Exhibit 99.1
CONTACT:
John C. Wobensmith
Chief Financial Officer
Genco Shipping & Trading Limited
(646) 443-8555
Genco Shipping & Trading Limited Amends $1.4 Billion Credit Facility
Enhances Financial Flexibility
NEW YORK, January 26, 2009 – Genco Shipping & Trading Limited (NYSE: GNK) today announced that it has entered into an agreement to amend the Company’s $1.4 billion credit facility. DnB NOR Bank ASA and Bank of Scotland PLC acted as the lead arrangers of the ten-year facility.
Under terms of the amended ten-year $1.4 billion facility, the collateral maintenance requirement will be waived until such time that Genco is in a position to satisfy the covenant and certain other conditions. Genco will continue to be able to borrow the undrawn portion of the loan during the waiver period. Amounts borrowed under the amended facility begin to reduce on March 31, 2009 at $12.5 million per quarter and will bear interest at LIBOR plus 2.00%.
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.
John C. Wobensmith, CFO, commented, “During a time when Genco’s modern fleet continues to generate stable revenue and cash flow, management has taken further important steps aimed at ensuring that the Company emerges from the current market environment as a leader in the industry. With the amendment of its $1.4 billion credit facility, Genco has both solidified the Company’s ability to fund its remaining three vessels and increased its financial flexibility.
We believe that the favorable long-term fundamentals in the drybulk industry remain intact and the Company is in a strong position to seek opportunities to take advantage of the current weakness in the drybulk industry for the benefit of shareholders.”
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(6) | To be determined (“TBD”) | TBD | TBD | | Q2 2009 |
| Genco Maximus | 2009(6) | TBD | TBD | TBD | | Q2 2009 |
| Genco Claudius | 2009(6) | TBD | TBD | TBD | | Q3 2009 |
| | | | | | | |
| Panamax Vessels | | | | | | |
| Genco Beauty | 1999 | Cargill International S.A. | May 2009 | 31,500 | | - |
| Genco Knight | 1999 | SK Shipping Ltd. | May 2009 | 37,700 | | - |
| Genco Leader | 1999 | Baumarine AS | November 2009 | Spot(7) | | - |
| Genco Vigour | 1999 | STX Panocean (UK) Co. Ltd. | March 2009 | 29,000(8) | | - |
| Genco Acheron | 1999 | Global Chartering Ltd (a subsidiary of ArcelorMittal Group) | July 2011 | 55,250(9) | | - |
| 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 | Spot(10) | | - |
| | | | | | | |
| Supramax Vessels | | | | | | |
| Genco Predator | 2005 | Bulkhandling Handymax A/S | September 2009 | Spot(11) | | |
| Genco Warrior | 2005 | Hyundai Merchant Marine Co. Ltd. | November 2010 | 38,750 | | - |
| Genco Hunter | 2007 | Pacific Basin Chartering Ltd. | June 2009 | 62,000(12) | | - |
| Genco Cavalier | 2007 | Samsun Logix Corporation | July 2010 | 48,500(13) | 47,700 | - |
| | | | | | | |
| Handymax Vessels | | | | | | |
| Genco Success | 1997 | Korea Line Corporation | February 2011 | 33,000(14) | | - |
| Genco Carrier | 1998 | Louis Dreyfus Corporation | March 2011 | 37,000 | | - |
| Genco Prosperity | 1997 | Pacific Basin Chartering Ltd | June 2011 | 37,000(15) | | - |
| Genco Wisdom | 1997 | Hyundai Merchant Marine Co. Ltd. | February 2011 | 34,500 | | - |
| Genco Marine | 1996 | NYK Bulkship Europe S.A. | March 2009 | 47,000 | | - |
| Genco Muse | 2001 | AMN Bulkcarriers INC | January 2009 | 30,000(16) | | |
| | | | | | | |
| Handysize Vessels | | | | | | |
| Genco Explorer | 1999 | Lauritzen Bulkers A/S | August 2009 | 19,500 | | - |
| Genco Pioneer | 1999 | Lauritzen Bulkers A/S | August 2009 | 19,500 | | - |
| Genco Progress | 1999 | Lauritzen Bulkers A/S | August 2009 | 19,500 | | - |
| Genco Reliance | 1999 | Lauritzen Bulkers A/S | August 2009 | 19,500 | | - |
| Genco Sugar | 1998 | Lauritzen Bulkers A/S | August 2009 | 19,500 | | - |
| 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, 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 December 31, 2007 and its reports on Form 10-Q and Form 8-K.
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