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EX-10.7 - EX-10.7 - GENCO SHIPPING & TRADING LTDa14-19931_1ex10d7.htm
EX-31.1 - EX-31.1 - GENCO SHIPPING & TRADING LTDa14-19931_1ex31d1.htm
EX-10.6 - EX-10.6 - GENCO SHIPPING & TRADING LTDa14-19931_1ex10d6.htm
EX-10.10 - EX-10.10 - GENCO SHIPPING & TRADING LTDa14-19931_1ex10d10.htm
EX-10.12 - EX-10.12 - GENCO SHIPPING & TRADING LTDa14-19931_1ex10d12.htm
EX-10.9 - EX-10.9 - GENCO SHIPPING & TRADING LTDa14-19931_1ex10d9.htm
EX-31.2 - EX-31.2 - GENCO SHIPPING & TRADING LTDa14-19931_1ex31d2.htm
EX-10.11 - EX-10.11 - GENCO SHIPPING & TRADING LTDa14-19931_1ex10d11.htm
EX-10.8 - EX-10.8 - GENCO SHIPPING & TRADING LTDa14-19931_1ex10d8.htm
EX-32.2 - EX-32.2 - GENCO SHIPPING & TRADING LTDa14-19931_1ex32d2.htm
EXCEL - IDEA: XBRL DOCUMENT - GENCO SHIPPING & TRADING LTDFinancial_Report.xls

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2014

 

OR

 

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from           to

 

Commission file number 000-51442

 


 

GENCO SHIPPING & TRADING LIMITED

(Exact name of registrant as specified in its charter)

 

Republic of the Marshall Islands

 

 

 

98-043-9758

(State or other jurisdiction of

 

 

 

(I.R.S. Employer

incorporation or organization)

 

 

 

Identification No.)

 

299 Park Avenue, 12th Floor, New York, New York 10171

(Address of principal executive offices) (Zip Code)

 

(646) 443-8550

(Registrant’s telephone number, including area code)

 


 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o

 

Accelerated filer x

 

 

 

Non-accelerated filer o

 

Smaller reporting company o

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes x No o

 

The number of shares outstanding of each of the issuer’s classes of common stock, as of November 17, 2014: Common stock, $0.01 per share — 61,541,389 shares.

 

 

 



Table of Contents

 

Genco Shipping & Trading Limited

 

 

 

Page

 

 

 

PART I — FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements (unaudited)

 

 

 

 

 

a)

Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013

1

 

 

 

 

 

b)

Condensed Consolidated Statements of Operations

2

 

 

 

 

 

c)

Condensed Consolidated Statements of Comprehensive (Loss) Income

4

 

 

 

 

 

d)

Condensed Consolidated Statements of Equity

5

 

 

 

 

 

e)

Condensed Consolidated Statements of Cash Flows

7

 

 

 

 

 

f)

Notes to Condensed Consolidated Financial Statements

8

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

43

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

69

 

 

 

 

Item 4.

Controls and Procedures

71

 

 

 

PART II —OTHER INFORMATION

 

 

 

 

 

Item 1.

Legal Proceedings

71

 

 

 

 

Item 6.

Exhibits

72

 

ii



Table of Contents

 

Website Information

 

We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor section. Accordingly, investors should monitor the Investor portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please submit your e-mail address at the Investor Relations Home page of the Investor section of our website. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

 

iii



Table of Contents

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

Genco Shipping & Trading Limited

Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013

(U.S. Dollars in thousands, except for share and per share data)

(Unaudited)

 

 

 

Successor

 

Predecessor

 

 

 

September 30,
2014

 

December 31,
2013

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

106,620

 

$

122,722

 

Restricted cash

 

9,850

 

9,850

 

Due from charterers, net of a reserve of $1,576 and $632, respectively

 

15,594

 

14,241

 

Prepaid expenses and other current assets

 

25,240

 

19,065

 

Time charters acquired

 

16

 

 

Total current assets

 

157,320

 

165,878

 

 

 

 

 

 

 

Noncurrent assets:

 

 

 

 

 

Vessels, net of accumulated depreciation of $17,215 and $730,662, respectively

 

1,522,106

 

2,673,795

 

Deposits on vessels

 

31,396

 

1,013

 

Deferred drydock, net of accumulated amortization of $69 and $11,107, respectively

 

3,096

 

11,069

 

Deferred financing costs, net of accumulated amortization of $2,562 and $22,279, respectively

 

6,691

 

22,011

 

Fixed assets, net of accumulated depreciation and amortization of $66 and $3,438, respectively

 

646

 

5,104

 

Other noncurrent assets

 

514

 

514

 

Restricted cash

 

300

 

300

 

Investments

 

38,463

 

77,570

 

Goodwill

 

166,067

 

 

Total noncurrent assets

 

1,769,279

 

2,791,376

 

 

 

 

 

 

 

Total assets

 

$

1,926,599

 

$

2,957,254

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

$

36,949

 

$

27,359

 

Current portion of long-term debt

 

32,242

 

1,316,439

 

Current interest payable

 

 

13,199

 

Convertible senior note payable

 

 

115,881

 

Deferred revenue

 

893

 

1,597

 

Current portion of lease obligations

 

 

176

 

Fair value of derivative instruments

 

 

6,975

 

Total current liabilities:

 

70,084

 

1,481,626

 

 

 

 

 

 

 

Noncurrent liabilities:

 

 

 

 

 

Long-term lease obligations

 

186

 

3,114

 

Time charters acquired

 

 

84

 

Long-term debt

 

372,803

 

163,625

 

Total noncurrent liabilities

 

372,989

 

166,823

 

 

 

 

 

 

 

Total liabilities

 

443,073

 

1,648,449

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

Genco Shipping & Trading Limited shareholders’ equity:

 

 

 

 

 

Predecessor Company common stock, par value $0.01; 100,000,000 shares authorized; 44,449,407 shares issued and outstanding at December 31, 2013

 

 

445

 

Predecessor Company additional paid-in capital

 

 

846,658

 

Successor Company common stock, par value $0.01; 250,000,000 shares authorized; 61,410,372 shares issued and outstanding at September 30, 2014

 

614

 

 

Successor Company additional paid-in capital

 

1,239,439

 

 

Accumulated other comprehensive (loss) income

 

(13,341

)

53,722

 

Retained (deficit) earnings

 

(18,290

)

66,644

 

Total Genco Shipping & Trading Limited shareholders’ equity

 

1,208,422

 

967,469

 

Noncontrolling interest

 

275,104

 

341,336

 

Total equity

 

1,483,526

 

1,308,805

 

 

 

 

 

 

 

Total liabilities and equity

 

$

1,926,599

 

$

2,957,254

 

 

See accompanying notes to condensed consolidated financial statements.

 

1



Table of Contents

 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Operations

(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)

(Unaudited)

 

 

 

Successor

 

 

Predecessor

 

 

 

Period from
July 9 to
September 30,
2014

 

 

Period from
July 1 to July 9,
2014

 

Three Months
Ended
September 30,
2013

 

Revenues:

 

 

 

 

 

 

 

 

Voyage revenues

 

$

43,943

 

 

$

4,034

 

$

58,605

 

Service revenues

 

756

 

 

72

 

828

 

 

 

 

 

 

 

 

 

 

Total revenues

 

44,699

 

 

4,106

 

59,433

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Voyage expenses

 

2,335

 

 

200

 

2,212

 

Vessel operating expenses

 

27,248

 

 

2,902

 

27,515

 

General, administrative, and management fees

 

15,492

 

 

6,147

 

7,871

 

Depreciation and amortization

 

17,356

 

 

3,213

 

35,222

 

Other operating income

 

(296

)

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

62,135

 

 

12,462

 

72,820

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(17,436

)

 

(8,356

)

(13,387

)

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

Other income (expense)

 

7

 

 

1

 

(45

)

Interest income

 

19

 

 

 

14

 

Interest expense

 

(3,592

)

 

(1,529

)

(23,079

)

 

 

 

 

 

 

 

 

 

Other expense

 

(3,566

)

 

(1,528

)

(23,110

)

 

 

 

 

 

 

 

 

 

Loss before reorganization items, net

 

(21,002

)

 

(9,884

)

(36,497

)

Reorganization items, net

 

(1,167

)

 

902,273

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income taxes

 

(22,169

)

 

892,389

 

(36,497

)

Income tax expense

 

(393

)

 

(38

)

(479

)

 

 

 

 

 

 

 

 

 

Net (loss) income

 

(22,562

)

 

892,351

 

(36,976

)

Less: Net loss attributable to noncontrolling interest

 

(4,272

)

 

(568

)

(1,942

)

Net (loss) income attributable to Genco Shipping & Trading Limited

 

$

(18,290

)

 

$

892,919

 

$

(35,034

)

 

 

 

 

 

 

 

 

 

Net (loss) earnings per share-basic

 

$

(0.30

)

 

$

20.49

 

$

(0.81

)

Net (loss) earnings per share-diluted

 

$

(0.30

)

 

$

20.49

 

$

(0.81

)

Weighted average common shares outstanding-basic

 

60,299,766

 

 

43,568,942

 

43,231,510

 

Weighted average common shares outstanding-diluted

 

60,299,766

 

 

43,568,942

 

43,231,510

 

Dividends declared per share

 

$

 

 

$

 

$

 

 

See accompanying notes to condensed consolidated financial statements.

 

2



Table of Contents

 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Operations

(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)

(Unaudited)

 

 

 

Successor

 

 

Predecessor

 

 

 

Period from
July 9 to
September 30,
2014

 

 

Period from
January 1 to
July 9,
2014

 

Nine Months
Ended
September 30,
2013

 

Revenues:

 

 

 

 

 

 

 

 

Voyage revenues

 

$

43,943

 

 

$

118,759

 

$

143,222

 

Service revenues

 

756

 

 

1,701

 

2,457

 

 

 

 

 

 

 

 

 

 

Total revenues

 

44,699

 

 

120,460

 

145,679

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Voyage expenses

 

2,335

 

 

4,140

 

6,352

 

Vessel operating expenses

 

27,248

 

 

64,670

 

81,400

 

General, administrative, and management fees

 

15,492

 

 

31,371

 

24,543

 

Depreciation and amortization

 

17,356

 

 

75,952

 

104,322

 

Other operating income

 

(296

)

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

62,135

 

 

176,133

 

216,617

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(17,436

)

 

(55,673

)

(70,938

)

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

Other income (expense)

 

7

 

 

(106

)

(58

)

Interest income

 

19

 

 

45

 

49

 

Interest expense

 

(3,592

)

 

(41,061

)

(65,922

)

 

 

 

 

 

 

 

 

 

Other expense

 

(3,566

)

 

(41,122

)

(65,931

)

 

 

 

 

 

 

 

 

 

Loss before reorganization items, net

 

(21,002

)

 

(96,795

)

(136,869

)

Reorganization items, net

 

(1,167

)

 

882,167

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income taxes

 

(22,169

)

 

785,372

 

(136,869

)

Income tax expense

 

(393

)

 

(815

)

(997

)

 

 

 

 

 

 

 

 

 

Net (loss) income

 

(22,562

)

 

784,557

 

(137,866

)

Less: Net loss attributable to noncontrolling interest

 

(4,272

)

 

(8,734

)

(9,300

)

Net (loss) income attributable to Genco Shipping & Trading Limited

 

$

(18,290

)

 

$

793,291

 

$

(128,566

)

 

 

 

 

 

 

 

 

 

Net (loss) earnings per share-basic

 

$

(0.30

)

 

$

18.21

 

$

(2.98

)

Net (loss) earnings per share-diluted

 

$

(0.30

)

 

$

18.21

 

$

(2.98

)

Weighted average common shares outstanding-basic

 

60,299,766

 

 

43,568,942

 

43,196,895

 

Weighted average common shares outstanding-diluted

 

60,299,766

 

 

43,568,942

 

43,196,895

 

Dividends declared per share

 

$

 

 

$

 

$

 

 

See accompanying notes to condensed consolidated financial statements.

 

3



Table of Contents

 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Comprehensive (Loss) Income

(U.S. Dollars in Thousands)

(Unaudited)

 

 

 

Successor

 

 

Predecessor

 

 

 

Period from
July 9 to
September 30,
2014

 

 

Period from
July 1 to July 9,
2014

 

Three Months
Ended
September 30,
2013

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(22,562

)

 

$

892,351

 

$

(36,976

)

 

 

 

 

 

 

 

 

 

Change in unrealized (loss) gain on investments

 

(13,341

)

 

2,186

 

14,514

 

Unrealized gain on cash flow hedges, net

 

 

 

95

 

2,076

 

Other comprehensive (loss) income

 

(13,341

)

 

2,281

 

16,590

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income

 

(35,903

)

 

894,632

 

(20,386

)

Less: Comprehensive loss attributable to noncontrolling interest

 

(4,272

)

 

(568

)

(1,942

)

Comprehensive (loss) income attributable to Genco Shipping & Trading Limited

 

$

(31,631

)

 

$

895,200

 

$

(18,444

)

 

 

 

Successor

 

 

Predecessor

 

 

 

Period from
July 9 to
September 30,
2014

 

 

Period from
January 1 to
July 9,
2014

 

Nine Months
Ended
September 30,
2013

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(22,562

)

 

$

784,557

 

$

(137,866

)

 

 

 

 

 

 

 

 

 

Change in unrealized (loss) gain on investments

 

(13,341

)

 

(25,766

)

20,841

 

Unrealized gain on cash flow hedges, net

 

 

 

2,401

 

6,763

 

Other comprehensive (loss) income

 

(13,341

)

 

(23,365

)

27,604

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income

 

(35,903

)

 

761,192

 

(110,262

)

Less: Comprehensive loss attributable to noncontrolling interest

 

(4,272

)

 

(8,734

)

(9,300

)

Comprehensive (loss) income attributable to Genco Shipping & Trading Limited

 

$

(31,631

)

 

$

769,926

 

$

(100,962

)

 

See accompanying notes to condensed consolidated financial statements.

 

4



Table of Contents

 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Equity

(U.S. Dollars in Thousands)

(Unaudited)

 

 

 

Common
Stock

 

Additional
Paid-in
Capital

 

Accumulated
Other
Comprehensive
(Loss)
Income

 

Retained
(Deficit)
Earnings

 

Genco
Shipping &
Trading
Limited
Shareholders’
Equity

 

Noncontrolling
Interest

 

Total Equity

 

Balance — January 1, 2014 (Predecessor)

 

$

445

 

$

846,658

 

$

53,722

 

$

66,644

 

$

967,469

 

$

341,336

 

$

1,308,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, exclusive of net gain from fresh-start adjustments

 

 

 

 

 

 

 

(124,107

)

(124,107

)

(8,734

)

(132,841

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on investments

 

 

 

 

 

(25,766

)

 

 

(25,766

)

 

(25,766

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on cash flow hedges, net

 

 

 

 

 

2,401

 

 

 

2,401

 

 

2,401

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonvested stock amortization

 

 

 

2,403

 

 

 

 

 

2,403

 

1,949

 

4,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends paid by Baltic Trading Limited

 

 

 

(5

)

 

 

 

 

(5

)

(2,041

)

(2,046

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted shares issued by Baltic Trading Limited

 

 

 

74

 

 

 

 

 

74

 

(74

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal — July 9, 2014 (Predecessor)

 

$

445

 

$

849,130

 

$

30,357

 

$

(57,463

)

$

822,469

 

$

332,436

 

$

1,154,905

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain from fresh-start adjustments (see Note 20)

 

 

 

 

 

 

 

917,399

 

917,399

 

 

917,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — July 9, 2014 (Predecessor)

 

$

445

 

$

849,130

 

$

30,357

 

$

859,936

 

$

1,739,868

 

$

332,436

 

$

2,072,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fresh-start adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of Predecessor common stock

 

(445

)

(849,130

)

 

 

 

 

(849,575

)

 

(849,575

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of Predecessor accumulated deficit and accumulated other comprehensive income

 

 

 

 

 

(30,357

)

(859,936

)

(890,293

)

 

(890,293

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination of Predecessor non-controlling interest

 

 

 

 

 

 

 

 

 

 

(332,436

)

(332,436

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of new equity interests in connection with emergence from Chapter 11, including the $100 million Rights Offering

 

603

 

1,232,397

 

 

 

 

 

1,233,000

 

 

1,233,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revaluation of non-controlling interest

 

 

 

 

 

 

 

 

 

 

279,069

 

279,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — July 9, 2014 (Successor)

 

$

603

 

$

1,232,397

 

$

 

$

 

$

1,233,000

 

$

279,069

 

$

1,512,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

(18,290

)

(18,290

)

(4,272

)

(22,562

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on investments

 

 

 

 

 

(13,341

)

 

 

(13,341

)

 

(13,341

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 1,110,600 shares of nonvested stock

 

11

 

(11

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonvested stock amortization

 

 

 

7,054

 

 

 

 

 

7,054

 

818

 

7,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends paid by Baltic Trading Limited

 

 

 

(1

)

 

 

 

 

(1

)

(511

)

(512

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — September 30, 2014 (Successor)

 

$

614

 

$

1,239,439

 

$

(13,341

)

$

(18,290

)

$

1,208,422

 

$

275,104

 

$

1,483,526

 

 

5



Table of Contents

 

 

 

Common
Stock

 

Additional
Paid-in
Capital

 

Accumulated
Other
Comprehensive
(Loss)
Income

 

Retained
(Deficit)
Earnings

 

Genco
Shipping &
Trading
Limited
Shareholders’
Equity

 

Noncontrolling
Interest

 

Total Equity

 

Balance — January 1, 2013 (Predecessor)

 

$

443

 

$

863,303

 

$

(11,841

)

$

214,391

 

$

1,066,296

 

$

194,911

 

$

1,261,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

(128,566

)

(128,566

)

(9,300

)

(137,866

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gain on investments

 

 

 

 

 

20,841

 

 

 

20,841

 

 

20,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on cash flow hedges, net

 

 

 

 

 

6,763

 

 

 

6,763

 

 

6,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 200,634 shares of nonvested stock, less forfeitures of 21,500 shares

 

2

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonvested stock amortization

 

 

 

2,314

 

 

 

 

 

2,314

 

1,156

 

3,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock of Baltic Trading Limited

 

 

 

(16,568

)

 

 

 

 

(16,568

)

97,609

 

81,041

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends paid by Baltic Trading Limited

 

 

 

 

 

 

 

(4

)

(4

)

(580

)

(584

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted shares issued by Baltic Trading Limited

 

 

 

(26

)

 

 

 

 

(26

)

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — September 30, 2013 (Predecessor)

 

$

445

 

$

849,021

 

$

15,763

 

$

85,821

 

$

951,050

 

$

283,822

 

$

1,234,872

 

 

See accompanying notes to condensed consolidated financial statements.

 

6



Table of Contents

 

Genco Shipping & Trading Limited

Condensed Consolidated Statements of Cash Flows

(U.S. Dollars in Thousands)

(Unaudited)

 

 

 

Successor

 

 

Predecessor

 

 

 

Period from
July 9 to
September 30,
2014

 

 

Period from
January 1 to
July 9,
2014

 

Nine Months
Ended
September 30,
2013

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(22,562

)

 

$

784,557

 

$

(137,866

)

Adjustments to reconcile net (loss) income to net cash used in operating activities:

 

 

 

 

 

 

 

 

Non-cash reorganization items and fresh-start accounting adjustments, net

 

 

 

(917,399

)

 

Depreciation and amortization

 

17,356

 

 

75,952

 

104,322

 

Amortization of deferred financing costs

 

384

 

 

4,461

 

6,862

 

Amortization of time charters acquired

 

434

 

 

(68

)

(283

)

Amortization of discount on Convertible Senior Notes

 

 

 

1,592

 

3,653

 

Interest expense related to the de-designation of the interest rate swap

 

 

 

1,048

 

 

Unrealized loss on derivative instruments

 

 

 

 

3

 

Amortization of nonvested stock compensation expense

 

7,872

 

 

4,352

 

3,470

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in due from charterers

 

(2,400

)

 

1,047

 

(3,066

)

Decrease (increase) in prepaid expenses and other current assets

 

5,519

 

 

(11,735

)

(244

)

(Decrease) increase in accounts payable and accrued expenses

 

(27,998

)

 

32,534

 

146

 

(Decrease) increase in deferred revenue

 

(104

)

 

(600

)

98

 

Increase in lease obligations

 

186

 

 

195

 

152

 

Deferred drydock costs incurred

 

(2,977

)

 

(9,253

)

(1,873

)

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

(24,290

)

 

(33,317

)

(24,626

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of vessels, including deposits

 

(918

)

 

(29,995

)

(41,097

)

Purchase of other fixed assets

 

(30

)

 

(415

)

(427

)

Changes in deposits of restricted cash

 

125

 

 

(125

)

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(823

)

 

(30,535

)

(41,524

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayments on the $100 Million Term Loan Facility

 

(1,923

)

 

(3,846

)

 

Repayments on the $253 Million Term Loan Facility

 

 

 

(10,150

)

 

Proceeds on the 2010 Baltic Trading Credit Facility

 

 

 

 

1,000

 

Proceeds from the Baltic Trading $22 Million Term Loan Facility

 

 

 

 

22,000

 

Repayments on the Baltic Trading $22 Million Term Loan Facility

 

(375

)

 

(750

)

 

Repayments on the Baltic Trading $44 Million Term Loan Facility

 

(688

)

 

(1,375

)

 

Payment of dividend by subsidiary

 

(512

)

 

(2,046

)

(584

)

Cash settlement of non-accredited Note holders

 

(375

)

 

 

 

Proceeds from Rights Offering

 

 

 

100,000

 

 

Proceeds from issuance of common stock by subsidiary

 

 

 

 

81,700

 

Payment of common stock issuance costs by subsidiary

 

 

 

(111

)

(379

)

Payment of deferred financing costs

 

(471

)

 

(4,515

)

(695

)

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

(4,344

)

 

77,207

 

103,042

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

(29,457

)

 

13,355

 

36,892

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

136,077

 

 

122,722

 

72,600

 

Cash and cash equivalents at end of period

 

$

106,620

 

 

$

136,077

 

$

109,492

 

 

See accompanying notes to condensed consolidated financial statements.

 

7



Table of Contents

 

Genco Shipping & Trading Limited

(U.S. Dollars in Thousands, Except Per Share and Share Data)

Notes to Condensed Consolidated Financial Statements (unaudited)

 

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 September 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 September 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 implemented a Prepackaged Plan of Reorganization of the Debtors Pursuant to Chapter 11 of the Bankruptcy Code (the “Prepack Plan”) 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 Company subsequently emerged from bankruptcy on July 9, 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 Aquitaine 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”); and

 

·                  the outstanding interest rate swap with DnB NOR Bank, relating to a liability position of $5,622.

 

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 were 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.

 

8



Table of Contents

 

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.  References to “Successor Company” refer to the Company after July 9, 2014, after giving effect to the application of fresh-start reporting (see “Financial Statement Presentation” section below).  References to “Predecessor Company” refer to the Company prior to July 9, 2014.

 

Key components of the Plan included:

 

·                  The conversion of 100% of the Claims under the 2007 Credit Facility into 81.1% of the Successor Company 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 Successor Company 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 Successor Company Common Stock, in which holders of 2007 Credit Facility Claims were entitled to subscribe for up to 80% of the Successor Company Common Stock offered, and holders of the 2010 Notes Claims were entitled to subscribe for up to 20% of the Successor Company Common Stock being offered under the Rights Offering 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 common stock of the Predecessor Company as of the Effective Date, with the holders thereof receiving warrants to acquire shares of the Successor Company Common Stock. Each of the Successor Company’s Equity Warrants is exercisable for one share of the Successor Company’s Common Stock, and holders received an aggregate of 3,938,298 of the Successor Company’s Equity Warrants for the common stock of the Predecessor Company. The Successor Company’s Equity Warrants in the aggregate are exercisable for approximately 6% of the Successor Company 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.

 

·                  The establishment of the Genco Shipping & Trading Limited 2014 Management Incentive Plan (the “MIP”), which provides for the distribution of the Successor Company’s MIP Primary Equity in the form of shares representing 1.8% of the Successor Company’s Common Stock and three tiers of the Successor Company’s MIP Warrants (“MIP Warrants”) with staggered strike prices based on increasing equity values to the participating officers, directors, and other management of the Successor Company. These awards were made on August 7, 2014.  Refer to Note 22 — Stock-Based Compensation.

 

Registration Rights Agreement

 

On the Effective Date, the Successor Company 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 the Successor Company’s Common Stock under the Plan with demand and piggyback registration rights. All other Registration Rights Parties have piggyback registration rights only.

 

9



Table of Contents

 

Reorganization Value

 

The Plan as confirmed by the Bankruptcy Court estimated the reorganization value of the Debtors to be $1.23 billion. This reorganization value was determined by, among other things, vessel appraisals and other valuation methodologies as well as the Debtors’ equity interests in Baltic Trading and Jinhui Shipping, $100,000 of cash invested through the Rights Offering and approximately $250,000 of debt projected to be on the balance sheet of the Debtors. It also assumed that The Debtors would issue approximately 61.7 million primary shares of New Genco Common Stock valued at $20.00 per share (prior to dilution) in order to satisfy claims pursuant to the Plan.

 

The foregoing estimates of the post-confirmation equity value of the Debtors and the share price of New Genco Common Stock were based on a number of assumptions, including no material adverse changes in the spot rate market, no further ship arrests, the continuing employment of the Debtors’ vessels, the continuing service revenue from Baltic Trading and MEP, the Rights Offering, and other assumptions. Such valuation assumptions are not a prediction or reflection of postconfirmation trading prices of the Debtors’ common stock. Such securities may trade at substantially lower or higher prices because of a number of factors. The trading prices of securities issued under a plan of reorganization are subject to many unforeseen circumstances and therefore cannot be predicted.

 

Successor Company Equity Warrant Agreement

 

On the Effective Date, pursuant to the Plan, the Successor Company’s Equity Warrants totaling 3,938,298 were issued pursuant to the terms of the Successor Company’s Equity Warrant Agreement (the “Equity Warrants”). Each of the Equity Warrants has a 7-year term (commencing on the day following the Effective Date) and are exercisable for one share of the Successor Company’s Common Stock. The Equity Warrants are exercisable on a cashless basis at an exercise price of $20.99 per share. The Successor Company’s 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 Equity Warrants were distributed to holders of the common stock of the Predecessor Company, which was cancelled as of the Effective Date. Shares of common stock of the Predecessor 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 Equity Warrants received in exchange were therefore deemed vested.  Refer to Note 22 — Stock-Based Compensation for further information.

 

Financial Statement Presentation

 

Upon the Company’s emergence from the Chapter 11 Cases on July 9, 2014, the Company adopted fresh-start accounting in accordance with provisions of ASC 852, Reorganizations (“ASC 852”).  Upon adoption of fresh-start accounting, the Company’s assets and liabilities were recorded at their value as of the fresh-start reporting date.  The fair values of the Company’s assets and liabilities in conformance with ASC 805, Business Combinations, as of that date differed materially from the recorded values of its assets and liabilities as reflected in its historical consolidated financial statements.  In addition, the Company’s adoption 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 adopted fresh-start accounting.  As a result of the adoption of fresh-start reporting, the Company’s condensed consolidated balance sheets and condensed consolidated statements of operations subsequent to July 9, 2014 will not be comparable in many respects to our condensed consolidated balance sheets and condensed consolidated statements of operations prior to July 9, 2014.

 

Under ASC 852, fresh-start accounting is required upon emergence from Chapter 11 if (i) the value of the assets of the emerging entity immediately before the date of confirmation is less than the total of all post-petition liabilities and allowed claims; and (ii) holders of existing voting shares immediately before confirmation receive less than 50% of the voting shares of the emerging entity.  Accordingly, the Company qualified for and adopted fresh-start accounting as of the Effective Date. Adopting fresh-start accounting results in a new reporting entity with no beginning retained earnings or deficit. The cancellation of all existing shares outstanding on the Effective Date and issuance of new shares of the reorganized entity caused a related change of control of the Company under ASC 852.

 

The following fresh-start balance sheet illustrates the financial effects on the Company of the implementation of the Plan and the adoption of fresh-start reporting.  This fresh-start balance sheet reflects the effect of the completion of the transactions included in the Plan, including the issuance of equity and the settlement of old indebtedness.

 

The effects of the Plan and fresh-start reporting on the Company’s condensed consolidated balance sheet are as follows:

 

10



Table of Contents

 

 

 

Fresh-Start Adjustments

 

 

 

Predecessor
July 9,
2014

 

Debt Discharge
and Equity
Issuance (a)

 

Reinstatement of
Liabilities (b)

 

Revaluation of
Assets and
Liabilities (c)

 

Successor
July 9,
2014

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

48,551

 

$

87,526

 

$

 

$

 

$

136,077

 

Restricted cash

 

9,975

 

 

 

 

9,975

 

Due from charterers, net

 

13,194

 

 

 

 

13,194

 

Prepaid expenses and other current assets

 

30,800

 

 

 

(41

)

30,759

 

Time charters acquired

 

 

 

 

450

 

450

 

Total current assets

 

102,520

 

87,526

 

 

409

 

190,455

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent assets:

 

 

 

 

 

 

 

 

 

 

 

Vessels, net

 

2,604,731

 

 

 

(1,065,882

)

1,538,849

 

Deposits on vessels

 

28,658

 

 

 

2,317

 

30,975

 

Deferred drydock, net

 

16,584

 

 

 

(16,396

)

188

 

Deferred financing costs, net

 

18,953

 

(11,893

)

 

 

7,060

 

Fixed assets, net

 

4,053

 

 

 

(3,443

)

610

 

Other noncurrent assets

 

514

 

 

 

 

514

 

Restricted cash

 

300

 

 

 

 

300

 

Investments

 

51,804

 

 

 

 

51,804

 

Goodwill

 

 

 

 

166,067

 

166,067

 

Total noncurrent assets

 

2,725,597

 

(11,893

)

 

(917,337

)

1,796,367

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,828,117

 

$

75,633

 

$

 

$

(916,928

)

$

1,986,822

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities not subject to compromise:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

60,333

 

$

(1,086

)

$

6,478

 

$

 

$

65,725

 

Current portion of long-term debt

 

4,250

 

 

27,992

 

 

32,242

 

Deferred revenue

 

997

 

 

 

 

997

 

Time charters acquired

 

16

 

 

 

(16

)

 

Total current liabilities not subject to compromise

 

65,596

 

(1,086

)

34,470

 

(16

)

98,964

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent liabilities not subject to compromise:

 

 

 

 

 

 

 

 

 

 

 

Long-term lease obligations

 

2,670

 

 

 

(2,670

)

 

Long-term debt

 

161,500

 

 

214,289

 

 

375,789

 

Total noncurrent liabilities not subject to compromises

 

164,170

 

 

214,289

 

(2,670

)

375,789

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities subject to compromise

 

1,443,446

 

(1,194,687

)

(248,759

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

1,673,212

 

(1,195,773

)

 

(2,686

)

474,753

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

Genco Shipping & Trading Limited shareholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

Predecessor Common stock

 

445

 

(445

)

 

 

 

Predecessor Additional paid-in capital

 

849,130

 

(849,130

)

 

 

 

Successor Common stock

 

 

603

 

 

 

603

 

Successor Additional paid-in capital

 

 

1,232,397

 

 

 

1,232,397

 

Accumulated other comprehensive income

 

30,357

 

4,574

 

 

(34,931

)

 

Retained (deficit) earnings

 

(57,463

)

936,774

 

 

(879,311

)

 

Total Genco Shipping & Trading Limited shareholders’ equity

 

822,469

 

1,324,773

 

 

(914,242

)

1,233,000

 

Noncontrolling interest

 

332,436

 

(53,367

)

 

 

279,069

 

Total equity

 

1,154,905

 

1,271,406

 

 

(914,242

)

1,512,069

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

2,828,117

 

$

75,633

 

$

 

$

(916,928

)

$

1,986,822

 

 

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Table of Contents

 

(a)         Debt Discharge and Equity Issuance — This column reflects the following adjustments pursuant to the Plan:

 

·                  The discharge of the outstanding debt under the 2007 Credit Facility of $1,055,912.

 

·                  The discharge of the long-term interest payable due pursuant to the 2007 Credit Facility of $13,199.

 

·                  The discharge of the 2010 Notes liability of $117,473 and the bond coupon interest of $1,105.

 

·                  Receipt of the $100,000 rights offering pursuant to the Plan.

 

·                  The payment of interest expense accrued up until the Effective Date of $1,772, $59 and $156 for the 2007 Credit Facility, the $100 Million Term Loan Facility and the $253 Million Term Loan Facility, respectively.

 

·                  The paydown on the Effective Date of $1,923 and $5,075 for the $100 Million Term Loan Facility and $253 Million Term Loan Facility, respectively, which were due on the Effective Date as they were not paid during the pendency of the Chapter 11 Cases.

 

·                  The adjustment of net unamortized deferred financing fees of $15,383 for the 2007 Credit Facility, the 2010 Notes as well as the $100 Million and $253 Million Term Loan Facilities prior to the amendments and restatements as per the Plan.

 

·                  The payment of deferred financing fees of $3,490 for the Amended and Restated $100 Million and $253 Million Term Loan Facilities.

 

·                  Adjustment of equity of $1,271,406 to adjust for the cancellation of the old equity of the Predecessor Company and the issuance of the new equity for the Successor Company.

 

(b)         Reinstatement of Liabilities — This column reflects the reinstatement of the remaining Liabilities subject to compromise for the Predecessor Company which were not already adjusted in the Debt Discharge and Equity Issuance column.  It includes the following adjustments:

 

·                  The reclassification of the debt outstanding under the Amended and Restated $100 Million Term Loan Facility.  This includes $7,692 of current long-term debt and $63,946 of long-term debt.

 

·                  The reclassification of the debt outstanding under the Amended and Restated $253 Million Term Loan Facility.  This includes $20,300 of current long-term debt and $150,343 of long-term debt.

 

·                  The reinstatement of $5,622 related to the termination of the interest rate swap agreement with DnB Nor.

 

·                  The reinstatement of the $815 lease obligation.

 

·                  The reinstatement of $41 of pre-petition accounts payable due to vendors in the United States.

 

(c)          Revaluation of Assets and Liabilities — Fresh-start accounting adjustments are made to reflect asset values at their estimated fair value, including:

 

·                  Adjustment of $179 to prepaid amounts for the Predecessor Company.

 

·                  Adjustment to reflect the fair value of time charters acquired of $434.

 

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Table of Contents

 

·                  Adjustment of $1,083,404 to reflect the fair value of vessel assets, vessel deposits, drydocking assets and other fixed assets as of the Effective Date.

 

·                  Adjustment of $2,670 to reflect the fair value of the Company’s current lease agreement which was previously recorded as long-term lease obligations.  As of the Effective Date, the lease agreement has been valued at below market, therefore we have recorded in Prepaid expenses and other current assets an asset of $138 which will be amortized over the remaining life of the lease agreement.

 

·                  An adjustment of $166,067 to reflect the reorganization value of the Successor Company in excess of the fair value of assets, net of liabilities.

 

Other General Information

 

Below is the list of GS&T’s wholly owned