Genco Shipping & Trading Limited Announces Plan to Extend Time Charter for Supramax Vessel
Increases Time Charter Coverage to 61% for 2010
NEW YORK, March 11 /PRNewswire-FirstCall/ -- 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:
Net
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
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