Genco Shipping & Trading has given itself an extra two weeks to enter into a definitive agreement with its lenders for purchase of its equity or filing a registration statement for an equity financing.
On June 10, Genco and a consortium of its lenders signed a commitment letter for a $400m senior secured term loan facility, with which to refinance six existing loan facilities – but the company first needs to sell $125m in equity.
The NASDAQ-listed company failed to secure the $125m equity financing in June, and on June 8 entered into separate equity commitment letters with institutional investors for a combined $62.5m, half of its original target.
The investors’ deadline to enter into a definitive purchase agreement for the equity has been extended from August 15 until September 14, which is the second time the deadline has been moved.
Funds managed by affiliates of Centerbridge Partners have already signed up for around $31.2m in Genco’s equity; affiliates of Strategic Value Partners for $17.3m, and funds managed by affiliates of Apollo Global Management for approximately $14m.
Genco has said it intends to use $37m of the $125m financing to repay its debt; $83m for general corporate purposes and $6m for transaction fees and expenses.
In order to secure the remaining $62.5m in equity financing, Genco has offered to the sell or scrap 10 vessels (including the Genco Marine, which was sold for demolition in May). The shipping company estimates this would incur an impairment charge of around $67m and generate $16m in cash.
Among the other terms, Genco has offered to reduce the minimum liquidity under the refinanced facilities from $52.5m to $21.5m until December 31, 2018.
The consortium of lenders comprises Nordea Bank Finland (New York branch); Skandinaviska Enskilda Banken, DVB Bank SE, ABN AMRO Capital USA, Crédit Agricole Corporate and Investment Bank; Deutsche Bank Filiale Deutschlandgeschäft, Crédit Industriel et Commercial, and BNP Paribas.
