Genco Shipping & Trading Limited Completes Acquisition of Nine Capesize Vessels

Jan 05, 2010
Takes Delivery of Genco Claudius
NEW YORK, Jan 05, 2010 /PRNewswire-FirstCall via COMTEX/ -- Genco Shipping & Trading Limited (NYSE: GNK) today announced that it has taken delivery of the Genco Claudius, a 169,025 dwt Capesize newbuilding. The Genco Claudius is the final vessel to be delivered to the Company under Genco's previously announced agreement on July 18, 2007 to acquire nine Capesize vessels from companies within the Metrostar Management Corporation group.

The Genco Claudius was delivered to its charterer, Cargill International S.A., on January 4, 2010 to commence a time charter for 10.5 to 13.5 months at a rate of $36,000 per day, less a 5% third party brokerage commission. Currently, Genco has approximately 51% of its fleet's estimated available days secured on contracts for 2010.

The Company used its available cash to pay the remaining balance of $96.0 million for the Genco Claudius.

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

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

    Capesize Vessels
    Genco Augustus  2007  Cargill            January 2010   45,263    62,750
                           International S.A.
    Genco Tiberius  2007  Cargill            February 2010  45,263    62,750
                           International S.A.
    Genco London    2007  SK Shipping Co.,   August 2010    57,500    64,250
    Genco Titus     2007  Cargill            September 2011 45,000(4) 46,250
                           International S.A.
    Genco           2008  Cargill            August 2012    52,750(4)
     Constantine           International S.A.
    Genco Hadrian   2008  Cargill            October 2012   65,000(4)
                           International S.A.
    Genco Commodus  2009  Morgan Stanley     June 2011      36,000
                           Capital Group Inc.
    Genco Maximus   2009  Cargill            February 2010  31,750
                           International S.A.
    Genco Claudius  2010  Cargill            November 2010  36,000(5)
                           International S.A.

    Panamax Vessels
    Genco Beauty    1999  LD Commodities     March 2010     19,125
                           Suisse, Geneva
    Genco Knight    1999  Swissmarine        February 2010  16,500
                           Services S.A.
    Genco Leader    1999  Baumarine AS/      Jan 10/Dec 10  20,742/
                           Klaveness                         20,000(6)
    Genco Vigour    1999  C Transport        January 2010   20,000
                           Panamax Ltd.
    Genco Acheron   1999  Global             July 2011      55,250
                           Chartering Ltd
                          (a subsidiary of
                           ArcelorMittal Group)
    Genco Surprise  1998  Hanjin Shipping    December 2010  42,100
                           Co., Ltd.
    Genco Raptor    2007  COSCO Bulk         April 2012     52,800
                           Carriers Co., Ltd.
    Genco Thunder   2007  Klaveness          March 2010     20,000

    Supramax Vessels
    Genco Predator  2005  Bulkhandling       April 2010     Spot(7)
                           Handymax A/S
    Genco Warrior   2005  Hyundai Merchant   November 2010  38,750
                           Marine Co. Ltd.
    Genco Hunter    2007  Pacific Basin      February 2010  17,000
                           Chartering Ltd.
    Genco Cavalier  2007  Clipper Bulk       February 2010  16,750
                           Shipping NV

    Handymax Vessels
    Genco Success   1997  Korea Line         February 2011  33,000(8)
    Genco Carrier   1998  Louis Dreyfus      March 2011     37,000
    Genco           1997  Pacific Basin      June 2011      37,000
     Prosperity            Chartering Ltd
    Genco Wisdom    1997  Hyundai Merchant   February 2011  34,500
                           Marine Co. Ltd.
    Genco Marine    1996  STX Pan Ocean Co.  February 2010  15,500
    Genco Muse      2001  Global Maritime    January 2010   15,000
                           Investments Ltd.

    Handysize Vessels
    Genco Explorer  1999 Lauritzen Bulkers   February 2010  Spot(9)
    Genco Pioneer   1999 Lauritzen Bulkers   February 2010  Spot(9)
    Genco Progress  1999 Lauritzen Bulkers   February 2010  Spot(9)
    Genco Reliance  1999 Lauritzen Bulkers   November 2010  Spot(9)
    Genco Sugar     1998 Lauritzen Bulkers   November 2010  Spot(9)
    Genco Charger   2005 Pacific Basin       November 2010  24,000
                          Chartering Ltd.
    Genco           2003 Pacific Basin       November 2010  24,000
     Challenger           Chartering Ltd.
    Genco Champion  2006 Pacific Basin       December 2010  24,000
                          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 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