Company Expands Fleet by 159% on a Tonnage Basis; Announces New $1.4 Billion
Credit Facility; Company to Host Conference Call on Thursday, July 19, 2007 at
8:30 a.m. ET
NEW YORK, July 18 /PRNewswire-FirstCall/ -- Genco Shipping & Trading
Limited (NYSE: GNK) today announced that it has agreed to acquire nine
Capesize vessels from companies within the Metrostar Management Corporation
group for an aggregate purchase price of approximately $1.1 billion. The
acquisition is subject to the completion of customary additional documentation
and closing conditions.
Two of the nine Capesize vessels were built in the first quarter of 2007
and are expected to be delivered to Genco during the third quarter of 2007.
The remaining seven Capesize vessels are expected to be built, and
subsequently delivered to Genco, between the fourth quarter of 2007 and the
third quarter of 2009. Upon completion of the acquisition, Genco's fleet will
consist of nine Capesize, seven Panamax, seven Handymax, and five Handysize
drybulk carriers, with a total carrying capacity of approximately 2,559,000
dwt and an average age of 8 years.
Robert Gerald Buchanan, President, commented, "Consistent with Genco's
goal of becoming the bellwether in the industry, the agreement to acquire nine
Capesize vessels will expand the Company's fleet of high quality vessels by
well over 100 percent on a tonnage basis. By acquiring the largest class of
drybulk vessels, we will also enhance our position for benefiting from the
strong demand for iron ore and coal in China and other developing countries.
With this acquisition, Genco has once again utilized management's strong
industry relationships to further enhance the Company's modern fleet profile
and future commercial prospects. Given that four of the nine Capesize vessels
already secured on time charters ranging from approximately three to four
years, we are well positioned to provide shareholders with stable earnings
while maintaining the ability to benefit from the industry's favorable long-
term fundamentals."
The following table sets forth information about the nine vessels to be
acquired by the Company:
Acquisition Summary
Vessel New Name DWT Shipyard Built(1) Expected Time
Delivery(1) Charter
Rate(2)
Ferro Genco 180,000 Imabari Q1 Q3
Goa Augustus Shipbuilding 2007 2007 $45,263(3)
Co. Ltd.
Ferro Genco 175,000 Universal Q1 Q3 $45,263(3)
Fos Tiberius Shipbuilding 2007 2007
Corp.
Hull Genco 177,000 Shanghai Q4 Q4 $57,500(4)
1044 London Waigaoqiao 2007 2007
Shipbuilding
Co. Ltd.
Hull Genco 177,000 Shanghai Q4 Q4 $45,000(5)
1118 Titus Waigaoqiao 2007 2007
Shipbuilding
Co. Ltd.
Hull Genco 180,000 Imabari Q2 Q2 n/a
8071 Constantine Shipbuilding 2008 2008
Co. Ltd.
Hull Genco 170,500 Sungdong Q4 Q4 n/a
1032 Hadrian Heavy 2008 2008
Industries
Co. Ltd.
Hull Genco 170,500 Sungdong Q2 Q2 n/a
1033 Commodus Heavy 2009 2009
Industries
Co. Ltd.
Hull Genco 170,500 Sungdong Q2 Q2 n/a
1034 Maximus Heavy 2009 2009
Industries
Co. Ltd.
Hull Genco 170,500 Sungdong Q3 Q3 n/a
1041 Claudius Heavy 2009 2009
Industries
Co. Ltd.
Total 1,571,000
(1) Built dates for vessels delivering in the future are estimates based
on guidance received from the sellers and respective shipyards.
(2) Time charter rates presented are the gross daily charterhire rates
before the payments of brokerage commissions ranging from 2.50% to 5.00% to
third parties. In a time charter, the charterer is responsible for voyage
expenses such as bunkers, port expenses, agents' fees and canal dues.
(3) Currently, the Ferro Goa and the Ferro Fos, which are to be renamed
the Genco Augustus and the Genco Tiberius, respectively, are each on charter
with Cargill International S.A., for 35 to 39 months at a gross rate of
$45,263 per day. Both charters are due to expire between December 2009 and
April 2010.
(4) Hull 1044, to be renamed the Genco London, is scheduled to be on
charter with SK Shipping Co., Ltd. for 35 to 39 months at a gross rate of
$57,500 per day. The charter is due to expire between September 2010 and
January 2011.
(5) Hull 1118, to be renamed the Genco Titus, is scheduled to be on
charter with Cargill International S.A., for 48 months at a gross rate of
$45,000 per day. The charter, which is due to expire in January 2012, also
includes a 50 percent index-based profit sharing component. The charterer has
the option to extend the charter for a period of one year.
Genco plans to finance the acquisition of the nine vessels through
borrowings under a new $1.4 billion revolving credit facility. The 10-year
facility, underwritten by DnB NOR Bank ASA, is intended to replace the
Company's existing $550 million credit facility and the Company's $155 million
short-term credit facility and is subject to the execution of definitive
agreements. Amounts borrowed under the facility will bear interest at LIBOR
plus 0.80% through the fifth anniversary and 0.85% thereafter.
John C. Wobensmith, Chief Financial Officer, commented, "We are pleased to
continue to successfully execute Genco's growth strategy while adhering to our
strict return requirements. This acquisition significantly enhances our
earnings power and meets our return criteria related to earnings and cash flow
accretion as well as return on capital hurdles. In further solidifying the
Company's leading position in the drybulk industry, we intend to draw upon our
financial strength, including our new $1.4 billion credit facility, to finance
the nine-vessel acquisition. We expect that the new facility, which will have
a ten-year term and a favorable interest rate, will replace our $550 million
and $155 million facilities and improve management's ability to capitalize on
growth opportunities that create long-term value. In our endeavors to meet
this critical objective, we remain dedicated to seeking to distribute sizable
dividends to our shareholders as we have since going public in July of 2005."
Conference Call Announcement
Genco Shipping & Trading Limited plans to hold a conference call on
Thursday, July 19, 2007 at 8:30 a.m., Eastern Time, to discuss the acquisition
of the nine Capesize vessels. The conference call and a presentation will be
simultaneously webcast and will be available on the Company's website,
www.GencoShipping.com. To access the conference call, dial (800) 946-0783 or
(719) 457-2658 and enter passcode 8762490. A replay of the conference call
can also be accessed until August 2, 2007 by dialing (888) 203-1112 or (719)
457-0820 and entering the passcode 8762490. The Company intends to place
additional materials related to the acquisition, including a slide
presentation, on its website prior to the start of the conference call.
About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited transports iron ore, coal, grain, steel
products and other drybulk cargoes along worldwide shipping routes. Assuming
the acquisition of the nine vessels, Genco Shipping & Trading Limited will own
a fleet of 28 drybulk vessels, consisting of nine Capesize, seven Panamax,
seven Handymax and five Handysize vessels, with a carrying capacity of
approximately 2,559,000 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 press release are (i) execution of additional
definitive documentation for the Company's agreement to acquire the nine
drybulk vessels; (ii) execution of definitive documentation for the new $1.4
billion credit facility; (iii) the fulfillment of the closing conditions under
the Company's agreement to acquire the nine drybulk vessels; (iv) increases in
costs and expenses including but not limited to: crew wages, insurance,
provisions, repairs, maintenance and general and administrative expenses; (v)
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; 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, 2006, 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.
SOURCE Genco Shipping & Trading Limited
CONTACT:
John C. Wobensmith,
Chief Financial Officer of Genco Shipping &
Trading Limited,
+1-646-443-8555
Web site: http://www.gencoshipping.com
(GNK)