Republic of the Marshall Islands
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001-33393
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98-043-9758
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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299 Park Avenue
12th Floor
New York, NY
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10171
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(Address of Principal Executive Offices)
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(Zip Code)
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01
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Entry into a Material Definitive Agreement
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Item 7.01. | Regulation FD Disclosure. |
· | Deferment of 2.5 years of debt amortization totaling approximately $127 million of amortization calculated at the time the presentation was given in June 2016, which would otherwise be made from 2016 to 2018 under the Prior Facilities; |
· | Maturity in 2021; |
· | a cash sweep mechanism to allow for further deleveraging upon improved market conditions; |
· | an interest rate of LIBOR plus 375 basis points with an option to convert 150 basis points of this to principal through December 31, 2018; |
· | a reduced covenant structure with no testing of collateral maintenance through June 29, 2018 and a minimum value covenant of 105% starting June 30, 2018, with gradual step-ups thereafter; |
· | other covenants including debt to total book capitalization and minimum working capital; |
· | the collateral maintenance covenant of 140% under the $98 million credit facility with certain funds managed or advised by Hayfin Capital Management, Breakwater Capital Ltd, or their nominee would remain in place, but certain amounts could be netted against its measurement; |
· | a reduction of minimum liquidity under the refinanced facilities from $52.5 million to $21.5 million through December 31, 2018; and |
· | the sale or scrapping of ten vessels (including the Genco Marine, which had already been scrapped in May 2016). |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit No. | Description |
99.1 | Presentation Materials. |
GENCO SHIPPING & TRADING LIMITED
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DATE: June 30, 2016 | ||
By
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/s/ Apostolos Zafolias
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Apostolos Zafolias
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Chief Financial Officer
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Exhibit No. | Description |
99.1 | Presentation Materials. |
Daily Expenses by Category
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Free Cash Flow(2)
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Net Income
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||||||
Direct Vessel Operating(3)
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$
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4,820
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$
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4,820
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||||
General, Administrative and Management Fees(4)
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989
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1,437
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||||||
Dry Docking(5)
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512
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-
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||||||
Interest Expense(6)
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1,017
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1,133
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||||||
Depreciation(7)
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-
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3,283
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||||||
Debt Amortization/Principal(8)
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2,109
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-
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||||||
Daily Expense(9)
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$
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9,447
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$
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10,673
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||||
Average Number of Vessels(10)
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69.00
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69.00
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(1) | Estimated pro-forma daily expenses are presented for illustrative purposes. |
(2) | Free Cash Flow is defined as net income plus depreciation less capital expenditures, primarily vessel dry dockings, and other non-cash items, namely restricted stock and warrant compensation, deferred financing costs, debt amortization and capitalized interest expenses. However, this does not include any adjustment for accounts payable and accrued expenses incurred in the ordinary course of business. We consider Free Cash Flow to be an important indicator of our ability to service debt and generate cash for acquisitions and other strategic investments. |
(3) | Direct Vessel Operating Expenses are based on management’s estimates and budgets submitted by our technical managers. We believe DVOE are best measured for comparative purposes over a 12-month period. |
(4) | General & Administrative amounts are based on a budget set forth at the beginning of the year, and actual results may vary. Free Cash Flow expenses do not include restricted stock and warrant amortization. Management Fees are based on the contracted monthly rate per vessel for the technical management of our fleet. |
(5) | Dry docking expenses represent estimated dry docking expenditures for 2H 2016. |
(6) | Interest expense is based on our estimated debt level as of June 30, 2016 of $561.7 million less debt amortization in 2H 2016 under our current credit facilities. Deferred financing costs are included in calculating net income interest expense. Interest expense is calculated based on an assumed LIBOR rate under our credit facilities plus the facilities respective margins. |
(7) | Depreciation is based on cost less estimated residual value and amortization of dry docking costs. Depreciation expense utilizes a residual scrap rate of $310 per LWT. |
(8) | Genco’s debt amortization payments for 2H 2016 aggregate to $26.8 million under all outstanding credit facilities. |
(9) | The amounts shown will vary based on actual results. |
(10) | Average number of vessels for the period is estimated to be 69.00 vessels for 2H 2016. The Genco Marine was scrapped in May 2016. |
Daily Expenses by Category
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Free Cash Flow(2)
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Net Income
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||||||
Direct Vessel Operating(3)
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$
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4,820
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$
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4,820
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||||
General, Administrative and Management Fees(4)
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989
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1,437
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||||||
Dry Docking(5)
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512
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-
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||||||
Interest Expense(6)
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785
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1,144
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||||||
Depreciation(7)
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-
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3,283
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||||||
Debt Amortization/Principal(8)
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125
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-
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||||||
Daily Expense(9)
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$
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7,231
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$
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10,684
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||||
Average Number of Vessels(10)
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69.00
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69.00
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(1) | Estimated pro-forma daily expenses are presented for illustrative purposes. |
(2) | Free Cash Flow is defined as net income plus depreciation less capital expenditures, primarily vessel dry dockings, and other non-cash items, namely restricted stock and warrant compensation, deferred financing costs, debt amortization and capitalized interest expenses. However, this does not include any adjustment for accounts payable and accrued expenses incurred in the ordinary course of business. We consider Free Cash Flow to be an important indicator of our ability to service debt and generate cash for acquisitions and other strategic investments. |
(3) | Direct Vessel Operating Expenses are based on management’s estimates and budgets submitted by our technical managers. We believe DVOE are best measured for comparative purposes over a 12-month period. |
(4) | General & Administrative amounts are based on a budget set forth at the beginning of the year, and actual results may vary. Free Cash Flow expenses do not include restricted stock and warrant amortization. |
(5) | Dry docking expenses represent estimated dry docking expenditures for 2H 2016. |
(6) | Interest expense is based on our estimated debt level as of June 30, 2016 of $525.0 million less debt amortization in 2H 2016 under our credit facilities. Deferred financing costs are included in calculating net income interest expense. Interest expense is calculated based on an assumed LIBOR rate under our credit facilities plus the facilities respective margins. Interest expense includes the interest rate on Commercial Bank Facilities of LIBOR plus 375 bps with option to PIK 150 bps on Commercial Bank Facilities. |
(7) | Depreciation is based on cost less estimated residual value and amortization of dry docking costs. Depreciation expense utilizes a residual scrap rate of $310 per LWT. |
(8) | Genco’s debt amortization payments post refinancing for 2H 2016 aggregate to an estimated $1.6 million and does not include any pay downs to be made under any of our credit facilities. |
(9) | The amounts shown will vary based on actual results. |
(10) | Average number of vessels for the period is estimated to be 69.00 vessels for 2H 2016. The Genco Marine was scrapped in May 2016. |
Daily Expenses by Category
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Free Cash Flow(2)
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Net Income
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||||||
Direct Vessel Operating(3)
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$
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4,820
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$
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4,820
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||||
General, Administrative and Management Fees(4)
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1,033
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1,512
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||||||
Dry Docking(5)
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270
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-
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||||||
Interest Expense(6)
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840
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1,224
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||||||
Depreciation(7)
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-
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3,292
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||||||
Debt Amortization/Principal(8)
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133
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-
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||||||
Daily Expense(9)
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$
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7,096
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$
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10,848
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||||
Average Number of Vessels(10)
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64.50
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64.50
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(1) | Estimated pro-forma daily expenses are presented for illustrative purposes. |
(2) | Free Cash Flow is defined as net income plus depreciation less capital expenditures, primarily vessel dry dockings, and other non-cash items, namely restricted stock and warrant compensation, deferred financing costs, debt amortization and capitalized interest expenses. However, this does not include any adjustment for accounts payable and accrued expenses incurred in the ordinary course of business. We consider Free Cash Flow to be an important indicator of our ability to service debt and generate cash for acquisitions and other strategic investments. |
(3) | Direct Vessel Operating Expenses are based on management’s estimates and budgets submitted by our technical managers. We believe DVOE are best measured for comparative purposes over a 12-month period. |
(4) | General & Administrative amounts are based on a budget set forth at the beginning of the year, and actual results may vary. Free Cash Flow expenses do not include restricted stock and warrant amortization. Management Fees are based on the contracted monthly rate per vessel for the technical management of our fleet. |
(5) | Dry docking expenses represent estimated dry docking expenditures for 2H 2016. |
(6) | Interest expense is based on our estimated debt level as of June 30, 2016 of $525.0 million less debt amortization in 2H 2016 under our credit facilities. Deferred financing costs are included in calculating net income interest expense. Interest expense is calculated based on an assumed LIBOR rate under our credit facilities plus the facilities respective margins. Interest expense includes the interest rate on Commercial Bank Facilities of LIBOR plus 375 bps with option to PIK 150 bps on Commercial Bank Facilities. |
(7) | Depreciation is based on cost less estimated residual value and amortization of dry docking costs. Depreciation expense utilizes a residual scrap rate of $310 per LWT. Does not include any potential impairment charges from selling/scrapping vessels. |
(8) | Genco’s debt amortization payments post refinancing for 2H 2016 aggregate to an estimated $1.6 million and does not include any pay downs to be made under any of our credit facilities. |
(9) | The amounts shown will vary based on actual results. |
(10) | Average number of vessels for the period is estimated to be 64.50 vessels for 2H 2016. The Genco Marine was scrapped in May 2016. For illustrative purposes, the additional nine vessels to be sold/scrapped are assumed to be sold/scrapped on September 30, 2016. |