← Back to DSX filing summaryThis is the extracted source text from the SEC filing. Formatting may differ from the original document.
Information on the Company
A.
History and development of the Company
Diana Shipping Inc. is a holding company
incorporated under the laws of Liberia in
March 1999 as Diana
Shipping
Investments
Corp.
In
February
2005,
the
Company’s
articles
of
incorporation
were
amended.
Under the amended
and restated articles
of incorporation, the
Company was
renamed Diana Shipping
Inc.
and was re-domiciled from the Republic
of Liberia to the Republic of
the Marshall Islands.
Our executive
offices
are located
at Pendelis
16,
175 64
Palaio Faliro,
Athens, Greece.
Our telephone
number at
this
address is +30-210-947-0100. Our agent and authorized representative in the United States is our wholly
owned
subsidiary,
Bulk
Carriers
(USA)
LLC,
established in
September
2006,
in
the
State
of
Delaware,
which is located
at 2711 Centerville Road, Suite
400, Wilmington, Delaware
19808. The SEC
maintains an
Internet
site
that
contains
reports,
proxy
and
information
statements,
and
other
information
regarding
issuers that file electronically with
the SEC. The address of
the SEC's Internet site
is http://www.sec.gov.
The address of
the Company's
Internet site is
http://www.dianashippinginc.com
. The information
contained
on or connected to our website is not part of this annual report.
Recent Developments
Genco Acquisition Proposal
During 2025, we acquired 6,413,151 shares of common stock
of Genco Shipping and Trading
Limited, or
Genco, representing
approximately 14.8%
of Genco’s
outstanding shares
for $103.5
million. On
November
24, 2025, we submitted
to Genco’s board of directors
a proposal to acquire
all of the outstanding
shares of
Genco
we did
not already
own for
a price
of $20.60
per share
in cash.
On
January 16,
2026, following
42
Genco’s rejection of our proposal we announced our intention to nominate a slate of independent director
candidates for election
on the Genco
board. On March
6, 2026, we increased
our offer to $23.50
per share
in cash. This acquisition proposal would be financed by a $1.43 billion fully committed facility arranged by
DNB
Carnegie and
Nordea,
and
with
participation of
other
international banks.
Also
on March
6,
2026,
Diana entered into a
definitive agreement with
Star Bulk Carriers Corp.,
or Star Bulk,
to acquire 16
vessels
of Genco for $470.5 million in cash upon, and subject to, the consummation
of an acquisition of Genco by
Diana.
Joint Venture Agreements
In
November
2023,
we
entered
into
a
joint
venture
agreement,
with
two
unrelated
companies
to
form
Windward
Offshore
GmbH
&
Co.
KG,
or
Windward,
for
the
purpose
of
establishing
and
operating
an
offshore wind
vessel company.
We
agreed to
contribute Euro
25.0 million,
being 45.45%
of Windward’s
capital, to
construct two
CSOVs. In
January 2024,
we increased
our commitment
to Euro
50.0 million,
being
45.87% of
Windward’s capital
in order
for the
partnership to
place orders
for two
additional CSOVs.
On
May 5, 2025, a new partner was admitted to Windward which reduced our ownership percentage to 34%.
In 2023,
2024 and 2025,
we invested Euro
9.7 million or
$10.3 million, Euro
25.0
million or
$27.1 million
and Euro
7.6 million or
$8.0 million,
respectively and in
2025 after
the admission
of the
new partner,
we
received Euro
3.1 million
or $3.5
million, as
return of
capital. As
of the
date of
this annual
report, we
invested
Euro 1.3 million or $1.5 million and the remaining commitment amounts
to Euro 9.4 million.
On March 12, 2025,
we entered into a
joint venture agreement with
an unrelated party to
establish Ecogas
Holding AS,
pursuant to
which we
agreed to
contribute $18.5
million, being
80.0% interests
of two
LPG
newbuilding
vessels
with
delivery
in
2027.
During
2025,
we
invested
$10.2
million
out
of
the
total
commitment.
In November 2025, Bergen Ultra
LP,
a limited partnership in which
we have 25% interest,
agreed to sell to
an unrelated third party,
the vessel DSI Drammen,
for $26.4 million. The vessel was delivered to her
new
owners on January 9, 2026
and we received $3.7 million as return of capital.
Tender offer
In
December 2024,
we
announced
the
commencement of
a
tender
offer
to
purchase
up
to
15,000,000
shares,
or
about
12.0%,
of
our
outstanding
common
stock
using
funds
available
from
cash
and
cash
equivalents
at
a
price
of
$2.00
per
share.
The
tender
offer
was
settled
on
January
7,
2025
and
we
purchased a total of 11,442,645 shares of common stock for an aggregate amount of $23.0 million.
Dividends
On
March 21,
2025, we
paid
a
cash dividend
of $0.01
per share,
or
$1.2 million,
to
all
shareholders of
record as of March 12, 2025.
On June 24, 2025,
we paid a cash
dividend of $0.01
per share, or $1.2 million,
to shareholders of record
as of June 17, 2025.
On September
11
, 2025,
we paid
a cash
dividend of
$0.01 per
share, or $1.2
million, to
shareholders of
record as of August 21, 2025.
On December
17, 2025,
we paid
a cash
dividend of
$0.01 per
share, or
$1.2 million,
to shareholders
of
record as of December 8, 2025.
On February 26, 2026, we declared a cash dividend of $0.01
per share, or $1.2 million, payable on March
18, 2026 to shareholders of record as of March 11, 2026.
43
Loans
On September 29, 2025, we signed a $55 million six-year secured term loan facility with National Bank of
Greece S.A. The full amount was drawn down immediately.
The new loan maturing in September 2031 is
secured by five vessels.
Warrant Distribution
On December 14, 2023,
we issued warrants to
purchase common shares (the “Warrants”)
to the holders
of record of Common Stock
as of the close of
business on December 6, 2023 (the
“Record Date”) on the
terms and conditions described in the Warrant Agreement (as defined below and attached as exhibit 2.10
to this
annual report). Each
holder received one
Warrant for
every five shares
of issued and
outstanding
shares of common stock held as of the
Record Date (rounded down to the nearest whole number for
any
fractional
Warrant).
Each
Warrant
entitles
the
holder
to
purchase,
at
the
holder’s
sole
and
exclusive
election,
at
the
exercise
price,
one
share
of
common
stock,
subject
to
adjustments,
plus
to
the
extent
described
below,
the
Bonus
Share
Fraction.
A
Bonus
Share
Fraction
entitles
a
holder
to
receive
an
additional 0.5 of
a share
of common stock
for each Warrant
exercised (the
“Bonus Share Fraction”)
without
payment of
any additional
exercise price,
also subject
to adjustments.
Since the
dividend ex-Date
on March
11
, 2026, each
Warrant entitles the
holder to purchase 1.12097
shares of common stock
plus the Bonus
Share Fraction adjusted to 0.56050 of a share of common stock
for each Warrant exercised.
The right
to receive
the Bonus
Share Fraction
will expire
at 5:00
p.m. New
York City time (the
“Bonus Share
Expiration Date”) upon
the earlier of (i)
the date specified
by the Registrant
upon not less than
20 business
days’
notice
and
(ii)
the
first
business
day
following
the
last
day
of
the
first
30
consecutive trading
day
period
in
which
the
daily
VWAP
of
the
shares
of
common
stock
has
been
at
least
equal
to
the
then
applicable
trigger
price
for
at
least
20
trading
days
(whether
or
not
consecutive)
(the
“Bonus
Price
Condition”). Any Warrant
exercised with an
exercise date after
the Bonus Share
Expiration Date will
not be
entitled to any Bonus Share
Fraction. The Company will
make a public announcement
of the Bonus Share
Expiration Date
(i) at least
20 business days
prior to
such date, in
the case
of the Company
setting a
Bonus
Share Expiration Date
and (ii) prior
to market
open on the
Bonus Share Expiration
Date in the
case of
a
Bonus Price Condition.
Unless earlier redeemed, the Warrants will expire
and cease to be exercisable at
5:00 p.m. New York City
time on December 14, 2026 (the “Expiration Date”).
In connection with the Warrant distribution, we filed a prospectus
supplement, dated December 14, 2023,
pursuant to a shelf registration statement
on Form F-3 declared effective
on July 9, 2021, registering
up to
33,919,605 shares of common stock to be issued upon
exercise of the Warrants under the
Securities Act
of
1933, as
amended.
The
shelf
registration
statement on
Form
F-3
declared
effective
on
July
9,
2021
expired
and
the
Warrant
distribution
is
now
being
offered
pursuant
to
our
existing
shelf
registration
statement on Form F-3 declared effective on September 9, 2024.
The
Warrants
commenced
trading
on
the
New
York
Stock
Exchange
under
the
ticker
“DSX
WS”
on
December 14, 2023.
As of
the date
of this
annual report,
out of
the 22,613,070
Warrants distributed
in this
transaction, 6,410,343
Warrants have been exercised and 9,866,677 common shares have been issued.
Appointment of new Co-Chief Financial Officer
Effective January
17, 2025, we
appointed Ms. Maria
Dede as the
Company’s Co-Chief Financial
Officer.
In addition, effective January 1, 2026, she was appointed Co-Chief Financial
Officer and Treasurer.
44
Effective January 1, 2026, Mr.
Ioannis Zafirakis is the Company’s President, Mr.
Evangelos Sfakiotakis is
the Company’s Chief Technical
Investment Officer and Ms. Margarita Veniou is the
Company’s Secretary
and Corporate Contact.
Vessels under construction
In February
2024, we
signed an
agreement
with an
unaffiliated third
party, for the
construction of
two 81,200
dwt methanol
dual fuel
new-building
Kamsarmax dry
bulk vessels
to be
built at
Tsuneishi Group (Zhoushan)
Shipbuilding Inc., China. The vessels
are expected to be delivered to
the Company by the second
half of
2027 and the first half of 2028.
Vessel acquisitions
In
August
2022,
we
entered
into
a
master
agreement
with
an
unaffiliated
third
party,
to
acquire
nine
Ultramax vessels for
an aggregate purchase
price of $330
million, of which
$220 million payable
in cash
and
$110
million
through
an
aggregate
of
18,487,393
newly
issued
common
shares,
issuable
on
the
delivery
of
each
vessel.
In
addition
to
the
master
agreement,
we
also
entered
into
nine
separate
memoranda of agreement for the acquisition of each vessel and issued nine warrants to the seller, for the
issuance of the shares, exercisable on the delivery date of each vessel. We took delivery of eight vessels
in December 2022 and the ninth vessel in January 2023.
Vessel disposals
In June 2025, we agreed to sell to an unrelated
third party, the vessel Selina,
for $11.8
million. The vessel
was delivered to her new owners on July 15, 2025.
In February 2025, we agreed to sell to an unrelated third party, the vessel Alcmene, for $11.9
million. The
vessel was delivered to her new owners on March 13, 2025.
In February 2024, we agreed to sell to an unrelated third party,
the vessel Houston, for $23.3 million. The
vessel was delivered to her new owners on September 4, 2024.
In January 2024,
we agreed to
sell to an
unrelated third party,
the vessel Artemis, for
the purchase price
of $13.0 million. The vessel was delivered to her new owners on
March 5, 2024.
In October
2023, we
agreed to
sell to
an unrelated
third party,
the vessel
Boston, for
$18.0 million.
The
vessel was delivered to her new owners on December 6, 2023.
In February
2023, we
agreed to
sell to
OceanPal, a
related party,
the vessel
Melia, for
$14.0 million,
of
which $4.0
million was
paid in
cash and
$10.0 million through
13,157 of
OceanPal Series
D Convertible
Preferred Shares. The vessel was delivered to her
new owners on February 8, 2023.
In
January
2023,
we
agreed
to
sell
to
an
unrelated
third
party,
the
vessel Aliki,
for
$15.08
million.
The
vessel was delivered to her new owners on February 8, 2023.
B.
Business overview
We specialize
in the ownership
and bareboat charter-in
of dry bulk
vessels, determined as one
business
segment. Each of our vessels is owned through a separate wholly-owned
subsidiary.
As of
the date
of this
report, our
fleet consisted
of 38
vessels of
which 36
in operation,
owned and
chartered-
45
in, having
a combined carrying
capacity of
4.1 million dead weight
tons, or
dwt, and
a weighted average
age of
12.3 years. We
also have
two Kamsarmax vessels
under construction with
expected deliveries in
2027 and 2028.
As of December
31, 2025,
we had a
fleet of 36
dry bulk
carriers, owned and
chartered-in, consisting
of nine
Ultramax,
five
Panamax,
six
Kamsarmax,
four
Post-Panamax,
eight
Capesize
and
four
Newcastlemax
vessels, having
a combined
carrying capacity
of approximately
4.1 million
dwt and a
weighted average
age
of 12.1 years.
As of December
31, 2024,
we had a
fleet of 38
dry bulk
carriers, owned and
chartered-in, consisting
of nine
Ultramax,
six
Panamax,
six
Kamsarmax,
five
Post-Panamax,
eight
Capesize
and
four
Newcastlemax
vessels, having
a combined
carrying capacity
of approximately
4.2 million
dwt and a
weighted average
age
of 11.3 years.
As
of
December
31,
2023,
we
had
a
fleet
of
40
dry
bulk
carriers,
consisting
of
nine
Ultramax,
seven
Panamax, six Kamsarmax, five
Post-Panamax, nine Capesize and
four Newcastlemax vessels, having
a
combined carrying capacity of approximately 4.5 million dwt and a
weighted average age of 10.5 years.
During
2025,
2024
and
2023,
we
had
a
fleet
utilization
of
99.7%,
99.7%
and
99.7%,
respectively,
our
vessels achieved daily
time charter equivalent
rates of
$15,454, $15,267 and
$16,713, respectively,
and
we generated revenues of $213.5 million, $228.2 million and $262.1
million, respectively.
We
operate
our
vessels
worldwide,
in
markets
that
have
historically
exhibited
seasonal
variations
in
demand and,
as a
result, in
charter hire
rates. The
dry bulk
carrier market
is typically
stronger in the
fall
and winter months in
anticipation of increased
consumption of coal and
other raw materials
in the northern
hemisphere during the winter months. In addition, unpredictable weather patterns
in these months tend to
disrupt vessel
scheduling and supplies
of certain commodities.
Currently,
the majority
of our vessels
are
employed on
short-
to medium-term
time charter
agreements.
We may
fix our
vessels on
short-, medium-
or
long-term
employment
depending
on
prevailing
market
conditions,
which
provides
us
with
flexibility
in
responding to market developments.
Management of Our Fleet
The commercial and technical management of our fleet, owned and
bareboat chartered-in, as well as the
provision of administrative services
relating to the fleet’s
operations, are carried out
by our wholly-owned
subsidiary, Diana Shipping Services S.A., which we refer to as DSS, and Diana Wilhelmsen Management
Limited, a 50/50 joint
venture with Wilhelmsen
Ship Management, which
we refer to as
DWM. In exchange
for
providing
us
with
commercial
and
technical
services,
personnel
and
office
space,
we
pay
DSS
a
commission,
which
is
a
percentage
of
the
managed
vessels’
gross
revenues,
a
fixed
monthly
fee
per
managed vessel and an additional monthly fee for the administrative services provided to Diana Shipping
Inc. Such services may
include budgeting, reporting,
monitoring of bank accounts,
compliance with banks,
payroll
services
and
any
other
possible
service
that
Diana
Shipping
Inc.
would
require
to
perform
its
operations. Similarly, in exchange
for providing
us with
commercial and
technical services,
we pay
to DWM
a commission
which is
a percentage
of the
managed vessels’
gross revenues
and a
fixed management
monthly fee
for each
managed vessel.
The amounts
deriving from
the agreements
with DSS
are considered
inter-company transactions and, therefore, are eliminated from
our consolidated financial statements. The
management fees
and commissions
deriving from
the agreements
with DWM
are included
in our
statement
of income in “Management fees to a related party” and “Voyage Expenses”.
Steamship
Shipbroking
Enterprises
Inc.,
or
Steamship,
a
related
party
controlled
by
our
CEO
Ms.
Semiramis Paliou,
provides brokerage services to us, since June 1, 2010. Brokerage fees are included in
“General
and
Administrative
expenses”
in
our
statement
of
income.
The
terms
of
this
relationship
are
currently governed by a Brokerage Services Agreement dated
February 25, 2026.
46
The following table presents certain information
concerning the dry bulk carriers in
our fleet, as of the date
of this annual report.
47
Fleet Employment (As of the date of this annual
report)
VESSEL
SISTE
R
SHIPS*
GROSS RATE
(USD PER DAY)
COM**
CHARTERERS
DELIVERY DATE
TO
CHARTERERS***
REDELIVERY DATE TO
OWNERS****
NOTES
BUILT DWT
9 Ultramax Bulk Carriers
1
DSI Phoenix
A
13,500
4.75%
Cargill Ocean Transportation
(Singapore) Pte. Ltd.
8-Aug-25
1/Oct/2026 - 30/Nov/2026
2017 60,456
2
DSI Pollux
A
14,750
5.00%
Stone Shipping Ltd
9-Dec-25
1/Jan/2027 - 28/Feb/2027
2015 60,446
3
DSI Pyxis
A
13,100
5.00%
Stone Shipping Ltd
8-Nov-24
20/Mar/2026 - 20/Apr/2026
1
2018 60,362
4
DSI Polaris
A
12,250
4.75%
Cargill Ocean Transportation
(Singapore) Pte. Ltd.
1-Jul-25
21/Jul/2026 - 21/Sep/2026
2018 60,404
5
DSI Pegasus
A
14,250
4.75%
Cargill Ocean Transportation
(Singapore) Pte. Ltd
15-Aug-25
20/May/2026 - 20/Jul/2026
2015 60,508
6
DSI Aquarius
B
14,500
5.00%
Bunge SA, Geneva
7-Nov-25
1/Nov/2026 - 31/Dec/2026
2016 60,309
7
DSI Aquila
B
14,500
5.00%
Bunge SA, Geneva
12-Oct-25
25/Feb/2027 - 25/Apr/2027
2
2015 60,309
8
DSI Altair
B
14,750
5.00%
Bunge SA, Geneva
19-Jan-26
15/Jan/2027 - 30/Mar/2027
3
2016 60,309
9
DSI Andromeda
B
14,600
5.00%
Western Bulk Carriers AS
7-Dec-25
1/Apr/2027 - 31/May/2027
4
2016 60,309
5 Panamax Bulk Carriers
10
LETO
12,750
4.75%
Cargill International SA, Geneva
4-Apr-25
16/Jul/2026 - 16/Sep/2026
2010 81,297
11
MAERA
11,750
5.00%
CRC Shipping Pte. Ltd., Singapore
3-Nov-25
20/Oct/2026 - 20/Dec/2026
2013 75,403
12
ISMENE
11,000
5.00%
CRC Shipping Pte. Ltd.
24-Apr-25
20/Mar/2026 - 20/May/2026
2013 77,901
13
CRYSTALIA
C
13,900
5.00%
Louis Dreyfus Company Freight
Asia Pte. Ltd.
4-May-24
13-Mar-26
5
2014 77,525
16,200
5.00%
SwissMarine Pte. Ltd., Singapore
13-Mar-26
10/Mar/2027 - 10/May/2027
6
14
ATALANDI
C
10,100
5.00%
Stone Shipping Ltd
8-Jun-25
15/Jun/2026 - 15/Aug/2026
7
2014 77,529
6 Kamsarmax Bulk Carriers
15
MAIA
D
11,600
5.00%
Paralos Shipping Pte. Ltd.
9-Dec-24
16-Jan-26
8
2009 82,193
14,000
5.00%
16-Jan-26
5/Jul/2027 - 5/Sep/2027
16
MYRSINI
D
13,000
4.75%
Cargill International SA, Geneva
26-Feb-25
3-Jan-26
2010 82,117
13,500
5.00%
Paralos Shipping Pte. Ltd.
3-Jan-26
20/Dec/2026 - 20/Feb/2027
17
MEDUSA
D
13,000
4.75%
Cargill International SA, Geneva
16-Mar-25
15/May/2026 - 15/Jul/2026
2010 82,194
18
MYRTO
D
12,000
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
23-Dec-24
25/Mar/2026 - 15/May/2026
1
2013 82,131
19
ASTARTE
12,500
5.00%
Propel Shipping Pte. Ltd.
2-Aug-25
16/Aug/2026 - 16/Oct/2026
2013 81,513
20
LEONIDAS P. C.
14,000
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
24-Sep-25
15/Sep/2026 - 15/Nov/2026
2011 82,165
4 Post-Panamax Bulk Carriers
21
AMPHITRITE
E
12,100
5.00%
Cobelfret S.A., Luxembourg
8-Jan-25
12-Feb-26
9
2012 98,697
16,500
5.00%
12-Feb-26
1/Mar/2027 - 30/Apr/2027
10
48
22
POLYMNIA
E
14,000
5.00%
Oldendorff Carriers GmbH & Co.
KG
17-Aug-25
10/Apr/2026 - 10/Jun/2026
2012 98,704
23
ELECTRA
F
14,000
5.00%
Oldendorff Carriers GmbH & Co.
KG
7-Dec-25
1/Dec/2026 - 31/Jan/2027
2013 87,150
24
PHAIDRA
F
9,750
5.00%
SwissMarine Pte. Ltd., Singapore
31-May-25
27-Feb-26
2013 87,146
14,500
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
27-Feb-26
20/Feb/2027 - 20/Apr/2027
8 Capesize Bulk Carriers
25
SEMIRIO
G
16,650
5.00%
Solebay Shipping Cape Company
Limited, Hong Kong
11-Feb-25
15-Mar-26
11
2007 174,261
21,650
5.00%
15-Mar-26
31/Jan/2027 - 15/Apr/2027
12
26
NEW YORK
G
17,600
5.00%
SwissMarine Pte. Ltd., Singapore
11-Jan-25
20/Mar/2026 - 13/May/2026
1,13
2010 177,773
27
SEATTLE
H
24,500
5.00%
SwissMarine Pte. Ltd., Singapore
29-Nov-25
1/May/2027 - 30/Jun/2027
2011 179,362
28
P.
S. PALIOS
H
25,200
5.00%
Glencore Freight Pte. Ltd.
15-Dec-25
15/Nov/2026 - 15/Jan/2027
2013 179,134
29
G. P. ZAFIRAKIS
I
26,800
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
16-Sep-24
16/Aug/2026 - 16/Nov/2026
2014 179,492
30
SANTA BARBARA
I
25,500
5.00%
Dampskibsselskabet Norden A/S
27-Nov-25
1/Mar/2027 - 30/Apr/2027
14
2015 179,426
31
NEW ORLEANS
26,000
5.00%
SwissMarine Pte. Ltd., Singapore
31-Oct-25
1/Dec/2026 - 15/Feb/2027
14,15
2015 180,960
32
FLORIDA
25,900
5.00%
Bunge S.A., Geneva
29-Mar-22
29/Jan/2027 - 29/May/2027
4
2022 182,063
4 Newcastlemax Bulk Carriers
33
LOS ANGELES
J
24,000
5.00%
MOL Ocean Bulk Pte. Ltd.,
Singapore
1-Nov-25
10/Sep/2026 - 1/Nov/2026
2012 206,104
34
PHILADELPHIA
J
21,500
5.00%
Refined Success Limited
29-May-25
9/Jun/2026 - 8/Aug/2026
2012 206,040
35
SAN FRANCISCO
K
26,000
5.00%
SwissMarine Pte. Ltd., Singapore
1-Mar-25
25/Oct/2026 - 25/Dec/2026
2017 208,006
36
NEWPORT NEWS
K
25,000
5.00%
Bohai Ocean Shipping (Singapore)
Holding Pte. Ltd.
16-Jun-25
1/Sep/2026 - 31/Oct/2026
2017 208,021
* Each dry bulk carrier is a “sister ship”, or closely
similar, to other dry bulk carriers that have the same letter.
** Total commission percentage paid to third parties.
*** In case of newly acquired vessel with
time charter attached, this date refers to the expected/actual
date of delivery of the vessel to the Company.
**** Range of redelivery dates, with the actual
date of redelivery being at the Charterers’
option, but subject to the terms, conditions, and
exceptions of the
particular charterparty.
1Based on latest information.
2Vessel on scheduled drydocking from September 17, 2025 to October
12, 2025.
3Vessel on scheduled drydocking from December 27, 2025 to January
19, 2026.
4Bareboat chartered-in for a period of ten years.
5Estimated redelivery date from the charterers.
6Estimated delivery date to the charterers.
7The charter rate was US$9,000 per day for
the first thirty-five (35) days of the charter period.
8Charterers have agreed to compensate the Owners,
for all the days over and above the maximum
redelivery date (December 31, 2025), at
a hire rate of
105% of the average of the Baltic Panamax Index
5TC or the vessel’s present charter party rate
whichever of the two is higher.
9The charter rate was US$8,750 per day for
the first fifty (50) days of the charter period.
10The charter rate will be US$13,000 per
day for the first thirty (30) days of the charter
period.
11Vessel off hire for drydocking from September 8, 2025 to November 1, 2025.
49
12Estimated date.
13The charter rate was US$6,300 per day for
the first trip of the charter period.
14Bareboat chartered-in for a period of eight years.
15Vessel on scheduled drydocking from September 20, 2025 to
October 31, 2025.
Our Customers
Our customers include
regional and international
companies, mainly with
concentrations below 10%
of our
gross revenues. During 2025,
only two of our
charterers accounted for
29% of our revenues,
in aggregate.
During
2024,
one
of
our
charterers
accounted
for
11%
of
our
revenues
and
during
2023,
one
of
our
charterers accounted for 13% of our revenues.
We charter our
dry bulk
carriers, owned
and bareboat
chartered-in, to
customers pursuant
to time charters.
Under our time charters, the charterer typically
pays us a fixed daily charter hire rate and
bears all voyage
expenses, including the cost
of bunkers (fuel
oil) and canal and
port charges. We
remain responsible for
paying the
chartered vessel's
operating expenses,
including the
cost of
crewing, insuring,
repairing and
maintaining the
vessel. In
2025, we
paid commissions that
ranged from
4.75% to
5.0% of
the total
daily
charter hire
rate of
each charter
to unaffiliated
ship brokers
and to
in-house brokers
associated with
the
charterer, depending on the number of brokers involved with arranging the charter.
We strategically monitor developments in the dry bulk shipping industry on a regular basis and, subject to
market
demand,
seek
to
adjust
the
charter
hire
periods
for
our
vessels
according
to
prevailing
market
conditions. In order to take advantage of relatively stable cash flow and high utilization rates,
we fix some
of our
vessels on
long-term time
charters. Currently,
most of
our vessels
are employed
on short-
to medium-
term time charters, which
allows us greater flexibility
to respond to market
developments. We continuously
evaluate
our
mix
of
short-
and
long-term
charters and
extend
or
reduce
the
charter
hire
periods
of
the
vessels in our fleet according to the developments in the dry bulk
shipping industry.
Charter Hire Rates
Charter hire
rates fluctuate
by varying
degrees among
dry bulk
carrier size
categories. The
volume and
pattern of
trade in
a small
number of
commodities
(major bulks)
affect demand
for larger
vessels. Therefore,
charter rates
and vessel
values of
larger vessels
often show
greater volatility. Conversely, trade
in a
greater
number
of
commodities (minor
bulks)
drives
demand
for
smaller
dry
bulk
carriers.
Accordingly,
charter
rates and vessel values for those vessels are usually subject
to less volatility.
Charter
hire
rates
paid
for
dry
bulk
carriers
are
primarily
a
function
of
the
underlying
balance
between
vessel supply and demand, although at
times other factors may play a
role. Furthermore, the pattern seen
in
charter
rates
is
broadly
mirrored
across
the
different
charter
types
and
the
different
dry
bulk
carrier
categories. In the
time charter market,
rates vary depending
on the length
of the charter
period and vessel-
specific factors such as age, speed and fuel consumption.
In the voyage charter market, rates are, among other things, influenced by cargo size, bunker prices, port
dues and canal transit fees, as well
as commencement and termination
regions. In general, a larger
cargo
size is quoted
at a lower
rate per ton
than a smaller
cargo size.
Routes with
costly ports or
canals generally
command higher rates
than routes
with low port
dues and
no canals to
transit. Voyages
with a
load port
within a
region that
includes ports
where vessels
usually discharge
cargo or
a discharge
port within
a region
with
ports
where
vessels
load
cargo
also
are
generally
quoted
at
lower
rates,
because
such
voyages
generally increase vessel utilization
by reducing the unloaded portion
(or ballast leg) that is
included in the
calculation of the return charter to a loading area.
50
Within the dry bulk shipping industry, the
charter hire rate references, most likely to be monitored, are the
freight rate indices
issued by the
Baltic Exchange. These
references are based
on actual charter
hire rates
under
charters
entered
into
by
market
participants
as
well
as
daily
assessments
provided
to
the
Baltic
Exchange by a panel
of major shipbrokers.
The Baltic Panamax
Index is the index
with the longest
history.
The Baltic Capesize Index and Baltic Handymax Index are
of more recent origin.
The Baltic Dry Index, or BDI, is a daily average of charter rates in
20 shipping routes measured on a time
charter and voyage basis and covering Capesize, Panamax, Supramax, and Handysize dry
bulk carriers.
In 2025, the BDI ranged from a low of 715 to a high of 2,845 and closed
at 1,972 on March 12, 2026.
The Dry Bulk Shipping Industry
The
global
dry
bulk
carrier
fleet
could
be
divided
into
seven
categories
based
on
a
vessel's
carrying
capacity. These categories consist of:
●
Very
Large Ore
Carriers/ Newcastlemax
. Vessels
with carrying
capacities of
between 200,000
and 220,000 dwt.
These vessels
carry both
iron ore
and coal
and they
represent the
largest vessels
able to enter the
port of Newcastle
in Australia. There are
relatively few ports
around the world with
the infrastructure to accommodate vessels of this size.
●
Capesize
. Capesize vessels (including Baby Capes) have a carrying capacity of 100,000-120.000
dwt
for
Baby
Capes,
and
150,000-199,999
dwt
for
conventional
Capes.
Only
the
largest
ports
around the world
possess the
infrastructure to
accommodate vessels
of this size.
Capesize vessels
are primarily
used to
transport iron
ore or
coal and,
to a
much lesser
extent, grains,
primarily on
long-haul routes.
●
Post-Panamax
.
Post-Panamax
vessels
have
a
carrying
capacity
of
84,000-99,999
dwt.
These
vessels tend
to have
a shallower
draft and
larger beam
than a
standard Panamax
vessel with
a
higher
cargo
capacity.
These
vessels
have
been
designed
specifically
for
loading
high
cubic
cargoes from draught
restricted ports. Post-Panamaxes
are used primarily
in the coal
trade, as well
as grains from River Plate to Far East.
●
Panamax
.
Panamax vessels have a carrying
capacity of 70,000-79,999, and a
subset within this
segment is
the ‘Kamsarmax’
at 80,000
- 83,999
dwt. These
vessels carry
coal, iron
ore, grains,
and,
to a lesser extent, minor bulks,
including steel products, cement, and fertilizers. Panamax vessels
are able to pass
through the Panama Canal, making them
more versatile than larger vessels
with
regard
to
accessing
different
trade
routes.
Most
Panamax
and
Post-Panamax
vessels
are
“gearless,”
and
therefore
must
be
served
by
shore-based
cargo
handling
equipment.
However,
there are a small
number of geared vessels with onboard
cranes, a feature that
enhances trading
flexibility
and
enables
operation
in
ports
which
have
poor
infrastructure
in
terms
of
loading
and
unloading facilities.
●
Ultramax
Ultramax
is
the
largest
class
before
Panamax
and
is
the
newer
form
of
the
smaller
Supramax with
a
maximum
length
of
200
meters
and
capacity
that
ranges
from
60,000
dwt
to
66,000 dwt. This class is considered an upgrade to Supramax class as it offers a better all-around
investment
for
Charterers
and
Shipowners
due
to
its
higher
cargo
carrying
capacity
and
better
bunker
efficiency.
Ultramax
class
bulk
carriers
have
5
cargo
holds.
are
fitted
with
4
cranes
and
usually are equipped with grabs allowing
them to call more ports with no such
facilities giving them
more versatility. Ultramaxes often compete with Panamaxes on certain grain routes.
51
●
Handymax/Supramax
.
Handymax vessels have a carrying
capacity of 40,000-59,999 dwt.
These
vessels
operate
in
a
large
number
of
geographically
dispersed
global
trade
routes,
carrying
primarily grains and minor
bulks. Within the Handymax category
there is also a
sub-sector known
as Supramax. Supramax
bulk carriers are
ships between 50,000
to 59,999 dwt,
normally offering
cargo
loading
and
unloading
flexibility
with
on-board
cranes,
or
“gear,”
while
at
the
same
time
possessing the cargo carrying capability approaching conventional
Panamax bulk carriers.
●
Handysize
.
Handysize vessels have
a carrying capacity
of up
to 39,999 dwt.
These vessels are
primarily
involved
in
carrying
minor
bulk
cargoes.
Increasingly,
ships
of
this
type
operate
within
regional
trading
routes, and
may
serve
as
trans-shipment
feeders
for
larger vessels.
Handysize
vessels are well
suited for small
ports with length
and draft restrictions.
Their cargo gear
enables
them to service ports lacking the infrastructure for cargo loading and unloading.
Other size categories occur in regional trade,
such as Kamsarmax, with a maximum length
of 229 meters,
the maximum
length that can
load in
the port
of Kamsar
in the
Republic of Guinea.
Other terms
such as
Seawaymax, Setouchmax and Dunkirkmax also appear in regional trade.
The supply
of dry
bulk carriers
is dependent
on the
delivery of
new vessels
and the
removal of
vessels
from the global fleet,
either through scrapping
or loss. The level
of scrapping activity
is generally a function
of scrapping prices
in relation to current
and prospective charter market
conditions, as well as
operating,
repair
and
survey
costs.
The
age
range
at
which
a
vessel
is
scrapped
is
between
20
and
32
years,
depending on among others, the vessel type, the freight
market conditions and regulatory requirements.
The
demand
for
dry
bulk
carrier
capacity
is
determined
by
the
underlying
demand
for
commodities
transported in
dry bulk carriers,
which in turn
is influenced by
trends in
the global
economy.
Demand for
dry
bulk
carrier
capacity
is
also
affected
by
the
operating
efficiency
of
the
global
fleet,
along
with
port
congestion, which has been a feature of the market since 2004,
absorbing tonnage and therefore leading
to a
tighter balance
between supply
and demand.
In evaluating
demand factors
for dry
bulk carrier
capacity,
the Company believes that dry
bulk carriers can be
the most versatile element
of the global shipping
fleets
in terms of employment alternatives.
Vessel Prices
Dry bulk
vessel values in
2025 generally remained
firm and
in several
segments increased compared
to
2024, despite fluctuations
in charter rates
during the year.
This resilience in
secondhand asset values
is
largely supported
by historically
high newbuilding
prices and
a restricted
availability of
shipyard slots
for
near-term deliveries which limits near-term fleet growth. While 2025 presented a mixed rate environment,
charter
rates
have shown
notable
strength and
an
upward
trajectory in
early
2026.
However,
given the
cyclical nature of the industry,
there can be no assurance
as to how long vessel values
and charter rates
will remain at
their current robust
levels, or whether
they will continue
to improve or
face adjustments in
the
near future.
Competition
Our business
fluctuates in
line with
the main
patterns of
trade of
the major
dry bulk
cargoes and
varies
according to
changes in
the supply
and demand
for these
items. We
operate in
markets that
are highly
competitive and
based primarily
on supply
and demand.
We compete
for charters
on the
basis of
price,
vessel
location,
size,
age
and
condition
of
the
vessel,
as
well
as
on
our
reputation
as
an
owner
and
operator. We
compete with other owners of dry bulk carriers
in the Panamax, Post-Panamax and smaller
class
sectors and
with owners
of Capesize
and Newcastlemax
dry
bulk carriers.
Ownership of
dry
bulk
carriers is highly fragmented.
52
We believe that we possess a number
of strengths that provide us
with a competitive advantage in
the dry
bulk shipping industry:
●
We own
a modern, high
quality fleet of
dry bulk carriers
.
We believe that
owning a modern,
high
quality fleet
reduces operating
costs, improves
safety and
provides us
with a
competitive advantage
in securing favorable time charters.
We maintain the
quality of our vessels by
carrying out regular
inspections, both while
in port and
at sea, and
adopting a comprehensive
maintenance program
for
each vessel.
●
Our fleet
includes groups
of sister
ships.
We believe
that maintaining
a fleet
that includes
sister
ships enhances the revenue
generating potential of our
fleet by providing us
with operational and
scheduling flexibility.
The uniform
nature of sister
ships also
improves our operating
efficiency by
allowing our
fleet managers
to
apply the
technical knowledge
of
one vessel
to
all vessels
of the
same series
and create
economies of
scale that
enable us
to realize
cost savings
when maintaining,
supplying and crewing our vessels.
●
We
have
an
experienced
management
team.
Our
management
team
consists
of
experienced
executives
who
have,
on
average,
more
than
30
years
of
operating
experience
in
the
shipping
industry and has demonstrated
ability in managing
the commercial, technical
and financial areas of
our business.
●
We benefit
from the
experience and
reputation of
Diana Shipping
Services S.A.
and the
relationship
with
Wilhelmsen
Ship
Management
through
the
Diana
Wilhelmsen
Management
Limited
joint
venture.
●
We
benefit from
strong relationships
with members
of the
shipping and
financial industries.
We
have developed strong relationships with major international charterers, shipbuilders and financial
institutions
that
we
believe
are
the
result
of
the
quality
of
our
operations,
the
strength
of
our
management team and our reputation for dependability.
●
We have
a strong
balance sheet
and a
relatively low
level of
indebtedness.
We believe
that our
strong
balance
sheet
and
relatively
low
level
of
indebtedness
provide
us
with
the
flexibility
to
increase
the
amount of
funds
that
we may
draw under
our
loan
facilities in
connection
with
any
future acquisitions or otherwise and enable us to use cash flow that would otherwise be dedicated
to debt service for other purposes.
Permits and Authorizations
We
are
required
by
various
governmental
and
quasi-governmental
agencies
to
obtain
certain
permits,
licenses and
certificates with
respect to
our vessels.
The kinds
of permits,
licenses and
certificates required
depend upon
several factors,
including the
commodity transported,
the waters
in which
the vessel
operates,
the
nationality
of
the
vessel's
crew
and
the
age
of
a
vessel.
We
have
been
able
to
obtain
all
permits,
licenses and
certificates currently
required to
permit our
vessels to
operate. Additional
laws and
regulations,
environmental or
otherwise, may
be adopted
which could
limit our
ability to
do business
or increase
the
cost of us doing business.
Disclosure Pursuant to Section 219 of the Iran Threat Reduction and
Syrian Human Rights
Act
Section 219
of the U.S.
Iran Threat
Reduction and Syria
Human Rights Act
of 2012,
or the ITRA,
added
new Section
13(r) to
the U.S.
Securities Exchange
Act of
1934, as
amended, or
the Exchange
Act, requiring
each SEC reporting issuer to disclose in its
annual and, if applicable, quarterly reports
whether it or any of
its affiliates
have knowingly
engaged in
certain activities,
transactions or dealings
relating to
Iran or
with
53
the
Government
of
Iran
or
certain
designated
natural
persons
or
entities
involved
in
terrorism
or
the
proliferation of weapons of mass destruction during the period
covered by the report.
Pursuant to Section 13(r) of the Exchange Act, we note that none of our vessels made port calls to Iran in
2025 and to the date of this annual report.
Environmental and Other Regulations in the Shipping Industry
Government
regulation
and
laws
significantly
affect
the
ownership
and
operation
of
our
fleet.
We
are
subject to international conventions and treaties,
national, state and local laws
and regulations in force in
the
countries
in
which
our
vessels
may
operate
or
are
registered
relating
to
safety
and
health
and
environmental
protection
including
the
storage,
handling,
emission,
transportation
and
discharge
of
hazardous and non-hazardous materials, and the remediation of contamination and liability
for damage to
natural
resources.
Compliance
with
such
laws,
regulations
and
other
requirements
entails
significant
expense, including vessel modifications and implementation of certain
operating procedures.
A
variety
of
government
and
private
entities
subject
our
vessels
to
both
scheduled
and
unscheduled
inspections.
These entities
include the
local port
authorities (applicable
national authorities
such as
the
United
States
Coast
Guard (“USCG”),
harbor
master
or
equivalent),
classification
societies,
flag
state
administrations
(countries
of
registry)
and
charterers,
particularly
terminal
operators.
Certain
of
these
entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our
vessels. Failure to maintain
necessary permits or approvals
could require us to
incur substantial costs or
result in the temporary suspension of the operation of one or more
of our vessels.
Increasing
environmental
concerns
have
created
a
demand
for
vessels
that
conform
to
stricter
environmental
standards.
We
are
required
to
maintain
operating
standards
for
all
of
our
vessels
that
emphasize
operational
safety,
quality
maintenance,
continuous
training
of
our
officers
and
crews
and
compliance with United States and international regulations. We
believe that the operation of
our vessels
is in substantial compliance with applicable environmental
laws and regulations and that our vessels have
all
material
permits,
licenses,
certificates
or
other
authorizations
necessary
for
the
conduct
of
our
operations. However, because such laws and regulations frequently
change and may impose increasingly
stricter
requirements,
we
cannot
predict
the
ultimate
cost
of
complying with
these
requirements,
or
the
impact of these requirements
on the resale value
or useful lives of
our vessels. In
addition, a future
serious
marine incident that causes
significant adverse environmental impact could result
in additional legislation
or regulation that could negatively affect our profitability.
International Maritime Organization
The International Maritime
Organization, the United
Nations agency for
maritime safety and the
prevention
of pollution
by vessels (the “IMO”),
has adopted
the International
Convention for
the Prevention
of Pollution
from Ships, 1973, as modified
by the Protocol of
1978 relating thereto, collectively
referred to as MARPOL
73/78 and
herein as “MARPOL,”
the International
Convention for
the Safety
of Life
at Sea
of 1974 (“SOLAS
Convention”), and
the International
Convention on
Load Lines
of
1966 (the
“LL
Convention”). MARPOL
establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air
emissions, handling and
disposal of noxious
liquids and the
handling of harmful
substances in packaged
forms. MARPOL is applicable
to drybulk,
tanker and LNG carriers,
among other
vessels, and is
broken into
six Annexes,
each of
which regulates
a different
source of
pollution. Annex
I relates
to oil
leakage or
spilling;
Annexes II and III
relate to harmful substances
carried in bulk in
liquid or in packaged
form, respectively;
Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly,
relates
to
air
emissions.
Annex
VI
was
separately
adopted
by
the
IMO
in
September
of
1997;
new
emissions
standards, titled IMO-2020, took effect on January 1, 2020.
54
Air Emissions
In
September
of
1997,
the
IMO
adopted
Annex
VI
to
MARPOL
to
address
air
pollution
from
vessels.
Effective May 2005, Annex VI sets limits
on sulfur oxide and nitrogen oxide
emissions from all commercial
vessel exhausts and prohibits
“deliberate emissions” of ozone depleting
substances (such as halons
and
chlorofluorocarbons), emissions of
volatile compounds from
cargo tanks, and
the shipboard incineration
of
specific substances.
Annex VI
also includes
a global
cap on
the sulfur
content of
fuel
oil and
allows for
special
areas
to
be
established
with
more
stringent
controls
on
sulfur
emissions,
as
explained
below.
Emissions
of
“volatile
organic
compounds”
from
certain
vessels,
and
the
shipboard
incineration
(from
incinerators installed after
January 1, 2000)
of certain
substances (such as
polychlorinated biphenyls, or
“PCBs”) are also prohibited. We believe that
all our vessels are currently compliant
in all material respects
with these regulations.
The Marine Environment Protection Committee, or
“MEPC”, adopted amendments to Annex VI
regarding
emissions of
sulfur oxide,
nitrogen oxide,
particulate matter
and ozone
depleting substances,
which entered
into force
on July
1, 2010.
The amended Annex
VI seeks
to further
reduce air
pollution by,
among other
things, implementing
a progressive
reduction of
the amount
of sulfur
contained in
any fuel
oil used
on board
ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global
0.5% m/m sulfur
oxide emissions
limit (reduced
from 3.50%)
starting from
January 1,
2020. This
limitation can
be met
by
using
low-sulfur compliant fuel
oil, alternative
fuels,
or
certain exhaust
gas cleaning
systems. Ships
are
now required
to obtain
bunker delivery
notes and
International Air
Pollution Prevention (“IAPP”)
Certificates
from their
flag states
that specify
sulfur content.
Additionally,
at MEPC
73,
amendments to
Annex VI
to
prohibit the carriage of bunkers
above 0.5% sulfur on ships were
adopted and took effect March
1, 2020,
with the exception of
vessels fitted with exhaust
gas cleaning equipment
(“scrubbers”) which can
carry fuel
of higher
sulfur content.
These regulations
subject ocean-going
vessels to
stringent emissions
controls and
may cause us to incur substantial costs.
Sulfur
content
standards
are
even
stricter
within
certain
“Emission
Control
Areas,”
or (“ECAs”).
As
of
January 1, 2015,
ships operating
within an
ECA were
not permitted
to use fuel
with sulfur content
in excess
of 0.1% m/m. Currently,
the IMO has designated five
ECAs, including specified portions of the
Baltic Sea
area, Mediterranean Sea area,
North Sea area, North
American area and United States
Caribbean area.
Ocean-going vessels
in these
areas will
be subject
to stringent
emission controls
and may
cause us
to
incur additional costs.
Other areas
in China are
subject to local
regulations that
impose stricter emission
controls.
In
July
2023,
MEPC
80
announced
three
new
ECA
proposals,
including
the
Canadian
Arctic
waters
and
the
Norwegian
Sea,
which
should
take
effect
in
March
2027.
MEPC
83
also
approved
the
Northeast Atlantic Ocean
as an ECA and
is expected to
take effect in 2028.
If other ECAs are
approved by
the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or
port operations by vessels
are adopted by the
U.S. Environmental Protection
Agency (“EPA”) or the states
where
we
operate,
compliance
with
these
regulations
could
entail
significant
capital
expenditures
or
otherwise increase the costs of our operations.
Amended Annex VI also established new tiers
of stringent nitrogen oxide emissions standards for marine
diesel engines, depending
on their date
of installation. Tier III
NOx standards were
designed for the
control
of NOx
produced by
vessels and
apply to
ships that
operate in
the North
American and
U.S. Caribbean
Sea ECAs with a marine diesel engine installed
and constructed on or after January 1,
2016. At MEPC 70
and MEPC 71,
the MEPC approved
the North Sea
and Baltic Sea
as ECAs
for nitrogen oxide
for ships built
on or after January 1,
2021. The Canadian-Arctic
ECA for NOx will
also be effective starting from
March 1,
2026
for
ships
built
on
or
after
January
1,
2025.
For
the
Norwegian
Sea
ECA,
the
NOx
Tier
III
engine
certification requirement will apply to ships (i) with building contracts placed on or after March 1, 2026, (ii)
in the
absence of
a building
contract, constructed
on or
after September
1, 2026,
or (iii)
delivered on
or
after
March
1,
2030. For
the
North-East Atlantic
ECA,
the
requirement
is expected
to
apply
to
ships (i)
contracted on
or after
January 1,
2027, (ii)
in the
absence of
a building
contract, constructed
on or
after
July 1, 2027, or (iii) delivered on or after January 1,
2031. The EPA promulgated equivalent (and in some
55
senses
stricter)
emissions
standards
in
2010. Tier
III
requirements
could
apply
to
additional
areas
designated for Tier
III NOx in the
future. In April 2025, MEPC
83 also adopted amendments (expected to
enter into force late
2026 and early 2027)
to the NOx Technical Code 2008, which allows
ships to optimize
fuel
consumption
based
on
their
operational
profile,
thus
improving
energy
efficiency,
while
ensuring
compliance
with
NOx
emission
requirements.
As
a
result
of
these
designations
or
similar
future
designations, we may be required to incur additional operating or other costs.
At the
MEPC 70,
Regulation 22A
of MARPOL
Annex VI became
effective as of
March 1, 2018
and requires
ships
above
5,000
gross
tonnage
to
collect
and
report
annual
data
on
fuel
oil
consumption
to
an
IMO
database, with the
first year of data
collection having
commenced on January
1, 2019. The
IMO used such
data
as
part
of
its
initial roadmap
(through
2023)
for
developing
its
strategy to
reduce
greenhouse gas
emissions
from
ships,
as
discussed
further
below.
MEPC
83
approved
draft
amendments
to
make
the
IMO’s data collection system more accessible to the public through an anonymized database.
As of January
1, 2013, MARPOL
made mandatory certain
measures relating to
energy efficiency for
ships.
All
ships
are
now
required
to
develop
and
implement
a
Ship
Energy
Efficiency
Management
Plans (“SEEMPs”), and new ships must be designed in compliance
with minimum energy efficiency levels
per
capacity
mile
as
defined
by
the
Energy
Efficiency
Design
Index (“EEDI”).
Additionally,
MEPC
75
adopted amendments
to MARPOL Annex
VI which brought
forward the effective
date of the
EEDI’s “phase
3” requirements
from April
1, 2022 to
January 1,
2025 for
several ship
types, including
gas carriers,
general
cargo ships, and LNG carriers.
Additionally,
in 2022,
MEPC 75
amended to
Annex VI
to impose
new regulations
to reduce
greenhouse
gas emissions from ships. These amendments
introduce requirements to assess and
measure the energy
efficiency of all ships and set the
required attainment values, with
the goal of reducing the carbon
intensity
of international shipping. The requirements include (1) a
technical requirement to reduce carbon intensity
based
on
a
new
Energy
Efficiency
Existing
Ship
Index
(“EEXI”),
and
(2)
operational
carbon
intensity
reduction requirements, based
on a
new operational carbon
intensity indicator (“CII”).
The attained EEXI
is required to be calculated for ships of 400 gross tonnage and above, in accordance with different values
set for
ship types
and categories.
With respect
to the
CII, the
draft amendments
would require
ships of
5,000
gross
tonnage
to
document
and
verify
their
actual
annual
operational
CII
achieved
against
a
determined
required
annual
operational
CII.
All
ships
above
400
gross
tonnage
must
also
have
an
approved SEEMP on
board. For ships
above 5,000 gross
tonnage, the
SEEMP needs to
include certain
mandatory content. That
same year,
MEPC amended MARPOL
Annex I to
prohibit the use
and carriage
for use as fuel of heavy fuel oil (“HFO”) by ships in Arctic waters on and
after July 1, 2024.
In July 2021, MEPC 77 adopted a
non-binding resolution which urges Member States and ship operators
to voluntarily use
distillate or other
cleaner alternative fuels
or methods of
propulsion that are
safe for ships
and could contribute to the reduction of Black Carbon emissions from ships when operating in or near the
Arctic. MEPC
79 adopted
amendments to
MARPOL
Annex VI,
Appendix IX
to
include the
attained and
required CII
values, the
CII rating
and attained
EEXI for
existing ships
in the
required information
to
be
submitted to
the IMO
Ship Fuel Oil
Consumption Database. MEPC
79 also
revised the
EEDI calculation
guidelines to include a CO2
conversion factor for ethane, a
reference to the updated ITCC
guidelines, and
a clarification that in case of a ship with
multiple load line certificates, the maximum certified summer
draft
should be used when
determining the deadweight.
These amendments entered
into force on May
1, 2024.
In July 2023, MEPC 80 approved the
plan for reviewing CII regulations and guidelines, and
in April 2025,
MEPC
83
adopted
amendments
to
2021
Guidelines
on
operational
carbon
intensity
reduction
factors,
which
outline methods
for
determining CII
reduction factors
from
2023 and
now
includes newly
defined
factors from 2027 to 2030.
We
may
incur
costs
to
comply
with
these
revised
standards.
Additional
or
new
conventions,
laws
and
regulations may be adopted that could require the
installation of expensive emission control systems and
could adversely affect our business, results of operations, cash flows and
financial condition.
56
Safety Management System Requirements
The SOLAS
Convention was
amended to
address the
safe manning
of vessels
and emergency
training
drills. The Convention of
Limitation of Liability for
Maritime Claims (the “LLMC”) sets limitations
of liability
for
a
loss
of
life
or
personal
injury
claim
or
a
property
claim
against
ship
owners.
The ISM
Certification provides validation that
both company and
ships are operating
using a process-based system
approach to manage risks and achieve continual improvement. The ISM code is meant to be a preventive
tool
and
asks
companies
to
assess
all
risks
and
then
take
measured
to
safeguard
against
them.
Responsibilities and authorities
are set out
for the various
entities includes in
the ISM process.
All of our
vessels as well as our shore-based operations are fully certified under
the ISM Code.
Under Chapter
IX of
the SOLAS
Convention, or the
International Safety Management
Code for
the Safe
Operation
of
Ships
and
for
Pollution
Prevention (the “ISM
Code”),
our
operations
are
also
subject
to
environmental standards and requirements. The ISM Code requires the party with operational
control of a
vessel to develop
an extensive
safety management
system that
includes, among
other things,
the adoption
of a
safety and
environmental protection policy
setting forth
instructions and procedures
for operating its
vessels safely and describing procedures
for responding to emergencies. Through
strong leadership and
a
disciplined,
clearly
documented
management
system,
the
Company
promotes
the
concept
of
HSSE
(Health, Safety,
Security and
Environmental) excellence
at all
levels in
the organisation.
This concept
is
achieved
by consistent
measurement and
feedback of
the
Company’s Management
System in
order to
generate
continuous
and
sustainable
improvement
in
Health,
Safety,
Security,
and
Quality
and
Environmental
(including
Energy
Efficiency)
(HSSQE)
management
processes. The
failure
of
a
vessel
owner or bareboat
charterer to
comply with
the ISM
Code may
subject such
party to
increased liability, may
decrease available insurance coverage for the affected vessels and
may result in a denial of access to, or
detention in, certain ports.
The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they
operate. This
certificate evidences
compliance by
a vessel’s management
with the
ISM Code
requirements
for a
safety management
system. No
vessel can
obtain a
safety management
certificate unless
its manager
has been
awarded a document
of compliance, issued
by each flag
state, under the
ISM Code. We
have
obtained applicable documents of compliance for our offices and safety management certificates for all of
our vessels
for which
the certificates
are required by
the IMO.
The documents of
compliance and safety
management certificate are renewed as required.
Regulation II-1/3-10
of
the
SOLAS Convention
governs ship
construction and
stipulates that
ships
over
150 meters
in length
must have
adequate strength,
integrity and
stability to
minimize risk
of loss
or pollution.
Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012,
with July 1,
2016 set for
application to new
oil tankers and
bulk carriers. The
SOLAS Convention regulation II-1/3-10
on goal-based
ship construction
standards for
bulk carriers
and oil
tankers, which
entered into
force on
January 1, 2012, requires
that all oil tankers
and bulk carriers of
150 meters in length
and above, for which
the building
contract is
placed on
or after
July 1,
2016, satisfy
applicable structural
requirements conforming
to
the
functional
requirements
of
the
International
Goal-based
Ship
Construction
Standards
for
Bulk
Carriers and Oil Tankers (“GBS Standards”).
Amendments to
the SOLAS Convention
Chapter VII
apply to
vessels transporting dangerous
goods and
require those
vessels be
in
compliance with
the
International Maritime
Dangerous Goods
Code (“IMDG
Code”). Effective
January 1, 2018,
the IMDG
Code includes (1)
updates to the
provisions for radioactive
material, reflecting
the
latest provisions
from the
International Atomic
Energy Agency,
(2) new
marking,
packing
and
classification
requirements
for
dangerous
goods,
and
(3)
new
mandatory
training
requirements. Amendments which took
effect on January
1, 2020 also reflect
the latest material from
the
UN Recommendations on the Transport of Dangerous
Goods, including (1) new provisions
regarding IMO
type 9 tank, (2) new abbreviations
for segregation groups, and
(3) special provisions for carriage
of lithium
57
batteries and of vehicles powered by flammable liquid or
gas. Additional amendments came into force on
June 1,
2022, include
(1) addition
of a
definition of
dosage rate,
(2) additions
to the
list of
high consequence
dangerous goods, (3)
new provisions for medical/clinical
waste, (4) addition
of various ISO
standards for
gas
cylinders,
(5)
a
new
handling
code,
and
(6)
changes
to
stowage
and
segregation
provisions.
The
newest
edition
of
the
IMDG
Code
took
effect
on
January
1,
2024,
although
the
changes
are
largely
incremental.
The
IMO
has
also
adopted
the
International
Convention
on
Standards
of
Training,
Certification
and
Watchkeeping for Seafarers (“STCW”). As of February
2017, all seafarers are required
to meet the STCW
standards
and
be in
possession
of
a
valid
STCW
certificate.
Flag
states
that
have
ratified
SOLAS
and
STCW
generally
employ
the
classification
societies,
which
have
incorporated
SOLAS
and
STCW
requirements into their class rules, to undertake surveys to confirm compliance.
The
IMO's
Maritime
Safety
Committee
and
MEPC,
respectively,
each
adopted
relevant
parts
of
the
International Code for Ships Operating in Polar Water
(the “Polar Code”). The Polar Code, which entered
into force
on January
1, 2017,
covers design,
construction, equipment,
operational, training,
search and
rescue as well
as environmental protection matters
relevant to ships
operating in the
waters surrounding
the two
poles. It
also includes mandatory
measures regarding
safety and pollution
prevention as
well as
recommendatory provisions. The Polar Code applies to new ships constructed after January 1, 2017, and
after
January
1,
2018,
ships
constructed
before
January
1,
2017
are
required
to
meet
the
relevant
requirements by the earlier of their first intermediate or renewal survey.
Furthermore,
cybersecurity
guidance
and
regulations
have
been
developed
in
an
attempt
to
combat
cybersecurity
threats.
For
new
ships
and
offshore
installations
contracted
for
construction
on
or
after
January
1,
2024,
the
International
Association
of
Classification
Societies
(“IACS”)
now
requires
vessel
owners,
yard
and
suppliers
to
build
cybersecurity
barriers
into
their
systems
and
vessels,
requiring
compliance across
the full
spectrum of
critical on-board
control and
navigation systems.
In addition
to these
requirements, the Company
is actively addressing
the European
Union's Network
and Information
Security
(NIS2)
Directive.
During
2025,
we
completed
a
comprehensive
NIS2
Gap
Analysis
and
have
initiated
remediation of findings to
ensure compliance with these
enhanced cybersecurity obligations. On July
16,
2025,
the
U.S.
Coast
Guard’s
final
rule,
Cybersecurity in
the
Martine
Transportation
System,
went
into
effect.
Under
this
rule,
all
regulated
entities
are
required
to
develop
Cybersecurity
and
Cyber
Incident
Response
Plans,
designate
a
Cybersecurity
Officer
to
implement
plans,
and
to
report
certain
cyber
incidents to the
National Response Center.
This might cause
companies to create
additional procedures
for
monitoring
cybersecurity,
which
could
require
additional
expenses
and/or
capital
expenditures.
The
impact of future regulations is hard to predict at this time.
In June
2022, SOLAS
also set
out new
amendments that
took effect
on January
1, 2024,
which include
new
requirements for:
(1)
the
design for
safe
mooring operations,
(2)
the
Global
Maritime
Distress and
Safety System (“GMDSS”),
(3) watertight integrity, (4) watertight doors
on cargo ships,
(5) fault-isolation of
fire detection
systems, (6)
life-saving appliances,
and (7)
safety of
ships using
LNG as
fuel. These
new
requirements may impact the cost of our operations.
Pollution Control and Liability Requirements
The IMO has negotiated international conventions
that impose liability for pollution in
international waters
and
the
territorial
waters
of
the
signatories
to
such
conventions.
For
example,
the
IMO
adopted
an
International
Convention
for
the
Control
and
Management
of
Ships’
Ballast
Water
and
Sediments, (the
“BWM Convention”), in 2004. The
BWM Convention entered into force on September
8, 2017. The BWM
Convention requires ships to manage their
ballast water to remove, render harmless,
or avoid the uptake
or discharge of new or
invasive aquatic organisms
and pathogens within ballast
water and sediments. The
BWM
Convention’s
implementing
regulations
call
for
a
phased
introduction
of
mandatory
ballast
water
58
exchange requirements, to
be replaced in
time with mandatory
concentration limits, and
require all ships
to carry a ballast water record book and an international ballast water
management certificate.
The MEPC maintains guidelines for approval of ballast water management systems (G8).
Ships over 400
gross tons
generally must
comply with
a “D-1
standard,” requiring
the exchange
of ballast
water only
in
open
seas and
away from
coastal waters.
The “D-2
standard” specifies
the
maximum amount
of viable
organisms allowed to
be discharged, and
compliance dates vary
depending on the
IOPP renewal dates.
These
standards have
been in
force since
2019, and
for most
ships, compliance
with the D-2
standard
involved
installing on-board
systems to
treat ballast
water and
eliminate unwanted
organisms. Ballast
water
management systems,
which include
systems that
make use
of chemical,
biocides, organisms
or biological
mechanisms, or which
alter the chemical or
physical characteristics of
the ballast water, must be
approved
in
accordance
with
IMO
Guidelines
(Regulation
D-3).
Since
September
8,
2024,
all
ships
have
been
required to meet the
D-2 standard. Additionally, in November
2020, MEPC 75
adopted amendments to
the
BWM Convention which would require
a commissioning test of the
ballast water management system for
the initial survey or when performing an additional survey for retrofits. This analysis will not apply to
ships
that already
have an
installed BWM
system certified
under the
BWM Convention.
These amendments
have
entered into force on
June 1, 2022. In
December 2022, MEPC
79 agreed that it
should be permitted
to use
ballast tanks
for temporary
storage of
treated sewage
and grey
water. MEPC 79
also established
that ships
are
expected to
return to
D-2
compliance after
experiencing challenging
uptake water
and bypassing
a
BWM system should only be used as a last resort.
Once
mid-ocean
exchange
ballast
water
treatment
requirements
become
mandatory
under
the
BWM
Convention, the
cost of
compliance could
increase for
ocean carriers
and may have
a material effect
on
our operations. Irrespective of the BWM
convention, certain countries
such as the U.S. have
enforced and
implemented regional requirement related to the system certification,
operation and reporting.
The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the
“Bunker
Convention”) to
impose
strict liability
on
ship
owners
(including the
registered
owner,
bareboat
charterer, manager
or operator) for
pollution damage in jurisdictional
waters of ratifying states
caused by
discharges of
bunker fuel.
The Bunker
Convention requires registered
owners of
ships over
1,000 gross
tons
to
maintain
insurance
for
pollution
damage
in
an
amount
equal
to
the
limits
of
liability
under
the
applicable
national
or
international
limitation
regime
(but
not
exceeding
the
amount
calculated
in
accordance with the LLMC). With respect to non-ratifying states, liability for spills
or releases of oil carried
as fuel
in ship’s
bunkers typically
is determined by
the national
or other
domestic laws
in the
jurisdiction
where the events or damages occur.
Ships are
required to
maintain a
certificate attesting
that they
maintain adequate
insurance to
cover an
incident. In jurisdictions, such
as the United
States where the
Bunker Convention has not
been adopted,
various legislative schemes or
common law govern, and
liability is imposed either
on the basis of
fault or
on a strict-liability basis.
Anti-Fouling Requirements
In 2001, the IMO adopted the International Convention on the Control
of Harmful Anti-fouling Systems on
Ships,
or
the
“Anti-fouling
Convention.”
The
Anti-fouling
Convention,
which
entered
into
force
on
September 17,
2008,
prohibits
the
use
of
organotin
compound
coatings
to
prevent
the
attachment
of
mollusks and other sea life
to the hulls of vessels.
Vessels of over 400 gross tons engaged in
international
voyages will also be required to undergo an initial survey before
the vessel is put into service or before an
International Anti-fouling System Certificate is issued for
the first time; and subsequent
surveys when the
anti-fouling systems
are altered
or replaced.
Vessels of 24
meters in
length or
more but
less than
400 gross
tonnage engaged in international voyages will have to carry a Declaration on Anti-fouling Systems signed
by the owner or authorized agent.
59
In November 2020, MEPC
75 approved draft amendments
to the Anti-fouling Convention to
prohibit anti-
fouling
systems
containing
cybutryne,
which
would
apply
to
ships
from
January
1,
2023,
or,
for
ships
already bearing such an
anti-fouling system, at the
next scheduled renewal of the
system after that date,
but no later
than 60 months
following the last
application to the
ship of such
a system. In
addition, the IAFS
Certificate has been
updated to address
compliance options for
anti-fouling systems to
address cybutryne.
Ships which are affected by this ban on cybutryne must
receive an updated IAFS Certificate no later than
two years after
the entry
into force of
these amendments.
Ships which
are not
affected (i.e. with
anti-fouling
systems which do not contain cybutryne)
must receive an updated IAFS Certificate
at the next Anti-fouling
application to
the vessel.
These amendments
were formally
adopted at
MEPC 76
in June
2021 and
entered
into force on January 1, 2023.
We have obtained Anti-fouling System Certificates for all of our vessels that are subject to the Anti-fouling
Convention.
Requirements for the Safe and Environmentally Sound Recycling of Ships
In
2009
the
Hong
Kong
International
Convention
and
MEPC
269(68)
adopted
the
guidelines
for
the
preparation of
the Inventory
of Hazardous
Materials. The
Convention concerns
all vessels
over 500
GT
entitled
to
fly
the
flag
of
a
Party
or
operating
under
its
authority,
with
some
exceptions
like
warships.
According to
the Convention
the shipowner
should control
Ship’s Hazardous
Materials inherent
in ship’s
structure,
machinery,
equipment
and
paints,
coatings
and
prohibit
the
new
installations
of
Hazardous
Materials, by maintaining an Inventory of Hazardous Materials (IHM). It is the Company’s responsibility to
maintain the IHM
Part I up
to date, during
the life of
the ship, according
to MEPC Guidelines.
The ships are
subject to
survey (initial,
renewal, additional
and final)
and certification
and should
keep a
valid International
Certificate on Inventory
of Hazardous Materials
or an International
Ready for Recycling
Certificate (in case
of recycling), on board. For ships been resulted
to contain hazardous materials (like asbestos), actions
for
removal should be
taken by
the shipowner. The ships
should only be
recycled according
to the regulations.
If the ship
is detected to be
in violation of
this Convention, the
Party carrying out
an inspection may take
steps
to
warn,
detain,
dismiss,
or
exclude
the
ship
from
its
ports,
which
might
have
an
impact
in
our
commercial image and
cause high fines
to the company. Our fleet
already complies with
this regulation
but
the preparation, maintenance and whenever needed removal have resulted
in substantial costs.
Compliance Enforcement
Noncompliance
with
the
ISM
Code
or
other
IMO
regulations
may
subject
the
ship
owner
or
bareboat
charterer to increased liability, may lead to decreases
in available insurance coverage
for affected vessels
and may
result in
the denial
of access
to, or
detention in,
some ports.
The USCG
and European
Union
authorities have
indicated that
vessels not
in compliance with
the ISM
Code by
applicable deadlines will
be prohibited
from trading
in U.S.
and European
Union ports,
respectively.
As of
the date
of this
report,
each of our vessels
is ISM Code certified. The
IMO continues to review and
introduce new regulations. It
is impossible to
predict what additional regulations,
if any,
may be passed
by the IMO
and what effect,
if
any, such regulations might have on our operations.
U.S. Regulations
The U.S. Oil Pollution
Act of 1990 and
the Comprehensive Environmental Response, Compensation and
Liability Act
The U.S. Oil Pollution Act
of 1990 (“OPA”)
established an extensive regulatory and liability regime for
the
protection and
cleanup of
the environment
from oil
spills. OPA
affects all
“owners and
operators” whose
vessels trade or
operate within the U.S., its territories
and possessions or whose
vessels operate in U.S.
waters, which includes the U.S.’s territorial sea and its 200 nautical mile exclusive economic zone around
60
the U.S.
The U.S.
has
also
enacted
the
Comprehensive
Environmental
Response,
Compensation
and
Liability Act (“CERCLA”), which applies
to the discharge of hazardous substances other
than oil, except in
limited circumstances, whether on land or
at sea. OPA
and CERCLA both define “owner and operator” in
the case of a vessel as any person owning,
operating or chartering by demise, the vessel. Both OPA
and
CERCLA impact our operations.
Under OPA,
vessel owners
and operators
are “responsible
parties” and
are jointly,
severally and
strictly
liable (unless the
spill results solely
from the act or
omission of a
third party, an act of God
or an act
of war)
for
all
containment
and
clean-up
costs
and
other
damages
arising
from
discharges
or
threatened
discharges of oil from their vessels,
including bunkers (fuel). OPA defines these other damages broadly
to
include:
(i)
injury to, destruction or loss of, or loss of use of, natural resources and
related assessment costs;
(ii)
injury to, or economic losses resulting from, the destruction of
real and personal property;
(iii)
loss of subsistence use of natural resources that are injured, destroyed
or lost;
(iv)
net
loss of
taxes, royalties,
rents, fees
or net
profit revenues
resulting from
injury,
destruction or
loss of real or personal property, or natural resources;
(v)
lost profits
or impairment
of earning
capacity due
to injury,
destruction or
loss of
real or
personal
property or natural resources; and
(vi)
net
cost
of
increased or
additional
public services
necessitated by
removal
activities
following a
discharge of oil, such as protection from fire,
safety or health hazards, and loss of subsistence
use
of natural resources.
OPA
contains statutory
caps
on
liability
and
damages;
such
caps
do
not
apply to
direct
cleanup costs.
Effective November 12, 2019, the USCG
adjusted the limits of OPA liability for non-tank vessels,
edible oil
tank vessels, and
any oil
spill response
vessels, to
the greater
of $1,200
per gross
ton or $997,100
(subject
to
periodic adjustment
for inflation).
On December
23, 2022,
the
USCG issued
a final
rule to
adjust the
limitation of
liability under the
OPA.
Effective March 23,
2023, the new
adjusted limits of
OPA
liability for
non-tank vessels, edible
oil tank vessels,
and any oil
spill response vessels,
to the
greater of $1,300
per
gross ton or $1,076,000 (subject to periodic adjustment for inflation).These limits of liability do not apply if
an incident
was proximately
caused by
the violation
of an
applicable U.S.
federal safety,
construction or
operating
regulation
by
a
responsible
party
(or
its
agent,
employee
or
a
person
acting
pursuant
to
a
contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on
liability similarly does not apply if the responsible party fails or
refuses to (i) report the incident as required
by law where the responsible party knows or
has reason to know of the incident; (ii)
reasonably cooperate
and assist
as requested
in connection
with oil
removal activities;
or (iii)
without sufficient
cause, comply
with an order issued under the Federal
Water Pollution Act (Section 311 (c), (e)) or the Intervention on the
High Seas Act.
CERCLA contains
a similar
liability regime
whereby owners
and operators
of vessels
are liable
for cleanup,
removal and remedial costs, as well as damages for
injury to, or destruction or loss of, natural resources,
including
the
reasonable
costs
associated
with
assessing the
same,
and
health
assessments
or
health
effects studies. There is no liability
if the discharge of a hazardous
substance results solely from the
act or
omission of a third party, an act of God
or an act of war. Liability under CERCLA
is limited to the greater
of
$300 per gross ton or $5.0 million for vessels carrying
a hazardous substance as cargo and the greater of
$300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible
person liable for the total cost
of response and damages) if
the release or threat of release
of a hazardous
substance
resulted
from
willful
misconduct
or
negligence,
or
the
primary
cause
of
the
release
was
a
61
violation of applicable safety,
construction or operating standards or regulations.
The limitation on liability
also does
not apply
if the
responsible person
fails or
refused to
provide all
reasonable cooperation
and
assistance as requested in connection with response activities where
the vessel is subject to OPA.
OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort
law.
OPA
and CERCLA both
require owners and
operators of vessels
to establish and
maintain with the
USCG evidence of
financial responsibility sufficient to
meet the maximum
amount of liability to
which the
particular
responsible
person
may
be
subject.
Vessel
owners
and
operators
may
satisfy
their
financial
responsibility obligations by providing a proof of insurance, a
surety bond, qualification as a self-insurer or
a
guarantee.
We comply
and
plan
to
comply going
forward
with
the
USCG’s
financial
responsibility
regulations by providing applicable certificates of financial responsibility.
OPA
specifically permits individual
states to
impose their own
liability regimes with
regard to oil
pollution
incidents
occurring
within
their
boundaries,
provided
they
accept,
at
a
minimum,
the
levels
of
liability
established
under
OPA
and
some
states
have
enacted
legislation
providing
for
unlimited
liability
for
oil
spills. Many U.S. states that border a navigable waterway have enacted environmental pollution laws that
impose
strict liability
on a
person
for removal
costs
and damages
resulting from
a
discharge of
oil
or
a
release of
a hazardous
substance. These
laws may
be more
stringent than
U.S. federal
law.
Moreover,
some states have enacted legislation providing for unlimited liability for discharge of pollutants within their
waters,
although in
some
cases, states
which have
enacted this
type
of legislation
have not
yet issued
implementing regulations defining vessel owners’
responsibilities under these laws.
The Company intends
to comply with all applicable state regulations in the ports where
the Company’s vessels call.
We currently maintain pollution
liability coverage insurance
in the amount
of $1 billion per
incident for each
of our
vessels. If
the damages from
a catastrophic spill
were to
exceed our
insurance coverage, it
could
have an adverse effect on our business and results of operation.
Other United States Environmental Initiatives
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires
the EPA to
promulgate standards applicable to
emissions of volatile organic
compounds and other air
contaminants.
The CAA requires states to adopt State
Implementation Plans, or SIPs, some of which
regulate emissions
resulting from vessel loading and unloading operations which
may affect our vessels.
The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water
in U.S.
navigable waters
unless authorized
by a
duly-issued permit
or exemption,
and imposes
strict liability
in the form of
penalties for any
unauthorized discharges. The
CWA also imposes substantial
liability for the
costs
of
removal,
remediation
and
damages
and
complements
the
remedies
available
under
OPA
and
CERCLA.
The EPA and the
USCG have
also enacted
rules relating
to ballast
water discharge,
compliance with
which
requires the
installation of
equipment on
our vessels
to treat
ballast water
before it
is discharged
or the
implementation of other port
facility disposal arrangements or
procedures at potentially substantial costs,
and/or otherwise restrict our vessels from entering U.S. Waters. The EPA will regulate these ballast water
discharges and other discharges incidental to the normal operation
of certain vessels within United States
waters pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December
4, 2018 and
replaces the 2013
Vessel General
Permit (“VGP”) program and
current Coast Guard
ballast
water management regulations adopted
under the U.S. National
Invasive Species Act. VIDA establishes
a
new
framework
for
the
regulation
of
vessel
incidental
discharges
under
the
CWA,
requires
the
EPA
to
develop
performance
standards
for
those
discharges
within
two
years
of
enactment,
and
requires
the
USCG
to
develop
implementation,
compliance,
and
enforcement
regulations
within
two
years
of
EPA’s
promulgation
of
standards.
In
October
2024,
the
EPA
finalized
its
rule
on
Vessel
Incidental
Discharge
62
Standards
of
Performance,
which
means
that
the
USCG
must
now
develop
corresponding
regulations
regarding ballast water within two years of that date.
Under
VIDA,
all
provisions
of
the
2013
VGP
and
USCG
regulations
regarding
ballast
water
treatment
remain in force and
effect until the EPA and USCG
regulations are finalized.
Non-military, non-recreational
vessels greater than 79
feet in length must
continue to comply
with the requirements
of the VGP, including
submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We
have
submitted NOIs
for our
vessels where
required. Compliance
with the
EPA, U.S.
Coast Guard
and
state regulations could require
the installation of ballast water
treatment equipment on our
vessels or the
implementation of
other port
facility disposal
procedures at
potentially substantial
cost or
may otherwise
restrict our vessels from entering U.S. waters.
European Union Regulations
In
October
2009,
the
European
Union
amended
a
directive
to
impose
criminal
sanctions
for
illicit
ship-
source discharges of polluting substances, including minor discharges,
if committed with intent, recklessly
or with serious negligence and the discharges individually or in the aggregate result in deterioration of the
quality
of
water.
Aiding
and
abetting
the
discharge
of
a
polluting
substance
may
also
lead
to
criminal
penalties. The
directive applies
to all
types of
vessels, irrespective
of their
flag, but
certain exceptions
apply
to warships or where human safety
or that of the ship is
in danger. Criminal liability for pollution may result
in
substantial
penalties
or
fines
and
increased
civil
liability
claims.
Regulation
(EU)
2015/757
of
the
European Parliament
and of
the Council
of 29
April 2015
(amending EU
Directive 2009/16/EC)
governs
the monitoring, reporting
and verification of
carbon dioxide emissions
from maritime transport,
and, subject
to some
exclusions, requires
companies with
ships over
5,000 gross
tonnages to
monitor and
report carbon
dioxide emissions annually, which may cause us to incur additional expenses.
The European Union has adopted
several regulations and directives requiring, among
other things, more
frequent inspections
of high-risk ships,
as determined
by type, age,
and flag as
well as the
number of
times
the ship has been detained. The European Union
also adopted and extended a ban on substandard
ships
and enacted
a minimum
ban period
and a
definitive ban
for repeated
offenses. The
regulation also
provided
the
European
Union
with
greater
authority
and
control
over
classification
societies,
by
imposing
more
requirements on classification societies and providing for fines or
penalty payments for organizations that
failed to comply. Furthermore,
the EU has implemented
regulations requiring
vessels to use
reduced sulfur
content
fuel
for
their
main
and
auxiliary
engines.
The
EU
Directive
2005/33/EC
(amending
Directive
1999/32/EC) introduced requirements parallel to those in Annex VI relating to the sulfur content of marine
fuels. In
addition, the EU imposed
a 0.1% maximum
sulfur requirement for
fuel used
by ships at
berth in
the
Baltic,
the
North
Sea
and
the
English
Channel
(the
so
called
“SOx-Emission
Control
Area”).
As
of
January 2020, EU member states must also ensure that ships in all
EU waters, except the SOx-Emission
Control Area, use fuels with a 0.5% maximum sulfur content.
On September
15, 2020,
the European
Parliament voted
to include
greenhouse gas
emissions from
the
maritime sector in the European Union’s carbon
market, the EU Emissions Trading System (“EU ETS”)
as
part of its
“Fit-for-55” legislation
to reduce net
greenhouse gas emissions
by at least
55% by 2030.
This will
require shipowners to
buy permits to
cover these emissions.
On December
18, 2022, the
Environmental
Council and European Parliament agreed on a gradual introduction of
obligations for shipping companies
to surrender allowances equivalent to a portion of their carbon emissions:
40% for verified emissions from
2024, 70% for
2025 and 100%
for 2026. Most
large vessels will
be included in
the scope of
the EU ETS
from the start. Big offshore vessels of 5,000 gross tonnage and above will be included in the 'MRV' on the
monitoring, reporting and verification of CO2 emissions from maritime transport
regulation from 2025 and
in the EU ETS from
2027. General cargo vessels
and off-shore vessels between 400-5,000
gross
tonnage
will be included in
the MRV regulation
from 2025 and their
inclusion in EU ETS
will be reviewed in
2026.
Furthermore, starting from
January 1, 2026,
the ETS regulations
will expand to
include emissions of
two
additional greenhouse gases: nitrous oxide and methane.
63
From January 1, 2025,
the EU adopted the
FuelEU Maritime regulation,
a proposal included
in the "Fit-for-
55" legislation. FuelEU Maritime
sets requirements on
the annual average GHG
intensity of energy
used
by
ships
trading
within the
EU
or
European
Economic Area
(EEA).
This intensity
is
measured
as GHG
emissions
per
energy
unit
(gCO2e/MJ)
and,
in
turn,
GHG
emissions
are
calculated
in
a
well-to-wake
perspective. The calculation takes into account emissions related to the extraction, cultivation, production
and transportation of
fuel, in addition
to emissions from
energy used on
board the ship.
The baseline for
the calculation is the
average well-to-wake GHG intensity
of the fleet
in 2020: 91.16 gCO2e/MJ.
This will
start at
a 2%
reduction in
2025, increasing
to 6%
in 2030,
and accelerating
from 2035
to reach
an 80%
reduction by 2050.
Compliance with
the Maritime
EU ETS
and FuelEU
Maritime regulations
will result
in additional
compliance
and administration costs to properly incorporate the provisions of the Directive into our business routines.
Additional EU regulations which are part of
the EU’s "Fit-for-55," could also affect
our financial position in
terms of compliance and administration costs when they take effect.
EU Ship Recycling Regulation
The Regulation
is mostly
aligned with
the
Hong Kong
Convention on
Ship Recycling,
mentioned earlier
and aims quick
ratification of the
Convention. However, it sets
some additional requirements
and has been
into force since 2015 for new ships
and 2020 for existing ships. It concerns
vessels over 500 GT flying the
flag of a
member state or
vessels flying
the flag
of a 3
rd
party calling at
port or anchorage
of member
states.
Our
fleet
fully
complies
with
this
regulation.
Our
fleet’s
Inventories
of
Hazardous Materials
preparation,
certification and continuous maintenance have resulted in a
significant cost to the Company.
International Labour Organization
The International Labour Organization (the “ILO”) is
a specialized agency of the UN
that has adopted the
Maritime Labor Convention
2006 (“MLC 2006”). A
Maritime Labor Certificate
and a Declaration
of Maritime
Labor
Compliance is
required to
ensure compliance
with the
MLC 2006
for all
ships that
are 500
gross
tonnage
or
over
and
are
either
engaged
in
international
voyages
or
flying
the
flag
of
a
Member
and
operating
from
a
port,
or
between
ports,
in
another
country.
All
of
our
vessels
are
certified
under
the
Maritime Labor Convention 2006 (“MLC 2006”).
Greenhouse Gas Regulation
Currently,
the
emissions
of
greenhouse
gases
from
international
shipping
are
not
subject
to
the
Kyoto
Protocol to
the United
Nations Framework
Convention on
Climate Change,
which entered
into force
in 2005
and pursuant
to which
adopting countries have
been required to
implement national programs
to reduce
greenhouse gas emissions
with targets extended
through 2020. International negotiations
are continuing
with respect to a successor to the Kyoto Protocol, and restrictions
on shipping emissions may be included
in
any
new
treaty.
In
December 2009,
more
than
27
nations,
including the
U.S.
and
China,
signed
the
Copenhagen Accord,
which includes
a non-binding
commitment to
reduce greenhouse
gas emissions.
The
2015 United Nations Climate Change Conference in Paris resulted in
the Paris Agreement, which entered
into force on
November 4, 2016
and does not
directly limit greenhouse
gas emissions from
ships. The U.S.
is not a party to the Paris Agreement.
At
MEPC
70
and
MEPC
71,
a
draft
outline
of
the
structure
of
the
initial
strategy
for
developing
a
comprehensive
IMO
strategy
on
reduction
of
greenhouse
gas
emissions
from
ships
was
approved.
In
accordance with this roadmap, in April 2018, nations at
the MEPC 72 adopted an initial strategy to reduce
greenhouse
gas
emissions
from
ships.
The
initial
strategy
identifies
“levels
of
ambition”
to
reduce
greenhouse gas
emissions and
notes that
technological innovation,
alternative fuels
and/or energy
sources
for international shipping will be
integral to achieve the overall ambition.
These regulations could cause us
64
to incur additional substantial expenses. At MEPC
77, the Member States agreed to initiate
the revision of
the Initial
IMO Strategy
on Reduction
of GHG
emissions from
ships, recognizing
the need
to strengthen
the
“levels
of
ambition.” In
July
2023, MEPC
80 adopted
the
2023 IMO
Strategy
on
Reduction of
GHG
Emissions from Ships (the
“2023 IMO Strategy”), which
builds upon the initial
strategy’s levels of ambition.
The
revised
levels
of
ambition
include
(1)
further
decreasing
the
carbon
intensity
from
ships
through
improvement
of
energy efficiency;
(2)
reducing
carbon
intensity
of
international shipping;
(3)
increasing
adoption of
zero or
near-zero emissions
technologies, fuels,
and energy
sources; and
(4) achieving
net
zero GHG
emissions from
international shipping.
Furthermore, the
following indicative
checkpoints were
adopted in order to reach net zero GHG emissions from international shipping: (1) reduce
the total annual
GHG emissions from international shipping by at least 20%, striving for
30%, by 2030, compared to 2008
levels; and (2) reduce the
total annual GHG emissions
from international shipping
by at least 70%, striving
for 80%, by
2040, compared
to 2008 levels.
As part of
the 2023 IMO
Strategy, MPEC also created
the IMO
Net-zero Framework, which
will combine mandatory
emissions limits and
GHG pricing across
the industry.
The IMO
Net-zero Framework
was approved
at MEPC
83 (Spring
2025) for
potential adoption
in Spring
2026 and will
eventually be included
in Annex VI.
Under these draft
regulations, ships will
be required to
reduce their annual greenhouse gas fuel intensity (“GFI”) calculated using the well-to-wake approach and
ships emitting
above GFI
thresholds will
have to
acquire remedial
units to
balance its
deficit emissions,
while those using zero or near-zero GHG technologies will
be eligible for financial rewards.
The EU made
a unilateral
commitment to
reduce overall
greenhouse gas
emissions from
its member
states
from 20% of 1990 levels
by 2020. The EU also committed
to reduce its emissions
by 20% under the
Kyoto
Protocol’s
second
period
from
2013
to
2020.
Starting
in
January
2018,
large
ships
over
5,000
gross
tonnage calling at EU ports
are required to collect
and publish data on
carbon dioxide emissions and
other
information.
Under
the
European
Climate
Law,
the
EU
committed
to
reduce
its
net
greenhouse
gas
emissions by at least 55% by 2030 through its “Fit-for-55” legislation
package. As part of this initiative, the
European Union’s
carbon market,
EU ETS,
has been
extended to
cover CO2
emissions from
all large
ships
entering EU ports starting January 2024.
Any passage
of climate
control legislation
or other
regulatory initiatives
by the
IMO, the EU,
the U.S.
or
other countries
where we
operate, or
any treaty
adopted at
the international
level to
succeed the
Kyoto
Protocol
or
Paris
Agreement,
that
restricts
emissions
of
greenhouse
gases
could
require
us
to
make
significant financial expenditures which we
cannot predict with certainty at
this time. Even in the
absence
of climate control
legislation, our business
may be indirectly
affected to the
extent that climate
change may
result in sea level changes or certain weather events.
Vessel Security Regulations
Since
the
terrorist
attacks
of
September
11,
2001
in
the
United
States,
there
have
been
a
variety
of
initiatives intended
to enhance
vessel security
such as
the U.S.
Maritime Transportation
Security Act
of
2002 (“MTSA”).
To
implement certain
portions of
the MTSA,
the
USCG issued
regulations requiring
the
implementation
of
certain
security
requirements
aboard
vessels
operating
in
waters
subject
to
the
jurisdiction of the
United States and
at certain ports
and facilities, some
of which are
regulated by the
EPA.
Similarly, Chapter XI-2 of
the SOLAS
Convention imposes
detailed security
obligations on
vessels and
port
authorities and
mandates compliance
with the
International Ship
and Port
Facility Security
Code (“the ISPS
Code”). The ISPS Code is designed to enhance
the security of ports and ships against
terrorism.
To
trade
internationally,
a vessel must
attain an
International Ship Security
Certificate (“ISSC”) from
a recognized
security organization approved
by the vessel’s flag
state. Ships operating
without a valid
certificate may be
detained, expelled from, or refused entry at port until they obtain an ISSC.
The USCG regulations, intended to align with
international maritime security standards, exempt non-U.S.
vessels
from
MTSA
vessel
security
measures,
provided
such
vessels
have
on
board
a
valid
ISSC
that
attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code.
65
Future security
measures could
have a
significant financial
impact on
us. We
intend to
comply with
the
various security measures addressed by MTSA,
the SOLAS Convention and the
ISPS Code. The cost of
vessel security
measures has
also been
affected by
the escalation
in the
frequency of
acts of
piracy against
ships, notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area. Substantial loss
of
revenue
and
other
costs
may
be
incurred
as
a
result
of
detention
of
a
vessel
or
additional
security
measures, and
the risk
of uninsured
losses could
significantly affect
our business.
Costs are
incurred in
taking
additional
security
measures
in
accordance
with
Best
Management
Practices
to
Deter
Piracy,
notably those contained in the BMP5 industry standard.
Inspection by Flag administration and Classification Societies
The flag represents the nationality of the ship, showing that it’s under the control of the registered country
and must comply with international and maritime law of it. The flag is required to take measures
to ensure
safety at sea
and should verify that
ships under its authority,
conform to relevant international
standards,
in regard to construction,
design, equipment and manning
of ships, through on
board physical inspections.
The hull and machinery of every commercial vessel
must be classed by a classification society
authorized
by
its
country
of
registry.
The
classification
society
certifies
that
a
vessel
is
safe
and
seaworthy
in
accordance with the
applicable rules and
regulations of the
country of registry of
the vessel and
SOLAS.
Most
insurance
underwriters
make
it
a
condition
for
insurance
coverage
and
lending
that
a
vessel
be
certified
“in
class”
by
a
classification
society
which
is
a
member
of
the
International
Association
of
Classification Societies, the IACS.
The IACS has adopted
harmonized Common Structural Rules, or
“the
Rules”, which apply
to oil tankers
and bulk carriers
contracted for construction
on or after
July 1, 2015.
The
Rules attempt to create
a level of
consistency between IACS Societies. All of
our vessels are certified as
being “in
class” by
all the
applicable Classification Societies
(e.g., American
Bureau of
Shipping, Lloyd's
Register of Shipping).
A vessel must undergo annual surveys,
intermediate surveys, drydockings and special surveys. In
lieu of
a special survey,
a vessel’s machinery may be
on a continuous survey cycle, under
which the machinery
would
be
surveyed
periodically
over
a
five-year
period.
Every
vessel
should
have
a
minimum
of
two
examinations of
the outside
of a
vessel's bottom
and related
items during
each five-year
special survey
period. One such examination is to
be carried out in conjunction with the
Special Periodical Survey.
In all
cases, the
interval between
any two
such examinations
is not
to exceed
36 months.
In all
cases, the
interval
between any two such examinations is not to exceed 36 months. If any vessel does not maintain its class
and/or fails any
annual survey, intermediate survey, drydocking
or special survey, the
vessel will be
unable
to
carry cargo
between ports
and
will be
unemployable and
uninsurable which
could
cause
us to
be
in
violation of certain covenants in our loan agreements.
Any such inability to carry cargo or be employed,
or
any such
violation of
covenants, could
have a
material adverse
impact on
our financial
condition and
results
of operations.
Risk of Loss and Liability Insurance
General
The operation
of any cargo
vessel includes
risks such
as mechanical
failure, physical damage,
collision,
property
loss,
cargo
loss
or
damage
and
business
interruption
due
to
political
circumstances
in
foreign
countries, piracy incidents, hostilities and
labor strikes. In
addition, there is
always an inherent
possibility
of
marine
disaster,
including
oil
spills
and
other
environmental
mishaps,
and
the
liabilities
arising
from
owning
and
operating
vessels
in
international
trade.
OPA,
which
imposes
virtually
unlimited
liability
upon shipowners,
operators
and bareboat
charterers
of any
vessel
trading
in
the
exclusive
economic
zone of the
United States
for certain
oil pollution
accidents in
the United
States, has
made liability
insurance
more
expensive
for shipowners
and
operators
trading
in
the United
States
market. We
carry
insurance
66
coverage as customary in
the shipping industry. However, not all risks can be
insured, specific claims
may
be rejected, and we might not be always
able to obtain adequate insurance coverage
at reasonable rates.
While we maintain hull and machinery insurance, war risks
insurance, protection and indemnity cover and
freight, demurrage and
defense cover for
our operating fleet
in amounts that
we believe to
be prudent to
cover
normal risks
in
our
operations,
we may
not
be
able to
achieve
or maintain
this
level of
coverage
throughout
a
vessel's
useful life.
Furthermore, while
we
believe
that
our
present
insurance
coverage is
adequate, not all risks can be insured, and there can be no guarantee that any specific
claim will be paid,
or that we will always be able to obtain adequate insurance coverage
at reasonable rates.
Hull & Machinery and War Risks Insurance
We maintain marine hull and
machinery and war risks insurance, which cover,
among other marine risks,
the risk
of actual
or constructive
total loss,
for all
of our
vessels. Our
vessels are
each covered
up to
at
least
fair
market
value
with
deductibles
ranging
to
a
maximum
of
$100,000
per
vessel
per
incident
for
Panamax, Kamsarmax and
Post-Panamax vessels
and $150,000 per
vessel per incident
for Capesize and
Newcastlemax vessels.
Protection and Indemnity Insurance
Protection and indemnity
insurance is provided
by mutual protection
and indemnity associations,
or “P&I
Associations,” and covers our third-party liabilities in connection with our shipping activities. This includes
third-party liability
and other
related expenses of
injury or
death of
crew, passengers and
other third
parties,
loss
or
damage
to
cargo,
claims
arising
from
collisions
with
other
vessels,
damage
to
other
third-party
property,
pollution
arising
from
oil
or
other
substances,
and
salvage,
towing
and
other
related
costs,
including
wreck
removal.
Protection
and
indemnity
insurance
is
a
form
of
mutual
indemnity
insurance,
extended by protection and indemnity mutual associations, or “clubs.”
Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident.
The 12
P&I Associations
that comprise
the International
Group insure
approximately 90%
of the world’s
commercial
tonnage
and
have
entered
into
a
pooling
agreement
to
reinsure
each association’s
liabilities. The
International
Group’s
website
states
that
the
Pool
provides
a
mechanism
for
sharing
all
claims in
excess of
US$10 million
up to,
currently,
approximately US$8.9
billion. As
a member
of a
P&I
Association,
which
is
a
member
of
the
International
Group,
we
are
subject
to
calls
payable
to
the
associations based on our
claim records as
well as the claim
records of all
other members of the
individual
associations and
members of
the shipping pool
of P&I
Associations comprising
the International
Group.
Our vessels may be
subject to supplemental calls which
are based on estimates of
premium income and
anticipated and paid
claims. Such estimates
are adjusted each year
by the Board
of Directors of
the P&I
Association until the closing of the relevant
policy year, which generally occurs within three years from the
end of the policy year.
Supplemental calls, if any, are
expensed when they are announced and according
to the period they relate to.
C.
Organizational structure
Diana Shipping Inc. is the sole owner of all of the issued and outstanding shares of the subsidiaries listed
in Exhibit 8.1 to this annual report.
D.
Property, plants and equipment
Since October 8, 2010, DSS owns
the land and the building where
we have our principal corporate offices
in Athens, Greece. In addition, DSS owns three
additional plots, one partly acquired in 2021 and
partly in
2023 from two related parties and
two acquired in 2024 from unrelated
third parties. All plots of land are in
67
the same area as our principal offices and were acquired for corporate use.
Other than this interest in real
property, our only material properties are the vessels in our fleet.