Paragon Shipping Inc. (NASDAQ: PRGN)
Paragon Shipping is having an incredible day in the market today, and for good reason. The company announced a few key updates with regard to debt agreements, building contracts, and corporate actions. Today, we’ll talk about the update that was provided, how investors reacted to the news, and what we can expect to see from PRGN moving forward. So, let’s get right to it…
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PRGN Announces New Building Contracts
First and foremost, Paragon Shipping has announced a new building contract. The company has entered into an agreement with Jiangsu Yangzijiang Shipbuilding Co., also known as Yangzijiang. Under the contract, the PRGN will be able to extend deliveries of its three Kamsarmax newbuilding drybulk carriers until September 30th, 2016, October 31st, 2016, and November 30th, 2016. The deal is subject to certain conditions.
Updates With Regard To Debt
In January, PRGN made a crucial agreement with the Bank of Ireland. According to the agreement, Paragon would apply the total net proceeds from the sale of M/V Kind Seas toward an immediate prepayment of the loan facility. As a result, about $2.2 million in debt was written-off and the remaning $2.2 million with interest was converted into a PIK note. According to the statement today, the company received notice on April 11th that it was discharged from all of its obligations under this PIK Note.
PRGN Files Suit
It was also announced that Paragon and Michael Bodouroglou, the CEO, President, and Chairman of the company, have filed a law suit against Tradewinds as well as Mr. Joe Brady Stamford, their Financial Reporter, for defamation damages. According to the suit, Tradewinds reported that the company had obtained its Board of Directors’ approval for filing bankruptcy under Chapter 11. However, the company’s board never approved filing Chapter 11. Additionally, they believe that the statements made by Tradewinds had a negative impact on the PRGN, its stock price, and its reputation. Of course, investors become fearful when bankruptcy is thrown around. According to the announcement, the lawsuit was submitted before the Prosecutor of the Criminal Court of Athens.
How The Market Is Reacting To The News
As investors, one of the first things that we learn is that the news moves the market. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of that company. Adversely, negative news leads to declines. In this particular case, the news provided by PRGN was overwhelmingly positive. Not only is the larger portion of its debt no longer an issue, the company is opening new building contracts, and holding those responsible for a large part of its recent declines accountable for their actions. As a result, the stock is climbing today. Currently (9:47), PRGN is trading at $2.83 per share after a gain of $1.08 per share or 61.71% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively bullish opinion of what we can expect to see from Paragon. While the company has fallen on hard times recently, new building contracts and relief of debt will likely help it to grow moving forward. The road may be bumpy, but I believe that things are looking up for PRGN at the moment.
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What Do You Think?
Where do you think PRGN is headed moving forward and why? Let us know your opinion in the comments below!
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