Genco Takes Delivery of Two Drybulk Vessels
Genco Shipping & Trading Limited (NYSE:GNK) announced that it has taken delivery of the Genco Bourgogne, a 2010-built Supramax vessel, and the Genco Bay, a 2010-built Handysize vessel. The Genco Bourgogne is the ninth vessel to be delivered to the company under its agreement previously announced on June 25, 2010 to acquire 13 Supramax vessels from Setaf SAS, a wholly owned subsidiary of Bourbon SA. The Genco Bay is the is the second of five vessels to be delivered to the company under its agreement previously announced on June 9, 2010 to acquire five Handysize vessels from companies within the Metrostar group of companies.
The company also announced that it has reached an agreement to enter into a time charter for the Genco Bourgogne with Setaf Saget SAS for 15 to 17.5 months at a rate of $19,900 per day, less a 3.75% third party brokerage commission. The time charter for the Genco Bourgogne is expected to commence on or about August 26, 2010 and is subject to the completion of definitive documentation.
The company has signed a novation agreement for Genco Bay's current spot market-related time charter with Cargill International S.A. for an initial duration of 34.5 to 37.5 months and a minimum expiration of February 2013. The rate for the spot market-related time charter will have a floor of $8,500 and a ceiling of $13,500 daily with a 50% profit sharing arrangement to apply to any amount above the ceiling. The rate will be based on 115% of the average of the daily rates of the Baltic Handysize Index (''BHSI''), as reflected in daily reports. Hire will be paid every 15 days in advance net of a 5% third party brokerage commission.
The company used its available cash to pay the remaining balance of $32.13m for the Genco Bourgogne and a combination of available cash and debt to pay the remaining balance of $29.93m for the Genco Bay. On August 20, 2010, the Company entered into its previously announced $253m senior secured term loan facility and intends to use the credit facility to refund a total of $21.5 million associated with the purchase of the Genco Bourgogne to the Company. On July 14, 2010, the Company entered into its previously announced $100m secured term loan facility and has used this credit facility to fund a total of $20m associated with the purchase of the Genco Bay.