 
Business
 
Days
 
following
 
the
 
request
 
of
 
the
 
Transferor
 
Lender,
 
unless
 
the
consent is expressly refused by the Borrowers within that time.
26.3
Transfer Certificate,
 
delivery and notification
As
 
soon
 
as
 
reasonably
 
practicable
 
after
 
a
 
Transfer
 
Certificate
 
is
 
delivered
 
to
 
the
 
Agent,
 
it
 
shall
(unless it has reason to believe that the Transfer
 
Certificate may be defective):
(a)
sign the
 
Transfer
 
Certificate on
 
behalf of
 
itself,
 
the Borrowers,
 
the Security
 
Parties, the
 
Security
Trustee, each of the other Lenders and the Swap Bank;
(b)
on behalf of the
 
Transferee Lender,
 
send to each
 
Borrower and each Security
 
Party letters or faxes
notifying them of the Transfer Certificate and attaching a copy of it; and
(c)
send to the Transferee
 
Lender copies of the letters or faxes sent under paragraph
 
above,
but
 
the
 
Agent
 
shall
 
only
 
be
 
obliged
 
to
 
execute
 
a
 
Transfer
 
Certificate
 
delivered
 
to
 
it
 
by
 
the
Transferor
 
Lender and the Transferee Lender once it is satisfied it has complied with all necessary
"know your customer" or other
 
similar checks under all
 
applicable laws and regulations in relation
to the transfer to that Transferee
 
Lender.
26.4
Effective Date of Transfer
 
Certificate
A Transfer Certificate becomes effective on the date, if any,
 
specified in the Transfer Certificate as
its effective
 
date,
 
Provided that
 
it is signed by the
 
Agent under Clause
 
(
Transfer Certificate,
delivery and notification
) on or before that date.
26.5
No transfer without Transfer
 
Certificate
Except as provided in Clause
 
(
Security over Lenders'
 
rights
), no assignment
 
or transfer of any
right or obligation of
 
a Lender under any Finance Document
 
is binding on, or effective
 
in relation
to,
 
any
 
Borrower,
 
any
 
Security
 
Party,
 
the
 
Agent
 
or
 
the
 
Security
 
Trustee
 
unless
 
it
 
is
 
effected,
evidenced or perfected by a Transfer
 
Certificate.
 
26.6
Lender re-organisation; waiver of Transfer
 
Certificate
However,
 
if
 
a
 
Lender
 
enters
 
into
 
any
 
merger,
 
de-merger
 
or
 
other
 
reorganisation
 
as
 
a
 
result
 
of
which all its rights
 
or obligations vest in another person
 
(the "
successor
"), the Agent may, if it sees
fit, by notice to the successor and the Borrowers
 
and the Security Trustee waive
 
the need for the
execution
 
and
 
delivery
 
of
 
a
 
Transfer
 
Certificate;
 
and,
 
upon
 
service
 
of
 
the
 
Agent's
 
notice,
 
the
successor shall
 
become a
 
Lender with
 
the same
 
Commitment and
 
Contribution as
 
were held
 
by
the predecessor Lender.
26.7
Effect of Transfer
 
Certificate
A Transfer
 
Certificate takes effect in accordance with English law as follows:
(a)
to
 
the
 
extent
 
specified
 
in
 
the
 
Transfer
 
Certificate,
 
all
 
rights
 
and
 
interests
 
(present,
 
future
 
or
contingent)
 
which
 
the Transferor
 
Lender has
 
under or
 
by
 
virtue
 
of
 
the
 
Finance Documents
 
are
assigned to
 
the Transferee
 
Lender absolutely,
 
free of any
 
defects in
 
the Transferor
 
Lender's title
and of any rights or equities which any Borrower
 
or any Security Party had against the
 
Transferor
Lender;
(b)
the
 
Transferor
 
Lender's
 
Commitment
 
is
 
discharged
 
to
 
the
 
extent
 
specified
 
in
 
the
 
Transfer
Certificate;
(c)
the Transferee
 
Lender becomes a Lender with the Contribution previously held by
 
the Transferor
Lender and a Commitment of an amount specified in the Transfer Certificate;
(d)
the Transferee
 
Lender becomes bound by all
 
the provisions of the
 
Finance Documents which are
applicable to
 
the Lenders
 
generally,
 
including those
 
about pro
 
rata
 
sharing and
 
the exclusion
 
of
liability on the part of,
 
and the indemnification of, the Agent
 
and the Security Trustee
 
and, to the
extent that the Transferee
 
Lender becomes bound by those provisions
 
(other than those relating
to exclusion of liability), the Transferor
 
Lender ceases to be bound by them;
(e)
any part
 
of the
 
Loan which
 
the Transferee Lender advances
 
after the
 
Transfer Certificate's effective
date ranks
 
in point
 
of priority and
 
security in the
 
same way
 
as it would
 
have ranked
 
had it been
advanced by
 
the transferor,
 
assuming that
 
any defects
 
in the
 
transferor's
 
title and
 
any rights
 
or
equities of any Borrower or any Security Party against the Transferor
 
Lender had not existed;
(f)
the Transferee
 
Lender becomes entitled to all the rights under the
 
Finance Documents which are
applicable
 
to
 
the
 
Lenders
 
generally,
 
including but
 
not
 
limited
 
to
 
those
 
relating
 
to
 
the
 
Majority
Lenders and those under
 
Clause
 
(
Market disruption
) and Clause
 
(
Fees and expenses
), and to
the
 
extent
 
that
 
the
 
Transferee
 
Lender
 
becomes
 
entitled
 
to
 
such
 
rights,
 
the
 
Transferor
 
Lender
ceases to be entitled to them; and
(g)
in
 
respect
 
of
 
any
 
breach
 
of
 
a
 
warranty,
 
undertaking, condition
 
or
 
other
 
provision
 
of
 
a
 
Finance
Document
 
or
 
any
 
misrepresentation
 
made
 
in
 
or
 
in
 
connection
 
with
 
a
 
Finance
 
Document,
 
the
Transferee
 
Lender shall be entitled to recover damages by reference to the loss incurred by it as
 
a
result of the breach or misrepresentation, irrespective of whether the original Lender would have
incurred a loss of that kind or amount.
The rights
 
and equities of
 
any Borrower
 
or any
 
Security Party
 
referred
 
to above
 
include, but are
not limited to, any right of set off and any other kind of cross claim.
26.8
Maintenance of register of Lenders
During the
 
Security Period
 
the Agent
 
shall maintain
 
a register
 
in which
 
it shall
 
record the
 
name,
Commitment, Contribution and
 
administrative details
 
(including the Facility
 
Office) from
 
time to
time of
 
each Lender
 
holding a
 
Transfer Certificate and the
 
effective date (in
 
accordance with
 
Clause
 
(
Effective Date
 
of Transfer
 
Certificate
)) of the Transfer
 
Certificate; and the Agent
 
shall make
the register available for inspection by any Lender, the Security Trustee
 
and the Borrowers during
normal banking hours, subject to receiving at least three Business Days' prior notice.
26.9
Reliance on register of Lenders
The entries
 
on that
 
register shall,
 
in the absence
 
of manifest
 
error,
 
be conclusive
 
in determining
the identities
 
of the
 
Lenders and
 
the amounts
 
of their
 
Commitments and
 
Contributions and
 
the
effective dates of Transfer
 
Certificates and may be relied upon by the Agent and the other parties
to the Finance Documents for all purposes relating to the Finance Documents.
26.10
Authorisation of Agent to sign Transfer Certificates
Each
 
Borrower,
 
the Security
 
Trustee,
 
each Lender
 
and the
 
Swap
 
Bank irrevocably
 
authorise the
Agent to sign Transfer
 
Certificates on its behalf.
26.11
Registration fee
In respect
 
of any
 
Transfer
 
Certificate, the
 
Agent shall
 
be entitled
 
to recover
 
a registration
 
fee of
$5,000 from the Transferor
 
Lender or (at the Agent's option) the Transferee Lender.
26.12
Sub-participation; subrogation assignment
A Lender may
 
sub participate and/or
 
take out credit insurance
 
on all or
 
any part of
 
its rights and/or
obligations
 
under or
 
in connection
 
with the
 
Finance Documents
 
without the
 
consent of,
 
or any
notice to, any
 
Borrower, any Security Party, the Agent or
 
the Security
 
Trustee or any other
 
Creditor
Party; and the Lenders may
 
assign, in any manner and terms agreed by the Majority Lenders,
 
the
Agent
 
and
 
the
 
Security
 
Trustee,
 
all
 
or
 
any
 
part
 
of
 
those
 
rights
 
to
 
an
 
insurer
 
or
 
surety
 
who
 
has
become subrogated to them.
26.13
Disclosure of information
A Lender
 
may disclose to
 
a potential Transferee Lender,
 
sub participant,
 
insurance and
 
reinsurance
broker,
 
insurer
 
or
 
reinsurer
 
any
 
information
 
which
 
the
 
Lender
 
has
 
received
 
in
 
relation
 
to
 
any
Borrower,
 
any Security Party
 
or their affairs
 
under or in
 
connection with any
 
Finance Document,
unless the information is clearly of a confidential nature.
26.14
Change of Facility Office
A Lender may change its Facility Office by giving notice to the Agent and the change shall become
effective on the later of:
(a)
the date on which the Agent receives the notice; and
(b)
the date, if any, specified in the notice as the date on which the change will come into effect.
26.15
Notification
On receiving
 
such a
 
notice, the
 
Agent
 
shall notify
 
the Borrowers
 
and the
 
Security Trustee;
 
and,
until the Agent receives such
 
a notice, it shall
 
be entitled to assume
 
that a Lender
 
is acting through
the Facility Office of which the Agent last had notice.
26.16
Security over Lenders' rights
In addition to the other rights provided to Lenders under this Clause
 
(
Transfers and changes in
Facility Offices
), each Lender
 
may without consulting
 
with or obtaining
 
consent from any Borrower
or any Security Party,
 
at any time charge, assign or otherwise create a Security Interest
 
in or over
(whether by way of collateral or otherwise) all or any of its rights under any Finance Document to
secure obligations of that Lender including, without limitation:
(a)
any
 
charge,
 
assignment
 
or
 
other
 
Security Interest
 
to
 
secure
 
obligations
 
to
 
a
 
federal
 
reserve
 
or
central bank; and
 
(b)
in the
 
case of
 
any Lender
 
which is
 
a fund,
 
any charge, assignment
 
or other
 
Security Interest granted
to any holders (or trustee or representatives
 
of holders) of obligations owed, or securities issued,
by that Lender as security for those obligations or securities, except that no such charge, assignment or Security Interest shall:
(i)
release a
 
Lender from
 
any of
 
its obligations
 
under the
 
Finance Documents
 
or substitute
the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a
party to any of the Finance Documents; or
 
(ii)
require any
 
payments to
 
be made by
 
any Borrower
 
or any
 
Security Party or
 
grant to
 
any
person
 
any
 
more
 
extensive
 
rights
 
than
 
those
 
required
 
to
 
be
 
made
 
or
 
granted
 
to
 
the
relevant Lender under the Finance Documents.
27
VARIATIONS
 
AND WAIVERS
 
27.1
Variations, waivers etc.
 
by Majority Lenders
Subject to
 
Clause
 
(
Variations, waivers
 
etc. requiring
 
agreement of
 
all Lenders
), a
 
document
shall be
 
effective
 
to
 
vary,
 
waive,
 
suspend or
 
limit any
 
provision
 
of
 
a Finance
 
Document, or
 
any
Creditor Party's rights or remedies
 
under such a
 
provision or the general law, only if
 
the document
is signed, or specifically agreed
 
to by fax, by the Borrowers, by the Agent
 
on behalf of the
 
Majority
Lenders, by the Agent and the Security
 
Trustee in their own rights, and, if the document relates to
a Finance Document to which a Security Party is party, by that Security Party.
27.2
Variations, waivers etc. requiring agreement of all Lenders
However,
 
as
 
regards
 
the
 
following,
 
Clause
 
(
Variations,
 
waivers
 
etc.
 
by
 
Majority
 
Lenders
)
applies
 
as if
 
the words
 
"by
 
the Agent
 
on
 
behalf of
 
the Majority
 
Lenders" were
 
replaced
 
by the
words "by or on behalf of every Lender and the Swap Bank":
(a)
a reduction in the Margin;
(b)
a
 
postponement
 
to
 
the
 
date
 
for,
 
or
 
a
 
reduction
 
in
 
the
 
amount
 
of,
 
any
 
payment
 
of
 
principal,
interest, fees or other sum payable under this Agreement;
(c)
an increase in any Lender's Commitment;
(d)
a change to the definition of "
Majority Lenders
";
(e)
a change to Clause
 
(
Position of Lenders, the Swap Bank and Majority Lenders
), or this Clause
(
Variations and waivers
);
(f)
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination
arrangement set out in a Finance Document; and
(g)
any
 
other
 
change
 
or
 
matter
 
as
 
regards
 
which
 
this
 
Agreement
 
or
 
another
 
Finance
 
Document
expressly provides that each Lender's consent is required.
27.3
Exclusion of other or implied variations
Except for
 
a document which
 
satisfies the requirements
 
of Clauses
 
(
Variations, waivers
 
etc.
requiring
 
agreement
 
of
 
all
 
Lenders
),
 
(
Exclusion
 
of
 
other
 
or
 
implied
 
variations
)
 
and
(
Changes
 
to reference rates
), no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on
behalf of any of them)
 
shall result in the Creditor Parties
 
or any of them (or
 
any person acting on
behalf
 
of
 
any
 
of
 
them)
 
being
 
taken
 
to
 
have
 
varied,
 
waived,
 
suspended
 
or
 
limited,
 
or
 
being
precluded (permanently or temporarily) from enforcing, relying on or exercising:
(a)
a provision of this Agreement or another Finance Document; or
(b)
an Event of Default; or
 
(c)
a
 
breach
 
by
 
a
 
Borrower
 
or
 
a
 
Security
 
Party
 
of
 
an
 
obligation
 
under
 
a
 
Finance
 
Document
 
or
 
the
general law; or
(d)
any right or remedy conferred by any Finance Document or by the general law,
and there
 
shall not
 
be implied
 
into
 
any
 
Finance Document
 
any
 
term or
 
condition requiring
 
any
such
 
provision
 
to
 
be
 
enforced,
 
or
 
such
 
right
 
or
 
remedy
 
to
 
be
 
exercised,
 
within
 
a
 
certain
 
or
reasonable time.
27.4
Changes to reference rates
(a)
If
 
a
 
Published
 
Rate
 
Replacement
 
Event
 
has
 
occurred
 
in
 
relation
 
to
 
any
 
Published
 
Rate,
 
any
amendment or waiver which relates to:
(i)
providing for the use
 
of a Replacement
 
Reference Rate in place
 
of that Published
 
Rate; and
(ii)
(A)
aligning any
 
provision of
 
any Finance
 
Document to
 
the use
 
of that
 
Replacement
Reference Rate;
(B)
enabling
 
that
 
Replacement
 
Reference
 
Rate
 
to
 
be
 
used
 
for
 
the
 
calculation
 
of
interest
 
under
 
this
 
Agreement
 
(including, without
 
limitation,
 
any
 
consequential
changes required
 
to enable that
 
Replacement Reference
 
Rate to
 
be used for
 
the
purposes of this Agreement);
(C)
implementing
 
market
 
conventions
 
applicable
 
to
 
that
 
Replacement
 
Reference
Rate;
(D)
providing
 
for
 
appropriate
 
fallback
 
(and
 
market
 
disruption)
 
provisions
 
for
 
that
Replacement Reference Rate; or
(E)
adjusting the pricing to reduce or eliminate, to the extent
 
reasonably practicable,
any
 
transfer
 
of
 
economic
 
value
 
from
 
one
 
Party
 
to
 
another
 
as
 
a
 
result
 
of
 
the
application of that Replacement
 
Reference Rate (and if any
 
adjustment or method
for
 
calculating
 
any
 
adjustment
 
has
 
been
 
formally
 
designated,
 
nominated
 
or
recommended
 
by
 
the
 
Relevant
 
Nominating
 
Body,
 
the
 
adjustment
 
shall
 
be
determined on the basis of that designation, nomination or recommendation),
may be
 
made with the
 
consent of the
 
Agent (acting on
 
the instructions of
 
the Majority Lenders)
and the Borrowers.
(b)
If any Lender fails to respond to a request for an amendment
 
or waiver described in paragraph
above
,
or for
 
any other
 
vote
 
of Lenders
 
in relation
 
to,
 
paragraph
 
above within
 
five
 
Business
Days
 
(or such
 
longer time
 
period in
 
relation to
 
any request
 
which the
 
Borrowers and
 
the Agent
may agree) of that request being made:
(i)
its Commitment or its participation in the Loan (as the case may be) shall not be included
for
 
the
 
purpose
 
of
 
calculating
 
the
 
Total
 
Commitments
 
or
 
the
 
amount
 
of
 
the
 
Loan
 
(as
applicable) when ascertaining whether any relevant percentage of Total
 
Commitments or
the aggregate
 
of participations in
 
the Loan (as
 
applicable) has been
 
obtained to approve
that request; and
(ii)
its
 
status
 
as
 
a Lender
 
shall be
 
disregarded
 
for
 
the purpose
 
of
 
ascertaining
 
whether the
agreement of any specified group of Lenders has been obtained to approve that request.
(c)
In this Clause
 
(
Changes to reference rates
):
"
Published Rate
" means:
(a)
SOFR; or
(b)
Term SOFR for
 
any Quoted Tenor.
"
Published Rate Replacement Event
" means, in relation to a Published Rate:
 
(a)
the methodology, formula
 
or other means of determining that Published Rate has, in the
opinion of the Majority Lenders and the Borrowers, materially changed;
(b)
(i)
(A)
the
 
administrator
 
of
 
that
 
Published
 
Rate
 
or
 
its
 
supervisor
 
publicly
announces that such administrator is insolvent; or
(B)
information
 
is
 
published
 
in
 
any
 
order,
 
decree,
 
notice,
 
petition
 
or
 
filing,
however described, of
 
or filed with
 
a court, tribunal,
 
exchange, regulatory
authority
 
or
 
similar
 
administrative,
 
regulatory
 
or
 
judicial
 
body
 
which
reasonably
 
confirms
 
that
 
the
 
administrator
 
of
 
that
 
Published
 
Rate
 
is
insolvent,
provided
 
that, in
 
each case,
 
at that
 
time, there
 
is no
 
successor administrator
 
to
continue to provide that Published Rate;
(ii)
the administrator of that Published Rate publicly announces that it has ceased or
will cease to provide that Published Rate permanently or indefinitely
 
and, at that
time, there
 
is no
 
successor administrator
 
to continue
 
to
 
provide
 
that Published
Rate;
(iii)
the supervisor
 
of the administrator
 
of that
 
Published Rate publicly
 
announces that
such Published Rate has been
 
or will be permanently or
 
indefinitely discontinued;
or
 
(iv)
the
 
administrator
 
of
 
that
 
Published
 
Rate
 
or
 
its
 
supervisor
 
announces
 
that
 
that
Published Rate may no longer be used; or
(c)
the administrator of that Published Rate (or the administrator of an interest rate which is
a constituent element of that Published
 
Rate) determines that that Published Rate should
be calculated in accordance with its reduced submissions
 
or other contingency or fallback
policies
 
or
 
arrangements
 
and
 
the
 
circumstance(s)
 
or
 
event(s)
 
leading
 
to
 
such
determination
 
are
 
not
 
(in
 
the
 
opinion
 
of
 
the
 
Majority
 
Lenders
 
and
 
the
 
Borrowers)
temporary; or
(d)
in the opinion
 
of the
 
Majority Lenders and
 
the Borrowers, that
 
Published Rate is
 
otherwise
no longer appropriate for the purposes of calculating interest under this Agreement.
"
Quoted Tenor
" means,
 
in relation
 
to Term
 
SOFR, any
 
period for
 
which that
 
rate
 
is customarily
displayed on the relevant page or screen of an information service.
"
Replacement Reference Rate
" means a reference rate which is:
(a)
formally designated, nominated
 
or recommended
 
as the
 
replacement for a
 
Published Rate
by:
(i)
the administrator
 
of that Published
 
Rate (provided
 
that the market
 
or economic
reality that
 
such reference
 
rate
 
measures is
 
the same
 
as that
 
measured by
 
that
Published Rate); or
(ii)
any Relevant Nominating Body,
and if
 
replacements have,
 
at the
 
relevant time,
 
been formally
 
designated, nominated
 
or
recommended
 
under
 
both
 
paragraphs,
 
the
 
"
Replacement
 
Reference
 
Rate
"
 
will
 
be
 
the
replacement under paragraph (ii) above;
(b)
in
 
the
 
opinion
 
of
 
the
 
Majority
 
Lenders
 
and
 
the
 
Borrowers,
 
generally
 
accepted
 
in
 
the
international
 
or
 
any
 
relevant
 
domestic
 
syndicated
 
loan
 
markets
 
as
 
the
 
appropriate
successor or alternative to a Published Rate; or
(c)
in the
 
opinion of
 
the Majority
 
Lenders
 
and the
 
Borrowers,
 
an appropriate
 
successor or
alternative to a Published Rate.
28
NOTICES
 
28.1
General
Unless
 
otherwise
 
specifically
 
provided,
 
any
 
notice
 
under
 
or
 
in
 
connection
 
with
 
any
 
Finance
Document
 
shall
 
be
 
given
 
by
 
letter
 
or
 
fax
 
and
 
references
 
in
 
the
 
Finance
 
Documents
 
to
 
written
notices, notices in writing and
 
notices signed by particular
 
persons shall be construed accordingly.
 
28.2
Addresses for communications
A notice by letter or fax shall be sent:
(a)
to the Borrowers:
 
c/o Approved Manager
16 Pendelis Street
175 64 Palaio Faliro
 
Athens
 
Greece
E-mail: corpgov@dianashippingservices.com
and
finance@dianashippingservices.com
(b)
to a Lender:
 
at the address below its name in
 
or (as the case
may require) in the
relevant Transfer
 
Certificate.
(c)
to the Swap Bank:
 
c/o
 
Nordea Danmark, Filial af Nordea Bank Abp, Finland
7288 Derivatives Services
PO box 850 DK-0900 Copenhagen K, Denmark
Telephone number: +45 55 47 51 71
E-mail: sls.norway@nordea.com
 
(d)
to the Lead Arranger,
 
Agent
 
or the Security Trustee:
 
Essendropsgate 7
0368 Oslo
Norway
Loan administration matters:
Fax No: +47 24013444
Attn: Structured Loan & Collateral Services NO
or to such other address as the relevant party may notify the Agent or,
 
if the relevant party is the
Agent or the
 
Security Trustee, the Borrowers, the
 
Lenders, the Swap Bank
 
and the Security
 
Parties.
28.3
Effective date of notices
Subject to Clauses
 
(
Service outside business hours
) and
 
(
Illegible notices
):
(a)
a notice
 
which is
 
delivered personally
 
or posted
 
shall be
 
deemed to
 
be served,
 
and shall
 
take effect,
at the time when it is delivered; and
(b)
a notice which is sent
 
by fax shall be
 
deemed to be served, and shall take
 
effect, 2 hours
 
after its
transmission is completed.
 
28.4
Service outside business hours
However,
 
if under Clause
 
(
Effective date of notices
) a notice would be deemed to be served:
(a)
on a day which is not a business day in the place of receipt; or
(b)
on such a business day, but after five p.m. local time,
the notice shall (subject to Clause
 
(
Illegible notices
)) be deemed to be served,
 
and shall take
effect, at 9 a.m. on the next day which is such a business day.
28.5
Illegible notices
Clauses
Effective date of notices
) and
Service outside business
 
hours
) do not
 
apply if the
recipient of a notice notifies the sender within one hour after the time at which the notice would
otherwise be deemed to be served
 
that the notice has been received in
 
a form which is illegible in
a material respect.
28.6
Valid notices
A notice
 
under or
 
in connection
 
with a
 
Finance Document
 
shall not
 
be invalid
 
by reason
 
that its
contents or
 
the manner of serving
 
it do not comply
 
with the requirements
 
of this Agreement or,
where appropriate, any other Finance Document under which it is served if:
(a)
the failure
 
to
 
serve it
 
in accordance
 
with the
 
requirements
 
of this
 
Agreement
 
or
 
other Finance
Document, as the case
 
may be, has not caused
 
any party to suffer any significant loss
 
or prejudice;
or
(b)
in the case
 
of incorrect
 
and/or incomplete contents,
 
it should have
 
been reasonably clear
 
to the
party on which the notice was served what the correct or missing particulars should have been.
28.7
Electronic communication
Any
 
communication
 
to
 
be
 
made
 
between
 
the
 
Agent
 
and
 
a
 
Lender
 
or
 
Swap
 
Bank
 
under
 
or
 
in
connection
 
with
 
the
 
Finance
 
Documents
 
may
 
be
 
made
 
by
 
electronic
 
mail
 
or
 
other
 
electronic
means, if the Agent and the relevant Creditor Party:
(a)
agree
 
that,
 
unless
 
and
 
until
 
notified
 
to
 
the
 
contrary,
 
this
 
is
 
to
 
be
 
an
 
accepted
 
form
 
of
communication;
(b)
notify each other in writing of their electronic mail address and/or any other information
required to enable the sending and receipt of information by that means; and
(c)
notify
 
each
 
other
 
of
 
any
 
change
 
to
 
their
 
respective
 
addresses
 
or
 
any
 
other
 
such
information supplied to them.
Any electronic
 
communication made
 
between the
 
Agent and
 
a Lender
 
or the
 
Swap Bank
 
will be
effective
 
only
 
when
 
actually
 
received
 
in
 
readable
 
form
 
and,
 
in
 
the
 
case
 
of
 
any
 
electronic
communication made by a Creditor Party to
 
the Agent, only if it is addressed in
 
such a manner as
the Agent shall specify for this purpose.
28.8
English language
Any notice under or in connection with a Finance Document shall be in English.
28.9
Meaning of "notice"
In
 
this
 
Clause
 
(
Notices
),
 
"
notice
"
 
includes
 
any
 
demand,
 
consent,
 
authorisation,
 
approval,
instruction, waiver or other communication.
 
29
JOINT AND SEVERAL LIABILITY
 
29.1
General
All liabilities and
 
obligations of the
 
Borrowers under
 
this Agreement shall,
 
whether expressed to
be so
 
or not,
 
be several
 
and, if
 
and to
 
the extent
 
consistent with
 
Clause
 
(
No impairment
 
of
Borrower's obligations
), joint.
29.2
No impairment of Borrower's obligations
The liabilities and obligations of a Borrower shall not be impaired by:
(a)
this
 
Agreement
 
being
 
or
 
later
 
becoming
 
void,
 
unenforceable
 
or
 
illegal
 
as
 
regards
 
any
 
other
Borrower;
(b)
any Lender,
 
the Swap Bank or
 
the Security Trustee
 
entering into any
 
rescheduling, refinancing or
other arrangement of any kind with any other Borrower;
(c)
any Lender,
 
the Swap
 
Bank or the
 
Security Trustee
 
releasing any
 
other Borrower
 
or any
 
Security
Interest created by a Finance Document; or
(d)
any combination of the foregoing.
29.3
Principal debtors
Each
 
Borrower
 
declares
 
that
 
it
 
is
 
and
 
will,
 
throughout
 
the
 
Security
 
Period,
 
remain
 
a
 
principal
debtor for all amounts owing under this Agreement and
 
the Finance Documents and no Borrower
shall in any
 
circumstances be
 
construed to be
 
a surety
 
for the obligations
 
of any other
 
Borrower
under this Agreement.
29.4
Subordination
Subject to Clause
 
(
Borrower's required action
), during the Security Period, no Borrower shall:
(a)
claim
 
any
 
amount
 
which
 
may
 
be
 
due
 
to
 
it
 
from
 
any
 
other
 
Borrower
 
whether
 
in
 
respect
 
of
 
a
payment made, or matter arising out of, this Agreement or any Finance Document, or any matter
unconnected with this Agreement or any Finance Document; or
(b)
take or enforce any form of security from any other Borrower for such an amount, or in any other
way seek to have recourse in respect of such an amount against any
 
asset of any other Borrower;
or
(c)
set off such an amount against any sum due from it to any other Borrower; or
(d)
prove
 
or
 
claim
 
for
 
such
 
an
 
amount
 
in
 
any
 
liquidation,
 
administration,
 
arrangement
 
or
 
similar
procedure involving any other Borrower or other Security Party; or
(e)
exercise or assert any combination of the foregoing.
29.5
Borrower's required action
If during
 
the Security
 
Period,
 
the Agent,
 
by
 
notice to
 
a Borrower,
 
requires
 
it to
 
take
 
any
 
action
referred
 
to
 
in
 
paragraphs
 
to
 
of
 
Clause
 
(
Subordination
),
 
in
 
relation
 
to
 
any
 
other
Borrower,
 
that Borrower
 
shall take
 
that action
 
as soon as
 
practicable after
 
receiving the Agent's
notice.
30
SUPPLEMENTAL
30.1
Rights cumulative, non-exclusive
The rights and remedies which the Finance Documents give to each Creditor Party are:
(a)
cumulative;
(b)
may be exercised as often as appears expedient; and
(c)
shall not,
 
unless a
 
Finance Document
 
explicitly and
 
specifically states
 
so, be
 
taken
 
to exclude
 
or
limit any right or remedy conferred by any law.
30.2
Severability of provisions
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal,
that shall
 
not affect
 
the validity,
 
enforceability or
 
legality of the
 
other provisions of
 
that Finance
Document or of the provisions of any other Finance Document.
30.3
Counterparts
A Finance Document may be executed in any number of counterparts.
30.4
Third Party rights
A person who is not a
 
Party has no right under the
 
Contracts (Rights of Third Parties)
 
Act 1999 to
enforce or to enjoy the benefit of any term of this Agreement.
31
BAIL-IN
Notwithstanding any other term of any Finance Document or any other agreement,
 
arrangement
or
 
understanding
 
between
 
the
 
parties
 
to
 
a
 
Finance
 
Document,
 
each
 
Party
 
acknowledges
 
and
accepts
 
that
 
any
 
liability
 
of
 
any
 
party
 
to
 
a
 
Finance
 
Document
 
under
 
or
 
in
 
connection
 
with
 
the
Finance
 
Documents
 
may
 
be
 
subject
 
to
 
Bail-In
 
Action
 
by
 
the
 
relevant
 
Resolution
 
Authority
 
and
acknowledges and accepts to be bound by the effect of:
(a)
any Bail-In Action in relation to any such liability, including (without limitation):
(i)
a
 
reduction,
 
in
 
full
 
or
 
in
 
part,
 
in
 
the
 
principal
 
amount,
 
or
 
outstanding
 
amount
 
due
(including any accrued but unpaid interest) in respect of any such liability;
(ii)
a
 
conversion
 
of
 
all,
 
or
 
part
 
of,
 
any
 
such
 
liability
 
into
 
shares
 
or
 
other
 
instruments
 
of
ownership that may be issued to, or conferred on, it; and
(iii)
a cancellation of any such liability; and
(b)
a variation of any term
 
of any Finance Document
 
to the extent necessary to
 
give effect to any Bail-
In Action in relation to any such liability.
32
LAW AND JURISDICTION
 
32.1
English law
This Agreement and any non-contractual obligations arising
 
out of or in
 
connection with it shall
 
be
governed by, and construed in accordance with, English law.
32.2
Exclusive English jurisdiction
Subject to Clause
 
(
Choice of forum for the exclusive
 
benefit of Creditor Parties
), the courts of
England shall have exclusive jurisdiction to settle any Dispute.
32.3
Choice of forum for the exclusive benefit of Creditor Parties
Clause
 
(
Exclusive English jurisdiction
) is for the exclusive benefit of the Creditor
 
Parties, each
of which reserves the rights:
(a)
to
 
commence
 
proceedings
 
in
 
relation
 
to
 
any
 
Dispute
 
in
 
the
 
courts
 
of
 
any
 
country
 
other
 
than
England and which have or claim jurisdiction to that Dispute; and
(b)
to commence
 
such proceedings in
 
the courts of
 
any such country
 
or countries concurrently
 
with
or in addition to proceedings in England or without commencing proceedings in England.
No Borrower shall commence
 
any proceedings in any
 
country other than England in
 
relation to a
Dispute.
32.4
Process agent
Each Borrower irrevocably appoints Hill Dickinson Services (London) Ltd at its registered office for
the time being at The Broadgate
 
Tower,
 
20 Primrose Street, London EC2A 2EW,
 
United Kingdom,
to act
 
as its agent
 
to receive
 
and accept on
 
its behalf any
 
process or other
 
document relating to
any proceedings in the English courts which are connected with a Dispute.
32.5
Creditor Party rights unaffected
Nothing in this Clause
 
(
Law and Jurisdiction
) shall exclude or limit any right which any Creditor
Party may have (whether under the law of any country, an international convention or otherwise)
with regard to the bringing of proceedings,
 
the service of process,
 
the recognition or enforcement
of a judgment or any similar or related matter in any jurisdiction.
32.6
Meaning of "proceedings" and "Dispute"
In this Clause
 
(
Law and Jurisdiction
), "
proceedings
" means proceedings
 
of any
 
kind, including
an application for a
 
provisional or protective measure and
 
a "
Dispute
" means any dispute arising
out of or in connection with this Agreement (including a dispute relating to the existence, validity
or termination of
 
this Agreement) or
 
any non-contractual obligation arising
 
out of or
 
in connection
with this Agreement.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
SCHEDULE
 
1
LENDERS AND COMMITMENTS
 
Lender
Facility Office
Commitment
(US Dollars)
Nordea Bank Abp, filial i Norge
Essendrops gate 7, Postboks
1166, Sentrum, 0107 Oslo
920058817 MVA
Norway
$167,263,025
 
SCHEDULE
 
2
DRAWDOWN NOTICE
To:
 
Nordea Bank Abp, filial i Norge
Essendrops gate 7, Postboks
 
1166, Sentrum, 0107 Oslo
 
920058817 MVA,
 
Norway
Attention:
 
[Loans Administration]
 
[
●
] 202[
●
]
DRAWDOWN NOTICE
1
We
 
refer
 
to
 
the
 
loan
 
agreement
 
(the
 
"
Loan
 
Agreement
")
 
dated
 
[
●
]
 
2024
 
and
 
made
 
between
ourselves, as joint
 
and several
 
Borrowers, the Lenders
 
referred to therein,
 
and yourselves
 
as Agent,
as Security Trustee,
 
as Bookrunner and as
 
Lead Arranger and
 
as Swap Bank
 
in connection with
 
a
facility of up to $167,263,025. Terms defined in the Loan Agreement have their defined meanings
when used in this Drawdown Notice.
2
We request to borrow the Loan as follows:
(a)
Amount: US$[167,263,025];
(b)
Drawdown Date: [
●
] 2024;
(c)
[Duration of the first Interest Period shall be [one][three] Months;] and
(d)
Payment instructions:
 
account in our name and numbered [
●
] with [
●
] of [
●
].
3
We represent and warrant that:
(a)
the
 
representations
 
and
 
warranties
 
in
 
clause
 
(
Representations
 
and
 
Warranties
)
 
of
 
the
 
Loan
Agreement
 
would
 
remain
 
true
 
and
 
not
 
misleading
 
if
 
repeated
 
on
 
the
 
date
 
of
 
this
 
notice
 
with
reference to the circumstances now existing; and
(b)
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of
the Loan.
4
This notice cannot be revoked without the prior consent of the Majority Lenders.
____________________________
[Name of Signatory]
[officer]
for and on behalf of
MANRA SHIPPING COMPANY INC.
 
JABWOT SHIPPING COMPANY
 
INC.
 
ARORAE SHIPPING COMPANY INC.
 
TAMANA SHIPPING COMPANY
 
INC.
 
BERU SHIPPING COMPANY INC.
 
BONRIKI SHIPPING COMPANY INC.
 
TAONGI SHIPPING COMPANY
 
INC.
 
EJITE SHIPPING COMPANY INC.
 
GUAM SHIPPING COMPANY INC.
PALAU SHIPPING COMPANY
 
INC.
SCHEDULE
 
3
CONDITION PRECEDENT DOCUMENTS
 
PART A
The following are the documents referred to in Clause
 
(
Documents, fees and no default
).
1
A duly executed original of:
(a)
this Agreement;
(b)
the Corporate Guarantee;
(c)
the Agency and Trust Deed;
(d)
the Master Agreement; and
(e)
any Master Agreement Assignment.
 
2
Copies of the constitutional
 
documents of each Borrower, the Corporate Guarantor and any other
Security Party.
3
Copies of resolutions of the shareholders and directors
 
of each Borrower and each Security Party
(other than the
 
Corporate Guarantor) authorising the
 
execution of each of
 
the Finance
 
Documents
to which that Borrower or that Security
 
Party is a party and, in the
 
case of a Borrower, authorising
named officers to give the Drawdown Notice.
4
Copies
 
of
 
resolutions
 
of
 
the
 
executive
 
committee
 
of
 
the
 
Corporate
 
Guarantor
 
authorising
 
the
execution of each of the Finance Documents to which it is a party.
5
The original of any
 
power of attorney under which
 
any Finance Document is
 
executed on behalf of
a Borrower,
 
the Corporate Guarantor or any other Security Party.
6
Copies of all
 
consents which any Borrower, the Corporate Guarantor
 
or any Security
 
Party requires
to enter into, or make any payment
 
under, any Finance Document.
7
The originals
 
of
 
any
 
mandates
 
or other
 
documents required
 
in connection
 
with the
 
opening or
operation of the Earnings Accounts.
8
Such
 
documents
 
as
 
the
 
Agent
 
may
 
require
 
for
 
its
 
"Know
 
your
 
customer"
 
and
 
other
 
customary
money laundering and sanctions and counter-terrorist financing checks.
9
Documentary evidence that the agent for service
 
of process named in Clause
 
(
Process Agent)
has accepted its appointment.
10
Favourable
 
legal opinions
 
from lawyers
 
appointed by
 
the Agent
 
on such
 
matters
 
concerning the
laws of Marshall Islands and such other relevant jurisdictions as the Agent may require.
11
If the Agent so requires, in respect of any of the documents referred to above, a certified English The following are the documents referred to in Clause
translation prepared by a translator approved by the Agent.
 
PART B
 
(
Documents, fees
 
and no
 
default
) required
before the Drawdown Date.
 
1
A
 
duly
 
executed
 
original
 
of
 
each
 
Mortgage
 
and
 
each
 
General
 
Assignment,
 
any
 
Charterparty
Assignment, each Shares
 
Pledge and the
 
Account Pledge in
 
respect of the
 
Earnings Account
 
held
by
 
each
 
Borrower
 
and
 
any
 
other
 
Finance
 
Document
 
not
 
delivered
 
pursuant
 
to
 
Part
 
A
 
of
 
this
Schedule 3 (
Condition precedent documents
).
2
Documentary evidence that:
(a)
each Ship is definitively
 
and permanently registered
 
in the name of
 
the relevant Borrower
 
under
an Approved Flag;
(b)
each
 
Ship
 
is
 
in
 
the
 
absolute
 
and
 
unencumbered
 
ownership
 
of
 
the
 
relevant
 
Borrower
 
save
 
as
contemplated by the Finance Documents;
(c)
each Ship maintains the class specified in Clause
 
(
Repair and classification
);
(d)
each
 
Mortgage
 
has
 
been
 
duly
 
registered
 
or
 
recorded
 
against
 
the
 
relevant
 
Ship
 
as
 
a
 
valid
 
first
priority or,
 
as the case may be,
 
preferred statutory
 
ship mortgage in accordance with
 
the laws of
the applicable Approved Flag State; and
(e)
each
 
Ship
 
is
 
insured
 
in
 
accordance
 
with
 
the
 
provisions
 
of
 
this
 
Agreement
 
and
 
all
 
requirements
therein in respect of insurances have been complied with.
3
Documents
 
establishing
 
that
 
each
 
Ship
 
will,
 
as
 
from
 
the
 
Drawdown
 
Date,
 
be
 
managed
 
by
 
the
Approved Manager on terms acceptable to the Lenders, together with:
(a)
a
 
copy
 
of
 
the
 
Management
 
Agreement
 
and
 
the
 
Manager's
 
Undertaking
 
duly
 
signed
 
by
 
the
Approved Manager; and
(b)
copies
 
of
 
the
 
Approved
 
Manager's
 
Document
 
of
 
Compliance
 
and
 
of
 
each
 
Ship's
 
Safety
Management
 
Certificate
 
(together
 
with
 
any
 
other
 
details
 
of
 
the
 
applicable
 
safety
 
management
system which the Agent requires) and ISSC.
3.1
Favourable
 
legal opinions
 
from lawyers
 
appointed by
 
the Agent
 
on such
 
matters
 
concerning the
laws of Marshall
 
Islands, the
 
Approved Flag State
 
and such
 
other relevant jurisdictions
 
as the
 
Agent
may require.
 
4
At
 
the
 
cost
 
of
 
the
 
Borrowers
 
a
 
favourable
 
opinion
 
from
 
an
 
independent
 
insurance
 
consultant
acceptable to the Agent on such matters
 
relating to the insurances for
 
the Ship as the Agent may
require.
5
Two
 
valuations
 
of
 
each
 
Ship
 
addressed
 
to
 
the
 
Agent,
 
stated
 
to
 
be
 
for
 
the
 
purposes
 
of
 
this
Agreement and dated not earlier than 40 days before the Drawdown Date in respect of that Ship selected by the Borrowers and approved by the Agent) which evidences compliance with
and each
 
prepared
 
in accordance
 
with Clause
 
(
Valuation
 
of ships
) each
 
from
 
an Approved
Broker (
Clause
 
(
Minimum required security cover
) immediately after the Drawdown Date.
6
Evidence
 
satisfactory
 
to
 
the
 
Agent
 
that
 
(i)
 
the
 
Existing
 
Indebtedness
 
is
 
repaid
 
in
 
full
 
and
 
the
relevant Borrowers
 
are released from all their obligations and liabilities under the Existing Facility
Agreement to
 
which each of
 
them is
 
a party,
 
and (ii) the
 
Existing Security
 
Interests in
 
respect of
the Ships and the Borrowers
 
have been discharged.
 
7
If the Agent so requires,
 
in respect of any of
 
the documents referred to
 
above, a certified English
translation prepared by a translator approved by the Agent.
Each
 
of
 
the documents
 
specified in
 
paragraphs
 
2, 3,
 
5
 
and 9
 
of
 
and every
 
other copy
 
document
delivered under
 
this Schedule shall
 
be certified as
 
a true and
 
up to
 
date copy
 
by a senior
 
officer of each
Borrower or a qualified lawyer.
 
SCHEDULE
 
4
TRANSFER CERTIFICATE
 
The Transferor
 
and the Transferee
 
accept exclusive
 
responsibility for ensuring
 
that this Certificate
 
and
the transaction to which it relates comply
 
with all legal and
 
regulatory requirements applicable to them
respectively.
To:
 
Nordea
 
Bank Abp,
 
filial i
 
Norge
 
for
 
itself and
 
for
 
and on
 
behalf of
 
the Borrower,
 
[each Security
Party], the Security
 
Trustee,
 
each Lender and the Swap
 
Bank, as defined in
 
the Loan Agreement referred
to below.
[
●
]
1
This Certificate relates to
 
a Loan Agreement
 
(the "
Agreement
") dated [
●
] 2024 and
 
made between
(1) Manra Shipping Company Inc.,
 
Jabwot Shipping Company Inc., Arorae
 
Shipping Company Inc.,
Tamana
 
Shipping
 
Company
 
Inc.,
 
Beru
 
Shipping
 
Company
 
Inc.,
 
Bonriki
 
Shipping
 
Company
 
Inc.,
Taongi
 
Shipping
 
Company
 
Inc.,
 
Ejite
 
Shipping
 
Company
 
Inc.,
 
Guam
 
Shipping
 
Company
 
Inc.
 
and
Palau Shipping Company Inc. as joint and several borrowers
 
(the "
Borrowers
"), (2) the banks and
financial institutions named therein, (3) Nordea Bank Abp, filial i Norge as Agent, (4) Nordea Bank
Abp, filial i Norge as
 
Security Trustee, (5) Nordea Bank Abp,
 
filial i Norge as Lead
 
Arranger [and] (6)
Nordea Bank Abp,
 
filial I Norge
 
as Bookrunner and (7)
 
Nordea Bank Abp
 
as Swap Bank
 
for a
 
loan
facility of up to $167,263,025.
2
In this
 
Certificate,
 
terms defined
 
in the
 
Agreement shall,
 
unless the
 
contrary
 
intention
 
appears,
have the same meanings when used in this Certificate and:
"
Relevant
 
Parties
" means
 
the
 
Agent,
 
the Borrower,
 
[each Security
 
Party],
 
the Security
 
Trustee,
each Lender and the Swap Bank;
"
Transferor
" means [full name] of [facility office]; and
"
Transferee
" means [full name] of [facility office].
3
The effective date of this Certificate is [
●
],
Provided that
 
this Certificate shall not come into effect
unless it is signed by the Agent on or before that date.
4
[The
 
Transferor
 
assigns
 
to
 
the
 
Transferee
 
absolutely
 
all
 
rights
 
and
 
interests
 
(present,
 
future
 
or
contingent)
 
which the
 
Transferor
 
has as
 
Lender under
 
or by
 
virtue of
 
the Agreement
 
and every
other
 
Finance
 
Document
 
in
 
relation
 
to
 
[
●
]
 
per
 
cent.
 
of
 
its
 
Contribution,
 
which
 
percentage
represents $[
●
].]
5
[By virtue
 
of this
 
Transfer
 
Certificate and
 
Clause
 
(
Transfers
 
and changes in
 
Facility Offices
) of
the Loan Agreement, the
 
Transferor
 
is discharged [entirely
 
from its Commitment which amounts
to
 
$[
●
]
 
[from
 
[
●
]
 
per
 
cent.
 
of
 
its
 
Commitment,
 
which
 
percentage
 
represents
 
$[
●
]]
 
and
 
the
Transferee
 
acquires a Commitment of $[
●
].]
6
The
 
Transferee
 
undertakes
 
with
 
the
 
Transferor
 
and
 
each
 
of
 
the
 
Relevant
 
Parties
 
that
 
the
Transferee will observe and perform all the obligations under the Finance Documents which Clause Transfers and Changes in Facility Offices
 
(
) of the Loan
 
Agreement provides will become binding
on it upon this Certificate taking effect.
7
The Agent, at the request of
 
the Transferee (which request is hereby made) accepts, for the Agent
itself and for and on behalf of every other Relevant
 
Party,
 
this Certificate as a Transfer
 
Certificate
taking
 
effect
 
in
 
accordance
 
with
 
Clause
 
(
Transfers
 
and
 
changes
 
in
 
Facility
 
Offices
)
 
of
 
the
Agreement.
8
The Transferor:
(a)
warrants to the Transferee
 
and each Relevant Party that:
(i)
the Transferor
 
has full capacity
 
to enter
 
into this transaction
 
and has taken
 
all corporate
action and
 
obtained all
 
consents which
 
are required
 
in connection
 
with this
 
transaction;
and
(ii)
this Certificate is valid and binding as regards the Transferor;
(b)
warrants to the Transferee
 
that the Transferor
 
is absolutely entitled, free of encumbrances, to all
the rights and interests covered by the assignment in paragraph 4; and
(c)
undertakes
 
with
 
the
 
Transferee
 
that
 
the
 
Transferor
 
will,
 
at
 
its
 
own
 
expense,
 
execute
 
any
documents which
 
the Transferee
 
reasonably requests
 
for
 
perfecting
 
in any
 
relevant
 
jurisdiction
the Transferee's
 
title under this Certificate or for a similar purpose.
9
The Transferee:
(a)
confirms that it has received a copy of the Agreement and each of the other Finance Documents;
(b)
agrees
 
that
 
it
 
will
 
have
 
no
 
rights
 
of
 
recourse
 
on
 
any
 
ground
 
against
 
either
 
the
 
Transferor,
 
the
Agent, the Security Trustee, any Lender or the Swap Bank in the event that:
(i)
any of the Finance Documents prove to be invalid or ineffective;
(ii)
any
 
Borrower
 
or
 
any
 
Security
 
Party
 
fails
 
to
 
observe
 
or
 
perform
 
its
 
obligations,
 
or
 
to
discharge its liabilities, under any of the Finance Documents; and
(iii)
it proves impossible
 
to realise any
 
asset covered by
 
a Security
 
Interest created by
 
a Finance
Document, or the proceeds
 
of such assets are insufficient
 
to discharge the liabilities of
 
the
Borrowers or any Security Party under any of the Finance Documents;
 
(c)
agrees that it
 
will have no
 
rights of recourse
 
on any ground
 
against the Agent, the
 
Security Trustee,
any Lender or the Swap Bank in the event that this Certificate proves to be invalid or ineffective;
 
(d)
warrants to the Transferor
 
and each Relevant Party that:
(i)
it has
 
full capacity
 
to
 
enter into
 
this transaction
 
and has
 
taken
 
all corporate
 
action and
obtained all consents which it needs to take or obtain in connection with this transaction;
and
(ii)
this Certificate is valid and binding as regards the Transferee;
 
and
(e)
confirms the accuracy of the administrative details set out below regarding the Transferee.
10
The
 
Transferor
 
and
 
the
 
Transferee
 
each
 
undertake
 
with
 
the
 
Agent
 
and
 
the
 
Security
 
Trustee
severally,
 
on demand, fully
 
to indemnify the
 
Agent and/or the
 
Security Trustee
 
in respect of
 
any
claim, proceeding, liability or
 
expense (including all legal
 
expenses) which they
 
or either of
 
them
may
 
incur in
 
connection with
 
this Certificate
 
or any
 
matter
 
arising out
 
of
 
it, except
 
such as
 
are
shown to have
 
been mainly
 
and directly caused
 
by the
 
gross and culpable
 
negligence or dishonesty
of the Agent's or the Security Trustee's own officers or employees.
11
The Transferee shall repay to
 
the Transferor on demand
 
so much
 
of any sum
 
paid by
 
the Transferor
under
 
paragraph
 
9
 
as exceeds
 
one-half of
 
the
 
amount
 
demanded by
 
the Agent
 
or
 
the Security
Trustee
 
in
 
respect
 
of
 
a
 
claim,
 
proceeding,
 
liability
 
or
 
expense
 
which
 
was
 
not
 
reasonably
foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of
each of the Transferor and the Transferee
 
to the Agent or the Security Trustee for the full amount
demanded by it.
[Name of Transferor]
 
[Name of Transferee]
By:
 
By:
Date:
 
Date:
Agent
Signed for itself and for and on behalf of itself
as Agent and for every other Relevant Party Transferor's interest in the security constituted by the Finance Documents in the Transferor's or
[Name of Agent]
By:
Date:
 
Administrative Details of Transferee
Name of Transferee:
 
Facility Office:
 
Contact Person
(Loan Administration Department):
 
Telephone:
 
Fax:
 
Contact Person
(Credit Administration Department):
 
Telephone:
 
Fax:
 
Account for payments:
 
Note
:
 
This
 
Transfer
 
Certificate
 
alone
 
may
 
not
 
be
 
sufficient
 
to
 
transfer
 
a
 
proportionate
 
share
 
of
 
the
Transferee's
 
jurisdiction.
 
It is
 
the responsibility
 
of each
 
Lender to
 
ascertain whether
 
any
 
other
documents are required for this purpose.
 
SCHEDULE
 
5
DESIGNATION NOTICE
Nordea Bank Abp, filial i Norge
Essendrops gate 7, Postboks
 
1166, Sentrum, 0107 Oslo
920058817 MVA,
 
Norway
 
[
●
]
Dear Sirs
Loan
 
Agreement
 
dated
 
[
●
]
 
2024
 
made
 
between
 
(i)
 
Manra
 
Shipping
 
Company
 
Inc.,
 
Jabwot
 
Shipping
Company Inc., Arorae Shipping Company
 
Inc., Tamana
 
Shipping Company Inc., Beru Shipping Company
Inc., Bonriki Shipping Company Inc., Taongi
 
Shipping Company Inc., Ejite Shipping Company Inc.,
 
Guam
Shipping Company Inc.
 
and Palau Shipping
 
Company Inc. as
 
joint and several borrowers, (ii)
 
the Lenders,
(iii) yourselves as
 
Agent, Security Trustee,
 
Bookrunner and Lead Arranger
 
and (iv) Nordea Bank Abp
 
as
Swap Bank (the "Loan Agreement").
We refer to:
1
the Loan Agreement;
 
2
the Master Agreement dated [
●
] 2024 made between ourselves and the Swap Bank; and
3
a Confirmation delivered pursuant
 
to the said Master
 
Agreement dated [
●
] and addressed by [
●
]
to us.
In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation
and hereby confirm that the Transaction evidenced by it will be designated as a "Designated Transaction"
for the purposes of the Loan Agreement and the Finance Documents.
Yours
 
faithfully,
.................................................
[
●
]
for and on behalf of
MANRA SHIPPING COMPANY INC.
 
JABWOT SHIPPING COMPANY
 
INC.
 
ARORAE SHIPPING COMPANY INC.
 
TAMANA SHIPPING COMPANY
 
INC.
 
BERU SHIPPING COMPANY INC.
 
BONRIKI SHIPPING COMPANY INC.
 
TAONGI SHIPPING COMPANY
 
INC.
 
EJITE SHIPPING COMPANY INC.
 
GUAM SHIPPING COMPANY INC.
PALAU SHIPPING COMPANY
 
INC.
SCHEDULE
 
6
SELECTION NOTICE
From:
MANRA SHIPPING COMPANY INC.
 
JABWOT SHIPPING COMPANY
 
INC.
 
ARORAE SHIPPING COMPANY INC.
 
TAMANA SHIPPING COMPANY
 
INC.
 
BERU SHIPPING COMPANY INC.
 
BONRIKI SHIPPING COMPANY INC.
 
TAONGI SHIPPING COMPANY
 
INC.
 
EJITE SHIPPING COMPANY INC.
 
GUAM SHIPPING COMPANY INC.
PALAU SHIPPING COMPANY
 
INC.
To:
Nordea Bank Abp, filial i Norge
Essendrops gate 7, Postboks
 
1166, Sentrum, 0107 Oslo
 
920058817 MVA,
 
Norway
Dated: [
●
]
Loan
 
Agreement
 
dated
 
[
●
]
 
2024
 
made
 
between
 
(i)
 
Manra
 
Shipping
 
Company
 
Inc.,
 
Jabwot
 
Shipping
Company Inc., Arorae Shipping Company
 
Inc., Tamana
 
Shipping Company Inc., Beru Shipping Company
Inc., Bonriki Shipping Company Inc., Taongi
 
Shipping Company Inc., Ejite Shipping Company Inc.,
 
Guam
Shipping Company Inc.
 
and Palau Shipping
 
Company Inc. as
 
joint and several borrowers, (ii)
 
the Lenders,
(iii) yourselves as
 
Agent, Security Trustee,
 
Bookrunner and Lead Arranger
 
and (iv) Nordea Bank Abp
 
as
Swap Bank (the "Loan Agreement").
1
We refer to the Loan Agreement.
 
This is a
 
Selection Notice.
 
Terms defined in the Loan Agreement
have the same meaning in this Selection Notice
 
unless given a different meaning
 
in this Selection
Notice.
2
We request [that the next Interest Period
 
for the Loan be [
●
]] OR [ an Interest Period for a part of
the Loan in an amount
 
equal to [
●
] (which is the amount of
 
the Repayment Instalment
 
next due)
ending on [
●
] (which is the Repayment
 
Date relating to
 
that Repayment Instalment)
 
and that the
Interest Period for the remaining part of the Loan shall be [
●
]].
3
This Selection Notice is irrevocable.
Yours
 
faithfully
____________________
[
●
]
authorised signatory for
MANRA SHIPPING COMPANY INC.
 
JABWOT SHIPPING COMPANY
 
INC.
 
ARORAE SHIPPING COMPANY INC.
 
TAMANA SHIPPING COMPANY
 
INC.
 
BERU SHIPPING COMPANY INC.
 
BONRIKI SHIPPING COMPANY INC.
 
TAONGI SHIPPING COMPANY
 
INC.
 
EJITE SHIPPING COMPANY INC.
 
GUAM SHIPPING COMPANY INC.
PALAU SHIPPING COMPANY
 
INC.
 
EXECUTION PAGES
THE BORROWERS
SIGNED
 
by
 
)
 
)
Its
 
for and on behalf of
 
)
MANRA SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
Its
 
)
for and on behalf of
 
)
JABWOT SHIPPING COMPANY
 
INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
its
 
)
for and on behalf of
 
)
ARORAE SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
its
 
)
for and on behalf of
 
)
TAMANA SHIPPING COMPANY
 
INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
its
 
)
for and on behalf of
 
)
BERU SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
its
 
)
for and on behalf of
 
)
BONRIKI SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
its
 
)
for and on behalf of
 
)
TAONGI SHIPPING COMPANY
 
INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
its
 
)
for and on behalf of
 
)
EJITE SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
its
 
)
for and on behalf of
 
)
GUAM SHIPPING COMPANY INC.
 
)
in the presence of:
 
)
SIGNED
 
by
 
)
 
)
its
 
)
for and on behalf of
 
)
PALAU SHIPPING COMPANY
 
INC.
 
)
in the presence of:
 
)
THE LENDERS
SIGNED
 
by
 
)
)
attorney-in-fact
 
)
for and on behalf of
 
)
NORDEA BANK ABP,
 
FILIAL I NORGE
 
)
in the presence of:
 
)



THE SWAP BANK
SIGNED
 
by
 
)
)
attorney-in-fact
 
)
for and on behalf of
 
)
NORDEA BANK ABP
 
 
)
in the presence of:
 
)
THE AGENT
SIGNED
 
by
 
)
)
attorney-in-fact
 
)
for and on behalf of
 
)
NORDEA BANK ABP,
 
FILIAL I NORGE
 
)
in the presence of:
 
)
THE SECURITY TRUSTEE
SIGNED
 
by
 
)
)
attorney-in-fact
 
)
for and on behalf of
 
)
NORDEA BANK ABP,
 
FILIAL I NORGE
 
)
in the presence of:
 
)
THE LEAD ARRANGER
SIGNED
 
by
 
)
)
attorney-in-fact
 
)
for and on behalf of
 
)
NORDEA BANK ABP,
 
FILIAL I NORGE
 
)
in the presence of:
 
)



THE BOOKRUNNER
SIGNED
 
by
 
)
)
attorney-in-fact
 
)
for and on behalf of
 
)
NORDEA BANK ABP,
 
FILIAL I NORGE
 
)
in the presence of:
 
)