Awash in red ink, Genmar looks for a liquidity fix

Shares in tanker operator General Maritime Corporation (NYSE: GMR) plunged in overnight trading after it issued a statement saying “it is engaged in ongoing discussions with prospective lenders and investors to seek additional liquidity through potential restructuring or refinancing of its existing credit facilities and/or issuance of debt or equity.”  As a result, it says, “General Maritime is not able to complete the preparation, review and filing of its Annual Report on Form 10−K for the fiscal year ended December 31, 2010 within the prescribed time period without unreasonable effort and expense.”

General Maritime is filing a Form 12b-25 with the Securities and Exchange Commission for an extension of time to file its 2010 Annual Report on Form 10-K.  It now expects to file its Form 10−K on or before March 31, 2011. 

The General Maritime Board has established a committee of independent directors to oversee the potential financing transactions “as Peter C. Georgiopoulos, the company’s Chairman, may have an economic interest in the counterparty to such a financing transaction.”

The company issued a brief summary of its expected financial results for the three months and full year ended December 31, 2010.  It said that for the three months ended December 31, 2010, the company expects to record a loss on impairment of vessels of approximately $100 million, for which there was no comparable loss in the prior year period.  For the same period, it expects to record a loss on impairment of goodwill of approximately $28 million compared to $40.9 million during the prior year period. 

Excluding these non-cash impairment charges, the company expects to record a net loss of approximately $39 million for the quarter, compared to a net loss of $12.0 million from the prior year period. 

It expects net voyage revenue, which is gross voyage revenues minus voyage expenses unique to a specific voyage (including port, canal and fuel costs), of approximately $51 million for the quarter, compared to $60.1 million for the prior year period.  It expects an operating loss in the quarter of approximately $144 million as compared to an operating loss of $40.1 million for the prior year period.  Net interest expense for the quarter is expected to increase to approximately $23 million compared to $13.8 million for the prior year period.  As a result of this, the net loss for the quarter is expected to increase to approximately $167 million, compared to a net loss of $52.9 million during the prior year period.

More HERE

March 17, 2011