Thursday, July 30, 2009
GENCO SHIPPING & TRADING LIMITED ANNOUNCES SECOND QUARTER 2009 FINANCIAL RESULTS
New York, New York, July 29, 2009 - Genco Shipping & Trading Limited (NYSE:GNK)
today reported its financial results for the three months ended June 30, 2009.
The following financial review discusses the results for the three months and six months
ended June 30, 2009 and June 30, 2008.
Second Quarter 2009 and Year-to-Date Highlights
• Recorded net income of $37.6 million, or $1.20 basic and diluted earnings per share
for the second quarter;
• Took delivery of the Genco Commodus and delivered the vessel to Morgan Stanley
Capital Group Inc. for the commencement of a 23 to 25 month time charter at a rate
of $36,000 per day;
• Signed short-term time charter agreements for three Panamax vessels, one Supramax
vessel and one Handymax vessel; and
• Reached agreement to enter the five Handysize vessels chartered to Lauritzen Bulkers
A/S in a spot pool under the management of Lauritzen Bulkers at the expiration of the
current charters in August 2009.
Financial Review: 2009 Second Quarter
The Company recorded net income for the second quarter of 2009 of $37.6 million, or
$1.20 basic and diluted earnings per share. Comparatively, for the three months ended
June 30, 2008 net income was $60.9 million or $2.05 basic and $2.03 diluted earnings per
share.
EBITDA was $73.9 million for the three months ended June 30, 2009 versus $88.8
million for the three months ended June 30, 2008.
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Robert Gerald Buchanan, President, commented, “During the second quarter, Genco
delivered strong results for shareholders by once again drawing upon its significant time
charter coverage with high-quality charterers and benefiting from profit sharing
agreements. Consistent with our portfolio approach, which provides a sizeable contracted
revenue stream while maintaining the ability to take advantage of future rate increases,
we locked away six vessels on time charters during the quarter. Currently, we have
approximately 67% of our fleet’s available days secured on contracts for the remainder of
2009 and 44% in 2010. With a growing modern and versatile fleet, we remain well
positioned to provide our world-class customers with dependable service and capitalize
on the positive long-term demand for the global transportation of essential commodities.”
Genco Shipping & Trading Limited revenues decreased 10.4% to $93.7 million for the
three months ended June 30, 2009 versus $104.6 million for the three months ended June
30, 2008 due to lower charter rates achieved for some of our vessels.
The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet
decreased 21.2% to $32,245 per day for the three months ended June 30, 2009 compared
to $40,945 for the three months ended June 30, 2008. The decrease in TCE rates resulted
from lower charter rates achieved in the second quarter of 2009 versus the second quarter
of 2008 for six of the Panamax vessels, five of the Supramax and Handymax vessels, and
three of the Handysize vessels in our current fleet. Furthermore, lower TCE rates were
achieved in the second quarter of 2009 versus the same period last year due to the
comparatively low revenue from the profit sharing agreements on two of our Capesize
vessels. This was slightly offset by higher revenues on two of our Handymax vessels.
Total operating expenses increased to $40.4 million for the three months ended June 30,
2009 from $33.8 million for the three month period ended June 30, 2008 due to higher
vessel operating expenses, management fees and depreciation and amortization related to
the operation of a larger fleet. Vessel operating expenses were $13.3 million for the
second quarter of 2009 compared to $11.2 million for the same period last year. The
increase in vessel operating expenses was due to the operation of a larger fleet, higher
crewing and insurance expenses, as well as the operation of more Capesize vessels for the
second quarter of 2009 versus the same period last year. We expect our vessel operating
expenses, which generally represent variable costs, to further increase as a result of the
expansion of our fleet and potentially higher crewing expenses in future years.
Depreciation and amortization expenses increased to $20.9 million for the second quarter
of 2009 from $16.7 million for the second quarter of 2008 related to the growth of our
fleet. General and administrative expenses decreased to $4.1 million from $4.4 million
during the comparative periods due to a decrease in costs associated with employee noncash
compensation, and other administrative costs, offset by an increase in legal fees.
Management fees were $0.9 million for the three months ended June 30, 2009 and $0.7
million for the three months ended June 30, 2008, respectively, and relate to fees paid to
our independent technical managers.
Daily vessel operating expenses, or DVOE, grew slightly to $4,556 per vessel per day
during the second quarter of 2009 from $4,378 for the same quarter last year as a result of
higher crew and insurance expenses as well as the operation of a greater number of
Capesize vessels. Daily vessel operating expenses year to date have been below budget
due to the timing of purchases of spare parts and lubricants as well as lower than
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anticipated crew costs. We believe daily vessel operating expenses are best measured for
comparative purposes over a 12-month period in order to take into account all of the
expenses that each vessel in our fleet will incur over a full year of operation. Based on
estimates provided by our technical managers and management’s expectations, our 2009
DVOE budget is $5,350 per vessel per day on a weighted average basis. As previously
announced the increased budget reflects the anticipated increased cost for crewing,
insurance and lube oil expenses, as well as the operation of a greater number of Capesize
vessels.
John C. Wobensmith, Chief Financial Officer, commented, “Genco’s strong quarterly
results demonstrate the notable success we have achieved executing our time charter
strategy for our expanding fleet. As we continued to generate sizeable cash flows during
a difficult market environment, management further strengthened the Company’s
industry leadership with the delivery of the Genco Commodus, a Capesize newbuilding,
which commenced a long-term time charter. We intend to utilize our strong liquidity
position combined with our cash flow from operations to fund our remaining two
Capesize newbuildings. In seeking to capitalize on additional opportunities to consolidate
the industry, we will maintain our disciplined approach by adhering to a strict set of
return criteria as we have done in the past.”
Financial Review: First Half 2009
Net income was $78.9 million or $2.52 basic and $2.51 diluted earnings per share for the
six months ended June 30, 2009, compared to $134.9 million or $4.61 basic and $4.58
diluted earnings per share for the six months ended June 30, 2008. Included in net income
for the six months ended June 30, 2008 is a $26.2 million gain from the sale of the Genco
Trader, $2.6 million of income received from our investment in stock of Jinhui Shipping
and Transportation Limited, and a loss from derivative instruments of $1.4 million.
Revenues slightly decreased to $190.4 million for the six months ended June 30, 2009
compared to $196.2 million for the six months ended June 30, 2008. EBITDA was
$150.0 million for the six months ended June 30, 2009 versus $189.9 for the six months
ended June 30, 2008. TCE rates obtained by the Company decreased to $32,724 per day
for the six months ended June 30, 2009 from $38,419 for the same period in 2008. Total
operating expenses were $82.0 million for the six months ended June 30, 2009 compared
to $40.1 for the six months ended June 30, 2008, and daily vessel operating expenses per
vessel were $4,743 versus $4,328 for the comparative periods.
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the six months ended June 30, 2009 and
2008, was $109.8 million and $131.6 million, respectively. The decrease was primarily
due to the higher net income realized for the six months ended June 30, 2008 versus the
same period this year. Decreases in adjustments to reconcile net income to operating cash
flows include $9.5 million of amortization of value of the time charters acquired as part
of the Metrostar and Evalend acquisitions, $2.5 million of prepaid and other current and
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non-current assets, $1.5 million in deferred voyage revenue and $2.5 million in deferred
drydock costs. Net cash provided by operating activities for the six months ended June
30, 2008 was primarily a result of recorded net income of $134.9 million, adjusted for
depreciation and amortization charges of $32.6 million and offset by a $26.2 million gain
on the sale of the Genco Trader.
Net cash used in investing activities was $2.4 million for the six months ended June 30,
2009 as compared to $302.0 million for the six months ended June 30, 2008. For the six
months ended June 30, 2009, cash used in investing activities primarily related to
deposits on vessels to be acquired of $1.4 million which represents capitalized interest
expense for vessels to be delivered. For the six months ended June 30, 2008 the cash used
in investing activities mostly related to the purchase of vessels in the amount of $247.1
million, deposits on vessels to be acquired of $80.6 million, and the purchase of
investments of $10.3 million, offset by the proceeds from the sale of the Genco Trader in
the amount of $43.1 million.
Net cash used in financing activities for the six months ended June 30, 2009 was
$3.6 million as compared to $194.8 million of net cash provided by financing activities
for the six months ended June 30, 2008. For the six months ended June 30, 2009, net
cash used in financing activities consisted of the payment of deferred financing costs of
$3.6 million related to the amendment to the Company’s $1.4 billion revolving credit
facility. For the six months ended June 30, 2008, net cash provided by financing activities
consisted of the drawdown of $321.3 million related to the purchase of vessels and
$195.7 million in net proceeds from our May 2008 follow-on offering. These inflows
were offset by the repayment of $268.0 million under the 2007 credit facility and the
payment of cash dividends of $53.8 million.
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Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions.
Our current fleet consists of seven Capesize, eight Panamax, four Supramax, six
Handymax and eight Handysize vessels, with an aggregate carrying capacity of
approximately 2,565,500 dwt. After the expected delivery of two 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 2,906,000
dwt.
In addition to acquisitions that we may undertake in future periods, we will incur
additional capital expenditures due to special surveys and drydockings for our fleet. We
estimate that two of our vessels will be drydocked in the third quarter of 2009. An
additional three vessels will be drydocked in the remainder of 2009.
We estimate our drydocking costs for our fleet through 2010 to be:
Q3 2009 Q4 2009 2010
Estimated Costs (1) $1.4 million $1.4 million $1.7 million
Estimated Offhire Days (2) 40 40 60
(1) Estimates are based on our budgeted cost of drydocking our vessels in China. Actual costs will vary based on
various factors, including where the drydockings are actually performed. We expect to fund these costs with cash from
operations.
(2) Assumes 20 days per drydocking per vessel. Actual length will vary based on the condition of the vessel, yard
schedules and other factors. Two of our Capesize vessels drydocking in the fourth quarter of 2009 are anticipated to
complete the required maintenance in only ten days.
The Genco Explorer, Marine and Vigour completed their drydockings during the second
quarter of 2009 at an aggregate cost of approximately $2.1 million. The vessels were on
planned offhire for 46 days in connection with their scheduled drydocking.
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Summary Consolidated Financial and Other Data
The following table summarizes Genco Shipping & Trading Limited’s selected
consolidated financial and other data for the periods indicated below.
June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008
(unaudited)
INCOME STATEMENT DATA:
Revenues $ 93,701 $ 104,572 $ 190,351 $ 196,242
Operating expenses:
Voyage expenses 1,284 724 2,863 1,468
Vessel operating expenses 13,268 11,187 27,469 22,106
General and administrative expenses 4,101 4,431 7,994 8,842
Management fees 863 665 1,742 1,338
Depreciation and amortization 20,933 16,748 41,882 32,612
Gain on sale of vessel - - (26,227)
Total operating expenses 40,449 33,755 81,950 40,139
Operating income 53,252 70,817 108,401 156,103
Other (expense) income:
Income from investment - 2,590 - 2,590
Other expense ( 301) ( 1,315) (283) (1,380)
Interest income 42 422 65 975
Interest expense ( 15,376) ( 11,615) (29,324) (23,402)
Other (expense): ( 15,635) ( 9,918) (29,542) (21,217)
Net income $ 37,617 $ 60,899 $ 78,859 $ 134,886
Earnings per share - basic $ 1.20 $ 2.05 $ 2.52 $ 4.61
Earnings per share - diluted $ 1.20 $ 2.03 $ 2.51 $ 4.58
Weighted average shares outstanding - basic 31,268,394 29,750,309 31,264,460 29,242,118
Weighted average shares outstanding - diluted 31,434,814 29,957,698 31,393,333 29,436,024
June 30, 2009 December 31, 2008
BALANCE SHEET DATA: (unaudited)
Cash & cash equivalents $ 228,764 $ 124,956
Current assets, including cash 247,232 140,748
Total assets 2,084,260 1 ,990,006
Current liabilities 28,874 30,192
Total long-term debt 1,173,300 1 ,173,300
Shareholders' equity 818,224 696,478
June 30, 2009 June 30, 2008
(unaudited)
Net cash provided by operating activities $ 109,760 131,627
Net cash used in investing activities (2,400) (302,000)
Net cash (used in) provided by financing activities (3,552) 194,841
(Dollars in thousands, except share and per share data) (Dollars in thousands, except share and per share data)
Three Months Ended Six Months Ended
(unaudited)
Six Months Ended
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June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008
FLEET DATA: (unaudited)
Total number of vessels at end of period 32 29 3 2 2 9
Average number of vessels (1) 32.0 28.1 3 2.0 2 8.1
Total ownership days for fleet (2) 2,912 2,555 5,792 5 ,107
Total available days for fleet (3) 2,866 2,536 5,729 5 ,070
Total operating days for fleet (4) 2,845 2,518 5,661 5 ,033
Fleet utilization (5) 99.3% 99.3% 98.8% 99.3%
AVERAGE DAILY RESULTS:
Time charter equivalent (6) $ 32,245 40,945 $ 3 2,724 $ 3 8,419
Daily vessel operating expenses per vessel (7)
4,556 4,378 4,743 4 ,328
June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008
EBITDA Reconciliation: (unaudited)
Net Income $ 37,617 $ 60,899 $ 7 8,859 $ 1 34,886
+ Net interest expense 15,334 11,193 2 9,259 2 2,427
+ Depreciation and amortization 20,933 16,748 4 1,882 3 2,612
EBITDA(8)
73,884 88,840 1 50,000 1 89,925
(unaudited)
(unaudited)
Six Months Ended
Three Months Ended
Three Months Ended
(Dollars in thousands) (Dollars in thousands)
Six Months Ended
(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the
number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period.
(2) We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us.
Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that
we record during a period.
(3) We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to
scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning
our vessels. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels
should be capable of generating revenues.
(4) We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire
due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during
which vessels actually generate revenues.
(5) We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the
period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and
minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel
upgrades, special surveys or vessel positioning.
(6) We define TCE rates as our net voyage revenue (voyage revenues less voyage expenses) divided by the number of our available days
during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily
to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because
charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time
charters generally are expressed in such amounts. Since some vessels were acquired with an existing time charter at 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. This
intangible liability is amortized as an increase to voyage revenues over the minimum remaining term of the charter.
(7) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and
maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel
operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period.
(8) EBITDA represents net income plus net interest expense and depreciation and amortization. EBITDA is included because it is used by
management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common
performance measure to compare results across peers. Our management uses EBITDA as a performance measure in our consolidating
internal financial statements, and it is presented for review at our board meetings. The Company believes that EBITDA is useful to investors
as the shipping industry is capital intensive which often results in significant depreciation and cost of financing. EBITDA presents investors
with a measure in addition to net income to evaluate the Company’s performance prior to these costs. EBITDA is not an item recognized by
U.S. GAAP and should not be considered as an alternative to net income, operating income or any other indicator of a company’s operating
performance required by U.S. GAAP. EBITDA is not a source of liquidity or cash flows as shown in our consolidated statement of cash
flows. The definition of EBITDA used here may not be comparable to that used by other companies.
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Genco Shipping & Trading Limited’s Fleet
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 33 drybulk vessels and after the expected delivery of
two 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 2,906,000 dwt.
Our current fleet consists of seven Capesize, eight Panamax, four Supramax, six
Handymax and eight Handysize drybulk carriers with an aggregate carrying capacity of
approximately 2,565,500 dwt. Our current fleet contains nine groups of sister ships,
which are vessels of virtually identical sizes and specifications. We believe that
maintaining a fleet that includes sister ships reduces costs by creating economies of scale
in the maintenance, supply and crewing of our vessels. As of July 29, 2009, the average
age of our current fleet was 6.8 years, as compared to the average age for the world fleet
of approximately 15 years for the drybulk shipping segments in which we compete. The
majority of the vessels in our current fleet are currently on long-term time charters with
an average remaining life of approximately 12 months as of July 29, 2009.
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:
Vessel
Year
Built Charterer
Charter
Expiration (1)
Cash Daily
Rate (2)
Net
Revenue
Daily
Rate (3)
Expected
Delivery
(4)
Capesize Vessels
Genco Augustus 2007 Cargill International S.A. December 2009 45,263 62,750 -
Genco Tiberius 2007 Cargill International S.A. January 2010 45,263 62,750 -
Genco London 2007 SK Shipping Co., Ltd August 2010 57,500 64,250 -
Genco Titus 2007 Cargill International S.A. September 2011 45,000(5) 46,250 -
Genco Constantine 2008 Cargill International S.A. August 2012 52,750(5) -
Genco Hadrian 2008 Cargill International S.A. October 2012 65,000(5) -
Genco Commodus 2009 Morgan Stanley Capital Group Inc. June 2011 36,000 -
Genco Maximus 2009(6) To Be Determined (“TBD”) TBD TBD Q3 2009
Genco Claudius 2009(6) TBD TBD TBD Q4 2009
Panamax Vessels
Genco Beauty 1999 Cargill International S.A. August 2009 15,000 (7) -
Genco Knight 1999 Swissmarine Services S.A. September 2009 16,500(8) -
Genco Leader 1999 Baumarine AS November 2009 20,742(9) -
Genco Vigour 1999 C Transport Panamax Ltd. October 2009 20,000(10) -
Genco Acheron 1999 Global Chartering Ltd
(a subsidiary of ArcelorMittal Group)
July 2011 55,250 -
Genco Surprise 1998 Hanjin Shipping Co., Ltd. December 2010 42,100 -
Genco Raptor 2007 COSCO Bulk Carriers Co., Ltd. April 2012 52,800 -
Genco Thunder 2007 Baumarine AS October 2009 20,079(11) -
Supramax Vessels
Genco Predator 2005 Bulkhandling Handymax A/S October 2009 Spot(12) -
Genco Warrior 2005 Hyundai Merchant Marine Co. Ltd. November 2010 38,750 -
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Genco Hunter 2007 Pacific Basin Chartering Ltd. September 2009 16,000(13) -
Genco Cavalier 2007 Clipper Bulk Shipping NV Aug / Nov 2009 12,000/
16,750(14)
-
Handymax Vessels
Genco Success 1997 Korea Line Corporation February 2011 33,000(15) -
Genco Carrier 1998 Louis Dreyfus Corporation March 2011 37,000 -
Genco Prosperity 1997 Pacific Basin Chartering Ltd June 2011 37,000 -
Genco Wisdom 1997 Hyundai Merchant Marine Co. Ltd. February 2011 34,500 -
Genco Marine 1996 STX Pan Ocean Co. Ltd. October 2009 13,750(16) -
Genco Muse 2001 Global Maritime Investments Ltd. Aug / Nov 2009 6,500/
15,000(17)
-
Handysize Vessels
Genco Explorer 1999 Lauritzen Bulkers A/S Aug 09/Nov 09 19,500/Spot(18) -
Genco Pioneer 1999 Lauritzen Bulkers A/S Aug 09/Nov 09 19,500/Spot(18) -
Genco Progress 1999 Lauritzen Bulkers A/S Aug 09/Nov 09 19,500/Spot(18) -
Genco Reliance 1999 Lauritzen Bulkers A/S Aug 09/Aug 10 19,500/Spot(18) -
Genco Sugar 1998 Lauritzen Bulkers A/S Aug 09/Aug 10 19,500/Spot(18) -
Genco Charger 2005 Pacific Basin Chartering Ltd. November 2010 24,000 -
Genco Challenger 2003 Pacific Basin Chartering Ltd. November 2010 24,000 -
Genco Champion 2006 Pacific Basin Chartering Ltd. December 2010 24,000 -
(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,
Genco Constantine, and Genco Hadrian under the terms of each contract, the charterer is entitled to extend the 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 and Genco Hadrian has the option to extend the
charter for a period of one year. The Genco Constantine has the option to extend the charter for a period of eight months.
(2) Time charter rates presented are the gross daily charterhire rates before third-party commissions ranging from 1.25% to 6.25%. 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 vessels 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 reached an agreement to extend the time charter for an additional 3 to 5.5 months at a rate of $15,000 per day. The extended time charter commenced
following the expiration of the current time charter on May 22, 2009.
(8) We have entered into a short-term time charter for approximately 3 to 5.5 months at a rate of $16,500 per day, less a 5% third-party commission. The vessel
entered into the time charter following the completion of its previous time charter with SK Shipping Ltd. on June 1, 2009.
(9) We 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. We exercised the option to convert the balance period of the charter party to a fixed rate on June 3, 2009 at a gross rate of $20,742 per day.
(10) We have reached an agreement to charter the vessel for 3.5 to 6 months at a rate of $20,000 per day less a 5% third-party commission which commenced on
July 10, 2009.
(11) 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. We exercised the option to convert the balance period of the charter party to a fixed rate on June 1, 2009 at a gross rate of $20,079 per
day.
(12) We 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. In addition to a 1.25% third-party brokerage commission, the charter party calls for a management fee.
(13) We have reached an agreement to enter into a time charter the vessel for 3 to 5 months at a rate of $16,000 per day less a 5% third-party commission which
commenced on June 24, 2009.
(14) We have reached an agreement to extend the time charter for approximately 3 to 5.5 months at a rate of $16,750 per day, less a 5% third-party commission.
The new time charter will commence following the expiration of the existing time charter on or about August 24, 2009.
(15) 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.
(16) We have entered into a short-term time charter for approximately 3 to 5 months at a rate of $13,750 per day, less a 5% third-party commission. The vessel
entered into the time charter following the completion of its previous time charter on July 6, 2009.
(17) We have reached an agreement to extend the time charter for approximately 3 to 4.5 months. The new time charter will commence following the expiration of
the existing time charter on or about August 7, 2009.
(18) We have reached an agreement to enter these vessels into a spot pool managed by Lauritzen Bulkers beginning at the expiration of their current time
charters in August 2009. Under the pool agreement, we can withdraw up to three vessels with three months’ notice until December 31, 2009 and the remaining
two vessels with 12 months’ notice. After December 31, 2009, we can withdraw up to two vessels with three months’ notice and the remaining three vessels with
12 months’ notice.
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Credit Facility Amendment
On January 26, 2009, the Company announced that it had entered into an agreement with
DnB NOR Bank ASA and Bank of Scotland PLC as the lead arrangers to amend its $1.4
billion credit facility. Under terms of the amended ten-year $1.4 billion facility, the
collateral maintenance requirement is waived until such time that Genco is in a position
to satisfy the requirement as well as continue to comply with all other covenants and
certain other conditions previously announced. Genco continues to be able to borrow the
undrawn portion of the loan during the waiver period. Amounts borrowed under the
amended facility began to reduce on March 31, 2009 at $12.5 million per quarter and will
bear interest at LIBOR plus 2.00%.
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 cash dividends and share repurchases 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.
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 33 drybulk vessels consisting of seven Capesize, eight
Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate
carrying capacity of approximately 2,565,500 dwt. After the expected delivery of two
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 2,906,000 dwt.
