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Genco Shipping & Trading Moves Forward With Restructuring Support Agreement

April 22, 2014, 07:19 AM
Filed Under: Shipping

Genco Shipping & Trading Limited ("Genco" or the "Company") announced that – consistent with its previously disclosed Restructuring Support Agreement with certain of the lenders under its $1.1 billion secured credit facility entered into in 2007 (the "2007 Facility Lenders"), its $253 million secured credit facility (the "$253 Million Facility Lenders"), and its $100 million secured credit facility (the "$100 Million Facility Lenders"), as well as certain holders of the Company's 5.00% Convertible Senior Notes due August 15, 2015 ("the Noteholders") – it and certain of its subsidiaries have filed voluntary Chapter 11 petitions to implement a prepackaged financial restructuring that is expected to reduce the Company's total debt by approximately $1.2 billion and enhance its financial flexibility. 

Importantly, all operating entities are expected to continue normal operations during the pendency of the financial restructuring.  Baltic Trading and its direct and indirect subsidiaries are not included in the court-supervised restructuring.  Baltic Trading is a separate public company from Genco, with an independent Board of Directors and separate financing.  Baltic Trading is expected to continue operating in the normal course.   

"Today, with the strong support of our lenders and noteholders, we are moving forward with our previously announced restructuring plan," said John C. Wobensmith, Chief Financial Officer.  "We believe the financial restructuring will provide an expedited path to significantly strengthen Genco's balance sheet and improve the Company's financial flexibility.  Our operations are strong, and once our restructuring is completed, we believe we will be well-positioned for continued growth and success.  We continue to leverage our efficient cost structure and opportunistic time charter approach to manage through the drybulk shipping cycle.  We look forward to continuing to provide our chartering customers the same high quality, reliable shipping services they've come to consistently expect from Genco."

To implement the terms of the restructuring, Genco and 57 of its direct and indirect subsidiaries expect to file today a prepackaged plan of reorganization (the "Prepack Plan") and related disclosure statement, each of which will contain details of the financial restructuring. 

The Plan has the support of 100% of the 2007 Facility Lenders, 100% of the $253 Million Facility Lenders and the $100 Million Facility Lenders, and over 83% of the Noteholders.  The Company expects to implement and emerge from the court-supervised process on an accelerated basis.

Genco expects that cash on hand, cash from operating activities, and cash expected to be made available under a cash collateral order will be sufficient to fund its projected cash needs during its financial restructuring, and therefore does not intend to seek debtor-in-possession (DIP) financing. 

In conjunction with today's filings, the Company also expects to file a variety of customary motions to continue to support its employees, customers and vendors during the financial restructuring process.  The Company expects to file motions seeking permission to continue to pay trade creditor and foreign vendor balances incurred before and after the filing in full and in the normal course.  The Company expects to receive court approval for these requests.  During the restructuring process, the Company anticipates operating as usual, meeting all its obligations, and expects to implement the restructuring and emerge from the court-supervised process expeditiously. 

Genco has established a Restructuring Information Hotline for interested parties, at (888) 213-9318.  In addition, a website has been set up by Genco's Claims Agent, which contains Court documents and other updates, at  

Kramer Levin Naftalis & Frankel LLP is serving as legal advisor and Blackstone Advisory Partners LP is serving as financial advisor to the Company.

To read the full press release, click here.

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