Genco amends loan agreement, suspends dividend

Genco amends loan agreement, suspends dividend Genco Shipping & Trading Ltd. said it amended a $1.4 billion, ten-year credit facility, and will suspend cash dividends.
   John C. Wobensmith, Genco's chief financial officer, said the actions 'solidified the company's ability to fund its remaining three vessels and increased its financial flexibility.
   'We believe that the favorable long-term fundamentals in the drybulk industry remain intact and the company is in a strong position to seek opportunities to take advantage of the current weakness in the drybulk industry for the benefit of shareholders,' he said.
   Under terms of the amended 10-year $1.4 billion facility, the collateral maintenance requirement will be waived until such time that Genco is in a position to satisfy the covenant and certain other conditions. Genco will continue to be able to borrow the undrawn portion of the loan during the waiver period. Amounts borrowed under the amended facility begin to reduce on March 31 at $12.5 million per quarter and will bear interest at LIBOR plus 2 percent.
   Genco plans to fund three remaining capesize newbuildings expected to be delivered in 2009 with the undrawn portion of its credit facility as well as cash flow from operations.
   Genco said under the terms of the amended credit facility, its cash dividends and share repurchases will be suspended, effective immediately. Genco will be able to reinstate its dividend policy and share repurchase program once the company can represent that it is in a position to again satisfy the collateral maintenance covenant. The amendment to the credit facility places no further restrictions on uses of the company's cash.