form8ka.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported): December 12,
2007
GENCO
SHIPPING & TRADING LIMITED
(Exact
Name of Registrant as Specified in Charter)
Republic
of the Marshall Islands
|
000-28506
|
98-043-9758
|
(State
or Other Jurisdiction of incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
299
Park Avenue
|
|
|
20th
Floor
|
|
10171
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (646) 443-8550
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
£
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))
This
Current Report on Form 8-K/A is being filed to correct certain incorrect
figures
inadvertently inserted in the break-even level and drydocking schedule tables
in
the Company’s Current Report on Form 8-K filed with the Securities and Exchange
Commission as of December 12, 2007. A reference to the Genco Beauty
in the footnote to the drydocking schedule table is also corrected to refer
to
the Genco Charger.
The
Company disclosed the following information with regard to its
estimated break-even levels for the fourth quarter of 2007(1):
Daily
Expenses by Category
|
Free
Cash Flow(2)
|
Net
Income
|
Direct
Vessel Operating(3)
|
$
4,200
|
$
4,200
|
General
& Administrative(4)
|
1,328
|
1,538
|
Management
Fees(5)
|
240
|
240
|
Dry
Docking (6)
|
403
|
-
|
Interest
Expense (7)
|
4,188
|
4,263
|
Depreciation(8)
|
-
|
5,503
|
Daily
Break-Even(9)
|
$
10,359
|
$
15,745
|
(1)
Calculation accounts for the completion of the acquisition of the six vessels
from Evalend, the delivery of the Genco Titus on November 15, 2007 and the
sale of the Genco Commander on December 3, 2007. Breakeven levels are based
on
an average number of vessels of 23.33 vessels for Q4 2007.
(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
compensation and deferred financing charges.
(3)
Direct Vessel Operating Expenses is 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. Included in the Q4 2007 direct
vessel operating expense budget is $360,000 of pre-operating costs related
to
the delivery of the vessels within the Evalend acquisitions, as well as higher
rates related to the operation of the 4 capesize vessels we have taken delivery
of as part of the Metrostar acquisition. The Company expects an
increase in its 2008 budget to reflect the anticipated increased cost for
crewing and lubes.
(4)
General & Administrative amounts are based on a budget and may vary,
including as a result of actual incentive compensation.
(5)
Management Fees are based on the contracted monthly rate per vessel for the
technical management of our fleet.
(6)
Dry
Docking represents the budgeted dry docking expenditures for Q4
2007.
(7)
Interest Expense is based on our debt level as of September 30, 2007 of $715.5
million outstanding plus $106.25 million for the delivery of the Genco Titus
on
November 15, 2007, plus $302.4 million for the delivery of the six new vessels
from Evalend, the repayment of $43.0 million related to the sale of the Genco
Commander on December 3, 2007, unused commitment fees, and amortization of
deferred financing costs. Of the outstanding amount, $331.2 million is
calculated on our weighted average fixed swap rate of approximately 4.85% plus
0.85% margin and the remainder is calculated based on an assumed LIBOR rate
of
5.35% plus 0.85% margin.
(8)
Depreciation is based on the acquisition value of the current fleet, including
the three vessels to be acquired and amortization of dry docking
costs.
(9)
The
amounts shown will vary based on actual results.
The
Company also disclosed the following information with respect to its estimated
drydocking schedule for the fourth quarter of 2007 and for 2008:
Vessel
Name
|
Next
DD Month
|
Proposed
Budget(1)
|
Offhire(1)
|
Genco
Surprise
|
November
2007
|
$865,000
|
19.2
|
|
|
|
|
Genco
Challenger
|
March
2008
|
$450,000
|
20
|
Genco
Charger
|
June
2008
|
$20,000
|
5
|
Genco
Beauty
|
July
2008
|
$700,000
|
20
|
Genco
Sugar
|
July
2008
|
$650,000
|
20
|
Genco
Progress
|
September
2008
|
$650,000
|
20
|
Genco
Pioneer
|
September
2008
|
$650,000
|
20
|
Genco
Acheron
|
December
2008
|
$750,000
|
20
|
Total
2008 Budget
|
|
$3,870,000
|
125
|
(1)
The
costs reflected are estimates based on drydocking our vessels in China. We
estimate that each drydock will result in 20 days of off-hire except for the
Genco Charger, which is expected to complete its intermediate survey in 5 days
during 2008. Actual costs will vary based on various factors, including where
the drydockings are actually performed. We expect to fund these costs with
cash
from operations.
The
foregoing information is also available on the Company’s website at
www.gencoshipping.com.
“Safe Harbor”
Statement Under the Private Securities Litigation Reform Act of
1995
This
report contains forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
forward looking statements are based on management’s current expectations and
observations. Included among the factors that, in our view, could cause actual
results to differ materially from the forward looking statements contained
in
this presentation are the following: (i) changes in demand or rates in the
drybulk shipping industry; (ii) changes in the supply of or demand for drybulk
products, generally or in particular regions; (iii) changes in the supply of
drybulk carriers including newbuilding of vessels or lower than anticipated
scrapping of older vessels; (iv) changes in rules and regulations applicable
to
the cargo industry, including, without limitation, legislation adopted by
international organizations or by individual countries and actions taken by
regulatory authorities; (v) increases in costs and expenses including but not
limited to: crew wages, insurance, provisions, repairs, maintenance and general
and administrative expenses; (vi) the adequacy of our insurance arrangements;
(vii) changes in general domestic and international political conditions; (viii)
changes in the condition of the Company’s vessels or applicable maintenance or
regulatory standards (which may affect, among other things, our anticipated
drydocking or maintenance and repair costs) and unanticipated drydock
expenditures; (ix) the number of offhire days needed to complete repairs on
vessels and the timing and amount of any reimbursement by our insurance carriers
for insurance claims including offhire days; (x) the Company’s acquisition or
disposition of vessels; (xi) the fulfillment of the closing conditions under
the
Company's agreement to acquire the remaining six Metrostar drybulk vessels;
(xii) the fulfillment of the closing conditions under the Company's agreement
to
sell the Genco Trader; (xiii) the fulfillment of the closing conditions under
the Company's agreements to acquire the six Evalend drybulk vessels, and other
factors listed from time to time in our public filings with the Securities
and
Exchange Commission including, without limitation, the Company’s Annual Reports
on Form 10-K for the year ended December 31, 2006 and its reports on Form 8-K
and 10-Q. Our ability to pay dividends in any period will depend upon factors
including the limitations under our loan agreements, applicable provisions
of
Marshall Islands law and the final determination by the Board of Directors
each
quarter after its review of our financial performance. The timing and amount
of
dividends, if any, could also be affected by factors affecting cash flows,
results of operations, required capital expenditures, or reserves. As a result,
the amount of dividends actually paid may vary.
The
information set forth under this Item 8.01 shall not be deemed “filed” for
purposes of Section 18 of the Securities Act of 1934, as amended, nor shall
such
information be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, except as shall be expressly set forth
by
specific reference in such filing.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, Genco Shipping
&
Trading Limited has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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GENCO
SHIPPING & TRADING LIMITED
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|
|
|
DATE: December
12, 2007
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|
|
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/s/
John C. Wobensmith
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John C. Wobensmith
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Chief
Financial Officer, Secretary and Treasurer
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(Principal
Financial and Accounting Officer)
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