Costamare to spin off dry bulk business into new entity

MONACO - Costamare Inc . (NYSE:CMRE), a global container shipping provider currently trading near its 52-week low at $10.30, has announced plans to separate its dry bulk shipping business from its container shipping operations. The proposed spin-off will establish Costamare Bulkers Holdings Limited as an independent, publicly traded company on the New York Stock Exchange. According to InvestingPro analysis, CMRE appears undervalued with strong fundamentals and a healthy 4.47% dividend yield.

This strategic move aims to unlock the value of the two distinct segments, with Costamare Inc. retaining its container vessels and Neptune Maritime Leasing Limited, while the new entity will focus on the ownership and operation of dry bulk vessels, including the existing owned dry bulk fleet and the CBI operating platform. The company’s strong financial position is evident in its Good financial health score from InvestingPro, which highlights 10+ additional insights available to subscribers.

The board of Costamare Inc. believes that this separation will benefit stakeholders by improving financial flexibility and allowing each company to concentrate on specific market opportunities and growth strategies within the container and dry bulk shipping markets. The decision is expected to create two focused investment opportunities for different investor bases and streamline the structure of each business for enhanced operational efficiency and value creation.

The completion of the spin-off is targeted within this calendar year and is subject to various conditions, including regulatory approvals and final board approval. Although the terms and timing are not guaranteed, the current plan involves a pro rata distribution of shares of Costamare Bulkers Holdings Limited to the shareholders of Costamare Inc.

Morgan Stanley (NYSE:MS) & Co. LLC is serving as the financial advisor, and Cravath, Swaine & Moore LLP is providing legal counsel for the transaction.

With a history spanning over half a century, Costamare Inc. has a significant presence in the international shipping industry, boasting a fleet of 68 owned containerships and 38 owned dry bulk vessels, with capacities of approximately 513,000 TEU and 3,016,000 DWT, respectively. The company, with a market capitalization of $1.24 billion and trailing twelve-month revenue of $2.08 billion, also engages in chartering and leasing operations, as well as derivative and hedging solutions through its dry bulk operating platform. The company has maintained dividend payments for 15 consecutive years, demonstrating consistent shareholder returns. Detailed financial analysis and comprehensive research reports are available through InvestingPro.

The announcement contains forward-looking statements, and there is no certainty regarding the completion of the spin-off or the realization of anticipated strategic benefits. This news is based on a press release statement from Costamare Inc.

In other recent news, Stifel analysts have adjusted their outlook on Costamare Inc., reducing the stock’s price target from $13 to $12 while maintaining a Hold rating. This revision follows Costamare’s recent quarterly performance, which was described as decent but uneventful. The company successfully forward chartered 12 vessels at rates higher than initially projected by Stifel. Despite the positive charter rates, the analysts cited increased depreciation and interest expenses as factors for the downward adjustment. The firm’s analysis also noted that the leasing platform for containers remains stable, but potential market dynamics could pose challenges. Specifically, the full opening of the Red Sea could lead to market oversupply, affecting Costamare’s growth prospects. Stifel’s report reflects a cautious approach, highlighting the impact of operational scale and market supply on the valuation of shipping stocks. These developments indicate that external market conditions could influence Costamare’s future performance.

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