As explained, Genco's efforts to modernize its fleet and build a more oriented asset base while reducing its carbon footprint are part of the transaction.

Without monetary consideration or additional capital required, the arrangement is structured as an asset swap.

Genco Vigilant, Genco Independence and Genco Magic will be renamed as the three Ultramaxes obtained by Genco. Between 2014 and 2015, they were constructed.

The deal, which is neutral in terms of money and asset value, will allow Genco to retain its liquidity position and accomplish a number of other key objectives. In particular, the company will continue to create scale in the core Ultramax sector, reduce the average age of its fleet by 0.3 years, escape the expense of the drydocking and ballast water treatment system in 2021 by approximately $3.6 million related to the three Handy units included in the deal, and retain exposure to the upside of the Capesize sector.

Genco has also agreed to sell two other vessels, the Baltic Cougar, a 2009-built Supramax vessel, for $7.60 million and the Baltic Hare, a 2009-built Handysize vessel, for $7.75 million, as part of its fleet renewal strategy, separate from the vessel swap deal.

Genco will have finally left the Handysize sector after the completion of the transactions, thus building a more oriented fleet consisting of Capesize, Ultramax and Supramax tonnage.

The pro forma fleet of Genco will consist of 41 vessels, including 17 Capesize, nine Ultramax and 15 Supramax vessels with an aggregate capacity of approximately 4,422,000 DWT and an average age of 10 years.

Maritime Business World