FreeSeas Inc. a transporter of dry-bulk cargoes through the ownership and operation of a fleet of Handysize and Handymax vessels, announced today that the Company has entered into an agreement to sell the M/V Free Envoy, a 1984-built, 26,318 dwt Handysize dry bulk carrier for a sale price of $4.2 million. The M/V Free Envoy is currently employed in the spot market, and is expected to be delivered to her new owners within May 2011.

FreeSeas expects to realize a gain on the sale of the vessel, which will be recognized in the second quarter of 2011. Most of the proceeds will be applied towards reducing Company's debt.