| Transactions with Related Parties | 3. Transactions with Related
Parties (a)
(b)
(c)
June 30, 2018 Current Non-current December 31, 2017 Current Non-current
Diana Shipping Inc - Term Loan $ 33,940 $ 33,940 $ - $ 82,617 $ 82,617 $ -
Discount Premium payable to the lenders 4,532 4,532 - 2,292 2,292 -
less unamortized deferred financing costs - - - (77) (77) -
Related party financing, net of unamortized deferred financing costs $ 38,472 $ 38,472 $ - $ 84,832 $ 84,832 $ -
On May 20, 2013, the Company,
through its subsidiary Eluk Shipping Company Inc., entered into an unsecured loan agreement of up to $50,000 with Diana Shipping
Inc., to be used to fund vessel acquisitions and for general corporate purposes. The loan was guaranteed by the Company and initially
bore interest at a rate of LIBOR plus a margin of 5.0% per annum and a fee of 1.25% per annum (“back-end fee”) on any
amounts repaid upon any repayment or voluntary prepayment dates. In August 2013, the full amount was drawn down under the loan
agreement, which was repayable on August 20, 2017. Under an amendment signed on September 9, 2015, the maturity of the loan was
extended until March 15, 2022, and the agreement provided for annual repayments of $5,000, plus a balloon instalment at the final
maturity date, and bore interest at LIBOR plus margin of 3.0% per annum. The Company also agreed to pay at the date of the amendment
the accumulated back-end fee, amounting to $1,302, and that no additional back-end fee would be charged thereafter. Furthermore,
the Company agreed to pay at the final maturity date a flat fee of $200. Following another amendment on September 12, 2016, the
loan was undertaken by Kapa Shipping Company Inc. and its repayment was immediately suspended and deferred to a later date. Finally,
the margin was revised to 3.35% per annum until December 31, 2018, thereafter reverting to 3.0% per annum until maturity. On May 30, 2017, the Company
issued 100 shares of its newly-designated Series C Preferred Stock, par value $0.01 per share, to DSI, in exchange for a reduction
of $3,000 in the principal amount of the Company's outstanding loan, thus leaving an outstanding principal balance of $42,417. On June 30, 2017, the Company
refinanced the above loan. The principal amount of the new secured loan is $82,617 and includes the $42,417 outstanding principal
balance as of June 30, 2017, increased by the flat fee of $200 which was payable at maturity, and an additional $40,000. The amount
of $40,000 was drawn to partially repay the Company’s then existing loan with The Royal Bank of Scotland plc (“RBS”),
whose settlement resulted in a net gain of $42,185 for the Company, which is reflected in Gain from bank debt write off in the
accompanying unaudited interim consolidated statements of operations. The new loan matures on December 31, 2018 and provides for
an additional $5,000 interest-bearing “discount premium ”, which is payable at maturity
and is recognized in Interest and Finance costs throughout the life of the loan and in Related party financing, net of unamortized
deferred financing costs. During the first six months of 2018, the Company repaid $48,677 of its outstanding
loan balance, by making use of warrant proceeds and vessels’ sales proceeds, according to the respective terms of the loan
agreement. As at June 30, 2018, the Company has classified an amount of $19,443 as Restricted Cash, representing cash collected
on June 29, 2018 upon the sale of the vessel “Puelo” (Note 4), which was immediately repayable to the lenders, according
to the terms of the loan agreement. For the six months ended
June 30, 2018 and 2017, interest expense incurred under the loan agreements with DSI amounted to $1,943 and $968, respectively,
while the discount premium amortization for the six months ended June 30, 2018 and 2017, amounted to $2,240 and $9, respectively.
Interest expense and discount premium amortization are included in Interest and finance costs in
the accompanying unaudited interim consolidated statements of operations. |
