Diana Shipping purchases UK-flagged CAPE PELICAN

Diana Shipping purchases UK-flagged CAPE PELICAN

Diana Shipping Inc. a global shipping transportation company specializing in dry bulk cargoes, today announced that it has signed a Memorandum of Agreement with an unaffiliated third party for the purchase of a Capesize dry bulk carrier of 180,235 dwt, built in 2005 by Imabari Shipbuilding Co., Ltd., for the price of $110 million. The vessel, to be renamed Aliki, is expected to be delivered to the Company by the sellers on or about April 30, 2007.

The Company also announced that it has entered into a time charter contract with Cargill International S.A. for the Aliki for a minimum 46 to maximum 49month period at an average rate of $48,500 per day with one year extension at the charterer’s option at the same rate. During the first two years of the charter the gross daily charter hire rate will be $52,000 and during the third and fourth years of the charter $45,000. The charterer has the option to employ the vessel for a further 11-13 month period at a daily charter rate of $48,500. The time charter contract is expected to commence immediately after the delivery of the vessel to the Company.

During the initial two years, this employment is expected to generate gross revenues of approximately $37 million and is expected to generate gross revenues of $32 million during the third and fourth years, amounting to a total of $69 million. If the charterer exercises its option for the fifth year, the charter is expected to generate aggregate gross revenues of approximately $86 million over the entire period.

Diana Shipping Chairman and Chief Executive Officer, Simeon Palios, commented: “We are committed to growing the Company with accretive acquisitions while at the same time improving the visibility of our earnings. With this acquisition, the Company increases its already fixed gross revenues for 2008 to approximately $80 million. The weighted average of our fleet, with the addition of Aliki and completion of the previously announced sale of Pantelis SP (not including the two newbuildings on order for delivery in 2010) will decrease to 3.1 years and the total cargo carrying capacity will increase to approximately 1.5 million dwt.”

The vessel is the UK-flagged CAPE PELICAN, operated by Zodiac Maritime, London.