Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the
“Company”), the largest U.S. headquartered drybulk shipowner
focused on the global transportation of commodities, today issued a
letter to shareholders highlighting steps the Company is continuing
to take to drive sustainable, long-term shareholder value.
The full text of the letter follows:
Dear Fellow Shareholders,
We are writing today with an update on the important steps we
continue to take at Genco to drive sustainable, long-term
shareholder value for you.
Over the last several years, our Board of Directors and
management team have navigated various market environments,
exhibited a disciplined approach to capital allocation and overseen
the successful transformation of the Company while maintaining the
highest of corporate governance standards. As a result of these
actions, the Company is delivering solid operating results and has
a strong foundation for continued growth built on its diverse fleet
and financial strength.
We are continuing to take concrete measures to deliver on our
Comprehensive Value Strategy in a sustainable
manner. We developed this strategy with the goal of
ensuring that Genco is well positioned to drive value
through drybulk shipping market cycles by enhancing the
Company’s potential to deliver returns to shareholders, reducing
the Company’s financial risks and maximizing the Company’s ability
to pursue accretive growth opportunities. Our recent progress has
included:
- Paying sustained dividends across the market
cycles. The Company has paid 17
consecutive quarterly dividends since 2019, including
eight since the announcement of the Value Strategy in 2021.
Over this 17-quarter period, the Company has paid dividends
of $4.745 per share, or approximately 30% of the current share
price;
- Prioritizing deleveraging within our strong
capital structure through voluntary debt repayments to maintain low
financial leverage and reduce our cash flow breakeven rate. We are
making notable progress towards our medium-term goal of zero net
debt and have lowered our debt outstanding by
68% or over $300 million, from Q1 2021 to
Q3 2023, significantly reducing our net loan-to-value ratio and
cash flow breakeven rate to the lowest in our peer group;
and
- Focusing on opportunistically driving growth and
profitability, having invested $520 million in fleet
expansion and modernization in the last five years to add 17
modern, high specification eco vessels to our fleet. We have
advanced our fleet renewal strategy with the
recent acquisition of two high specification scrubber-fitted
Capesize vessels and have an agreement to sell an older, less
fuel-efficient Capesize vessel. At the same time, we have
invested in new technology that increases efficiency while
reducing fuel usage and lowering costs, making our fleet
more sustainable and more profitable.
Looking ahead, we have the resources to continue these efforts,
having recently closed on a $500 million revolving credit facility
and by maintaining significant access to capital with approximately
$290 million of undrawn revolver availability. Among other uses,
this capital can help us fund future accretive growth
opportunities.
A key focus for our Board as part of the Comprehensive Value
Strategy is capital allocation. Based on a rigorous analysis of
capital allocation alternatives, the Board has strategically
prioritized financial deleveraging while simultaneously returning
significant capital to shareholders and opportunistically pursuing
growth. We believe that achieving low net leverage and, in turn,
reduced cash flow breakeven levels provides the most flexibility
and optionality for the Company to pursue accretive growth
opportunities while maintaining meaningful capital returns during
times of strong markets, as well as through periods of downward
volatility in our highly cyclical business. We believe that Genco’s
low leverage, high dividend payout model executed in this scale is
industry-leading in the drybulk shipping public markets, which is a
core differentiator of the Company, making Genco a highly
attractive platform for you, our valued shareholders. That said,
our management team and Board regularly evaluates its capital
allocation strategy and will continue to do so going forward.
We have accomplished the above strategic initiatives while
having been ranked #1, out of 64 public shipping companies,
in the annual Webber Research ESG
Scorecard1 three years in a
row for our industry leadership in
sustainability, transparency and
governance, representing good capital
stewardship. This top ranking is a testament to the entire
Genco platform and our well-planned and well-executed corporate
governance and sustainability initiatives led by our Board and
management team. Furthermore, Genco is one of only two drybulk
shipping companies in the public space that files as a U.S.-based
company, providing a high-level of transparency regarding our
public disclosure and communications.
Our Board consists of active and engaged directors that are
open-minded with respect to value-creation opportunities. Our
highly-qualified directors bring complementary skills, experience
and industry expertise in areas relevant to our business, including
shipping, fleet management, commercial and technical management, as
well as capital allocation management, financial reporting and
M&A.
The Board is of course reviewing the director nominations
recently made by George Economou through his entity GK Investor
LLC. Our Board is committed to strong corporate governance and will
consider these nominations as a part of its normal review process.
It will make its formal recommendation in due course and will
continue to take actions that are in the best interests of the
Company and all of its shareholders.
We believe Genco’s future is bright. We’re executing a clear
plan that is delivering solid results today, providing us
flexibility to drive returns through the volatility and cyclicality
inherent in the business and positioning us to capitalize on market
opportunities going forward. Looking ahead, we remain committed to
maintaining our strong governance and taking actions that we
believe will create the most value for shareholders.
We thank you for your continued support,
James G. DolphinChairman of the Board |
John C. WobensmithChief Executive Officer |
Jefferies LLC is acting as financial advisor to Genco, and
Kramer Levin Naftalis & Frankel LLP is serving as its legal
counsel.
About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited is a U.S. based drybulk
ship owning company focused on the seaborne transportation of
commodities globally. We provide a full-service logistics solution
to our customers utilizing our in-house commercial operating
platform, as we transport key cargoes such as iron ore, grain,
steel products, bauxite, cement, nickel ore among other commodities
along worldwide shipping routes. Our wholly owned high quality,
modern fleet of dry cargo vessels consists of the larger Capesize
(major bulk) and the medium-sized Ultramax and Supramax vessels
(minor bulk) enabling us to carry a wide range of cargoes. We make
capital expenditures from time to time in connection with vessel
acquisitions. As of January 22, 2024, Genco Shipping & Trading
Limited’s fleet consists of 19 Capesize, 15 Ultramax and 12
Supramax vessels with an aggregate capacity of approximately
4,997,000 dwt and an average age of 11.7 years.
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995
This letter contains certain forward-looking
statements pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements use words such as “expect,” “intend,” “plan,” “believe,”
and other words and terms of similar meaning in connection with a
discussion of potential future events, circumstances or future
operating or financial performance. These forward-looking
statements are based on management’s current expectations and
observations. For a discussion of factors that could cause results
to differ, please see the Company's filings with the Securities and
Exchange Commission, including, without limitation, the Company’s
Annual Report on form 10-K for the year ended December 31, 2022,
and the Company's reports on Form 10-Q and Form 8-K subsequently
filed with the SEC. We do not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Important Additional Information Regarding Proxy
Solicitation
Genco intends to file a proxy statement and associated WHITE
proxy card with the U.S. Securities and Exchange Commission (the
“SEC”) in connection with the solicitation of proxies for Genco’s
2024 Annual Meeting of Shareholders (the “Proxy Statement”). Genco,
its directors and certain of its executive officers will be
participants in the solicitation of proxies from shareholders in
respect of the 2024 Annual Meeting of Shareholders. Information
regarding the names of Genco’s directors and executive officers and
their respective interests in Genco by security holdings or
otherwise is set forth in Genco’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2022, filed with the SEC on
February 22, 2023 and Genco’s proxy statement for the 2023 Annual
Meeting of Shareholders, filed with the SEC on April 6, 2023. To
the extent holdings of such participants in Genco’s securities are
not reported, or have changed since the amounts described, in the
2023 proxy statement, such changes have been reflected on Initial
Statements of Beneficial Ownership on Form 3 or Statements of
Change in Ownership on Form 4 filed with the SEC. Details
concerning the nominees of Genco’s Board of Directors for election
at the 2024 Annual Meeting of Shareholders will be included in the
Proxy Statement. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND
SHAREHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE
COMPANY’S DEFINITIVE PROXY STATEMENT AND ANY SUPPLEMENTS THERETO
AND ACCOMPANYING WHITE PROXY CARD WHEN THEY BECOME AVAILABLE,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
shareholders will be able to obtain a copy of the definitive Proxy
Statement and other relevant documents filed by Genco free of
charge from the SEC’s website, www.sec.gov. Genco’s shareholders
will also be able to obtain, without charge, a copy of the
definitive Proxy Statement and other relevant filed documents by
directing a request by mail to Genco Shipping & Trading
Limited, 299 Park Avenue, 12th Floor, New York, NY 10171 or from
the Investors section of Genco’s website at
www.gencoshipping.com.
CONTACT:Peter AllenChief Financial OfficerGenco
Shipping & Trading Limited(646) 443-8550
Aaron Palash / Carleigh Roesler / Jenna Shinderman Joele Frank,
Wilkinson Brimmer Katcher (212) 355-4449
1 Based on the Webber Research 2023, 2022 and 2021 ESG
scorecard
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