Genco Reaches Bankruptcy Restructuring Deal

Posted by Eric Haun
Friday, April 04, 2014
Photo: Genco Shipping & Trading Ltd.

Genco Shipping & Trading Ltd. will cut its debt by more than $1 billion by giving control of the company to its lenders in a deal that requires the dry bulk shipping company to file for bankruptcy.

Lenders backing a $1.06 billion credit facility would convert their debt into about 81.1 percent of company's stock, according to a regulatory filing from Thursday.

Investors who hold $125 million of Genco convertible debt would receive 8.4 percent of the company. The remaining equity would be allocated to those investors funding a $100 million rights offering, while management would also get a 1.8 percent stake in the company.

Existing Genco stock would be canceled and shareholders would receive warrants for 6 percent of the reorganized company's stock.

Genco stock jumped 28 percent to $1.96 per share on the New York Stock Exchange in late trading on Friday.

The agreement requires Genco to file for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Manhattan. A bankruptcy would allow the company to force a small number of hold-out creditors to accept the plan.

Firms that specialize in distressed investing - Centerbridge Partners, Apollo Management and Solus Alternative Asset Management - would rank as the largest shareholders after the company reorganizes.

The company joins a growing list of shipping companies that have been struggling as charter rates have been depressed by a glut of large new vessels. A U.S. energy boom has also hit some companies as oil shipments to the United States have dropped.

Peter Georgiopoulos, Genco's chairman and one of its largest stockholders, was a founder of General Maritime Corp, a shipping company that succumbed to Chapter 11 bankruptcy in 2011. The company emerged a year later under the control of Oaktree Capital Management, a distressed investment firm.

Genco has hired Kramer Levin Naftalis & Frankel to lead the restructuring talks and Blackstone Advisory Partners as a financial adviser.

(Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Billy Cheung in New York; Editing by Dan Grebler)

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Equinox Class Scrubber Systems Receive Certification

Algoma Central Corporation (“Algoma”), the largest Canadian shipowner and operator of domestic Great Lakes vessels announces that it has received all requisite

MARAD Tests Alternative Power for Ships

The Maritime Administration (MARAD) is testing state-of-the-art, environmentally efficient technology onboard the Training Ship (TS) Kennedy.   The National Defense

Finance

Italy Ending Med Sea Rescues

Rights groups warn of risk of more deaths; EU mission Triton will have more limited scope. Italy said on Friday it would close a sea rescue mission that has saved the lives of more than 100,

St. Lawrence Seaway Workers Extend Strike Deadline

The union that represents workers on the St. Lawrence Seaway, the waterway that links the Great Lakes and the Atlantic Ocean, has extended a strike deadline to Monday at 5 p.

Mitsubishi Exits Cruise Business; Books $357m Loss

Mitsubishi Heavy Industries, Ltd. (MHI) announced its decision to book an extraordinary loss from its cruise ship business in the company's consolidated financial

News

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Equinox Class Scrubber Systems Receive Certification

Algoma Central Corporation (“Algoma”), the largest Canadian shipowner and operator of domestic Great Lakes vessels announces that it has received all requisite

Wärtsilä, Diesel United Renew Pact

Wärtsilä and Diesel United Ltd in Japan have signed a ten-year renewal of their co-operation agreement for the sale, manufacturing and servicing of Wärtsilä low-speed marine engines.

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Offshore Oil Pod Propulsion Port Authority Salvage Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1484 sec (7 req/sec)