Box Ships selling additional 9% cumulative redeemable preferreds; proceeds to repay Paragon loan

By Stephanie N. Rotondo

Phoenix, Oct. 3 - Box Ships Inc. intends to price an add-on to its 9% series C cumulative redeemable perpetual preferreds, the company said in a prospectus filed with the Securities and Exchange Commission on Thursday.

The company sold $13.95 million of the preferreds on July 26 at a discounted price of $24.00 per share.

Maxim Group LLC, Ladenburg Thalmann & Co. Inc., MLV & Co. LLC and National Securities Corp. are the joint bookrunning managers.

Dividends are payable on the first day of January, April, July and October. At any time on or after July 29, 2016 and prior to July 29, 2018, the company can redeem the shares at 101% of par plus accrued dividends.

There is also a change-of-control feature.

Also, if the company fails to comply with certain covenants, or if six quarterly dividend payments are in arrears, the dividend rate will increase to 1.25 times the fixed rate on each subsequent dividend payment date, up to a maximum of 25%.

The preferreds are listed on the New York Stock Exchange under the ticker symbol "TEUPC." The shares were trading at $24.65 as of Wednesday's close.

About $6.1 million of proceeds will be used to repay the outstanding balance plus accrued interest on an unsecured loan with Paragon Shipping. Any remaining proceeds will be used for general corporate purposes, which may include the repayment of debt and the acquisition of vessels.

Box Ships is a Voula, Greece-based international shipping company.

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