Vessels and vessel improvements

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

As of December 31, 2019, the Company’s owned fleet consisted of 50 drybulk vessels.

During the third quarter of 2019, the Company entered into a series of agreements to purchase six Ultramax vessels with two different sellers. The aggregate purchase price including direct expenses of acquisition for the six vessels is $124.3 million. The Company took delivery of all the vessels during the third and fourth quarters of 2019. The Company financed the purchase partially from the proceeds raised from the issuance of the Convertible Bond Debt on July 29, 2019 as well as the funds raised under the New Ultraco Debt Facility. Please see Note 6 Debt to the consolidated financial statements for additional information.

For the year ended December 31, 2019, the Company sold four vessels (Merlin, Condor, Thrasher and Kestrel) for total net proceeds of $29.6 million after brokerage commissions and associated selling expenses. The Company recorded a net gain of $6.0 million in the Consolidated Statement of Operations for the year ended December 31, 2019.

On December 21, 2018, the Company signed a memorandum of agreement to purchase a 2015 built Ultramax vessel for $20.4 million. As of December 31, 2018, the Company paid a deposit of $2.0 million. The Company took delivery of the vessel in the first quarter of 2019.

On August 14, 2018, the Company entered into a contract for installation of ballast water treatment systems ("BWTS") on 40

of our owned vessels. The projected costs, including installation, is approximately $0.5 million per BWTS. The Company intends to complete the installation during scheduled drydockings. The Company completed installation of BWTS on nine vessels and recorded $3.8 million in the Vessel and vessel improvements in the Consolidated Balance Sheet as of December 31, 2019. Additionally, the Company recorded $2.9 million as advances paid towards installation of BWTS on the remaining vessels as a noncurrent asset in its Consolidated Balance Sheet as of December 31, 2019.

On September 4, 2018, the Company entered into a series of agreements to purchase up to 37 Scrubbers which are to be retrofitted on owned vessels. The projected costs, including installation, are approximately $2.2 million per scrubber. The Company completed and commissioned 24 scrubbers and recorded $52.4 million in Vessel and vessel improvements in the Consolidated Balance Sheet as of December 31, 2019. Additionally, the Company recorded $23.6 million as advances paid towards installation of scrubbers on the remaining vessels as a noncurrent asset in its Consolidated Balance Sheet as of December 31, 2019.

The Vessel and vessel improvements activity for the years ended December 31, 2019 and 2018 is below:


	December 31, 2019		December 31, 2018
Vessel and vessel improvements at the beginning of the year	$	682,944,936	$	690,236,419
Advance paid for vessel purchase	2,040,000		2,201,773
Purchase of vessels and vessel improvements	143,477,720		41,487,795
Sale of vessels	(14,757,027)		(10,354,855)
Reclassification to vessels held for sale	—		(8,458,444)
Scrubbers and BWTS	56,267,925		—
Depreciation expense	(34,014,470)		(32,167,752)
Vessels and vessel improvements at the end of the year	$	835,959,084	$	682,944,936