Genco calls in Blackstone, ponders Chapter 11

FEBRUARY 19, 2014 — In an SEC filing, Peter C. Georgiopoulos-led dry bulk specialist Genco Shipping & Trading Limited disclosed that it did not make the scheduled semi-annual interest payment of approximately $3.1 million due yesterday on a $100 million term loan facility.

It said the lenders under the $100 million term loan facility have agreed to waive, “for a certain period of time and subject to certain conditions, the occurrence of an Event of Default.” The waiver “expires upon the earliest of March 21, 2014, the occurrence of any Event of Default under the $100 Million Term Loan Facility other than the Event of Default being waived, and the failure of the Company or any of its subsidiaries who is a guarantor under such facility to observe any of its covenants or agreements under the Waiver Agreement.

“In fulfillment of a condition to the waiver, the Company prepaid approximately $1.9 million of the principal amount under the facility that was due on March 31, 2014.”

Genco says that as a result of the continued weakness in charter rates and required payment of debt obligations and expenditures it is using the grace period to review its financing options and is currently considering various alternatives with respect to the restructuring of its capital structure.

It says it has retained Blackstone Advisory Partners L.P. as its financial advisor with respect to a potential restructuring and that, given the ongoing restructuring discussions,it has not yet scheduled the release of its financial results for the year ended December 31, 2013.

Genco says that potential modifications to the company’s capital structure include seeking additional liquidity through amendments or refinancings of existing indebtedness or waivers or extensions of obligations thereunder, conversion or exchange of debt into equity, additional offerings of debt or equity, vessel sales, the sale of all or a portion of the company’s business, and/or commencing a voluntary proceeding to reorganize under Chapter 11 of the Bankruptcy Code.

It says that any such restructuring is not anticipated to affect the company’s subsidiary, Baltic Trading Limited, which operates as a separate business under the leadership of its own board of directors and with its own financing commitments and relationships.

Read the filing HERE