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Tuesday, June 15, 2021

Genco Buys Newbuild Ultramax Bulker Pair

Maritime Activity Reports, Inc.

May 19, 2021

© Patrick Deenick / MarineTraffic.com

© Patrick Deenick / MarineTraffic.com

Dry bulk shipping company Genco Shipping & Trading Limited announced on Wednesday that it has entered into agreements to acquire two 2022-built 61,000 dwt Ultramax vessels to be constructed at Dalian Cosco KHI Ship Engineering Co. Ltd. (DACKS). The vessels are expected to be delivered to Genco in January 2022.

The purchases mark the fifth and sixth high specification, fuel-efficient Ultramax vessels that Genco has agreed to acquire since December 2020, doubling its core Ultramax presence over that time, the company said in a statement.

Genco CEO, John C. Wobensmith, said, “This latest acquisition continues the expansion of our fleet at an attractive point in the dry bulk cycle as asset values continue to trail the strong freight rate environment leading to attractive returns on capital. Built at a first-class shipyard, we expect these two Ultramaxes will seamlessly integrate into our in-house commercial platform while reducing our carbon footprint as they replace older, less fuel-efficient vessels. These vessels continue our growth trajectory within the key Ultramax sector while improving the age profile of our asset base.”

The company said it intends to fund the acquisition from cash on the balance sheet on a low leverage basis.

“Acquiring these vessels on a low leverage basis enables us to continue to drive down our financial leverage and cash flow breakeven rate while augmenting our operating leverage. Growth together with deleveraging serve as primary components of our comprehensive value strategy as we continue to progress towards full execution in the months ahead,” Wobensmith said.

Genco also announced that it has capitalized on the strong market to fix two additional vessels on period time charters to secure cash flows as part of its portfolio approach to fixture activity. The ships are the 2010-built Capesize Baltic Bear, fixed at $32,000 per day for 10 to 14 months, and 2015-built Ultramax Genco Vigilant, fixed at $17,750 per day for 11 to 13 months beginning in October 2021.

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