FreeSeas Announces Elimination of $30 million Debt

FreeSeas Announces Elimination of $30 million Debt

Athens, Greece, Oct. 10, 2013 (GLOBE NEWSWIRE) -- October 10, 2013 -- FreeSeas
Inc. (Nasdaq CM: FREE)("FreeSeas'' or the"Company"), a transporter of dry-bulk
cargoes through  the ownership  and  operation of  a  fleet of  six  Handysize 
vessels and one Handymax vessel, announced today that approval was received on
October 9, 2013, by the  Supreme Court of the State  of New York of the  terms 
and conditions of  an exchange  agreement (the  "Exchange Agreement")  between 
FreeSeas and Crede CG  III Ltd ("Crede"), a  wholly owned subsidiary of  Crede 
Capital Group.

Mr. Ion G. Varouxakis, Chairman, President and Chief Executive Officer of  the 
Company  made  the  following  comments:  "We  are  pleased  to  announce  the 
extinguishment  of   approximately   $30   million   of   debt,   representing 
approximately one third  of the  Company's total bank  debt. This  transaction 
will result in significant gains, which are presently estimated to exceed  $12 
million. As  a  result, our  balance  sheet will  be  completely  transformed, 
resetting us in position for future growth."

Previously, the  Company  amended  a  settlement  agreement  (the  "Settlement 
Agreement") with Deutsche  Bank Nederland  N.V. ("Deutsche  Bank"), and  Crede 
became a party  thereto and agreed  to purchase $10.5  million of  outstanding 
indebtedness owed by  the Company to  Deutsche Bank, subject  to, among  other 
things, court approval  of the Exchange  Agreement. As a  result of the  court 
approval, Crede will release  today $10.5 million  to Deutsche Bank  Nederland 
N.V. ("Deutsche  Bank"), presently  held in  escrow, and  Deutsche Bank,  upon 
receipt of  the funds,  will,  in accordance  with the  Settlement  Agreement, 
forgive the remaining  outstanding indebtedness and  overdue interest owed  by 
FreeSeasof approximately  $19.5  million  in  total as  well  as  release  all 
collateral associated with the  loan, including the  lifting of the  mortgages 
over the M/V Free Maverick and the M/V Free Knight. The other $10.5 million of
outstanding  indebtedness  will  be   eliminated  upon  consummation  of   the 
transactions contemplated by  the Exchange Agreement,  which will occur  later 
today. A complete description of the Exchange Agreement and the court approval
is more fully  described in a  6-K Form  being filed with  the Securities  and 
Exchange Commission contemporaneously herewith.

The Company  is reviewing  the  accounting treatment  of the  transaction  and 
preliminary expects to recognize a gain on extinguishment of debt during  the 
year ending  December 31,  2013. The  gain, which  represents the  difference 
between the fair value of the equity  interest granted by the Company and  the 
carrying amount of the debt, is estimated to be in excess of $12 million.

About FreeSeas Inc.

FreeSeas Inc.  is a  Marshall Islands  corporation with  principal offices  in 
Athens, Greece. FreeSeas is engaged  in the transportation of drybulk  cargoes 
through the ownership and operation of  drybulk carriers. Currently, it has  a 
fleet of Handysize and Handymax vessels. FreeSeas' common stock trades on  the 
NASDAQ Capital  Market under  the  symbol FREE.  Risks and  uncertainties  are 
described in  reports filed  by FreeSeas  Inc. with  the U.S.  Securities  and 
Exchange Commission, which can be obtained free of charge on the SEC's website
at For more information about FreeSeas Inc., please  visit 
the corporate website,

Forward-Looking Statements

This press release contains forward-looking statements (as defined in  Section 
27A of  the  Securities Act  of  1933, as  amended,  and Section  21E  of  the 
Securities Exchange Act of 1934, as amended) concerning future events and  the 
Company's growth strategy and measures to implement such strategy. Words  such 
as  ''expects,''   ''intends,''  ''plans,''   ''believes,''   ''anticipates,'' 
''hopes,'' ''estimates,'' and variations of such words and similar expressions
are intended  to identify  forward-looking  statements. Although  the  Company 
believes that the  expectations reflected in  such forward-looking  statements 
are reasonable, no assurance can be given that such expectations will prove to
be correct. These  statements involve known  and unknown risks  and are  based 
upon a number  of assumptions and  estimates which are  inherently subject  to 
significant uncertainties  and contingencies,  many of  which are  beyond  the 
control of  the  Company. Actual  results  may differ  materially  from  those 
expressed or implied  by such forward-looking  statements. Factors that  could 
cause actual results  to differ materially  include, but are  not limited  to, 
changes in the demand for dry bulk vessels; competitive factors in the  market 
in which the Company  operates; risks associated  with operations outside  the 
United States; and  other factors listed  from time to  time in the  Company's 
filings with the  Securities and  Exchange Commission.  The Company  expressly 
disclaims any obligation  or undertaking  to release publicly  any updates  or 
revisions to any  forward-looking statements contained  herein to reflect  any 
change in the  Company's expectations with  respect thereto or  any change  in 
events, conditions or circumstances on which any statement is based.

Contact Information:

At the Company

FreeSeas Inc.

AlexandrosMylonas, Chief Financial Officer


Fax: 011-30-210-429-10-10
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