After a long wait and an extended deadline, entities representing three of Genco Shipping & Trading’s largest shareholders have entered into agreements to purchase up to $125m of the NYSE-listed company’s Series A preferred stock, which will enable Genco to secure a $400m loan.
Funds affiliated to Centerbridge Partners, Strategic Value Partners and Apollo Global Management have agreed to purchase the stock at a price of $4.85 per share.
Genco needed to secure the $125m equity financing in order to secure a $400m senior secured term loan facility from a consortium of its lenders, with whom it signed a commitment letter on June 10. The company will also be granted certain amendments to its existing $98m credit facility.
Before now, the shipping company has only managed to secure financing from institutional investors for $62.5m, half of its original target.
In order to secure the remaining equity financing, Genco previously offered to sell or scrap 10 vessels (including the Genco Marine, which was sold for demolition in May). The shipping company has estimated this would incur an impairment charge of around $67m and generate $16m in cash.
Among other terms, Genco has also offered to reduce the minimum liquidity under the refinanced facilities from $52.5m to $21.5m until December 31, 2018.
It is not clear whether the lenders accepted Genco’s offers as part of the new equity financing agreements.
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.