Gener8 Maritime Sells Three Oldies

Image Courtesy: Shipspotting

New York-headquartered crude oil shipping company Gener8 Maritime revealed it has entered into agreements to sell its three older vessels.

Following the sale, agreed in July 2017, the company expects to receive net cash proceeds of USD 3.4 million after debt repayment of USD 24.1 million.

The vessels in question are two 1999-built Suezmax tankers, Gener8 Horn and Gener8 Phoenix and they will be sold for demolition prior to the vessels’ special surveys. In addition, the company intends to dispose of the 2002-built Aframax, Gener8 Elektra.

This was announced in the company’s financial report which shows that Gener8 Maritime finished the second quarter of this year with a net loss of USD 82.5 million, compared to a net income of USD 38 million posted in the same period a year earlier.

What is more, net voyage revenues decreased by 28.5% to USD 72.8 million for the three months ended June 30, 2017, from USD 101.8 million dollars for the prior year period. As explained, the decrease in net voyage revenues was primarily attributable to the decrease in the company’s average daily fleet TCE rate.

During the quarter, the company entered into a series of transactions that are expected to increase cash on the balance sheet by more than USD 87 million and reduce total indebtedness by approximately USD 144 million.

Apart from the sale of the three above mentioned vessels, these transactions include modifying Gener8 Maritime’s interest rate swap agreements, resulting in aggregate net cash proceeds of USD 18.2 million in April 2017. Furthermore, the company sold the 2002-built Aframax, Gener8 Daphne, two 2016-built VLCCs, Gener8 Noble and Gener8 Theseus, and a 2002-built Suezmax, Gener8 Orion. The vessels were sold for net cash proceeds of USD 65.4 million after debt repayment of USD 119.7 million.

“We continue to take important steps to strengthen our platform and balance sheet. In this seasonally weaker rate environment, we remain focused on maximizing our financial flexibility in order to manage our business for the near- and long-term.  We continue to dispose of older vessels, streamlining our fleet and focusing on high-quality tonnage with the best return profile,” Peter Georgiopoulos, Chairman and Chief Executive Officer of Gener8 Maritime, commented.

“Our balance sheet is expected to be further strengthened during the second quarter, by our agreeing to transactions that are expected to provide over USD 87 million of additional liquidity. The sales of our older vessels have also been timely, as several have come before the vessels’ 2017 special surveys, which according to budgeted amounts will preserve an additional USD 18 million of liquidity,” Leo Vrondissis, Chief Financial Officer, added.

As of July 31, 2017, Gener8 Maritime has a fleet of 39 wholly-owned vessels comprised of 25 VLCCs including one newbuilding, nine Suezmaxes, three Aframaxes, and two Panamax tankers.

Image Courtesy: Shipspotting

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