Genco Shipping & Trading Limited Completes Acquisition of Nine Capesize Vessels
Takes Delivery of Genco Claudius
NEW YORK, Jan. 5 /PRNewswire-FirstCall/ -- 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:
Net
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
Ltd
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)
Chartering
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
Chartering
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)
Corporation
Genco Carrier 1998 Louis Dreyfus March 2011 37,000
Corporation
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
Ltd.
Genco Muse 2001 Global Maritime January 2010 15,000
Investments Ltd.
Handysize Vessels
-----------------
Genco Explorer 1999 Lauritzen Bulkers February 2010 Spot(9)
A/S
Genco Pioneer 1999 Lauritzen Bulkers February 2010 Spot(9)
A/S
Genco Progress 1999 Lauritzen Bulkers February 2010 Spot(9)
A/S
Genco Reliance 1999 Lauritzen Bulkers November 2010 Spot(9)
A/S
Genco Sugar 1998 Lauritzen Bulkers November 2010 Spot(9)
A/S
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
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