Movers and SHAKERS
Genco Shipping & Trading Limited (GNK)
Asset Swap Enhances Fleet Profile Without Capital Outlay
Genco Shipping & Trading Limited, incorporated on September 27, 2004, transports iron ore, coal, grain, steel products and other drybulk cargoes along shipping routes through the ownership and operation of drybulk carrier vessels. The Company is engaged in the ocean transportation of drybulk cargoes around the world through the ownership and operation of drybulk carrier vessels. As of December 31, 2016, its fleet consisted of 61 drybulk carriers, including 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 4,735,000 deadweight tons (dwt). Of the vessels in its fleet, 15 are on spot market-related time charters, and 27 are on fixed-rate time charter contracts. As of December 31, 2016, additionally, 19 of the vessels in its fleet were operating in vessel pools.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Three modern, eco Ultramaxes will be acquired in exchange for six older Handysizes in a transaction designed to modernize and focus the asset base while maintaining liquidity since no capital will be required. A total of nine vessels are involved in the asset swap. Three ~63k DWT Ultramaxes, built in 2014 and 2015 at Jiangsu shipyard, will be acquired and renamed. In return, six Handysize vessels will be delivered to the counter party. The Handys were built in 2010 and 2011, with the first five built at the SPP shipyard and the last built at Hakodate. The cash neutral asset swap will enhance the asset base, complement in-house commercial platform, lower the average age of the fleet by 0.3 years; and avoid drydocking and ballast water treatment system (BWTS) costs of ~$3.6 million on three Handysizes.
Two other asset sales announced. Exiting Handysize sector. Two other vessels will be sold for a total of $15.35 million; the Baltic Cougar (2009-built Supramax) for $7.60 million, and the Baltic Hare (2009-built Handysize) for $7.75 million. The exit from the Handysize sector will be complete after the transactions close and the fleet will be more focused on the Cape, Ultra and Supra sectors ...
This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.