PANGAEA LOGISTICS SOLUTIONS LTD. (PANL) SPO
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|Company Name||PANGAEA LOGISTICS SOLUTIONS LTD.|
|Company Address||109 LONG WHARF
NEWPORT, RI 02840
|Company Phone||401 846 7790|
|Employees (as of 3/23/2017)||62|
|State of Inc||--|
|Fiscal Year End||12/31|
|Shares Over Alloted||--|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||--|
We intend to use the net proceeds from the sale of securities offered by us as set forth in the applicable prospectus supplement. We will not receive any of the proceeds from the sale or other disposition of the shares of common stock offered by the selling shareholders pursuant to this prospectus.
The Company operates in markets that are highly competitive and based primarily on supply and demand for ocean transport of drybulk commodities. The Company competes for COAs on the basis of service, price, route history, size, age and condition of the vessel and for charters on the basis of service, price, vessel availability, size, age and condition of the vessel, as well as on its reputation as an owner and operator. The Company principally competes with owners and operators of Panamax, Supramax, Ultramax and Handymax bulk carriers.
Pangaea Logistics Solutions Ltd., and its subsidiaries provide logistics and ocean transportation services to a broad base of worldwide industrial customers who require transportation of a wide variety of dry bulk cargoes for utilization in manufacturing, processing, or trading. The Company
operates an ocean-going fleet of vessels in the handymax, supramax, ultramax and panamax segments. This fleet comprises 30-50 vessels chartered-in on a short-term basis for operation under our contract and spot businesses. In addition, to cement defensive barriers in its daily operations, the Company has invested in 18 vessels which are wholly-owned or partially-owned through joint ventures. The Company uses its fleet of motor vessels (“m/v”) to transport approximately 25 million tons of cargo annually to more than 200 ports around the world, averaging approximately 53 vessels in daily service during 2017. The Company’s ocean transportation services provide cargo loading, cargo discharge, vessel chartering, voyage planning, and technical vessel management to vessel and cargo owners. Our logistics capabilities provide a wide array of services which allow our customers to extend their own services, to more efficiently transport their cargo, and to extend relationships with their own suppliers and customers. For some customers, the Company acts as their ocean transportation department, providing scheduling, terminal operations, port services, and marketing functions. For other customers, the Company transports supplies used in mining or processing in addition to cargo transport. The Company has worked with other customers on design, construction, and operation of loading and discharge facilities, and has absorbed some shipping risks, such as demurrage and weather, for others. The Company focuses on fixing cargo and cargo contracts for transportation on backhaul routes. Backhaul routes position vessels for cargo discharge in typical loading areas. Backhaul routes allow us to reduce ballast days and instead earn revenues at times and on routes that are typically traveled without paying cargo. The Company is a leader in the high ice class sector, secured by its control of a majority of the world's large dry bulk vessels with Ice-Class 1A designation. High ice class trading includes service in ice-restricted areas during both the winter (Baltic Sea and Gulf of St. Lawrence) and summer (Arctic Ocean). Contracts and spot trading during the ice seasons have provided superior profit margins, rewarding the Company for its investment in the specialized ships and the expertise it has developed working in the harsh environment. The Company derives substantially all of its revenue from contracts of affreightment, “COAs”, voyage charters, and time charters. The Company transports a wide range of fundamental global commodities including grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, limestone, and other minor bulks. COAs are contracts to transport multiple shipments of cargo during the term of the contract between specified load and discharge ports, at a fixed or variable price per metric ton of cargo. The Company’s COAs typically extend for a period of one to five years, although some extend for longer periods. A voyage charter is a contract for the carriage of a specific amount and type of cargo on a load port to discharge port basis, subject to various cargo handling terms. COAs and voyage charters provide voyage revenue to the Company. A time charter is a contract under which the Company is paid to provide transportation services on a per day basis for a specified period of time. Time charters provide charter revenues to the Company. Active risk management is an important part of our business model. The Company believes its active risk management allows it to reduce the sensitivity of its revenues to market fluctuations and helps it to secure its long-term profitability and lower relative volatility of earnings. We manage our market risk by chartering in vessels for periods of less than nine months on average and through a portfolio approach based upon owned vessels, chartered-in vessels, COAs, voyage charters, and time charters. The Company tries to identify routes and ports for efficient bunkering to minimize its fuel expense. The Company also seeks to hedge a portion of its exposure to changes in the price of marine fuels, or bunkers, through fuel swaps; and to fluctuating future freight rates through forward freight agreements. We have also entered into interest rate agreements to fix a portion of our interest rate exposure. The Company is a holding company incorporated under the laws of Bermuda as an exempted company on April 29, 2014. Bulk Partners, which is wholly owned by the Company, is also a holding company that was incorporated under the laws of Bermuda as an exempted company on June 17, 2008, the subsidiaries of which provide seaborne drybulk transportation and ancillary services. The Company owns its vessels through separate wholly-owned subsidiaries and through joint venture entities, which we consolidate as variable interest entities. The Company’s wholly-owned subsidiaries are organized in Bermuda, Denmark, British Virgin Islands, Panama, and Delaware. The Company’s principal executive headquarters is located at 109 Long Wharf, Newport, Rhode Island 02840, and its phone number at that address is (401) 846-7790. The Company also has offices in Copenhagen, Denmark, Athens, Greece and Singapore. The Company’s corporate website address is www.pangaeals.com.
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