At the start of the year, I had mentioned Euroseas (ESEA) plans to create a spin-off entity via the sale of its three oldest vessels to an affiliated entity, Euroholdings, Ltd.
Well, Euroseas started to implement the strategy, and then, an opportunity presented itself. Euroholdings have opted to sell one of the three vessels, MV Diamantis P, for $13.15M
The sold vessel is/was 26 years old, and on the smaller end @ 2008-TEU. I give ESEA management kudos for the move. The entity operates in this niche segment, and have a good sense of when monetization of an asset at a given price makes sense. ESEA lost an older vessel to an engine fire some years back. IIRC, ESEA got insurance proceeds of a few million.
Good move - Euroholdings start with a smaller fleet. But, a lot more cash
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Another view of the ESEA spin-off. But, from the perspective of someone without an ESEA position, and not factoring a subsequent event.
https://seekingalpha.com/article/4747802-euroseas-stock-sell-spin-off-retain-parent-company
Whether the vessel sale occurred while it was an ESEA asset or, when it a Euroholding Ltd. asset, I don’t think it changes much. If the asset was still an ESEA asset, then there would have been all the additions and subtractions, and a net amount left at the ESEA level (figure somewhere in the $10M - $11.5M neighborhood). ESEA still have a newbuild program in place. My guess is that a chunk of it would likely have gone to the newbuild program. The rest to the dividend. And when I say, to the dividend, I don’t mean to increase the dividend. Just to keep the dividend ongoing until the market improves.
If the asset transferred to Euroholdings, Ltd already, it just means the new entity has a different asset mix. Fewer vessels, more cash. Who knows? Euroholdings might acquire the next-oldest asset from ESEA. Perhaps, just a little earlier than planned, and possibly with less additional shares for equity.