Bulker at Dacks

Genco adds fuel-efficient Ultramax pair to its fleet

 Bulk shipping company Genco Shipping & Trading Limited has inked a deal to acquire two 2022-built 61,000 dwt Ultramax vessels to be constructed at Dalian Cosco KHI Ship Engineering (DACKS).

Bulker at Dacks
Illustration; Image credit: DACKS

The shipowner did not reveal the price tag of the two newbuilds. The vessels are expected to be delivered to Genco in January 2022.

The purchases mark the fifth and sixth high specification, fuel-efficient Ultramax vessels that Genco has agreed to acquire since December 2020, doubling its core Ultramax presence over that time.

To remind, last month Genco bought a 2016-built 64,000 dwt Ultramax vessel constructed at Zhejiang Yangfan shipyard in China. The vessel, to be renamed Genco Enterprise, is expected to be delivered to Genco between May and July 2021.

The purchase followed the acquisition of three modern Ultramaxes in exchange for six older Handysize vessels, completed in February this year.

With the conclusion of these transactions, Genco fully exited the Handysize sector while creating a more focused fleet consisting of Capesize, Ultramax and Supramax vessels.

The move is also part of Genco’s fleet modernization push, which resulted in the divestment of a number of older, less fuel-efficient tonnage.

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The shipowner said it would fund the acquisition from cash on the balance sheet on a low leverage basis.

“This latest acquisition continues the expansion of our fleet at an attractive point in the drybulk cycle as asset values continue to trail the strong freight rate environment leading to attractive returns on capital. Built at a first-class shipyard, we expect these two Ultramaxes will seamlessly integrate into our in-house commercial platform while reducing our carbon footprint as they replace older, less fuel-efficient vessels,” John C. Wobensmith, Chief Executive Officer, commented.

“Furthermore, acquiring these vessels on a low leverage basis enables us to continue to drive down our financial leverage and cash flow breakeven rate while augmenting our operating leverage.”

Separately, Genco also announced that it has capitalized on the strong market to fix two additional vessels on period time charters to secure cash flows as part of its portfolio approach to fixture activity:

  • Baltic Bear (2010-built Capesize) fixed at $32,000 per day for 10 to 14 months
  • Genco Vigilant (2015-built Ultramax) fixed at $17,750 per day for 11 to 13 months beginning in October 2021

Genco’s fleet consists of 17 Capesize, 9 Ultramax and 14 Supramax vessels with an aggregate capacity of 4.3 million dwt and an average age of 10.4 years.