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GENERAL INFORMATION | 6 Months Ended
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Jun. 30, 2014
GENERAL INFORMATION |
GENERAL INFORMATION | 1 - GENERAL INFORMATION The accompanying condensed consolidated financial statements include the accounts of Genco Shipping & Trading Limited (“GS&T”), its wholly-owned subsidiaries, and its subsidiary, Baltic Trading Limited (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. GS&T is incorporated under the laws of the Marshall Islands and as of June 30, 2014, is the sole owner of all of the outstanding shares of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco RE Investments LLC; and the ship-owning subsidiaries as set forth below. As of June 30, 2014, Genco Ship Management LLC is the sole owner of all of the outstanding shares of Genco Management (USA) Limited. Bankruptcy Filing On April 21, 2014 (the “Petition Date”), GS&T and its subsidiaries other than Baltic Trading Limited and its subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors continued to operate their businesses in the ordinary course as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Through the Chapter 11 Cases, the Debtors seek to implement a Prepackaged Plan of Reorganization of the Debtors Pursuant to Chapter 11 of the Bankruptcy Code for which the Company solicited votes from certain classes of its creditors prior to commencement of the Chapter 11 Cases in accordance with the Restructuring Support Agreement that the Debtors entered into with certain of its creditors on April 3, 2014. The filing of the Chapter 11 Cases constituted an event of default with respect to each of the following agreements or instruments: · the Credit Agreement, dated as of July 20, 2007 (as amended to date), by and among the Company as borrower, the banks and other financial institutions named therein as lenders, Wilmington Trust, N.A., as successor administrative and collateral agent, and the other parties thereto, relating to approximately $1,055,912 of principal plus accrued and unpaid interest, fees, costs, and other expenses (the “2007 Credit Facility”); · the Loan Agreement, dated as of August 20, 2010 (as amended to date), by and among the Company as borrower, Genco Aquitane Limited and the other subsidiaries of the Company named therein as guarantors, the banks and financial institutions named therein as lenders, BNP Paribas, Credit Agricole Corporate and Investment Bank, DVB Bank SE, Deutsche Bank AG Filiale Deutschlandgeschaft, Skandinaviska Enskilda Banken AB (publ) as mandated lead arrangers, BNP Paribas, Credit Agricole Corporate and Investment Bank, DVB Bank SE, Deutsche Bank AG, Skandinaviska Enskilda Banken AB (publ) as swap providers, and Deutsche Bank Luxembourg S.A. as agent for the lenders and the assignee, relating to approximately $175,718 of principal and accrued and unpaid interest, fees, costs, and other expenses (the “$253 Million Term Loan Facility”); · the Loan Agreement, dated as of August 12, 2010 (as amended to date), by and among the Company as borrower, Genco Ocean Limited and the other subsidiaries of the Company named therein as guarantors, the banks and financial institutions named therein as lenders, and Credit Agricole Corporate and Investment Bank as agent and security trustee, relating to approximately $73,561 of principal plus accrued and unpaid interest, fees, costs, and other expenses (the “$100 Million Term Loan Facility”); · the Indenture and First Supplemental Indenture relating to $125,000 of principal plus accrued and unpaid interest outstanding of the Company’s 5.00% Convertible Senior Notes (the “2010 Notes”) due August 15, 2015 (the “Indenture”); · the outstanding interest rate swap with DnB NOR Bank, relating to a liability position of $5,622 as of June 30, 2014. As a result of the filing of the Chapter 11 Cases, all indebtedness outstanding under the 2007 Credit Facility and the Indenture was accelerated and became due and payable, and indebtedness under the other agreements and instruments described above can be accelerated and become due and payable upon notice to the Company, subject to an automatic stay of any action to collect, assert, or recover a claim against the Company or the other Debtors and the application of the applicable provisions of the Bankruptcy Code. On July 2, 2014, the Bankruptcy Court entered an order (the “Confirmation Order”), confirming the First Amended Prepackaged Plan of Reorganization of the Debtors Pursuant to Chapter 11 of the Bankruptcy Code (the “Plan”). Capitalized terms used but not defined below shall have the meanings given to them in the Plan. On July 9, 2014 (the “Effective Date”), the Debtors completed their financial restructuring and emerged from Chapter 11 through a series of transactions contemplated by the Plan, and the Plan became effective pursuant to its terms. Key components of the Plan included: · The conversion of 100% of the Claims under the 2007 Credit Facility into 81.1% of the New Genco Common Stock (subject to dilution by the warrants issued under the Plan). On the Effective Date, the 2007 Credit Facility was terminated, and the liens and mortgages thereunder were released. Refer to Note 9 — Debt for further information. · The conversion of 100% of the Claims under the 2010 Notes into 8.4% of the New Genco Common Stock (subject to dilution by the warrants issued under the Plan). On the Effective Date, the 2010 Notes and the Indenture were fully satisfied and discharged. Refer to Note 10 — Convertible Senior Notes for further information. · A fully backstopped Rights Offering for approximately 8.7% of the New Genco Common Stock, in which holders of 2007 Credit Facility Claims were entitled to subscribe for up to 80% of the New Genco Common Stock offered, and holders of the 2010 Notes Claims were entitled to subscribe for up to 20% of the New Genco Common Stock being offered under the Rights Offering. Each Right entitled its holder to purchase one share of New Genco Common Stock at a subscription price of $18.62537, for an aggregate subscription price of $100,000. · The amendment and restatement of the $253 Million Term Loan Facility and the $100 Million Term Loan Facility as of the Effective Date, with extended maturities, a financial covenant holiday and certain other amendments, as discussed further in Note 9 - Debt. · The cancellation of the old common stock of Genco as of the Effective Date, with the holders thereof receiving warrants to acquire shares of New Genco Common Stock. Each New Genco Equity Warrant is exercisable for one share of New Genco Common Stock, and holders received an aggregate of 3,938,298 New Genco Equity Warrants for the old common stock of Genco. The New Genco Equity Warrants in the aggregate are exercisable for approximately 6% of New Genco Common Stock (subject to dilution). · Reinstatement, non-impairment or payment in full in the ordinary course of business during the pendency of the Chapter 11 Cases of all Allowed General Unsecured Claims, including Allowed Claims of trade vendors, suppliers, customers and charterers, per the approval by the Bankruptcy Court. · The non-impairment of all other General Unsecured Claims under section 1124 of the Bankruptcy Code. · A Management Incentive Program, which provides for the distribution of New Genco MIP Primary Equity in the form of shares representing 1.8% of the New Genco Common Stock and three tiers of New Genco MIP Warrants with staggered strike prices based on increasing equity values to the participating officers, directors, and other management of Reorganized Genco. These awards were made on August 7, 2014. Registration Rights Agreement On the Effective Date, Reorganized Genco and the Registration Rights Parties entered into the Registration Rights Agreement. The Registration Rights Agreement provided the Registration Rights Parties who receive 10% or more of New Genco Common Stock under the Plan with demand and piggyback registration rights. All other Registration Rights Parties have piggyback registration rights only. New Genco Equity Warrant Agreement On the Effective Date, pursuant to the Plan, the New Genco Equity Warrants were issued pursuant to the terms of the New Genco Equity Warrant Agreement. Each New Genco Equity Warrant has a 7-year term (commencing on the day following the Effective Date) and are exercisable for one share of New Genco Common Stock. The New Genco Equity Warrants are exercisable on a cashless basis at an exercise price of $20.99 per share. The New Genco Equity Warrant Agreement contains customary anti-dilution adjustments in the event of any stock split, reverse stock split, stock dividend, reclassification, dividend or other distributions (including, but not limited to, cash dividends), or business combination transaction. The New Genco Equity Warrants were distributed to holders of the old common stock of the Company, which was cancelled as of the Effective Date. Shares of old common stock of the Company issued to directors, officers and employees of Genco under compensatory plans that were unvested as of the Effective Date were deemed vested automatically on the Effective Date, so that all New Genco Equity Warrants received in exchange therefor were deemed vested. Accounting Guidance The Company was required to apply Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations, effective on April 21, 2014, which is applicable to companies in Chapter 11, which generally does not change the manner in which financial statements are prepared. However, it does require that the financial statements for periods subsequent to the filing of the Chapter 11 Cases distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Revenues, expenses, realized gains and losses, and provisions for losses that can be directly associated with the reorganization and restructuring of the business must be reported separately as Reorganization items in the consolidated statements of operations beginning in the quarter ending June 30, 2014. The balance sheet must distinguish pre-petition Liabilities subject to compromise from both those pre-petition liabilities that are not subject to compromise and from post-petition liabilities. The Company has evaluated creditors’ claims for other claims that may also have priority over unsecured creditors. Liabilities that may be affected by a plan of reorganization must be reported at the amounts expected to be approved by the Bankruptcy Court, even if they may be settled for lesser amounts as a result of the plan or reorganization. In addition, cash used by reorganization items in the consolidated statements of cash flows are disclosed in Note 4 — Cash Flow Information. In connection with the emergence from the Chapter 11 Cases, the Company believes it qualifies for fresh-start accounting. Upon adoption of fresh-start accounting, the Company’s assets and liabilities will be recorded at their value as of the fresh-start reporting date. The fair values of the Company’s assets and liabilities as of that date may differ materially from the recorded values of its assets and liabilities as reflected in its historical consolidated financial statements. In addition, the Company’s adoptions of fresh-start accounting may materially affect its results of operations following the fresh-start reporting dates, as the Company will have a new basis in its assets and liabilities. Consequently, the Company’s historical financial statements may not be reliable indicators of its financial condition and results of operations for any period after it adopts fresh-start accounting. See Note 25 — Subsequent Events for a further discussion of fresh-start accounting. Other General Information Below is the list of GS&T’s wholly owned ship-owning subsidiaries as of June 30, 2014:
Wholly Owned Subsidiaries |  | Vessel Acquired |  | Dwt |  | Delivery Date |  | Year Built
Genco Reliance Limited |  | Genco Reliance |  | 29,952 |  | 12/6/04 |  | 1999
Genco Vigour Limited |  | Genco Vigour |  | 73,941 |  | 12/15/04 |  | 1999
Genco Explorer Limited |  | Genco Explorer |  | 29,952 |  | 12/17/04 |  | 1999
Genco Carrier Limited |  | Genco Carrier |  | 47,180 |  | 12/28/04 |  | 1998
Genco Sugar Limited |  | Genco Sugar |  | 29,952 |  | 12/30/04 |  | 1998
Genco Pioneer Limited |  | Genco Pioneer |  | 29,952 |  | 1/4/05 |  | 1999
Genco Progress Limited |  | Genco Progress |  | 29,952 |  | 1/12/05 |  | 1999
Genco Wisdom Limited | Genco Wisdom |  | 47,180 |  | 1/13/05 |  | 1997
Genco Success Limited |  | Genco Success |  | 47,186 |  | 1/31/05 |  | 1997
Genco Beauty Limited |  | Genco Beauty |  | 73,941 |  | 2/7/05 |  | 1999
Genco Knight Limited |  | Genco Knight |  | 73,941 |  | 2/16/05 |  | 1999
Genco Leader Limited |  | Genco Leader |  | 73,941 |  | 2/16/05 |  | 1999
Genco Marine Limited |  | Genco Marine |  | 45,222 |  | 3/29/05 |  | 1996
Genco Prosperity Limited |  | Genco Prosperity |  | 47,180 |  | 4/4/05 |  | 1997
Genco Muse Limited |  | Genco Muse |  | 48,913 |  | 10/14/05 |  | 2001
Genco Acheron Limited |  | Genco Acheron |  | 72,495 |  | 11/7/06 |  | 1999
Genco Surprise Limited |  | Genco Surprise |  | 72,495 |  | 11/17/06 |  | 1998
Genco Augustus Limited |  | Genco Augustus |  | 180,151 |  | 8/17/07 |  | 2007
Genco Tiberius Limited |  | Genco Tiberius |  | 175,874 |  | 8/28/07 |  | 2007
Genco London Limited |  | Genco London |  | 177,833 |  | 9/28/07 |  | 2007
Genco Titus Limited |  | Genco Titus |  | 177,729 |  | 11/15/07 |  | 2007
Genco Challenger Limited |  | Genco Challenger |  | 28,428 |  | 12/14/07 |  | 2003
Genco Charger Limited |  | Genco Charger |  | 28,398 |  | 12/14/07 |  | 2005
Genco Warrior Limited |  | Genco Warrior |  | 55,435 |  | 12/17/07 |  | 2005
Genco Predator Limited |  | Genco Predator |  | 55,407 |  | 12/20/07 |  | 2005
Wholly Owned Subsidiaries |  | Vessel Acquired |  | Dwt |  | Delivery Date |  | Year Built
Genco Hunter Limited |  | Genco Hunter |  | 58,729 |  | 12/20/07 |  | 2007
Genco Champion Limited |  | Genco Champion |  | 28,445 |  | 1/2/08 |  | 2006
Genco Constantine Limited |  | Genco Constantine |  | 180,183 |  | 2/21/08 |  | 2008
Genco Raptor LLC |  | Genco Raptor |  | 76,499 |  | 6/23/08 |  | 2007
Genco Cavalier LLC |  | Genco Cavalier |  | 53,617 |  | 7/17/08 |  | 2007
Genco Thunder LLC |  | Genco Thunder |  | 76,588 |  | 9/25/08 |  | 2007
Genco Hadrian Limited |  | Genco Hadrian |  | 169,694 |  | 12/29/08 |  | 2008
Genco Commodus Limited |  | Genco Commodus |  | 169,025 |  | 7/22/09 |  | 2009
Genco Maximus Limited |  | Genco Maximus |  | 169,025 |  | 9/18/09 |  | 2009
Genco Claudius Limited |  | Genco Claudius |  | 169,025 |  | 12/30/09 |  | 2010
Genco Bay Limited |  | Genco Bay |  | 34,296 |  | 8/24/10 |  | 2010
Genco Ocean Limited |  | Genco Ocean |  | 34,409 |  | 7/26/10 |  | 2010
Genco Avra Limited |  | Genco Avra |  | 34,391 |  | 5/12/11 |  | 2011
Genco Mare Limited |  | Genco Mare |  | 34,428 |  | 7/20/11 |  | 2011
Genco Spirit Limited |  | Genco Spirit |  | 34,432 |  | 11/10/11 |  | 2011
Genco Aquitaine Limited |  | Genco Aquitaine |  | 57,981 |  | 8/18/10 |  | 2009
Genco Ardennes Limited |  | Genco Ardennes |  | 57,981 |  | 8/31/10 |  | 2009
Genco Auvergne Limited |  | Genco Auvergne |  | 57,981 |  | 8/16/10 |  | 2009
Genco Bourgogne Limited |  | Genco Bourgogne |  | 57,981 |  | 8/24/10 |  | 2010
Genco Brittany Limited |  | Genco Brittany |  | 57,981 |  | 9/23/10 |  | 2010
Genco Languedoc Limited |  | Genco Languedoc |  | 57,981 |  | 9/29/10 |  | 2010
Genco Loire Limited |  | Genco Loire |  | 53,416 |  | 8/4/10 |  | 2009
Genco Lorraine Limited |  | Genco Lorraine |  | 53,416 |  | 7/29/10 |  | 2009
Genco Normandy Limited |  | Genco Normandy |  | 53,596 |  | 8/10/10 |  | 2007
Genco Picardy Limited |  | Genco Picardy |  | 55,257 |  | 8/16/10 |  | 2005
Genco Provence Limited |  | Genco Provence |  | 55,317 |  | 8/23/10 |  | 2004
Genco Pyrenees Limited |  | Genco Pyrenees |  | 57,981 |  | 8/10/10 |  | 2010
Genco Rhone Limited |  | Genco Rhone |  | 58,018 |  | 3/29/11 |  | 2011
Baltic Trading Limited (“Baltic Trading”) was a wholly-owned indirect subsidiary of GS&T until Baltic Trading completed its initial public offering, or IPO, on March 15, 2010. As of June 30, 2014 and December 31, 2013, Genco Investments LLC owned 6,356,471 shares of Baltic Trading’s Class B Stock, which represented an 11.04% and 11.05% ownership interest in Baltic Trading, respectively, and 65.06% and 65.08% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock, respectively. Additionally, pursuant to the subscription agreement between Genco Investments LLC and Baltic Trading, for so long as GS&T directly or indirectly holds at least 10% of the aggregate number of outstanding shares of Baltic Trading’s common stock and Class B stock, Genco Investments LLC will be entitled to receive an additional number of shares of Baltic Trading’s Class B stock equal to 2% of the number of common shares issued in the future, other than shares issued under Baltic Trading’s Equity Incentive Plans. Below is the list of Baltic Trading’s wholly owned ship-owning subsidiaries as of June 30, 2014:
Baltic Trading’s Wholly Owned Subsidiaries |  | Vessel Acquired |  | Dwt |  | Delivery Date |  | Year Built
Baltic Leopard Limited |  | Baltic Leopard |  | 53,447 |  | 4/8/10 |  | 2009
Baltic Panther Limited |  | Baltic Panther |  | 53,351 |  | 4/29/10 |  | 2009
Baltic Cougar Limited |  | Baltic Cougar |  | 53,432 |  | 5/28/10 |  | 2009
Baltic Jaguar Limited |  | Baltic Jaguar |  | 53,474 |  | 5/14/10 |  | 2009
Baltic Bear Limited |  | Baltic Bear |  | 177,717 |  | 5/14/10 |  | 2010
Baltic Wolf Limited |  | Baltic Wolf |  | 177,752 |  | 10/14/10 |  | 2010
Baltic Wind Limited |  | Baltic Wind |  | 34,409 |  | 8/4/10 |  | 2009
Baltic Cove Limited |  | Baltic Cove |  | 34,403 |  | 8/23/10 |  | 2010
Baltic Breeze Limited |  | Baltic Breeze |  | 34,386 |  | 10/12/10 |  | 2010
Baltic Fox Limited |  | Baltic Fox |  | 31,883 |  | 9/6/13 |  | 2010
Baltic Hare Limited |  | Baltic Hare |  | 31,887 |  | 9/5/13 |  | 2009
Baltic Lion Limited |  | Baltic Lion |  | 179,185 |  | 12/27/13 |  | 2012
Baltic Tiger Limited |  | Baltic Tiger |  | 179,185 |  | 11/26/13 |  | 2011
Baltic Hornet Limited |  | Baltic Hornet |  | 64,000 |  | Q3 2014 (1) |  | 2014 (1)
Baltic Wasp Limited |  | Baltic Wasp |  | 64,000 |  | Q4 2014 (1) |  | 2014 (1)
Baltic Scorpion Limited |  | Baltic Scorpion |  | 64,000 |  | Q2 2015 (1) |  | 2015 (1)
Baltic Mantis Limited |  | Baltic Mantis |  | 64,000 |  | Q3 2015 (1) |  | 2015 (1)
(1) Built dates and dates for vessels being delivered in the future are estimates based on the guidance received from the sellers and the respective shipyards. The Company provides technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”). Peter C. Georgiopoulos, Chairman of the Board of Directors of GS&T, controls and has a minority interest in MEP. These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services. The services are provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and were provided for an initial term of one year. MEP has the right to cancel provision of services on 60 days’ notice with payment of a one-year termination fee upon a change in control of the Company. The Company may terminate provision of the services at any time on 60 days’ notice.

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