Genco Shipping & Trading Limited Amends $1.4 Billion Credit Facility
Posted on: Monday, 26 January 2009, 15:44 CST
Enhances Financial Flexibility
Under terms of the amended ten-year
Genco plans to fund the three remaining Capesize newbuildings expected to be delivered in 2009 with the undrawn portion of its credit facility as well as cash flow from operations. Currently, Genco has approximately 67% of its fleet's estimated available days secured on contracts for the remainder of 2009.
The Company also announced that, under the terms of the amended credit facility, its cash dividends and its share repurchases will be suspended, effective immediately. Genco will be able to reinstate its dividend policy and share repurchase program once the Company can represent that it is in a position to again satisfy the collateral maintenance covenant. The amendment to the credit facility places no further restrictions on uses of the Company's cash.
The following table reflects the current employment of Genco's current fleet as well as the employment or other status of vessels expected to join Genco's fleet:
Net Charter Cash Revenue Expected Year Expiration Daily Daily Delivery Vessel Built Charterer (1) Rate(2) Rate(3) (4) ----------- ------ ---------------- ------------- ------- ------- -------- Capesize Vessels ----------- Genco 2007 Cargill December 2009 45,263 62,750 - Augustus International S.A. Genco Tiberius 2007 Cargill January 2010 45,263 62,750 - International S.A. Genco London 2007 SK Shipping August 2010 57,500 64,250 - Co., Ltd Genco Titus 2007 Cargill September 2011 45,000 46,250 - International (5) S.A. Genco Constantine 2008 Cargill August 2012 52,750 - International (5) S.A. Genco Hadrian 2008 Cargill October 2012 65,000 - International (5) S.A. Genco Commodus 2009(6) To be TBD TBD Q2 2009 determined ("TBD") Genco Maximus 2009(6) TBD TBD TBD Q2 2009 Genco Claudius 2009(6) TBD TBD TBD Q3 2009 Panamax Vessels ----------- Genco Beauty 1999 Cargill May 2009 31,500 - International S.A. Genco Knight 1999 SK Shipping Ltd. May 2009 37,700 - Genco Leader 1999 Baumarine AS November 2009 Spot(7) - Genco Vigour 1999 STX Panocean March 2009 29,000(8) - (UK) Co. Ltd. Genco Acheron 1999 Global Chartering July 2011 55,250(9) - Ltd (a subsidiary of ArcelorMittal Group) Genco Surprise 1998 Hanjin Shipping December 2010 42,100 - Co., Ltd. Genco Raptor 2007 COSCO Bulk April 2012 52,800 - Carriers Co., Ltd. Genco Thunder 2007 Baumarine AS October 2009 Spot(10) - Supramax Vessels ----------- Genco Predator 2005 Bulkhandling September 2009 Spot(11) Handymax A/S Genco Warrior 2005 Hyundai Merchant November 2010 38,750 - Marine Co. Ltd. Genco Hunter 2007 Pacific Basin June 2009 62,000 - Chartering Ltd. (12) Genco Cavalier 2007 Samsun Logix July 2010 48,500 47,700 - Corporation (13) Handymax Vessels ----------- Genco Success 1997 Korea Line February 2011 33,000 - Corporation (14) Genco Carrier 1998 Louis Dreyfus March 2011 37,000 - Corporation Genco Prosperity 1997 Pacific Basin June 2011 37,000 - Chartering Ltd (15) Genco Wisdom 1997 Hyundai Merchant February 2011 34,500 - Marine Co. Ltd. Genco Marine 1996 NYK Bulkship March 2009 47,000 - Europe S.A. Genco Muse 2001 AMN Bulkcarriers January 2009 30,000 INC (16) Handysize Vessels ----------- Genco Explorer 1999 Lauritzen August 2009 19,500 - Bulkers A/S Genco Pioneer 1999 Lauritzen August 2009 19,500 - Bulkers A/S Genco Progress 1999 Lauritzen August 2009 19,500 - Bulkers A/S Genco Reliance 1999 Lauritzen August 2009 19,500 - Bulkers A/S Genco Sugar 1998 Lauritzen August 2009 19,500 - Bulkers A/S Genco Charger 2005 Pacific Basin November 2010 24,000 - Chartering Ltd. Genco Challenger 2003 Pacific Basin November 2010 24,000 - Chartering Ltd. Genco Champion 2006 Pacific Basin December 2010 24,000 - Chartering Ltd. (1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Except for the Genco Titus, under the terms of each contract, the charterer is entitled to extend time charters from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off- hire. The charterer of the Genco Titus has the option to extend the charter for a period of one year. (2) Time charter rates presented are the gross daily charterhire rates before third party commissions ranging from 1.25% to 6.25%, except as indicated for the Genco Leader in note 7 below. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents' fees and canal dues. (3) For the vessels acquired with a below-market time charter rate, the approximate amount of revenue on a daily basis to be recognized as revenues is displayed in the column named "Net Revenue Daily Rate" and is net of any third-party commissions. Since these vessels were acquired with existing time charters with below-market rates, we allocated the purchase price between the respective vessel and an intangible liability for the value assigned to the below-market charterhire. This intangible liability is amortized as an increase to voyage revenues over the minimum remaining term of the charter. For cash flow purposes, we will continue to receive the rate presented in the "Cash Daily Rate" column until the charter expires. (4) Dates for vessels being delivered in the future are estimates based on guidance received from the sellers and/or the respective shipyards. (5) These charters include a 50% index-based profit sharing component above the respective base rates listed in the table. The profit sharing between the charterer and us for each 15-day period is calculated by taking the average over that period of the published Baltic Cape Index of the four time charter routes, as reflected in daily reports. If such average is more than the base rate payable under the charter, the excess amount is allocable 50% to each of the charterer and us. A third-party brokerage commission of 3.75% based on the profit sharing amount due to us is payable out of our share. (6) Year built for vessels being delivered in the future are estimates based on guidance received from the sellers and/or the respective shipyards. (7) We have reached an agreement to enter the vessel into the Baumarine Pool with an option to convert the balance period of the charter party to a fixed rate, but only after June 1, 2009. The vessel entered the pool following the completion of its previous time charter on December 16, 2008. In addition to a 1.25% third party brokerage commission, the charter party calls for a management fee which consists of a 1.25% deduction as well as a $334 fixed daily management fee. (8) We have entered into a time charter for 23 to 25 months at a rate of $33,000 per day for the first 11 months, $25,000 per day for the following 11 months and $29,000 per day thereafter, less a 5% third-party commission. For purposes of revenue recognition, the time charter contract is reflected on a straight-line basis at approximately $29,000 per day for 23 to 25 months in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. (9) We have entered into a time charter agreement with a subsidiary of ArcelorMittal for 35 to 37 months at a rate of $55,250 per day less a 5% third-party commission. The vessel delivered to its new charterer on August 1, 2008. (10) We have reached an agreement to enter the vessel into the Baumarine Pool with an option to convert the balance period of the charter party to a fixed rate, but only after March 1, 2009. The vessel entered the pool following the completion of its previous time charter on November 16, 2008. In addition to a 1.25% third party brokerage commission, the charter party calls for a management fee which consists of a 1.25% deduction as well as a $334 fixed daily management fee. (11) We have entered into a short-term time charter with A/S Klaveness Chartering for 3 to 5 months at a rate of $58,000 per day less a 5% third- party commission. The charter was completed on November 2, 2008. Following the expiration of this charter we have entered the vessel into the Bulkhandling Handymax Pool with an option to convert the balance period of the charter party to a fixed rate, but only after January 1, 2009. (12) We have reached an agreement to extend the time charter with Pacific Basin Chartering Ltd. for 11 to 13.5 months at a rate of $62,000 per day, less a 5% third party brokerage commission. The time charter commenced following the expiration of the vessel's prior time charter on July 21, 2008. (13) The time charter for this vessel commenced on July 19, 2008. In completing the negotiation of certain changes we required for novation of the existing charter, we agreed to reduce the daily gross rate and received a rebate from the brokers involved in the vessel sale. Since the vessel was acquired with a below-market rate, we allocated the purchase price between the vessel and an intangible liability for the value assigned to the below-market charterhire. (14) We extended the time charter for an additional 35 to 37.5 months at a rate of $40,000 per day for the first 12 months, $33,000 per day for the following 12 months, $26,000 per day for the next 12 months and $33,000 per day thereafter less a 5% third-party commission. In all cases, the rate for the duration of the time charter will average $33,000 per day. For purposes of revenue recognition, the time charter contract is reflected on a straight-line basis at approximately $33,000 per day for 35 to 37.5 months in accordance with U.S. GAAP. (15) We recently extended the time charter for an additional 35 to 37.5 months at a rate of $37,000 per day less a 5% third-party commission. The new charter commenced on July 10, 2008, following the expiration of the previous charter. (16) We have entered into a time charter agreement with AMN Bulkcarriers Inc. for 3 to 5 months at a rate of $30,000 per day less a 5% third-party commission. The new charter commenced on October 5, 2008, following the expiration of the previous charter.About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Genco Shipping & Trading Limited currently owns a fleet of 32 drybulk vessels consisting of six Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,396,000 dwt. After the expected delivery of three vessels the Company has agreed to acquire, Genco Shipping & Trading Limited will own a fleet of 35 drybulk vessels, consisting of nine Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,908,000 dwt.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on management's current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) changes in demand or rates in the drybulk shipping industry; (ii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iii) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (iv) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (v) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, repairs, maintenance and general and administrative expenses; (vi) the adequacy of our insurance arrangements; (vii) changes in general domestic and international political conditions; (viii) changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (ix) the number of offhire days needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims including offhire days; (x) the Company's acquisition or disposition of vessels; (xi) the fulfillment of the closing conditions under, or the execution of customary additional documentation for, the Company's agreements to acquire a total of three remaining drybulk vessels; (xiii) the results of the investigation into the incident involving the collision of the Genco Hunter, the possible cause of and liability for such incident, and the scope of insurance coverage available to Genco for such incident; and other factors listed from time to time in our public filings with the Securities and Exchange Commission, including, without limitation, the Company's Annual Report on Form 10-K for the year ended
SOURCE Genco Shipping & Trading Limited
Source: PR Newswire
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