Genco announced that it has closed on a previously announced $400 million credit facility and certain amendments to the Company’s existing $98 Million Credit Facility and its 2014 Term Loan Facilities with ABN AMRO.
Genco also announced that it has completed the sale of an aggregate of $125 million of Series A Preferred Stock of the Company.
Proceeds from the new $400 million credit facility will be used to refinance all of the Company’s existing credit facilities into one facility with the exception of the $98 Million Credit Facility and the 2014 Term Loan Facilities.
The new $400 million facility has improved the terms and covenants across all of the Company’s refinanced facilities and simplified its capital structure. The Company further improved its liquidity and balance sheet with the completion of the $125 million capital raise.
The terms of the $400 million credit facility include the following:
An improved repayment structure with no significant fixed amortization payments until 2019
The elimination of collateral maintenance covenants through the first half of 2018
The elimination of the maximum leverage covenant
The reduction of the minimum liquidity requirement
The facility has a final maturity date of November 15, 2021, and borrowings, which are available for working capital purposes, will bear interest at LIBOR plus 375 basis points with an option to convert 150 basis points of this to principal through December 31, 2018. The syndicate of banks for this facility includes Nordea Bank Finland plc, New York Branch, Skandinaviska Enskilda Banken AB (publ), DVB Bank SE, ABN AMRO Capital USA LLC, Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgeschäft, Crédit Industriel et Commercial, and BNP Paribas.
The Company also completed the sale of an aggregate of $125 million of Series A Preferred Stock of the Company. The Series A Preferred Stock sale consists of the purchase of $86.4 million of Genco’s Series A Preferred Stock by funds or related entities managed by affiliates of Centerbridge Partners, L.P., funds or related entities managed by Strategic Value Partners, LLC or its affiliates, and funds managed by affiliates of Apollo Global Management, LLC, representing the Company’s three largest shareholders, at a price of $4.85 per share. An additional $38.6 million in Series A Preferred Stock was purchased by certain investors at a price of $4.85 per share in an equity private placement. Such investors include affiliates of the Company’s three largest shareholders as well as a number of other investors. The Series A Preferred Stock has a liquidation preference of $4.85 per share and will mandatorily convert into shares of the Company’s common stock at a conversion price of $4.85 per share, subject to certain adjustments, upon receipt of approval of such conversion by the Company’s shareholders. An additional $6.25 million of Series A Preferred Stock was issued to the investors in the $86.4 million purchase as a commitment fee.
John C. Wobensmith, President, commented, “Genco’s recent steps to strengthen its balance sheet represent a significant milestone for the Company. We have significantly enhanced our financial flexibility and bolstered our ability to manage the current market downturn. Importantly, we have also repositioned Genco to thrive in a recovery and capitalize on the Company’s leading drybulk platform. Genco’s focus remains on achieving the highest operational standards for our customers, while maintaining cost-efficient operations for the benefit of our shareholders. We appreciate the strong and continued support we have received from our investors and our banking group, which we believe underscores the Company’s industry leadership and strong future prospects.”