Increases Time Charter Coverage to 88% for 2006NEW YORK, NY, May 25, 2006 (MARKET WIRE via COMTEX News Network) -- Genco Shipping & Trading Limited (NASDAQ: GSTL) today announced it
has reached an agreement in principle to extend the time charters for
the five Handysize vessels currently on charter with Lauritzen
Bulkers A/S. The company intends to extend the time charters for
the
1999-built Genco Reliance, the 1999-built Genco Explorer, the
1999-built Genco Pioneer, the 1999-built Genco Progress, and the
1998-built Genco Sugar with Lauritzen Bulkers for an additional
eleven to thirteen months at a rate of $13,500 per vessel per day,
less a 1.25% third party brokerage commission. The time charters
would commence following the expiration of the vessels' current time
charters in August and September of 2006. The extensions are subject
to the completion of definitive agreements acceptable to both Genco
and Lauritzen.
Robert Gerald Buchanan, President, commented, "We are pleased to draw
upon our leading industry position and strong relationship with
Lauritzen as we extend these contracts at rates that are favorable to
our break-even level and our capital costs. By the extension of
these charters with a leading charterer, Genco will increase its time
charter coverage to 88 percent for 2006, further solidifying its
position to distribute sizeable dividends to shareholders in 2006.
Going forward, we will continue to execute our strategy of securing
our vessels on contracts with leading charterers while actively
exploring opportunities to utilize our significant liquidity to
further consolidate the drybulk industry."
Genco Shipping & Trading Limited's Fleet
2006
Expiration Time Charter
Vessel Vessel Type Date(1) Rates (2)
--- ------------ ------------ ------------ ------------
1 Genco Beauty Panamax February 2007 $29,000
2 Genco Knight Panamax February 2007 $29,000
3 Genco Leader Panamax Spot(3) N/A
4 Genco Trader Panamax Spot(3) N/A
5 Genco Vigour Panamax December 2006 $29,000
6 Genco Muse Handymax September 2007 $26,500 (4)
7 Genco Marine Handymax March 2007 $26,000 (5)
8 Genco Prosperity Handymax March 2007 $23,000
9 Genco Carrier Handymax December 2006 $24,000
10 Genco Wisdom Handymax January 2007 $24,000
11 Genco Success Handymax January 2007 $23,850
12 Genco Glory Handymax December 2006 $18,250
13 Genco Explorer Handysize August 2006 $17,250
July 2007 $13,500 (6)
14 Genco Pioneer Handysize September 2006 $17,250
August 2007 $13,500 (6)
15 Genco Progress Handysize September 2006 $17,250 (7)
August 2007 $13,500 (6)
16 Genco Reliance Handysize August 2006 $17,250
July 2007 $13,500 (6)
17 Genco Sugar Handysize August 2006 $17,250
July 2007 $13,500 (6)
(1) The dates presented on this table represent the earliest dates that our
charters may be terminated. Except with respect to the Genco Trader and
Genco Leader charters, under the terms of the contracts, charterers are
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.
(2) Time charter rates presented are the gross daily charterhire rates
before the payments of brokerage commissions ranging from 1.25% to 5% to
unaffiliated third parties. In a time charter, the charterer is responsible
for voyage expenses such as bunkers, port expenses, agents' fees and canal
dues.
(3) The Genco Trader and Genco Leader entered into the Baumarine Pool
arrangement in December 2005 and February 2006, respectively.
(4) Since this vessel was acquired with an existing time charter at an
above market rate, the Company allocates the purchase price between the
vessel and a deferred asset for the value assigned to the above market
charterhire. This deferred asset is amortized as a reduction to voyage
revenues over the remaining term of the charter, resulting in a daily rate
of approximately $21,500 recognized as revenue. For cash flow purposes, the
Company will continue to receive $26,500 per day less commissions.
(5) The time charter rate is $26,000 until March 2006 and $18,000
thereafter. For purposes of revenue recognition, the charter contract is
reflected on a straight-line basis in accordance with GAAP.
(6) The company intends to extend the time charters with Lauritzen for an
additional eleven to thirteen months at a rate of $13,500 per day per
vessel less a 1.25% third party brokerage commission.
(7) The time charter rate was $21,560 through March 2005 and $17,250
thereafter. For purposes of revenue recognition, the charter contract is
reflected on a straight-line basis in accordance with GAAP.
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 17
drybulk carriers, consisting of five Panamax, seven Handymax and five
Handysize vessels, with a carrying capacity of approximately 839,000
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 terms and conditions of any definitive agreements that
the Company and Lauritzen may enter into for such extension, and
other factors listed from time to time in our public filings with the
Securities and Exchange Commission including, without limitation, our
Annual Report on Form 10-K for the year ended December 31, 2005, our
Quarterly Reports on Form 10-Q, and our reports on Form 8-K. Our
ability to pay dividends in any period will depend upon factors
including the limitations under our loan agreements, applicable
provisions of Marshall Islands law and the final determination by the
Board of Directors each quarter after its review of our financial
performance. 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.
CONTACT:
John C. Wobensmith
Chief Financial Officer
Genco Shipping & Trading Limited
(646) 443-8555
SOURCE: Genco Shipping & Trading Limited