Genco Shipping buys used but young vessels, and then contracts them out to customers for periods of one to four years for a fixed daily fee. Unlike many of its competitors, which focus on building up a fleet of just one or two ship types, Genco evaluates a ship on its value in and of itself, not on its type. Each ship is capable of carrying a different amount of cargo, with a Capesize vessel capable of moving six times as much cargo as a Handysize vessel. Being larger is not always better, however. A large ship like the Capesize can only be accommodated by the largest deep water terminals, while a Handysize vessel can access nearly all ports. Therefore, although rates for dry bulk ships tend to move together, they do vary by vessel type. Having a diversified fleet lets Genco minimize volatility in its revenues. Genco has also made the choice, which it may later change, to make time charters rather than running its ships on the spot market. On the spot market, a company can contract out its ship for a single voyage based on current charter rates on the Baltic Dry Indeix (BDI). The BDI is a daily average of the prices required by shipping companies on the Baltic Exchange to transport raw materials across the sea. The Baltic Exchange is a global marketplace for brokering dry cargo shipping contracts. Long term contracts avoid the risks, but also the potential profits to be made on the spot market. In a time charter, Genco loans its ships to another company for a fixed daily fee. Genco is responsible for managing the ship and its crew during that time, but has no control over how its ship is used, aside from terms set in the charter contract. Genco does not manage its ships directly, preferring to contract technical managers from companies in the business of taking care of the day to day activities of dry cargo vessels.
Genco Shipping & Trading Limited (NYSE: GNK) 72.3% HIGHER; announced that it has entered into agreements with 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, for the purchase of an aggregate of up to $125 million of Series A Preferred Stock of the Company at a price of $4.85 per share. http://www.streetinsider.com/Specia...her;+(ALNY)+(INVT)+(TWTR)+Lower/12110788.html
