Genco Shipping reveals Capesize buy in a fleet revamp

Image: CEO John Wobensmith

U.S. headquartered drybulk shipowner Genco Shipping & Trading revealed this week that the sale of two capesize vessels has been “terminated…due to the buyers’ breach of the agreements’ terms.”

The John C. Wobensmith-led owner said in a US securities and exchange commission filing that the deal to offload the two 2009-2010-built 169,000 dwt capesize vessels Genco Maximus and Genco Claudius to an undisclosed buyer has been cancelled on February 24.

Now the two capesizes are back on market for sale and the owner believes that they can be sold in higher prices.

“We continue to market these vessels for sale in what we believe are favorable market conditions that may allow us to sell the vessels at prices above those previously agreed with the former buyers,” the owner said.

To remind, the shipowner agreed to divest three older, less fuel-efficient vessels with their third special survey due in 2024, in an attempt to opportunistically renew the fleet.

During the fourth quarter of 2023, the company entered into agreements to sell three of its capesize vessels, the Genco Claudius, Genco Commodus and Genco Maximus. The Genco Commodus was delivered to its third-party buyer on February 7, 2024, as the company reports.

This year the shipowner was busy as he also settled all disputes and claims by entering into settlement agreements with the opposing parties in connection with a 2022 case.

On December 14, 2022, a sub-charterer of the Genco Constellation asserted a claim for monetary losses in connection with alleged delays of the loading of their cargo, short loading, or both at the port of Longkou, China.

Hizone Group Co. Ltd (Hizone) had sub-chartered the vessel from SCM Corporation Limited, which had subchartered the vessel from BG Shipping Co. Limited, which in turn had chartered the vessel from the company. A dispute arose due to the need to restow the cargo to ensure the safety of the crew and the vessel, as the owner reveals in the US securities and exchange commission filing.

Following the vessel’s arrival at Tema Harbour in Ghana, Hizone petitioned the superior court of judicature to have the vessel arrested in connection with a claim alleging damages. The petition was granted on December 14, 2022 and although Genco offered security to release the vessel shortly thereafter, the vessel was only released at the end of February 2023.

Moreover, Hizone petitioned the superior court of judicature to have the vessel arrested again on February 2, 2023 on an allegedly different claim.

“The vessel was not generating revenue while it was subject to arrest. We vigorously defended them while continuing to seek reimbursement of damages arising from the arrest of the vessel, including the recovery of lost revenue while arrested and reimbursement of legal fees. The company obtained security from BG Shipping Co. Limited and proceeded with arbitration,” the owner explains in the US filing.

“Under the settlement terms, which are currently being implemented, we will be reimbursed for damages we sustained because of the arrest of the Genco Constellation, including contractual revenue and affiliated expenses, as well as for the ensuing legal and security fees and costs we have incurred in order to defend against the claims brought by the other parties.”

During the first quarter of 2024, the owner claims that it settled all disputes and claims and is not involved in any other legal proceedings that he believes are likely to have a significant effect on his business.