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November 4, 2008

Genco cancels six-ship newbuild acquisition

Peter Georgiopoulos-led Genco Shipping & Trading Limited (NYSE: GNK) is forfeiting $53 million in deposits and canceling a previously announced $530 million acquisition of six drybulk newbuildings (three Capesize and three Handysize) from Lambert Navigation Ltd., Northville Navigation Ltd., Providence Navigation Ltd., and Prime Bulk Navigation Ltd.

CFO John C. Wobensmith said that while Genco was prepared to take delivery of the six, management had "made a proactive decision to forego the vessels, which we believe provides important benefits."

"Specifically," explained Mr. Wobensmith, "the company's liquidity has been strengthened during a difficult market environment and our ability to act opportunistically has been enhanced. By taking advantage of the company's increased financial flexibility, combined with our significant time charter coverage of approximately 93% for our fleet's available days for the remainder of 2008 and 67% in 2009, we remain well positioned to continue to serve the best interests of our shareholders as we have consistently done since our IPO in July 2005."

Genco has four remaining Capesize newbuildings scheduled to be delivered in 2009. It says it intends to utilize the undrawn portion of its credit facilities as well as cash flow from operations to fund these acquisitions.

The move will result in a fourth quarter charge to the income statement of approximately $54.0 million related to the forfeiture of the deposits. Genco has repaid the $53 million in debt associated with the deposits using cash flow from operations, thereby reducing the debt outstanding under its 2007 revolving credit facility to $1.077 billion. The company is discussing with its lenders the potential extension of the $320 million credit facility put in place to fund the six vessel acquisition. The terms of this facility provide that it is to be cancelled upon a cancellation of the acquisition contracts. Cancellation of the facility would result in a fourth quarter non-cash charge to interest expense of approximately $2.3 million associated with deferred financing costs.


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