Genco Shipping & Trading Limited has acquired six drybulk vessels with an average age of 2 years from affiliates of Evalend Shipping Co. S.A. for $336 million.
The acquisition is subject to the completion of customary additional documentation and closing conditions. Genco plans to finance the acquisition through borrowings under its $1.4 billion revolving credit facility.
The six vessels, comprised of three Supramax vessels and three Handysize vessels, are expected to be delivered to Genco during the fourth quarter of 2007. Upon completion of the acquisition, and including the nine Capesize vessels to be acquired from companies within the Metrostar Management Corporation group announced on July 18, 2007, Genco's fleet will consist of nine Capesize, seven Panamax, three Supramax, seven Handymax, and eight Handysize drybulk carriers, with a total carrying capacity of approximately 2,814,000 dwt and an average age of approximately 8 years.
Robert Gerald Buchanan, president, comments, "Once again, Genco has capitalized on an attractive opportunity to consolidate the drybulk industry and expand its modern, high-quality fleet. This latest acquisition further strengthens Genco's leading industry position and increases Genco's earnings power. We plan to continue to utilize management's expertise in taking advantage of the strong fundamentals for drybulk shipping and to secure the vessels in our expanded fleet on long-term time charters at favorable rates prior to their delivery. In accomplishing this important goal, we remain dedicated to providing leading international charterers with the highest quality vessels that adhere to stringent operational standards."
John C. Wobensmith, chief financial officer, comments, "With the acquisition of six drybulk vessels, combined with our recent agreement to acquire nine Capesize vessels, Genco is positioned to expand its deadweight tonnage by approximately 185% as the Company continues to establish itself as a leading consolidator and bellwether in the drybulk industry. The acquisition meets our strict return criteria related to earnings and cash flow accretion as well as return on capital hurdles. In addition, we expect this transaction to contribute to Genco's financial results in the near term, as all six vessels are scheduled to be delivered in the fourth quarter of 2007. We plan to finance our latest acquisition through borrowings under our $1.4 billion revolving credit facility. In maintaining our commitment to create significant long-term value through the successful execution of our growth strategy, we remain focused on seeking to provide shareholders with sizeable dividends."