Genco Shipping & Trading Limited Advances Fleet Renewal Strategy

Rhea-AI Summary

Genco Shipping & Trading Limited (GNK) has acquired a 2016-built 181,000 dwt scrubber-fitted Capesize vessel, the Genco Reliance, for $43.0 million. The Company also acquired the Genco Ranger and agreed to sell the Genco Commodus for $19.5 million. The acquisitions will be funded through a combination of cash on hand, a drawdown on its revolving credit facility, and proceeds from the sale of the Genco Commodus.

Acquired Two High Specification Scrubber-Fitted Capesize Vessels; Agreed to Sell Older, Less Fuel-Efficient Capesize Vessel

NEW YORK, Nov. 27, 2023 (GLOBE NEWSWIRE) -- Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”), the largest U.S. headquartered drybulk shipowner focused on the global transportation of commodities, has acquired an additional 2016-built 181,000 dwt scrubber-fitted Capesize vessel, the Genco Reliance, for a purchase price of $43.0 million. The Company took delivery of the Genco Reliance, as well as the previously announced Capesize acquisition, the Genco Ranger, during the last week of November 2023.

Genco also announced today that it has agreed to sell the Genco Commodus, a 2009-built 169,098 dwt Capesize vessel, for $19.5 million. This anticipated sale will result in drydocking savings in 2024 due to the vessel’s upcoming third special survey. The vessel is expected to deliver to buyers in January 2024.

Genco intends to fund the above acquisitions through a combination of cash on hand, a drawdown on its revolving credit facility and proceeds from the sale of the Genco Commodus. Assuming this drawdown on our revolver and the closing of our previously announced $500 million credit facility, we expect to have debt outstanding of approximately $210 million and undrawn revolver availability of approximately $290 million.

John C. Wobensmith, Chief Executive Officer, commented, “We are pleased to have taken important steps to advance our fleet renewal strategy. Leveraging our significant financial strength, we opportunistically acquired two modern, fuel-efficient Capesize vessels, while divesting older, non-core tonnage. We expect these two new Capes will seamlessly integrate into our global commercial platform, as sister ships to existing Genco vessels. Importantly, we’ve enhanced the average age of our asset base and improved our earnings capacity to take advantage of favorable long-term industry fundamentals.”

Mr. Wobensmith concluded, “Given that the acquired Capesizes are high-specification vessels, we viewed these fleet additions as highly attractive, positioning Genco well for the longer term while also improving the efficiency of our fleet to further reduce our carbon footprint. Going forward, we intend to continue to assess additional sale and purchase transactions in the market and at the same time remain focused on delivering sizable dividends to shareholders, deleveraging, and further growth.”

About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited is a U.S. based drybulk ship owning company focused on the seaborne transportation of commodities globally. We provide a full-service logistics solution to our customers utilizing our in-house commercial operating platform, as we transport key cargoes such as iron ore, grain, steel products, bauxite, cement, nickel ore among other commodities along worldwide shipping routes. Our wholly owned high quality, modern fleet of dry cargo vessels consists of the larger Capesize (major bulk) and the medium-sized Ultramax and Supramax vessels (minor bulk) enabling us to carry a wide range of cargoes. We make capital expenditures from time to time in connection with vessel acquisitions. As of November 27, 2023, Genco Shipping & Trading Limited’s fleet consists of 19 Capesize, 15 Ultramax and 12 Supramax vessels with an aggregate capacity of approximately 4,997,000 dwt and an average age of 11.5 years.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995
This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements use words such as “anticipate,” “budget,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance.  These forward-looking statements are based on our 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 release are the following: (i) declines or sustained weakness in demand in the drybulk shipping industry; (ii) weakness or declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) 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; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance, general and administrative expenses, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy, including without limitation the ongoing war in Ukraine; (x) 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; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete maintenance, repairs, and installation of equipment to comply with applicable regulations on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results are affected by weakness in market conditions and freight and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xvii) completion of documentation for vessel transactions and the performance of the terms thereof by buyers or sellers of vessels and us; (xviii) the relative cost and availability of low sulfur and high sulfur fuel, worldwide compliance with sulfur emissions regulations that took effect on January 1, 2020 and our ability to realize the economic benefits or recover the cost of the scrubbers we have installed; (xix) our financial results for the year ending December 31, 2023 and other factors relating to determination of the tax treatment of dividends we have declared; (xx) the financial results we achieve for each quarter that apply to the formula under our new dividend policy, including without limitation the actual amounts earned by our vessels and the amounts of various expenses we incur, as a significant decrease in such earnings or a significant increase in such expenses may affect our ability to carry out our new value strategy; (xxi) the exercise of the discretion of our Board regarding the declaration of dividends, including without limitation the amount that our Board determines to set aside for reserves under our dividend policy; (xxii) the duration and impact of the COVID-19 novel coronavirus epidemic, which may negatively affect general global and regional economic conditions, our ability to charter our vessels at all and the rates at which are able to do so; our ability to call on or depart from ports on a timely basis or at all; our ability to crew, maintain, and repair our vessels, including without limitation the impact diversion of our vessels to perform crew rotations may have on our revenues, expenses, and ability to consummate vessel sales, expense and disruption to our operations that may arise from the inability to rotate crews on schedule, and delay and added expense we may incur in rotating crews in the current environment; our ability to staff and maintain our headquarters and administrative operations; sources of cash and liquidity; our ability to sell vessels in the secondary market, including without limitation the compliance of purchasers and us with the terms of vessel sale contracts, and the prices at which vessels are sold; and other factors relevant to our business described from time to time in our filings with the Securities and Exchange Commission; (xxiii) the completion of definitive documentation for, potential changes in terms to, our entry into, and fulfillment of conditions precedent under our proposed $500 million credit facility, and (xxiv) other factors listed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent reports on Form 8-K and Form 10-Q).  Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance, market developments, and the best interests of the Company and its shareholders. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves. As a result, the amount of dividends actually paid may vary. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:
Peter Allen
Chief Financial Officer
Genco Shipping & Trading Limited
(646) 443-8550

FAQ

What vessels did Genco Shipping & Trading Limited acquire recently?

Genco Shipping & Trading Limited acquired the Genco Reliance and the Genco Ranger.

How will Genco Shipping & Trading Limited fund the recent acquisitions?

The acquisitions will be funded through a combination of cash on hand, a drawdown on its revolving credit facility, and proceeds from the sale of the Genco Commodus.

What is the purchase price of the Genco Reliance?

The purchase price of the Genco Reliance is $43.0 million.

What vessel is Genco Shipping & Trading Limited planning to sell?

Genco Shipping & Trading Limited is planning to sell the Genco Commodus for $19.5 million.

How does Genco Shipping & Trading Limited plan to enhance its financial strength?

Genco Shipping & Trading Limited plans to leverage its significant financial strength to opportunistically acquire modern, fuel-efficient Capesize vessels while divesting older, non-core tonnage.