Genco Shipping & Trading Limited Announces Plan to Extend Time Charter for Supramax Vessel

Mar 11, 2010
Increases Time Charter Coverage to 61% for 2010
NEW YORK, March 11, 2010 /PRNewswire via COMTEX/ -- Genco Shipping & Trading Limited (NYSE: GNK) today announced that it has reached an agreement to extend the time charter for the Genco Hunter, a 2007-built Supramax vessel, with Pacific Basin Chartering Ltd. for approximately 11.0 to 13.5 months at a rate of $21,750 per day, less a 5% third-party brokerage commission. The time charter is expected to commence following the expiration of the vessel's current time charter on or about April 1, 2010 and is subject to the completion of definitive documentation. Currently, Genco has approximately 61% of its fleet's estimated available days secured on contracts for the remainder of 2010.

The following table reflects the current employment of Genco's fleet:

                                                          Cash      Revenue
               Year                         Charter       Daily      Daily
    Vessel    Built       Charterer       Expiration(1)  Rate(2)    Rate (3)
    ------    -----       ---------       -------------  -------    --------

    Capesize Vessels
    Genco       2007  Cargill             December 2010   39,000
     Augustus          International S.A.

    Genco       2007  Cargill             March 10/       45,263/
     Tiberius          International S.A.  June 10        38,000(4)

    Genco       2007  SK Shipping         August 2010     57,500     64,250
     London            Co., Ltd

    Genco Titus 2007  Cargill             September 2011  45,000(5)  46,250
                       International S.A.

    Genco       2008  Cargill             August 2012     52,750(5)
     Constantine       International S.A.

    Genco       2008  Cargill             October 2012    65,000(5)
     Hadrian           International S.A.

    Genco       2009  Morgan Stanley      June 2011       36,000
     Commodus          Capital Group Inc.

    Genco       2009  Cargill             May 2010        32,0000(6)
     Maximus           International S.A.

    Genco       2010  Cargill             November 2010   36,000(7)
     Claudius          International S.A.

    Panamax Vessels
    Genco       1999  LD Commodities      April 2010      19,125
     Beauty            Suisse, Geneva

    Genco       1999  Swissmarine         April 2010      16,500
     Knight            Services S.A.

    Genco       1999  Klaveness           December 2010   20,000
     Leader            Chartering

    Genco       1999  Global Maritime     November 2010   24,000
     Vigour            Investments Ltd.

    Genco       1999  Global Chartering   July 2011       55,250
     Acheron           Ltd (a subsidiary
                       of ArcelorMittal Group)

    Genco       1998  Hanjin Shipping     December 2010   42,100
     Surprise          Co., Ltd.

    Genco       2007  COSCO Bulk Carriers April 2012      52,800
     Raptor            Co., Ltd.

    Genco       2007  Klaveness           April 2010      20,000
     Thunder           Chartering

    Supramax Vessels
    Genco       2005  Bulkhandling        April 2010      Spot(8)
     Predator          Handymax A/S

    Genco       2005  Hyundai Merchant    November 2010   38,750
     Warrior           Marine Co. Ltd.

    Genco       2007  Pacific Basin       April 2010      17,000
     Hunter            Chartering Ltd.
                      Pacific Basin
                       Chartering Ltd.    March 2011      21,750

    Genco       2007  Clipper Bulk        April 2010      20,000(9)
     Cavalier          Shipping NV

    Handymax Vessels
    Genco       1997  Korea Line          February 2011   33,000(10)
     Success           Corporation

    Genco       1998  Louis Dreyfus       March 2011      37,000
     Carrier           Corporation

    Genco       1997  Pacific Basin       June 2011       37,000
     Prosperity        Chartering Ltd.

    Genco       1997  Hyundai Merchant    February 2011   34,500
     Wisdom            Marine Co. Ltd.

    Genco       1996  STX Pan Ocean       April 2010      15,500
     Marine            Co. Ltd.

    Genco Muse  2001  Global Maritime     December 2010   17,750
                       Investments Ltd.

    Handysize Vessels
    Genco       1999  Lauritzen           June 2010       Spot(11)
     Explorer          Bulkers A/S

    Genco       1999  Lauritzen          June 2010        Spot(11)
     Pioneer           Bulkers A/S

    Genco       1999  Lauritzen          March 2011       Spot(11)
     Progress          Bulkers A/S

    Genco       1999  Lauritzen          March 2011       Spot(11)
     Reliance          Bulkers A/S

    Genco Sugar 1998  Lauritzen          March 2011       Spot(11)
                       Bulkers A/S

    Genco       2005  Pacific Basin      November 2010    24,000
     Charger           Chartering Ltd.

    Genco       2003  Pacific Basin      November 2010    24,000
     Challenger        Chartering Ltd.

    Genco       2006  Pacific Basin      December 2010    24,000
     Champion          Chartering Ltd.

(1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Except for the Genco Titus, Genco Constantine, and Genco Hadrian under the terms of each contract, the charterer is entitled to extend the 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. The charterer of the Genco Titus and Genco Hadrian has the option to extend the charter for a period of one year. The Genco Constantine has the option to extend the charter for a period of eight months.

(2) Time charter rates presented are the gross daily charterhire rates before third-party commissions generally ranging from 1.25% to 5.00%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents' fees and canal dues.

(3) For the vessels acquired with a below-market time charter rate, the approximate amount of revenue on a daily basis to be recognized as revenues is displayed in the column named "Net Revenue Daily Rate" and is net of any third-party commissions. Since these vessels were acquired with existing time charters with below-market rates, we allocated the purchase price between the respective vessels and an intangible liability for the value assigned to the below-market charterhire. This intangible liability is amortized as an increase to voyage revenues over the minimum remaining term of the charter. The minimum remaining term for the Genco Tiberius expired on January 13, 2010, the Genco London expires on August 30, 2010 and the Genco Titus on September 26, 2011 at which point the respective liabilities are amortized to zero and the vessels begin earning the "Cash Daily Rate". For cash flow purposes, we will continue to receive the rate presented in the "Cash Daily Rate" column until the charter expires.

(4) We have entered into an agreement to extend the time charterer for 2.5 to 5.5 months at a rate of $38,000 per day, less a 5% third-party commission and will commence on or about March 16, 2010.

(5) These charters include a 50% index-based profit sharing component above the respective base rates listed in the table. The profit sharing between the charterer and us for each 15-day period is calculated by taking the average over that period of the published Baltic Cape Index of the four time charter routes, as reflected in daily reports. If such average is more than the base rate payable under the charter, the excess amount is allocable 50% to each of the charterer and us. A third-party brokerage commission of 3.75% based on the profit sharing amount due to us is payable out of our share.

(6) We have entered into an agreement to extend the time charter for 2.5 to 5.5 months at a rate of $32,000 per day, less a 5% third-party commission and the time charter agreement commenced on March 6, 2010.

(7) We have reached an agreement to charter the vessel for 10.5 to 13.5 months at a rate of $36,000 per day, less a 5% third-party commission and commenced on January 4, 2010.

(8) We entered the vessel into the Bulkhandling Handymax Pool with an option to convert the balance period of the charter party to a fixed rate, but only after January 1, 2009. In addition to a 1.25% third-party brokerage commission, the charter party calls for a management fee.

(9) We reached an agreement to extend the time charter for an additional 2 to 4 months at a rate of $20,000 per day less a 5% third-party commission. The charter commenced following the completion of the previous time charter on February 20, 2010.

(10) We extended the time charter for an additional 35 to 37.5 months at a rate of $40,000 per day for the first 12 months, $33,000 per day for the following 12 months, $26,000 per day for the next 12 months and $33,000 per day thereafter less a 5% third-party commission. In all cases, the rate for the duration of the time charter will average $33,000 per day. For purposes of revenue recognition, the time charter contract is reflected on a straight-line basis at approximately $33,000 per day for 35 to 37.5 months in accordance with U.S. GAAP.

(11) We have reached an agreement to enter these vessels into the LB/IVS Pool whereby Lauritzen Bulkers A/S acts as the pool manager. Under the pool agreement, we can withdraw up to three vessels with three months' notice until December 31, 2009 and the remaining two vessels with 12 months' notice. After December 31, 2009, we can withdraw up to two vessels with three months' notice and the remaining three vessels with 12 months' notice.

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 35 drybulk vessels, consisting of nine Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,903,000 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 include, without limitation, statements with respect to the commencement of time charters and 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 the following: (i) changes in demand or rates in the drybulk shipping industry; (ii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iii) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (iv) 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; (v) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, repairs, maintenance and general and administrative expenses; (vi) the adequacy of our insurance arrangements; (vii) changes in general domestic and international political conditions; (viii) 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; (ix) the number of offhire days needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims including offhire days; (x) the Company's acquisition or disposition of vessels; (xi) the completion of definitive documentation with respect to time charters; and other factors listed from time to time under "Risk Factors" and other sections of our public filings with the Securities and Exchange Commission including, without limitation, the Company's Annual Report on Form 10-K for the year ended December 31, 2009.

SOURCE Genco Shipping & Trading Limited