Notes Receivable

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Notes Receivable

NOTE 13 – NOTES RECEIVABLE

On July 15, 2016, the Company entered into a charter restructuring agreement for the reduction of the hire rate for five Containerships chartered out to Hyundai Merchant Marine Co. (“HMM”) which resulted in a decrease in cash charter hire to be received of approximately $38,461. More specifically, the reduction of the hire rate will be applied as follows:

• With effect from (and including) July 18, 2016, until (and including) December 31, 2019, hire rate shall be reduced to $24,400 per day pro rata.

• With effect from (and including) January 1, 2020, hire rate shall be restored to the rate of $30,500 per day pro rata until redelivery.

In exchange for the reduction of the hire rate, the Company received (i) $7,692 on principal amount of senior, unsecured notes, amortizing subject to available cash flows, accruing interest at 3% per annum payable on maturity in July 2024 and (ii) 3,657 freely tradable securities of HMM (publicly traded at the Stock Market Division of the Korean Exchange).

On July 18, 2016, the Company recognized the fair value of the HMM securities totaling $40,277 and also recognized the fair value of the senior unsecured notes totaling $6,074. The total fair value of the non-cash compensation received was recognized as deferred revenue, which will be amortized over the remaining duration of each time charter. The Company recognized non-cash interest income and discount unwinding totaling to $226 and $246, respectively, for these instruments under the caption “Interest income” in the condensed Consolidated Statements of Operations for each of the six month periods ended June 30, 2020 and 2019, respectively. As of June 30, 2020 and December 31, 2019, the outstanding balance of the notes receivable, including accrued interest and discount unwinding, amounted to $7,781 and $7,554, respectively, presented under the caption “Notes receivable, net of current portion” in the condensed Consolidated Balance Sheets.

For the six month periods ended June 30, 2020 and 2019, the Company recorded an amount of $562 and $6,058, respectively, of deferred revenue amortization in the condensed Consolidated Statements of Operations under the caption “Time charter and voyage revenues”.

As of June 30, 2020, the outstanding balances of the current and non-current portion of deferred revenue in relation to HMM amounted to $1,127 and $2,753, respectively. As of December 31, 2019, the outstanding balances of the current and non-current portion of deferred revenue in relation to HMM amounted to $1,130 and $3,312, respectively.

On January 12, 2017, the Company sold the vessel the MSC Cristina for a gross sale price of $126,000 and received a cash payment of $107,250 and a note receivable of $18,750 accruing interest at 6% per annum payable in 16 quarterly instalments. As of June 30, 2020, the outstanding balance of the current and non-current note receivable amounted to $2,344 and $0, respectively. For each of the six month periods ended June 30, 2020 and 2019, the Company recorded interest income of $105 and $245, respectively, including accrued interest income of $19 and $57, respectively, under the caption “Interest income” in the condensed Consolidated Statements of Operations.