Strengthens Financial Flexibility
NEW YORK, Nov. 4 /PRNewswire-FirstCall/ -- Genco Shipping & Trading
Limited (NYSE: GNK) today announced that it has agreed to cancel the
previously announced acquisition of six drybulk newbuildings from Lambert
Navigation Ltd., Northville Navigation Ltd., Providence Navigation Ltd., and
Prime Bulk Navigation Ltd., with an aggregate purchase price of $530 million.
As part of the agreement, the selling group will retain the deposits totaling
$53 million for the six vessels, comprised of three Capesize and three
Handysize vessels.
John C. Wobensmith, Chief Financial Officer, commented, "While Genco was
prepared to take delivery of the six drybulk newbuildings that we agreed to
acquire in June 2008, management has made a proactive decision to forego the
vessels, which we believe provides important benefits. Specifically, the
Company's liquidity has been strengthened during a difficult market
environment and our ability to act opportunistically has been enhanced. By
taking advantage of the Company's increased financial flexibility, combined
with our significant time charter coverage of approximately 93% for our
fleet's available days for the remainder of 2008 and 67% in 2009, we remain
well positioned to continue to serve the best interests of our shareholders as
we have consistently done since our IPO in July 2005."
Genco has four remaining Capesize newbuildings scheduled to be delivered
in 2009. The Company intends to utilize the undrawn portion of its credit
facilities as well as cash flow from operations to fund these acquisitions.
This transaction will result in a fourth quarter charge to the income
statement of approximately $54.0 million related to the forfeiture of the
deposits associated with the acquisition. The Company has repaid the $53
million in debt associated with the deposits for the vessels using cash flow
from operations, thereby reducing the debt outstanding under the Company's
2007 revolving credit facility to $1.077 billion. Lastly, the Company is
discussing with its lenders the potential extension of the Company's $320
million credit facility put in place to fund the six vessel acquisition. The
terms of this facility provide that it is to be cancelled upon a cancellation
of the acquisition contracts. Cancellation of the facility would result in a
fourth quarter non-cash charge to interest expense of approximately $2.3
million associated with deferred financing costs.
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 31 drybulk vessels
consisting of five Capesize, eight Panamax, four Supramax, six Handymax and
eight Handysize vessels, with an aggregate carrying capacity of approximately
2,226,500 dwt. After the expected delivery of four 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 2,909,000 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) the Company's acquisition
or disposition of vessels; (ii) the fulfillment of the closing conditions
under, or the execution of customary additional documentation for, the
Company's agreements to acquire a total of 4 remaining drybulk vessels; 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, 2007, and our subsequent
reports on Form 10-Q and Form 8-K.
SOURCE Genco Shipping & Trading Limited
-0- 11/04/2008
/CONTACT: John C. Wobensmith, Chief Financial Officer of Genco Shipping &
Trading Limited, +1-646-443-8555/
/Web Site: http://www.gencoshipping.com /
(GNK)
CO: Genco Shipping & Trading Limited; Lambert Navigation Ltd.~~Northville
Navigation Ltd.~~Providence Navigation Ltd.~~Prime Bulk Navigation Ltd.
ST: New York
IN: MAR TRN
SU: TNM ERP
PR
-- NY43859 --
3859 11/04/2008 16:16 EST http://www.prnewswire.com