Gener8 Maritime Bleeds Red Ink amid Vessel Disposal Losses

The U.S.-based crude oil shipping company Gener8 Maritime ended the year with USD 168.5 million net loss amid considerable losses stemming from vessel disposal.

During 2017, the company sold 12 ships increasing its vessel disposal losses by USD 115 million.

The red ink is being reported on the back of net income booked for 2016 which came at USD 67.3 million.

For the three months ended December 31, 2017, Gener8 Maritime’s net loss was USD 45.4 million, a major drop when compared to a net income of USD 5.8 million from the corresponding period in 2016.

During the quarter, the shipowner disposed of four veterans for net cash proceeds of USD 33.2 million after debt repayment of USD 63.8 million and release of working capital from the Navig8 pools.

The sold ships are the 2003-built Aframax Gener8 Pericles, 2000-built Suezmax Gener8 Argus, 2002-built VLCC Gener8 Poseidon and a 2010-built VLCC Gener8 Zeus.

In December last year, Gener8 Maritime entered into a merger agreement with Euronav NV and Euronav MI Inc., a wholly-owned subsidiary of Euronav NV.

Under the plan, which is subject to regulatory approval, Gener8 Maritime would become a wholly-owned subsidiary of Euronav.

The combined company will have a fleet of 75 crude tankers, including 44 VLCCs and 28 Suezmax crude tankers, representing over 18 million dwt in total, it was disclosed earlier.

In line with the terms of the deal, approximately 60.9 million of new Euronav shares will be issued to Gener8 shareholders, with the exchange ratio of 0.7272 Euronav shares for each Gener8 share.

The merger is subject to the approval of Gener8’s shareholders and some of its lenders.

The company has 30 vessels on the water, totaling in 7.49 million dwt.