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News from Diana Containerships Inc…

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Diana Shipping offices

Diana Containerships Inc. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2014Declares Cash Dividend of $0.0025 Per Share for the Second QuarterAnnounces $92 Million Private Placement of Common Shares

At-The-Market Offering Update

ATHENS, GREECE, July 28, 2014 – Diana Containerships Inc. (NASDAQ: DCIX), (the “Company”), a global shipping company specializing in the ownership of containerships, today reported net income of $0.6 million for the second quarter of 2014, compared to a net loss of $5.0 million for the respective period of 2013. The loss for the second quarter of 2013 was mainly the result of $4.3 million of losses arising from the disposal of three vessels.Time charter revenues, net of prepaid charter revenue amortization, were $12.5 million for the second quarter of 2014, compared to $12.2 million for the same period of 2013, mainly due to increased average time charter rates achieved, despite the decrease in ownership days in 2014 compared to 2013, resulting from the disposal of five vessels from May 2013 to February 2014, which was partly offset by the addition to the Company’s fleet of two vessels in August and September 2013, respectively.Net income for the six months ended June 30, 2014 amounted to $0.9 million, compared to a net loss of $36.8 million for the same period of 2013.  The loss for the six months ended June 30, 2013 was mainly the result of an impairment loss and actual losses arising from the disposal of three vessels, together totalling $36.9 million. Time charter revenues, net of prepaid charter revenue amortization for the six months ended June 30, 2014 amounted to $26.0 million, compared to $27.4 million for the same period of 2013.

Dividend Declaration
The Company has declared a cash dividend on its common stock of $0.0025 per share with respect to the second quarter of 2014. The cash dividend will be payable on or around September 3, 2014 to all shareholders of record as at August 14, 2014. The Company has 36, 505, 605 shares of common stock outstanding.

The Company stated that the Board’s decision with respect to the amount of the cash dividend, combined with the private placement transaction discussed below, are consistent with its long-term strategy of positioning Diana Containerships to capitalize on the eventual recovery in the container market by providing the Company the flexibility to acquire additional containership vessels when attractive opportunities arise.

Private Placement
On July 28, 2014, the Company entered into an agreement to sell 36, 653, 386 shares of its common stock (the “Shares”) in a private placement to a group of investors including Diana Shipping Inc. (“Diana Shipping”), unaffiliated institutional investors, and the Company’s Chairman and Chief Executive Officer, Mr. Symeon Palios, and a member of his family, along with other members of the Company’s senior management, at a purchase price of $2.51 per share, for expected proceeds of approximately $92 million.  In the transaction, Diana Shipping purchased $40.0 million of common shares, two institutional investors not affiliated with the Company whose manager is based in the United States together purchased $40.0 million of common shares, and Mr. Palios and a member of his family, along with other members of the Company’s senior management, purchased an aggregate of $12.0 million of common shares.  The transaction is subject to customary closing conditions and is expected to close on or prior to July 29, 2014.  The Company intends to use the net proceeds for general corporate purposes, including vessel acquisitions and working capital.  The purchasers received customary registration rights with respect to the Shares.  The transaction was approved by an independent committee of the Company’s Board of Directors, which obtained a fairness opinion from Houlihan Lokey Financial Advisors, Inc. regarding the financial fairness to the Company of the aggregate purchase price to be received by the Company in the transaction.  The fairness opinion was provided solely for the use of the independent committee of the Company’s Board of Directors in connection with its evaluation of the transaction and may not be relied upon or used by any other person or for any other purpose, is subject to various assumptions, qualifications and limitations, and does not constitute advice or a recommendation on how to act with respect to the transaction or any other investment decision.

At-the-Market Offering Update
The Company does not expect to sell additional shares under its existing at-the-market offering with Deutsche Bank Securities Inc., as sales agent, until there is a significant improvement in the containership market…

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