June 25, 2010
Genco to acquire 16 Supramax bulkers for $545 million
Genco Shipping & Trading Limited (NYSE:GNK) is to acquire 16 Supramax vessels, including two newbuildings, from Setaf SAS, a wholly owned subsidiary of Bourbon SA, for an aggregate purchase price of $545 million. Genco intends to retain 13 of the vessels, 12 of which are expected to be delivered to Genco in the third quarter of 2010, with the remaining vessel scheduled to be delivered in the first quarter of 2011.
Bourbon Chairman and CEO Jacques de Chateauvieux commented: "As a shipowner, we are a pragmatic company, and we seized an opportunity." He noted that the contemplated sales will contribute significantly to the financing of its new Bourbon 2015 Leadership Strategy - a $2 billion program new building program to renew Bourbon's old and obsolete continental offshore fleet and meet demand in deepwater
Six of these 13 vessels being acquired by Genco are secured on time charters with remaining durations between approximately one month and 54 months. The transfer of these time charters to Genco is subject to the charterers' consent.
On completion of the acquisition, and including five Handysize vessels to be acquired from companies within the Metrostar group of companies announced on June 9, 2010, Genco's fleet will consist of 53 drybulk vessels with a total carrying capacity of approximately 3,813,000 dwt and an average age of approximately 6.4 years.
Genco plans to finance the acquisition of these vessels using bank debt for approximately 60% of the purchase price, cash on hand, and up to $150 million of capital markets financing in the debt, equity-linked and equity markets, depending on which is more attractive at the time. If Genco does not obtain financing sufficient for the acquisition by July 13, 2010, Genco may cancel the acquisition.
Genco will not keep three of the 16 Supramax vessels, including one newbuilding. On delivery of these vessels, which is expected in the third and fourth quarters of 2010, Genco plans to immediately resell them at Genco's aggregate purchase price of approximately $105 million to Maritime Equity Partners LLC, a company controlled by Genco's Chairman, Peter C. Georgiopoulos. An independent committee of Genco's board of directors reviewed and approved this transaction.