Performance Shipping secures refinancing deal with Alpha Bank

ATHENS - Performance Shipping Inc. (NASDAQ:PSHG), a tanker vessel company with a market capitalization of $24.16 million, has accepted a commitment letter to refinance approximately $29.75 million in existing debt with Alpha Bank A.E., the company announced Tuesday. According to InvestingPro data, the company maintains a healthy balance sheet with more cash than debt.

The refinancing arrangement, which remains subject to customary closing conditions and final loan agreement execution, will cover debt secured by two vessels: M/T P. Long Beach and M/T P. Aliki.

Under the terms disclosed, the facility will carry an interest rate of SOFR plus 1.90% per annum. Repayment will occur through 20 quarterly installments of $1.05 million each, with a final balloon payment of $8.75 million due in mid-2030.

"The competitive terms of this refinancing loan facility reflect both our robust financial position and the continued confidence and support of our lending partners," said Andreas Michalopoulos, Performance Shipping’s Chief Executive Officer, in the press release statement.

The company noted that the new arrangement will reduce its average payable margins by 23% compared to existing loan agreements while maintaining the same amortization profile. The refinancing also extends loan maturities by more than two and a half years, with no substantial debt maturities scheduled before mid-2030.

Performance Shipping specializes in tanker vessel ownership and employs its fleet on spot voyages, through pool arrangements, and on time charters. The information is based on a company press release.

In other recent news, Performance Shipping Inc. has completed the sale of its Aframax tanker vessel, M/T P. Yanbu, for a gross sale price of $39 million. This transaction is expected to result in a gain of approximately $21.5 million for the first quarter of 2025, before accounting for commissions and related expenses. The sale is a part of the company’s strategy to modernize and expand its fleet, with plans to integrate three newbuild LR2 Aframax tankers and a newbuild LR1 chemical/product oil tanker. Following this sale, Performance Shipping’s cash balance is projected to exceed $105 million, significantly surpassing its year-end debt balance of $47.7 million. The first of the new LR2 tankers is anticipated to be delivered around August 2025. Once the new vessels are incorporated into the fleet, the average age of the company’s vessels is expected to decrease from 14 to 10 years. Performance Shipping’s future plans include a focus on LNG-ready vessels, aligning with industry trends towards environmentally friendly shipping. The company has noted that these plans are subject to uncertainties such as market conditions and regulatory changes.

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