Increases Time Charter Coverage to 57% for 2010NEW YORK, Jan 15, 2010 /PRNewswire via COMTEX/ -- Genco Shipping & Trading Limited (NYSE: GNK) today announced that it has reached an agreement to enter into a time charter for the Genco Augustus, a 2007-built Capesize vessel, with Cargill International S.A. for approximately 10.5 to 12.5 months at a rate of $39,000 per day, less a 5% third-party brokerage commission.
The time charter for the Genco Augustus is subject to the completion of definitive documentation and is expected to commence on or about January 23, 2010 following the vessel's scheduled drydocking. The previous time charter for the Genco Augustus was completed on January 10, 2010.
The following table reflects the current employment of Genco's fleet:
Net
Charter Revenue
Year Expiration Cash Daily
Vessel Built Charterer (1) Daily Rate(2) Rate(3)
------ ----- ------------- ---------- ------------- -------
Capesize
Vessels
--------
Cargill
International December
Genco Augustus 2007 S.A. 2010 39,000
Cargill
International February
Genco Tiberius 2007 S.A. 2010 45,263 62,750
SK Shipping
Genco London 2007 Co., Ltd August 2010 57,500 64,250
Cargill
International September
Genco Titus 2007 S.A. 2011 45,000(4) 46,250
Cargill
Genco International
Constantine 2008 S.A. August 2012 52,750(4)
Cargill
International
Genco Hadrian 2008 S.A. October 2012 65,000(4)
Morgan
Stanley
Capital
Genco Commodus 2009 Group Inc. June 2011 36,000
Cargill
International February
Genco Maximus 2009 S.A. 2010 31,750
Cargill
International November
Genco Claudius 2010 S.A. 2010 36,000(5)
Panamax Vessels
---------------
LD
Commodities
Suisse,
Genco Beauty 1999 Geneva March 2010 19,125
Swissmarine
Services February
Genco Knight 1999 S.A. 2010 16,500
Baumarine AS/
Klaveness Jan 10/Dec
Genco Leader 1999 Chartering 10 20,742/
20,000(6)
Global
Maritime
Investments
Genco Vigour 1999 Ltd. November 10 24,000
Global
Chartering
Genco Acheron 1999 Ltd. July 2011 55,250
(a subsidiary
of
ArcelorMittal
Group)
Hanjin
Shipping December
Genco Surprise 1998 Co., Ltd. 2010 42,100
COSCO Bulk
Carriers
Genco Raptor 2007 Co., Ltd. April 2012 52,800
Klaveness
Genco Thunder 2007 Chartering March 2010 20,000
Supramax
Vessels
--------
Bulkhandling
Genco Predator 2005 Handymax A/S April 2010 Spot(7)
Hyundai
Merchant
Marine Co. November
Genco Warrior 2005 Ltd. 2010 38,750
Pacific Basin
Chartering February
Genco Hunter 2007 Ltd. 2010 17,000
Clipper Bulk February
Genco Cavalier 2007 Shipping NV 2010 16,750
Handymax
Vessels
--------
Korea Line February
Genco Success 1997 Corporation 2011 33,000(8)
Louis Dreyfus
Genco Carrier 1998 Corporation March 2011 37,000
Pacific Basin
Genco Chartering
Prosperity 1997 Ltd. June 2011 37,000
Hyundai
Merchant
Marine Co. February
Genco Wisdom 1997 Ltd. 2011 34,500
STX Pan Ocean February
Genco Marine 1996 Co. Ltd. 2010 15,500
Global
Maritime
Investments
Genco Muse 2001 Ltd. January 2010 15,000
Handysize
Vessels
---------
Lauritzen April
Genco Explorer 1999 Bulkers A/S 2010 Spot(9)
Lauritzen April
Genco Pioneer 1999 Bulkers A/S 2010 Spot(9)
Lauritzen January
Genco Progress 1999 Bulkers A/S 2011 Spot(9)
Lauritzen January
Genco Reliance 1999 Bulkers A/S 2011 Spot(9)
Lauritzen January
Genco Sugar 1998 Bulkers A/S 2011 Spot(9)
Pacific Basin
Chartering November
Genco Charger 2005 Ltd. 2010 24,000
Pacific Basin
Genco Chartering November
Challenger 2003 Ltd. 2010 24,000
Pacific Basin
Chartering December
Genco Champion 2006 Ltd. 2010 24,000
(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 ranging from 1.25% to 6.25%. 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. For cash flow purposes, we will continue to receive the rate presented in the "Cash Daily Rate" column until the charter expires.
(4) 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.
(5) 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.
(6) We reached an agreement to enter the vessel into the Baumarine Pool with an option to convert the balance period of the charter party to a fixed rate, but only after June 1, 2009. We exercised the option to convert the balance period of the charter party to a fixed rate on June 3, 2009 at a gross rate of $20,742 per day. We further reached an agreement to charter the vessel for 10.5 to 13.5 months at a rate of $20,000 per day, less a 5% third-party commission. The vessel is expected to enter into the time charter following the completion of its previous time charter on or about January 16, 2010.
(7) 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. We extended the charter party by an additional 5 to 7.5 months starting November 5, 2009. In addition to a 1.25% third-party brokerage commission, the charter party calls for a management fee.
(8) 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.
(9) We have reached an agreement to enter these vessels into a spot pool managed by Lauritzen Bulkers beginning at the expiration of their current time charters in August 2009. 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; 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, 2008 and its subsequently filed reports on Form 10-Q and Form 8-K.
SOURCE Genco Shipping & Trading Limited