Increases Time Charter Coverage to 88% for the Remainder of 2007 and 45% for 2008
NEW YORK, April 18 /PRNewswire-FirstCall/ -- Genco Shipping & Trading
Limited (NYSE: GNK) today announced it has reached an agreement to extend the
time charter for the Genco Beauty, a 1999-built Panamax vessel currently on
charter with Cargill International S.A. The extended time charter would be for
an additional 23 to 26 months at a rate of $31,500 per day, less a 5% third
party brokerage commission. The time charter, subject to completion of
definitive documentation, is expected to commence following the expiration of
the vessel's current time charter in June of 2007. Additionally, the Company
announced that the previously disclosed time charter for the Genco Vigour is
expected to commence following the expiration of the vessel's current time
charter on or about May 5, 2007.
Robert Gerald Buchanan, President, said, "Our extended time charter for
the Genco Beauty with Cargill, a top international charterer, further
demonstrates management's expertise in capitalizing on strong market
conditions and securing vessels on long-term time charters at attractive
rates. With this agreement, we have approximately 88% of our fleet's available
days secured on contracts for the remainder of 2007 and 45% for 2008. Genco's
significant time charter coverage supports its strategy of seeking to
distribute sizable dividends to shareholders. As we maintain our focus on
locking in favorable rates for our vessels over the long term, we will
continue to seek strategic acquisitions that meet our strict return criteria
related to cash flow and earnings accretion as well as return on capital."
The following table sets forth information about the employment of Genco's
fleet:
Time
Charter Charter
Vessel Charterer Expiration (1) Rate (2)
Panamax Vessels
Genco Beauty Cargill International S.A. June 2007 $29,000
23 to 26 31,500
months from
delivery
Genco Knight BHP May 2007 29,000
Genco Leader A/S Klaveness December 2008 25,650(3)
Genco Trader Baumarine AS October 2007 25,750(3)
Genco Vigour BHP May 2007 29,000
STX Panocean (UK) Co. Ltd. March 2009 29,000(4)
Genco Acheron STX Panocean (UK) Co. Ltd. February 2008 30,000(5)
Genco Cosco Bulk
Surprise Carrier Co., Ltd. November 2007 25,000
Handymax Vessels
Genco Success KLC January 2008 24,000
Genco
Commander A/S Klaveness October 2007 19,750
Genco Pacific Basin
Carrier Chartering Ltd. February 2008 24,000
Genco
Prosperity DS Norden June 2007 23,000
A/C Pacific Basin 11 to 13 26,000
Chartering Ltd. months from
delivery to
new charterer
Genco Wisdom HMMC November 2007 24,000
Genco Marine NYK Bulkship
Europe S.A. February 2008 24,000(6)
Genco Muse Qatar Navigation
QSC September 2007 26,500(7)
Handysize
Vessels
Genco Lauritzen Bulkers September 2007 13,500
Explorer A/S August 2009 19,500
Genco Lauritzen Bulkers September 2007 13,500
Pioneer A/S August 2009 19,500
Genco Lauritzen Bulkers September 2007 13,500
Progress A/S August 2009 19,500
Genco Lauritzen Bulkers September 2007 13,500
Reliance A/S August 2009 19,500
Genco Sugar Lauritzen Bulkers September 2007 13,500
A/S August 2009 19,500
(1) The charter expiration dates presented represent the earliest dates
that our charters may be terminated in the ordinary course. 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.
(2) Time charter rates presented are the gross daily charterhire rates
before the payments of brokerage commissions ranging from 1.25% to 5%
to third parties, except as indicated for the Genco Trader and the
Genco Leader in note 3 below. In a time charter, the charterer is
responsible for voyage expenses such as bunkers, port expenses,
agents' fees and canal dues.
(3) The Genco Leader and the Genco Trader were delivered to the charterer
for the commencement of the time charter on January 15, 2007 and
December 24, 2006, respectively. For each of these vessels, the time
charter rate presented is the net daily charterhire rate. There are no
payments of brokerage commissions associated with these time charters.
(4) We have reached an agreement to commence 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 brokerage 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. The time charter is expected to commence
following the expiration of the vessel's current time charter on or
about May 5, 2007.
(5) The vessel was delivered to the charterer for the commencement of the
time charter on March 20, 2007.
(6) The vessel was delivered to the charterer for the commencement of the
time charter on March 29, 2007.
(7) Since this vessel was acquired with an existing time charter at an
above-market rate, we allocated the purchase price between the vessel
and an intangible asset for the value assigned to the above-market
charterhire. This intangible asset is amortized as a reduction to
voyage revenues over the remaining term of the charter, resulting in a
daily rate of approximately $22,000 recognized as revenues. For cash
flow purposes, we will continue to receive $26,500 per day until the
charter expires.
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 owns a fleet of 19 drybulk vessels, consisting of
seven Panamax, seven Handymax and five Handysize vessels, with a carrying
capacity of approximately 988,000 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 documentation that the Company may execute with Cargill for the
time charter described above or other charters for which definitive
documentation has not yet been executed 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 and our reports on Form 8-K.