Slide 1: Equity Committee Meeting
Preliminary and subject to changePrivileged and confidentialPrepared at the request of counsel Equity Committee MeetingMay 13, 2014 Genco Shipping & Trading Limited Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408
Slide 2: Company Overview
Preliminary and subject to changePrivileged and confidentialPrepared at the request of counsel Company Overview
Slide 3: Company Overview
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Company Overview Genco Shipping & Trading Limited, along with 57 direct and indirect subsidiaries, (“Genco” or the “Company”) is a leading provider of international seaborne transportation services for drybulk cargoT
Slide 4: Company Overview (cont.)
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Company Overview (cont.) While Genco’s management team has strong relationships with charter counterparties and a history of lean operations, the dry bulk market is commoditizedIndustry-wide, ownership of drybulk ves
Slide 5: Business Plan
Preliminary and subject to changePrivileged and confidentialPrepared at the request of counsel Business Plan
Slide 6: Business Plan Overview
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Overview The Company has prepared a Business Plan, built on a vessel-by-vessel basis, underlying the Prepack PlanThe primary operating assumptions include:Fleet: Consistent with prudent industry practice, the Company
Slide 7: Operating Assumptions (cont.)
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Operating Assumptions (cont.) Assumption FleetComposition As part of a fleet renewal program, the Company projects purchasing new comparable class replacement vessels whenever a currently owned vessel reaches its 20t
Slide 8: Operating Assumptions (cont.)
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Operating Assumptions (cont.) Assumption Service Revenue The Business Plan assumes continued service revenue from third party management agreements Fleet Utilization Utilization factor accounts for unplanned off-hire
Slide 9: Operating Assumptions (cont.)
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Operating Assumptions (cont.) Assumption G&A G&A is estimated based on historical expenses and the Company’s view of continued lean operationsThere are two fundamental components of G&ACore G&A (approximately $19mm p
Slide 10: Operating Assumptions: Drydock Projections
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Operating Assumptions Drydock Projections Drydock expenses are based on expected maintenance requirements corresponding to the age of the Company’s fleetThe Company negotiates directly with drydock yards and it’s int
Slide 11: Operating Projections
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Operating Projections
Slide 12: Levered Projections
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Levered Projections
Slide 13: Restructuring Background & Discussion
Preliminary and subject to changePrivileged and confidentialPrepared at the request of counsel Restructuring Background & Discussion
Slide 14: Restructuring Background
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Restructuring Background Potential covenant defaults under Prepetition Credit Facilities in 2011 & 2012 led to amendments, waivers of covenants and amortization holidaysDuring this process, the Company’s liquidity pr
Slide 15: Negotiation Summary & Consideration to Equity
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Negotiation Summary & Consideration to Equity Beginning in late 2013, the Company began organizing its secured creditors and an ad hoc group of convertible noteholders.Steering Committee of 2007 Facility Lenders$253
Slide 16: Negotiation Summary & Consideration to Equity
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Negotiation Summary & Consideration to Equity The negotiations were extensive. During this negotiation, the Company required various forbearances and waivers to avoid exercise of remedies and/or defaults which could
Slide 17: Negotiation Summary & Consideration to Equity (cont.)
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Negotiation Summary & Consideration to Equity (cont.) Initial negotiations with the 2007 Lenders in January had a significantly reduced recovery and impairment of all GUCs, including the Converts. The 2007 Lenders wo
Slide 18: Evaluation of Alternatives
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Evaluation of Alternatives The Company contemplated alternative restructuring approaches and believes the currently proposed plan (the “Prepack Plan”) maximizes value for all stakeholders and minimizes risk from a no
Slide 19: Evaluation of Alternatives (cont.)
rt Preliminary and subject to change Privileged and confident! ‘Subject FRE 408 Evaluation of Alternatives (cont.) = = Sale Alternative. Given negative publicity surrounding Company's financial situation, a sale process includes significant risks in maintaining or stabilizing operations (including r
Slide 20: Evaluation of Alternatives (cont.)
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Evaluation of Alternatives (cont.) Pursuing a protracted sales process as part of a bankruptcy case would jeopardize the consideration currently being offered to all stakeholders under the Prepack Plan, including the
Slide 21: Material Risk of Ongoing Business Disruption
a Material Risk of Ongoing Business Disruption Preliminary and subject to change Privileged and confident! ‘Subject FRE 408 Prior to the Chapter 11 case, the Company suffered business disruption — including difficulties with its charter parties — the key source of operating revenues. International c
Slide 22: Financing Discussion
Preliminary and subject to changePrivileged and confidentialPrepared at the request of counsel Financing Discussion
Slide 23: Financing Summary
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 Financing Summary As part of the restructuring process, the Company and its advisors evaluated the post-reorganization capital structureThe Company initially entertained a 50% loan to vessel value capital structure t
Slide 24: Concluding Remarks
Preliminary and subject to changePrivileged and confidentialPrepared at the request of counsel Concluding Remarks
Slide 25: The Prepack Plan offers significant benefit for all stakeholders
* Preliminary and subject to changePrivileged and confidentialSubject to F.R.E. 408 The Prepack Plan offers significant benefit for all stakeholders including the Existing EquityAvoids disruption to international operationsDramatically delevers balance sheet and positions the Company to compete in a