Genco Secures Financing for Scrubber Installations

FinanceIllustration. Image Courtesy: Pixabay under CC0 Creative Commons license

Dry bulk specialists Genco Shipping & Trading Limited has closed financing for scrubber installations on 17 of the company’s Capesize vessels.

The shipowner said that it entered into an amendment to its USD 460 million credit facility in February 2019 providing an additional tranche of up to USD 35 million to cover up to 90% of the expenses related to the scrubbers acquisition and installation as part of the company’s IMO 2020 strategy.

Borrowings under the USD 35 million tranche will bear interest at LIBOR plus 250 basis points through September 30, 2019 and LIBOR plus a range of 225 to 275 basis points thereafter, dependent upon total net indebtedness to consolidated EBITDA for the preceding four calendar quarters.

Nordea Bank ABP, New York Branch, Skandinaviska Enskilda Banken AB (publ), Crédit Agricole Corporate and Investment Bank, and Danish Ship Finance A/S are the lenders for the additional tranche.

The company unveiled the development in its fourth quarter of 2018 financial report in which it said it would remain weighted towards short-term fixtures after marking a strong end to 2018.

Genco Shipping & Trading recorded a net income of USD 18.3 million in the fourth quarter of 2018, compared to an income of USD 2.5 million seen in the same quarter of 2017. Net revenue totaled USD 75.6 million during the three-month period ended December 31, 2018, increasing by 27% from USD 59.3 million reported a year earlier.

Time charter equivalent (TCE) increased to USD 13,237 for the quarter, marking a year-over-year improvement of 23%.

“So far in 2019, seasonal factors coupled with events such as the Vale dam tragedy have led to volatility in freight rates in the short-term. We believe such short-term volatility highlights the importance of our solid liquidity position as well as our approach of deploying a fleet with direct exposure to the major and minor drybulk commodities both of which present strong long-term demand prospects underpinned by a backdrop of low net fleet growth,” John C. Wobensmith, Chief Executive Officer, said.

“We believe that our active commercial strategy, together with our efficient cost structure, provides continuing potential for increased margins. Furthermore, our barbell approach to fleet composition provides direct exposure to both major and minor bulk commodities enabling our fleet’s cargo carrying capabilities to closely mirror those of global commodity trade flows.”

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