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Diana Containerships Inc. (DCIXV) Message Board

  • barrygeo barrygeo May 23, 2013 10:05 AM Flag

    Future dividends

    This is how the company words it in their prospectus for the upcoming $40 million offering:

    After giving effect to this offering, the number of our outstanding common shares will substantially increase. If we fail to effectively apply the proceeds of this offering to identify, purchase, develop and integrate vessels at reasonable prices in accordance with our business strategy ... the amount of available cash from operations is expected to be insufficient to pay dividends to shareholders at the current level. Furthermore, even if we are able to successfully apply the proceeds of this offering to create a long-term increase in available cash from operations, we may be unsuccessful in sufficiently increasing cash from operations in the short-term to maintain dividends to shareholders at the current level without relying on additional funding sources. In particular, our cash from operations may be reduced if we are unable to recharter our vessels or forced to do so at reduced or unprofitable rates upon the expiration or termination of their current charters, including those of the Centaurus, currently employed on a time charter scheduled to expire between June 2013 and August 2013 (depending on whether the charterer’s option to extend the charter is exercised), and the Sagitta, currently employed on a time charter scheduled to expire between October 2013 and February 2014 (depending on whether the charterer’s option to extend the charter is exercised).
    If cash from operations available for the payment of dividends is insufficient to pay dividends to shareholders at the current level, it may result in a decrease or elimination of our variable dividend in the future, including, for the avoidance of doubt, any anticipated dividend in connection with the quarter ended June 30, 2013, unless we use funds other than available cash from operations to pay or supplement such dividend

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    • I must admit, that sounds pretty grim. What is propping up the price?

      • 1 Reply to johnboy8082001
      • It was a disclaimer, legal requirement. You can find similar texts in every stock prospectus.

        DCIX is propped up by mighty DSX. Firstly, DSX cash supports dividend here and yield is very high. Secondly, management likes containerships better than dry-bulk at the moment; just compare last conference calls of respective companies. Also, most of remaining ships are on long-term (longer than this year) profitable charters.

        DSX/DCIX management has good reputation, especially for prediction abilities, and market takes note. It is even possible that some institutions can decide to make it synthetic: long DCIX and short DSX.

 
DCIX
2.45+0.01(+0.41%)Jul 22 4:00 PMEDT

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