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Tuesday, September 28, 2021

Ships Swap: Genco Trades Six Older Vessels for Three Ultramaxes

Maritime Activity Reports, Inc.

December 22, 2020

The 2010-built Genco Ocean is one of six Handysize bulk carriers traded away by Genco in the no cash asset swap. (© F. Ybancos / MarineTraffic.com)

The 2010-built Genco Ocean is one of six Handysize bulk carriers traded away by Genco in the no cash asset swap. (© F. Ybancos / MarineTraffic.com)

Genco Shipping & Trading has entered into an agreement to acquire three modern, eco Ultramax bulk carriers in exchange for six older Handysize vessels, the largest U.S. headquartered dry bulk shipowner announced Monday. 

The transaction with an unnamed trading partner is structured as an asset swap without monetary consideration or additional capital required. The vessels are scheduled to be delivered to both parties through the first quarter of 2021.

Genco, which aims to continue building scale in the Ultramax sector while divesting non-core assets, said the swap is part of its fleet moderniztion efforts, reducing the average age of its fleet by 0.3 years. In addition, the deal helps the shipowner avoid approximately $3.6 million in drydocking and ballast water treatment system costs in 2021 for three of the Handysize vessels it traded away, the company said.

The three Ultramaxes to be acquired by Genco are 63,446-63,671 dwt vessels built at Jiangsu in 2014 and 2015. They will be renamed Genco Vigilant, Genco Freedom and Genco Magic.

In return, Genco sheds the 31,883-34,432 dwt Handysize vessels Genco Ocean, Baltic Cove, Genco Avra, Genco Mare, Genco Spirit and Baltic Fox built at SPP and Hakodate in 2010 and 2011.

Separate from the vessel swap, Genco said it also agreed to sell two other vessels as part of its fleet renewal plan: the Baltic Cougar, a 2009-built Supramax vessel, for $7.6 million, and the Baltic Hare, a 2009-built Handysize vessel, for $7.75 million.

Following the conclusion of the transactions, Genco will have fully exited the Handysize sector. Its fleet will consist of 41 bulk carriers including 17 Capesize, nine Ultramax and 15 Supramax vessels with an aggregate capacity of approximately 4,422,000 dwt and an average age of 10 years.

John C. Wobensmith, Genco CEO, said, “We are pleased to continue to efficiently execute our fleet renewal strategy, acquiring three modern, fuel-efficient Ultramax vessels, while divesting older, less fuel-efficient tonnage, as we further implement our barbell approach to fleet composition. In one transaction, we were able to expand within a key growth sector for Genco while completing a strategic goal of the company to exit the ownership of older Handysize tonnage. This transaction further builds scale in our Ultramax and Supramax sector that we believe will seamlessly integrate into our world-class in-house commercial operating platform. Furthermore, the addition of these Ultramax vessels, which will improve the overall age profile, earnings capacity and carbon footprint of our fleet, complements our strong presence in the Capesize sector, enhancing our ability to take advantage of a favorable drybulk market.”

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