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 or organization)
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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
(Address of principal
executive offices)
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10171
(Zip code)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Debt amortization relief on Commercial Bank Facilities(1)
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· |
2016-2018: No debt amortization after closing (except for amortization of $100,000 per quarter)
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2019-2020: $32 million of debt amortization per year (reflecting 50% of the 17-year amortization profile)
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Minimum liquidity required reduced from $51.8 million based on a fleet of 69 vessels to $21.5 million(2) through December 31, 2018
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Combination of capital raise, sales / scrapping of 10 vessels(3) and the refinancing would create approximately $318 million of liquidity.
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(1) |
Excludes the 2014 Term Loan and $98 Million Credit Facilities, except as otherwise expressly indicated. The 2014 Term Loan Facilities’ terms are subject to ongoing negotiation and confirmation.
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(2) |
Based on pro forma fleet of 60 vessels. Assumes the 2014 Term Loan Facilities conform financial covenants, which are subject to ongoing negotiation and confirmation.
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(3) |
Assuming sale / scrap of ten vessels, including the Genco Marine, which was sold in May 2016, as well as the Genco Pioneer and Genco Sugar, which were sold in the fourth quarter of 2016.
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(4) |
Vessel values used for the calculation of P/NAV are estimates derived from values published in Clarksons Research. These values are for standard ships of the types described in average condition, built at “first class competitive” Far East / European shipyards but with no account taken for survey status or condition which could affect values. To the extent a vessel does not meet these standards, the value of a vessel may be lower. As these vessel values are only published for vessels with ages in five year increments, the value of a vessel with an age between those used in Clarksons Research has been interpolated using the two closest data points. Using the average of valuations of the Company’s vessels on an individual charter free basis from two brokers, which is the method for valuing its vessels under its credit facilities, the aggregate vessel value under the most recent valuations the Company has (which are not the valuations in effect for purposes of computing covenant levels in its credit facilities) is approximately 11% lower than the aggregate estimated value in the P/NAV calculation. Neither the valuations the Company obtains for its vessels nor the estimated values used in such calculations are necessarily the same as the amount any vessel may bring upon sale, which may be more or less, and should not be relied upon as such. The vessel values used are for illustrative purposes in this presentation and for no other purpose.
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Exhibit No.
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Description
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99.1
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Presentation Materials.
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GENCO SHIPPING & TRADING LIMITED
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DATE: October 27, 2016
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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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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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$4,820
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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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1,333
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Dry Docking(5)
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934
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-
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Interest Expense(6)
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1,035
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1,151
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Depreciation(7)
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-
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2,974
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Debt Amortization/Principal(8)
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2,110
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-
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Daily Expense(9)
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$9,888
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$10,278
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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.
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(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.
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(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.
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(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.
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(5) |
Dry docking expenses represent estimated dry docking expenditures for Q4 2016.
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(6) |
Interest expense is based on our estimated debt level as of September 30, 2016 of $548.3 million less pre-refinancing scheduled debt amortization in Q4 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.
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(7) |
Depreciation is based on cost less estimated residual value and amortization of dry docking costs.
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(8) |
Depreciation expense utilizes a residual scrap rate of $310 per LWT. Genco’s pre-refinancing debt amortization payments for Q4 2016 aggregate to $13.4 million under all outstanding credit facilities.
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(9) |
The amounts shown will vary based on actual results.
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(10) |
Average number of vessels for the period is estimated to be 69.00 vessels for Q4 2016.
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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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$4,820
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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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1,333
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Dry Docking(5)
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934
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-
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Interest Expense(6)
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814
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1,172
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Depreciation(7)
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-
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2,974
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Debt Amortization/Principal(8)
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126
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-
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Daily Expense(9)
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$7,683
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$10,299
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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. Post refinancing breakeven rates assume the new credit facility structure commenced on October 1, 2016 for illustrative purposes.
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(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.
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(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.
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(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.
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(5) |
Dry docking expenses represent estimated dry docking expenditures for Q4 2016.
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(6) |
Interest expense is based on our estimated debt level as of September 30, 2016 of $548.3 million less a pay down of $24.0 million less debt amortization in Q4 2016 under our credit facilities.
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(7) |
Depreciation is based on cost less estimated residual value and amortization of dry docking costs.
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(8) |
Depreciation expense utilizes a residual scrap rate of $310 per LWT. Genco’s debt amortization payments post refinancing for Q4 2016 aggregate to an estimated $0.8 million and does not include any pay down to be made under any of our credit facilities.
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(9) |
The amounts shown will vary based on actual results.
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(10) |
Average number of vessels for the period is estimated to be 69.00 vessels for Q4 2016.
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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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$4,820
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$4,820
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General, Administrative and Management Fees(4)
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1,036
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1,407
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Dry Docking(5)
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289
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-
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Interest Expense(6)
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875
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1,260
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Depreciation(7)
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-
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3,176
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Debt Amortization/Principal(8)
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135
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-
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Daily Expense(9)
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$7,155
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$10,663
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Average Number of Vessels(10)
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64.18
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64.18
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(1) |
Estimated pro-forma daily expenses are presented for illustrative purposes. Post refinancing breakeven rates assume the new credit facility structure commenced on October 1, 2016 for illustrative purposes.
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(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.
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(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.
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(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.
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(5) |
Dry docking expenses represent estimated dry docking expenditures for Q4 2016.
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(6) |
Interest expense is based on our estimated debt level as of September 30, 2016 of $548.3 million less a pay down of $24.0 million less debt amortization in Q4 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.
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(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.
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(8) |
Genco’s debt amortization payments post refinancing for Q4 2016 aggregate to an estimated $0.8 million and does not include any pay down to be made under any of our credit facilities.
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(9) |
The amounts shown will vary based on actual results.
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(10) |
Average number of vessels for the period is estimated to be 64.18 vessels for Q4 2016. For illustrative purposes, one of the additional nine vessels to be sold / scrapped is assumed to be sold/scrapped on October 17, 2016 and the remaining eight are assumed to be sold/scrapped on November 15, 2016.
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