Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
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Current Assets: | ||
Due from charterers, reserve | $ 662 | $ 1,064 |
Noncurrent assets: | ||
Vessels, accumulated depreciation | 242,465 | 288,373 |
Deferred drydock, accumulated amortization | 7,691 | 11,862 |
Fixed assets, accumulated depreciation and amortization | 2,057 | 2,154 |
Deferred financing costs, noncurrent | $ 11,648 | $ 13,094 |
Genco Shipping & Trading Limited shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 41,801,753 | 41,754,413 |
Common stock, shares outstanding (in shares) | 41,801,753 | 41,754,413 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Revenues: | ||||
Revenues | $ 74,206 | $ 83,550 | $ 172,542 | $ 177,014 |
Operating expenses: | ||||
Voyage expenses | 41,695 | 41,800 | 90,063 | 84,822 |
Vessel operating expenses | 21,058 | 24,358 | 42,871 | 47,549 |
Charter hire expenses | 1,432 | 4,849 | 4,507 | 7,267 |
General and administrative expenses (inclusive of nonvested stock amortization expense of $476, $569, $957 and $1,021, respectively) | 5,471 | 5,799 | 11,238 | 12,109 |
Technical management fees | 1,724 | 1,885 | 3,578 | 3,825 |
Depreciation and amortization | 15,930 | 18,271 | 33,504 | 36,348 |
Impairment of vessel assets | 0 | 13,897 | 112,814 | 13,897 |
Loss (gain) on sale of vessels | 486 | (611) | ||
Total operating expenses | 87,310 | 110,859 | 299,061 | 205,206 |
Operating loss | (13,104) | (27,309) | (126,519) | (28,192) |
Other (expense) income: | ||||
Other income (expense) | 120 | 107 | (464) | 437 |
Interest income | 253 | 1,073 | 847 | 2,400 |
Interest expense | (5,473) | (8,124) | (12,418) | (16,699) |
Impairment of right-of-use asset | (223) | (223) | ||
Other expense | (5,100) | (7,167) | (12,035) | (14,085) |
Net loss | $ (18,204) | $ (34,476) | $ (138,554) | $ (42,277) |
Net loss per share-basic | $ (0.43) | $ (0.83) | $ (3.31) | $ (1.01) |
Net loss per share-diluted | $ (0.43) | $ (0.83) | $ (3.31) | $ (1.01) |
Weighted average common shares outstanding-basic | 41,900,901 | 41,742,301 | 41,883,629 | 41,734,248 |
Weighted average common shares outstanding-diluted | 41,900,901 | 41,742,301 | 41,883,629 | 41,734,248 |
Voyage | ||||
Revenues: | ||||
Revenues | $ 74,206 | $ 83,550 | $ 172,542 | $ 177,014 |
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Consolidated Statements of Operations | ||||
Nonvested stock amortization expenses | $ 476 | $ 569 | $ 957 | $ 1,021 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (18,204) | $ (34,476) | $ (138,554) | $ (42,277) |
Other comprehensive income | 0 | 0 | 0 | 0 |
Comprehensive loss | $ (18,204) | $ (34,476) | $ (138,554) | $ (42,277) |
Consolidated Statements of Equity (Parenthetical) - $ / shares |
3 Months Ended | |
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Mar. 31, 2020 |
Mar. 31, 2019 |
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Consolidated Statements of Equity | ||
Issuance of shares of RSUs, net (in shares) | 47,341 | 12,477 |
Forfeited (in shares) | 1,490 | |
Dividends declared per share | $ 0.175 |
GENERAL INFORMATION |
6 Months Ended |
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Jun. 30, 2020 | |
GENERAL INFORMATION | |
GENERAL INFORMATION | 1 - GENERAL INFORMATION The accompanying condensed consolidated financial statements include the accounts of Genco Shipping & Trading Limited (“GS&T”) and its direct and indirect wholly-owned subsidiaries (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels and operates in one business segment. At June 30, 2020, the Company’s fleet consists of 53 drybulk vessels, including 17 Capesize drybulk carriers, six Ultramax drybulk carriers, 20 Supramax drybulk carriers and 10 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 4,837,000 dwt and an average age of approximately 10.0 years. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus strain, or COVID-19, to be a pandemic. The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Governments have implemented measures in an effort to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings, working from home, supply chain logistical changes, and closure of non-essential businesses. This has led to a significant slowdown in overall economic activity levels globally and a decline in demand for certain of the raw materials that our vessels transport. At present, it is not possible to ascertain the overall impact of COVID-19 on the Company’s operational and financial performance, which may take some time to materialize and may not be fully reflected in the results for 2020. However, an increase in the severity or duration or a resurgence of the COVID-19 pandemic could have a material adverse effect on the Company’s business, results of operations, cash flows, financial condition, the carrying value of the Company’s assets, the fair values of the Company’s vessels, and the Company’s ability to pay dividends. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which includes the accounts of GS&T and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Basis of presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2019 (the “2019 10-K”). The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2020. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include vessel valuations, the valuation of amounts due from charterers, residual value of vessels, useful life of vessels and the fair value of derivative instruments, if any. Actual results could differ from those estimates. Restricted cash Current and non-current restricted cash includes cash that is restricted pursuant to our credit facilities. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same amounts shown in the Condensed Consolidated Statements of Cash Flows:
Vessels held for sale
The Company’s Board of Directors has approved a strategy of divesting specifically identified older, less fuel-efficient vessels as part of a fleet renewal program to streamline and modernize the Company’s fleet. On March 2, 2020, the Company entered into an agreement to sell the Baltic Wind and on March 20, 2020, the Company entered into agreements to sell the Baltic Breeze and Genco Bay. The relevant vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheet as of June 30, 2020. The Baltic Wind was sold on July 7, 2020, the Baltic Breeze was sold on July 31, 2020 and the Genco Bay is expected to be sold during the third quarter of 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreements. On September 25, 2019, the Company entered into an agreement to sell the Genco Thunder, and the relevant vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheet as of December 31, 2019. This vessel was sold on March 5, 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreement. Voyage expense recognition In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These expenses are borne by the Company during spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters, spot market-related time charters and pool agreements. Refer to Note 10 — Voyage Revenues for further discussion of the accounting for fuel expenses for spot market voyage charters. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company. At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. Additionally, the Company records lower of cost and net realizable value adjustments to re-value the bunker fuel on a quarterly basis for certain time charter agreements where the inventory is subject to gains and losses. These differences in bunkers, including any lower of cost and net realizable value adjustments, resulted in a net loss (gain) of $958 and ($113) during the three months ended June 30, 2020 and 2019, respectively, and $1,800 and $237 during the six months ended June 30, 2020 and 2019, respectively. Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement. Impairment of vessel assets During the three months ended June 30, 2020 and 2019, the Company recorded $0 and $13,897, respectively, related to the impairment of vessel assets in accordance with ASC 360 — “Property, Plant and Equipment” (“ASC 360”). Additionally, during the six months ended June 30, 2020 and 2019, the Company recorded $112,814 and $13,897, respectively, related to the impairment of vessel assets in accordance with ASC 360. At March 31, 2020, the Company determined that the expected estimated future undiscounted cash flows for four of its Supramax vessels, the Genco Picardy, the Genco Predator, the Genco Provence and the Genco Warrior, did not exceed the net book value of these vessels as of March 31, 2020. The Company adjusted the carrying value of these vessels to their respective fair market values as of March 31, 2020. This resulted in an impairment loss of $27,046 during the six months ended June 30, 2020. On February 24, 2020, the Board of Directors determined to dispose of the Company’s following ten Handysize vessels: the Baltic Hare, the Baltic Fox, the Baltic Wind, the Baltic Cove, the Baltic Breeze, the Genco Ocean, the Genco Bay, the Genco Avra, the Genco Mare and the Genco Spirit, at times and on terms to be determined in the future. Given this decision, and that the revised estimated future undiscounted cash flows for each of these older vessels did not exceed the net book value for each vessel given the estimated probabilities of whether the vessels will be sold, the Company adjusted the values of these older vessels to their respective fair market values during the three months ended March 31, 2020. Subsequent to February 24, 2020, the Company has entered into agreements to sell three of these vessels during the three months ended March 31, 2020, namely the Baltic Wind, the Baltic Breeze and the Genco Bay, which were adjusted to their net sales price. This resulted in an impairment loss of $85,768 during the six months ended June 30, 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the vessel sales. On August 2, 2019, the Company entered into an agreement to sell the Genco Challenger, a 2003-built Handysize vessel, for $5,250 less a 2.0% broker commission payable to a third party. As the anticipated undiscounted cash flows, including the net sales price, did not exceed the net book value of the vessel as of June 30, 2019, the vessel value for the Genco Challenger was adjusted to its net sales price of $5,145 as of June 30, 2019. This resulted in an impairment loss of $4,401 during the three and six months ended June 30, 2019. Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the vessel sale.
At June 30, 2019, the Company determined that the expected estimated future undiscounted cash flows for the Genco Champion, a 2006-built Handysize vessel, and the Genco Charger, a 2005-built Handysize vessel, did not exceed the net book value of these vessels as of June 30, 2019. As such, the Company adjusted the value of these vessels to their respective fair market values as of June 30, 2019. This resulted in an impairment loss of $9,496 during the three and six months ended June 30, 2019. Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the vessel sale. Loss (gain) on sale of vessels During the six months ended June 30, 2020, the Company recorded a net loss of $486 related to the sale of vessels. The net loss of $486 recorded during the six months ended June 30, 2020 related primarily to the sale of the Genco Charger and Genco Thunder. During the six months ended June 30, 2019, the Company recorded a net gain of $611 related to the sale of vessels. The net gain of $611 recorded during the six months ended June 30, 2019 related primarily to the sale of the Genco Vigour. There were no vessels sold during the three months ended June 30, 2020 and 2019. Recent accounting pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, “Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-03”),” which change the disclosure requirements for fair value measurements by removing, adding, and modifying certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, and for interim periods within that year. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company has evaluated the impact of the adoption of ASU 2018-03 and has determined that there is no effect on its condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses" ("ASU 2016-13"). ASU 2016-13 amends the current financial instrument impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 was effective on January 1, 2020, with early adoption permitted. The Company adopted ASU 2016-13 during the first quarter of 2020 and it did not have a material impact on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”).” ASU 2020-04 provides temporary optional expedients and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for adoption at any time between March 12, 2020 and December 31, 2022. The Company is currently evaluating the impact of this adoption on its condensed consolidated financial statements and related disclosures. |
CASH FLOW INFORMATION |
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CASH FLOW INFORMATION | 3 - CASH FLOW INFORMATION For the six months ended June 30, 2020, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $33 for the Purchase of scrubbers, $1,726 for the Purchase of vessels and ballast water treatment systems, including deposits, $490 for the Purchase of other fixed assets and $13 for the Net proceeds from sale of vessels. For the six months ended June 30, 2020, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expense consisting of $103 for Cash dividends paid and $179 for the Payment of deferred financing costs. For the six months ended June 30, 2019, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $2,383 for the Purchase of vessels and ballast water treatment systems, including deposits, $4,104 for the Purchase of scrubbers and $77 for the Purchase of other fixed assets. During the six months ended June 30, 2020 and 2019, cash paid for interest was $10,457 and $14,946, respectively. During the six months ended June 30, 2020 and 2019, there was no cash paid for estimated income taxes. During the six months ended June 30, 2020, the Company made a reclassification of $23,252 from Vessels, net of accumulated depreciation to Vessels held for sale as the Company entered into agreements to sell the Baltic Wind, Baltic Breeze and Genco Bay prior to June 30, 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions. On February 25, 2020, the Company issued 173,749 restricted stock units and options to purchase 344,568 shares of the Company’s stock at an exercise price of $7.06 to certain individuals. The fair value of these restricted stock units and stock options were $1,227 and $693, respectively. On May 15, 2019, the Company issued 29,580 restricted stock units to certain members of the Board of Directors. The aggregate fair value of these restricted stock units was $255. On March 4, 2019, the Company issued 106,079 restricted stock units and options to purchase 240,540 shares of the Company’s stock at an exercise price of $8.39 to certain individuals. The fair value of these restricted stock units and stock options were $890 and $904, respectively. Refer to Note 13 — Stock-Based Compensation for further information regarding the aforementioned grants. Supplemental Condensed Consolidated Cash Flow information related to leases is as follows:
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VESSEL ACQUISITIONS AND DISPOSITIONS |
6 Months Ended |
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Jun. 30, 2020 | |
VESSEL ACQUISITIONS AND DISPOSITIONS | |
VESSEL ACQUISITIONS AND DISPOSITIONS | 4 - VESSEL ACQUISITIONS AND DISPOSITIONS Vessel Dispositions On March 20, 2020, the Company entered into agreements to sell the Baltic Breeze and Genco Bay, both 2010-built Handysize vessels, for $7,900 each less a 2.0% broker commission payable to a third party. The sale of the Baltic Breeze was completed on 31, . Refer to Note 15 — Subsequent Events. The sale of the Genco Bay is expected to be completed during the third quarter of 2020. The vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheets as of June 30, 2020. Refer to “Impairment of vessel assets” section in Note 2 — Summary of Significant Accounting Policies for impairment expense recorded during the six months ended June 30, 2020. On March 2, 2020, the Company entered into an agreement to sell the Baltic Wind, a 2009-built Handysize vessel, for $7,750 less a 2.0% broker commission payable to a third party. The sale was completed on July 7, 2020, refer to Note 15 — Subsequent Events. The vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheets as of June 30, 2020. Refer to “Impairment of vessel assets” section in Note 2 — Summary of Significant Accounting Policies for impairment expense recorded during the six months ended June 30, 2020. On September 25, 2019, the Company entered into an agreement to sell the Genco Thunder, a 2007-built Panamax vessel, for $10,400 less a 2.0% broker commission payable to a third party. The sale was completed on March 5, 2020. The vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheets as of December 31, 2019. On February 3, 2020, the Company entered into an agreement to sell the Genco Charger, a 2005-built Handysize vessel, to a third party for $5,150 less a 1.0% commission payable to a third party. The sale of the Genco Charger was completed on February 24, 2020. On November 4, 2019, the Company entered into an agreement to sell the Genco Raptor, a 2007-built Panamax vessel, for $10,200 less a 2.0% broker commission payable to a third party. The sale was completed on December 11, 2019. The Genco Thunder, Genco Charger and Genco Raptor served as collateral under the $495 Million Credit Facility; therefore $5,339, $3,471 and $6,045, respectively, of the net proceeds received from the sale will remain classified as restricted cash for 360 days following the respective sale dates, which has been reflected as restricted cash in the Condensed Consolidated Balance Sheets as of June 30, 2020. Refer to Note 7 — Debt for amendment to the $495 Million Credit Facility. As of , a total amount of $6,045 was reflected as restricted cash in the Condensed Consolidated Balance Sheets for the Genco Raptor. These amounts can be used towards the financing of a replacement vessel or vessels meeting certain requirements and added as collateral under the facility. If such a replacement vessel is not added as collateral within such 360 day period, the Company will be required to use the proceeds as a loan prepayment. On September 20, 2019, the Company entered into an agreement to sell the Genco Champion, a 2006-built Handysize vessel, for $6,600 less a 3.0% broker commission payable to a third party. The sale was completed on October 21, 2019. On August 2, 2019, the Company entered into an agreement to sell the Genco Challenger, a 2003-built Handysize vessel, for $5,250 less a 2.0% broker commission payable to a third party. The sale was completed on October 10, 2019. The Genco Champion and Genco Challenger served as collateral under the $495 Million Credit Facility; therefore, $6,880 of the net proceeds from the sale of these two vessels was required to be used as a loan prepayment since a replacement vessel was not going to be added as collateral within 180 days following the respective sales dates.
On November 23, 2018, the Company entered into an agreement to sell the Genco Vigour, a 1999-built Panamax vessel, to a third party for $6,550 less a 2.0% broker commission payable to a third party. The sale was completed on January 28, 2019. The Genco Vigour did not serve as collateral under any of the Company’s credit facilities. |
NET LOSS PER SHARE |
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NET LOSS PER SHARE | 5 - NET LOSS PER SHARE The computation of basic net loss per share is based on the weighted-average number of common shares outstanding during the reporting period. The computation of diluted net loss per share assumes the vesting of nonvested stock awards and the exercise of stock options (refer to Note 13 — Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive. There were 288,319 restricted stock units and 837,338 stock options excluded from the computation of diluted net loss per share during the three and six months ended June 30, 2020 because they were anti-dilutive. There were 258,084 restricted stock units and 496,148 stock options excluded from the computation of diluted net loss per share during the three and six months ended June 30, 2019 because they were anti-dilutive (refer to Note 13 — Stock-Based Compensation). The Company’s diluted net loss per share will also reflect the assumed conversion of the equity warrants issued when the Company emerged from bankruptcy on July 9, 2014 (the “Effective Date”) and MIP Warrants issued by the Company (refer to Note 13 — Stock-Based Compensation) if the impact is dilutive under the treasury stock method. The equity warrants have a 7-year term that commenced on the day following the Effective Date and are exercisable for tenth of a share of the Company’s common stock. There were no unvested MIP Warrants and 3,936,761 equity warrants excluded from the computation of diluted net loss per share during the three and six months ended June 30, 2020 and 2019 because they were anti-dilutive. The components of the denominator for the calculation of basic and diluted net loss per share are as follows:
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RELATED PARTY TRANSACTIONS |
6 Months Ended |
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Jun. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 6 - RELATED PARTY TRANSACTIONS During the three and six months ended June 30, 2020 and 2019, the Company did not identify any related party transactions.
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DEBT |
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DEBT | 7 – DEBT Long-term debt, net consists of the following:
As of June 30, 2020 and December 31, 2019, $11,648 and $13,094 of deferred financing costs, respectively, were presented as a direct deduction within the outstanding debt balance in the Company’s Condensed Consolidated Balance Sheets. $495 Million Credit Facility On May 31, 2018, the Company entered into the $460 Million Credit Facility, a five-year senior secured credit facility for an aggregate amount of up to $460,000 which was used to (i) refinance all of the Company’s prior credit facilities into one facility and (ii) pay down the debt on seven of the Company’s oldest vessels, which have been sold. On February 28, 2019, the Company entered into an amendment to the $460 Million Credit Facility, which provided an additional tranche of up to $35,000 to finance a portion of the acquisitions, installations, and related costs for scrubbers for 17 of the Company’s Capesize vessels (as so amended, the “$495 Million Credit Facility”). On June 5, 2020, the Company entered into an amendment to the $495 Million Credit Facility to extend the period that collateral vessels can be sold or disposed of without prepayment of the loan if a replacement vessel or vessels meeting certain requirements are included as collateral from 180 days to 360 days. On August 28, 2019, September 23, 2019 and March 12, 2020, the Company made total drawdowns of $9,300, $12,200 and $11,250, respectively, under the $35 million tranche of the $495 Million Credit Facility. As of June 30, 2020, the Company drew down a total of $32,750, and this tranche is considered fully drawn. Scheduled quarterly repayments under this tranche are $2,339. As of June 30, 2020, there was no availability under the $495 Million Credit Facility. Total debt repayments of $16,661 and $19,575 were made during the three months ended June 30, 2020 and 2019 under the $495 Million Credit Facility, respectively. Total debt repayments of $33,321 and $34,575 were made during the six months ended June 30, 2020 and 2019 under the $495 Million Credit Facility, respectively. As of June 30, 2020, the Company was in compliance with all of the financial covenants under the $495 Million Credit Facility.
$133 Million Credit Facility On August 14, 2018, the Company entered into the $108 Million Credit Facility, a five-year senior secured credit facility that was used to finance a portion of the purchase price of six vessels, which also serve as collateral under the facility, which were delivered to the Company during the three months ended September 30, 2018. On June 11, 2020, the Company entered into an amendment and restatement agreement to the $108 Million Credit Facility which provided for a revolving credit facility of up to $25,000 (the “Revolver”) for general corporate and working capital purposes (as so amended, the “$133 Million Credit Facility”). The key terms associated with the Revolver are as follows:
The collateral and financial covenants otherwise remain substantially the same as they were under the $108 Million Credit Facility. On June 15, 2020, the Company drew down $24,000 under the Revolver of the $133 Million Credit Facility. As of June 30, 2020, there was $1,000 of availability under the $133 Million Credit Facility. Total debt repayments of $1,700 and $1,580 were made during the three months ended June 30, 2020 and 2019 under the $133 Million Credit Facility, respectively. Total debt repayments of $3,280 and $3,160 were made during the six months ended June 30, 2020 and 2019 under the $133 Million Credit Facility, respectively. As of June 30, 2020, the Company was in compliance with all of the financial covenants under the $133 Million Credit Facility.
Interest rates The following table sets forth the effective interest rate associated with the interest expense for the Company’s debt facilities noted above, including the cost associated with unused commitment fees, if applicable. The following table also includes the range of interest rates on the debt, excluding the impact of unused commitment fees, if applicable:
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FAIR VALUE OF FINANCIAL INSTRUMENTS |
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FAIR VALUE OF FINANCIAL INSTRUMENTS | 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values and carrying values of the Company’s financial instruments as of June 30, 2020 and December 31, 2019 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.
The carrying value of the borrowings under the $495 Million Credit Facility and the $133 Million Credit Facility as of June 30, 2020 and December 31, 2019 approximate their fair value due to the variable interest nature thereof as each of these credit facilities represent floating rate loans. The carrying amounts of the Company’s other financial instruments as of June 30, 2020 and December 31, 2019 (principally Due from charterers and Accounts payable and accrued expenses) approximate fair values because of the relatively short maturity of these instruments. ASC Subtopic 820-10, “Fair Value Measurements & Disclosures” (“ASC 820-10”), applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumption (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 requires significant management judgment. The three levels are defined as follows:
Cash and cash equivalents and restricted cash are considered Level 1 items, as they represent liquid assets with short-term maturities. Floating rate debt is considered to be a Level 2 item, as the Company considers the estimate of rates it could obtain for similar debt or based upon transactions amongst third parties. Nonrecurring fair value measurements include vessel impairment assessments completed during the interim period and at year-end as determined based on third-party quotes, which are based on various data points, including comparable sales of similar vessels, which are Level 2 inputs. During the six months ended June 30, 2020, the vessel assets for fourteen of the Company’s vessels were written down as part of the impairment recorded during the six months ended June 30, 2020. There was no vessel impairment recorded during the three months ended June 30, 2020. During the three and six months ended June 30, 2019, the vessel assets for three of the Company’s vessels were written down as part of the impairment recorded during the three and six months ended June 30, 2019. The vessels held for sale as of June 30, 2020 were written down as part of the impairment recorded during the six months ended June 30, 2020. The vessel held for sale as of December 31, 2019 was written down as part of the impairment recorded during the three months ended September 30, 2019. Refer to “Impairment of vessel assets” section in Note 2 — Summary of Significant Accounting Policies. Nonrecurring fair value measurements also include impairment tests conducted by the Company during the three and six months ended June 30, 2020 and 2019 of its operating lease right-of use assets. The fair value determination for the operating lease right-of-use assets was based on third party quotes, which is considered a Level 2 input. During the three and six months ended June 30, 2020, there was no impairment of the operating lease right-of-use assets. During the three and six months ended June 30, 2019, the operating lease right-of-use asset was written down as part of the impairment of right-of-use asset recorded during the three and six months ended June 30, 2019. The Company did not have any Level 3 financial assets or liabilities as of June 30, 2020 and December 31, 2019. |
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following:
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VOYAGE REVENUES |
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VOYAGE REVENUE | 10 – VOYAGE REVENUES Total voyage revenues include revenue earned on fixed rate time charters, spot market voyage charters and spot market-related time charters, as well as the sale of bunkers consumed during short-term time charters. For the three months ended June 30, 2020 and 2019, the Company earned $74,206 and $83,550 of voyage revenue, respectively. For the six months ended June 30, 2020 and 2019, the Company earned $172,542 and $177,014 of voyage revenue, respectively. Revenue for spot market voyage charters is recognized ratably over the total transit time of the voyage which begins when the vessel arrives at the loading port and ends at the time the discharge of cargo is completed at the discharge port in accordance with ASC 606 — Revenue from Contracts with Customers. Spot market voyage charter agreements do not provide the charterers with substantive decision-making rights to direct how and for what purpose the vessel is used, therefore revenue from spot market voyage charters is not within the scope of ASC 842 — Leases (“ASC 842”). Additionally, the Company has identified that the contract fulfillment costs of spot market voyage charters consist primarily of the fuel consumption that is incurred by the Company from the latter of the end of the previous vessel employment and the contract date until the arrival at the loading port in addition to any port expenses incurred prior to arrival at the load port, as well as any charter hire expenses for third-party vessels that are chartered in. The fuel consumption and any port expenses incurred prior to arrival at the load port are capitalized and recorded in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets and are amortized ratably over the total transit time of the voyage from arrival at the loading port until the vessel departs from the discharge port and expensed as part of Voyage Expenses. Similarly, for any third party vessels that are chartered in, the charter hire expenses during this period are capitalized and recorded in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets and are amortized and expensed as part of Charter hire expenses. During time charter agreements, including fixed rate time charters and spot market-related time charters, the charterers have substantive decision-making rights to direct how and for what purpose the vessel is used. As such, the Company has identified that time charter agreements contain a lease in accordance with ASC 842. During time charter agreements, the Company is responsible for operating and maintaining the vessels. These costs are recorded as vessel operating expenses in the Condensed Consolidated Statements of Operation. The Company has elected the practical expedient that allows the Company to combine lease and non-lease components under ASC 842 as the Company believes (1) the timing and pattern of recognizing revenues for operating the vessel is the same as the timing and pattern of recognizing vessel leasing revenue; and (2) the lease component, if accounted for separately, would be classified as an operating lease. Total voyage revenue recognized in the Condensed Consolidated Statements of Operations includes the following:
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LEASES |
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LEASES | |
LEASES | 11 - LEASES On June 14, 2019, the Company entered into a sublease agreement for a portion of the leased space for its main office in New York, New York that commenced on July 26, 2019 and will end on September 29, 2025. There was $306 and $612 of sublease income recorded during the three and six months ended June 30, 2020, respectively. There was no sublease income recorded during the three and six months ended June 30, 2019. Sublease income is recorded net with the total operating lease costs in General and administrative expenses in the Condensed Consolidated Statements of Operation. The Company charters in third-party vessels and the Company is the lessee in these agreements under ASC 842. The Company has elected the practical expedient under ASC 842 to not recognize right-of-use assets and lease liabilities for short-term leases. During the three and six months ended June 30, 2020 and 2019, all charter-in agreements for third-party vessels were less than twelve months and considered short-term leases. |
COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 12 – COMMITMENTS AND CONTINGENCIES During the second half of 2018, the Company entered into agreements for the purchase of ballast water treatments systems (“BWTS”) for 42 of its vessels. The cost of these systems will vary based on the size and specifications of each vessel and whether the systems will be installed in China during the vessels’ scheduled drydockings. Based on the contractual purchase price of the BWTS and the estimated installation fees, the Company estimates the cost of the systems to be approximately $0.9 million for Capesize vessels, $0.6 million for Supramax vessels and $0.5 million for Handysize vessels. These costs will be capitalized and depreciated over the remainder of the life of the vessel. Prior to any adjustments for vessel impairment and vessel sales, the Company recorded cumulatively $16,049 and $12,783 in Vessel assets in the Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively, related to BWTS additions. On December 21, 2018, the Company entered into agreements to install scrubbers on its 17 Capesize vessels. The Company completed scrubber installation on 16 of its Capesize vessels during 2019 and the remaining Capesize vessel on January 17, 2020. The cost of each scrubber varied according to the specifications of the Company’s vessels and technical aspects of the installation, among other variables. These costs will be capitalized and depreciated over the remainder of the life of the vessel. The Company recorded cumulatively $42,621 and $41,270 in Vessel assets in the Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively, related to scrubber additions. The Company entered into an amendment to the $495 Million Credit Facility to provide financing to cover a portion of these expenses; refer to Note 7 — Debt for further information.
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STOCK-BASED COMPENSATION |
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STOCK-BASED COMPENSATION | 13 - STOCK-BASED COMPENSATION 2014 Management Incentive Plan As of June 30, 2020 and December 31, 2019, a total of 8,557,461 of warrants were outstanding under the Genco Shipping & Trading Limited 2014 Management Incentive Plan (the “MIP”). The MIP Warrants were issued in three tranches for 238,066, 246,701 and 370,979 shares and have exercise prices, as adjusted for dividends declared during the fourth quarter of 2019 and the first quarter of 2020, of $240.89221, $267.11051 and $317.87359 per whole share, respectively. For the three and six months ended June 30, 2020 and 2019, there was no amortization expense of the fair value of these warrants. As of June 30, 2020, there was no unamortized stock-based compensation for the warrants and all warrants were vested. The following table summarizes certain information about the warrants outstanding as of June 30, 2020:
2015 Equity Incentive Plan Stock Options On February 25, 2020, the Company issued options to purchase 344,568 of the Company’s shares of common stock to certain individuals with an exercise price of $7.06 per share. third of the options become exercisable on each of the first anniversaries of February 25, 2020, with accelerated vesting that may occur following a change in control of the Company, and all unexercised options expire on the sixth anniversary of the grant date. The fair value of each option was estimated on the date of the grant using the Cox-Ross-Rubinstein pricing formula, resulting in a value of $2.01 per share, or $693 in the aggregate. The assumptions used in the Cox-Ross-Rubinstein option pricing formula are as follows: volatility of 53.91% (representing the Company’s historical volatility), a risk-free interest rate of 1.41%, a dividend yield of 7.13%, and expected life of 4 years (determined using the simplified method as outlined in SAB Topic 14 due to lack of historical exercise data). For the three and six months ended June 30, 2020 and 2019, the Company recognized amortization expense of the fair value of these options, which is included in General and administrative expenses, as follows:
Amortization of the unamortized stock-based compensation balance of $879 as of June 30, 2020 is expected to be expensed $389, $367, $111 and $12 during the remainder of 2020 and during the years ended December 31, 2021, 2022 and 2023, respectively. The following table summarizes the unvested option activity for the six months ended June 30, 2020:
The following table summarizes certain information about the options outstanding as of June 30, 2020:
As of June 30, 2020 and December 31, 2019, a total of 837,338 and 496,148 stock options were outstanding, respectively. Restricted Stock Units The Company has issued restricted stock units (“RSUs”) under the 2015 Plan to certain members of the Board of Directors and certain executives and employees of the Company, which represent the right to receive a share of common stock, or in the sole discretion of the Company’s Compensation Committee, the value of a share of common stock on the date that the RSU vests. As of June 30, 2020 and December 31, 2019, 373,588 and 326,247 shares of the Company’s common stock were outstanding in respect of the RSUs, respectively. Such shares of common stock will only be issued in respect of vested RSUs issued to directors when the director’s service with the Company as a director terminates. Such shares of common stock will only be issued to executives and employees when their RSUs vest under the terms of their grant agreements and the amended 2015 Plan described above. The RSUs that have been issued to certain members of the Board of Directors generally vest on the date of the annual shareholders meeting of the Company following the date of the grant. In lieu of cash dividends issued for vested and nonvested shares held by certain members of the Board of Directors, the Company will grant additional vested and nonvested RSUs, respectively, which are calculated by dividing the amount of the dividend by the closing price per share of the Company’s common stock on the dividend payment date and will have the same terms as other RSUs issued to members of the Board of Directors. The RSUs that have been issued to other individuals vest ratably on each of the anniversaries of the determined vesting date. The table below summarizes the Company’s unvested RSUs for the six months ended June 30, 2020:
The total fair value of the RSUs that vested during the six months ended June 30, 2020 and 2019 was $352 and $230, respectively. The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date. The following table summarizes certain information of the RSUs unvested and vested as of June 30, 2020:
The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures. As of June 30, 2020, unrecognized compensation cost of $1,274 related to RSUs will be recognized over a weighted-average period of 2.04 years. For the three and six months ended June 30, 2020 and 2019, the Company recognized nonvested stock amortization expense for the RSUs, which is included in General and administrative expenses as follows:
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LEGAL PROCEEDINGS |
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LEGAL PROCEEDINGS | 14 - LEGAL PROCEEDINGS From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material effect on the Company, its financial condition, results of operations or cash flows. |
SUBSEQUENT EVENTS |
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SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 15 – SUBSEQUENT EVENTS On August 5, 2020, the Company announced a regular quarterly dividend of $0.02 per share to be paid on or about August 25, 2020 to shareholders of record as of August 17, 2020. The aggregate amount of the dividend is expected to be approximately $0.8 million, which the Company anticipates will be funded from cash on hand at the time the payment is to be made. On July 31, 2020, the Company completed the sale of the Baltic Breeze, a 2010-built Handysize vessel, to a third party for $7,900 less a 2.0% broker commission payable to a third party. Additionally, on July 7, 2020, the Company completed the sale of the Baltic Wind, a 2009-built Handysize vessel, to a third party for $7,750 less a 2.0% broker commission payable to a third party. The vessel assets for the Baltic Breeze and Baltic Wind have been classified as held for sale in the Condensed Consolidated Balance Sheet as of June 30, 2020. Refer also to Note 4 — Vessel Acquisitions and Dispositions. The Company expects to record a net loss on the sale of the Baltic Breeze during the third quarter of 2020 of between approximately $200 and $400. The Company expects to record a net loss on the sale of the Baltic Wind during the third quarter of 2020 of between $200 and $400.
These vessels served as collateral under the $495 Million Credit Facility; therefore, $4,797 and $4,575 of the net proceeds received from the sale of the Baltic Breeze and Baltic Wind, respectively, will remain classified as restricted cash for 360 days following the sale date. Those amounts can be used towards a loan prepayment under the facility or for the financing of a replacement vessel or vessels meeting certain requirements and added as collateral under the facility. If such a replacement vessel is not added as collateral within such 360 day period, the Company will be required to use these proceeds as a loan prepayment. On July 15, 2020, the Company issued 42,642 restricted stock units to certain members of the Board of Directors. The aggregate fair value of these restricted stock units was $255. The awards will vest on the earlier of the date of the next annual shareholders meeting of the Company and the date that is fourteen months after the grant date. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Principles of consolidation | Principles of consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which includes the accounts of GS&T and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
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Basis of presentation | Basis of presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2019 (the “2019 10-K”). The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2020. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include vessel valuations, the valuation of amounts due from charterers, residual value of vessels, useful life of vessels and the fair value of derivative instruments, if any. Actual results could differ from those estimates. |
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Restricted cash | Restricted cash Current and non-current restricted cash includes cash that is restricted pursuant to our credit facilities. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same amounts shown in the Condensed Consolidated Statements of Cash Flows:
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Vessels held for sale | Vessels held for sale
The Company’s Board of Directors has approved a strategy of divesting specifically identified older, less fuel-efficient vessels as part of a fleet renewal program to streamline and modernize the Company’s fleet. On March 2, 2020, the Company entered into an agreement to sell the Baltic Wind and on March 20, 2020, the Company entered into agreements to sell the Baltic Breeze and Genco Bay. The relevant vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheet as of June 30, 2020. The Baltic Wind was sold on July 7, 2020, the Baltic Breeze was sold on July 31, 2020 and the Genco Bay is expected to be sold during the third quarter of 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreements. On September 25, 2019, the Company entered into an agreement to sell the Genco Thunder, and the relevant vessel assets have been classified as held for sale in the Condensed Consolidated Balance Sheet as of December 31, 2019. This vessel was sold on March 5, 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions for details of the agreement. |
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Voyage expense recognition | Voyage expense recognition In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These expenses are borne by the Company during spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters, spot market-related time charters and pool agreements. Refer to Note 10 — Voyage Revenues for further discussion of the accounting for fuel expenses for spot market voyage charters. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company. At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. Additionally, the Company records lower of cost and net realizable value adjustments to re-value the bunker fuel on a quarterly basis for certain time charter agreements where the inventory is subject to gains and losses. These differences in bunkers, including any lower of cost and net realizable value adjustments, resulted in a net loss (gain) of $958 and ($113) during the three months ended June 30, 2020 and 2019, respectively, and $1,800 and $237 during the six months ended June 30, 2020 and 2019, respectively. Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement. |
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Impairment of vessel assets | Impairment of vessel assets During the three months ended June 30, 2020 and 2019, the Company recorded $0 and $13,897, respectively, related to the impairment of vessel assets in accordance with ASC 360 — “Property, Plant and Equipment” (“ASC 360”). Additionally, during the six months ended June 30, 2020 and 2019, the Company recorded $112,814 and $13,897, respectively, related to the impairment of vessel assets in accordance with ASC 360. At March 31, 2020, the Company determined that the expected estimated future undiscounted cash flows for four of its Supramax vessels, the Genco Picardy, the Genco Predator, the Genco Provence and the Genco Warrior, did not exceed the net book value of these vessels as of March 31, 2020. The Company adjusted the carrying value of these vessels to their respective fair market values as of March 31, 2020. This resulted in an impairment loss of $27,046 during the six months ended June 30, 2020. On February 24, 2020, the Board of Directors determined to dispose of the Company’s following ten Handysize vessels: the Baltic Hare, the Baltic Fox, the Baltic Wind, the Baltic Cove, the Baltic Breeze, the Genco Ocean, the Genco Bay, the Genco Avra, the Genco Mare and the Genco Spirit, at times and on terms to be determined in the future. Given this decision, and that the revised estimated future undiscounted cash flows for each of these older vessels did not exceed the net book value for each vessel given the estimated probabilities of whether the vessels will be sold, the Company adjusted the values of these older vessels to their respective fair market values during the three months ended March 31, 2020. Subsequent to February 24, 2020, the Company has entered into agreements to sell three of these vessels during the three months ended March 31, 2020, namely the Baltic Wind, the Baltic Breeze and the Genco Bay, which were adjusted to their net sales price. This resulted in an impairment loss of $85,768 during the six months ended June 30, 2020. Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the vessel sales. On August 2, 2019, the Company entered into an agreement to sell the Genco Challenger, a 2003-built Handysize vessel, for $5,250 less a 2.0% broker commission payable to a third party. As the anticipated undiscounted cash flows, including the net sales price, did not exceed the net book value of the vessel as of June 30, 2019, the vessel value for the Genco Challenger was adjusted to its net sales price of $5,145 as of June 30, 2019. This resulted in an impairment loss of $4,401 during the three and six months ended June 30, 2019. Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the vessel sale.
At June 30, 2019, the Company determined that the expected estimated future undiscounted cash flows for the Genco Champion, a 2006-built Handysize vessel, and the Genco Charger, a 2005-built Handysize vessel, did not exceed the net book value of these vessels as of June 30, 2019. As such, the Company adjusted the value of these vessels to their respective fair market values as of June 30, 2019. This resulted in an impairment loss of $9,496 during the three and six months ended June 30, 2019. Refer to Note 4 — Vessel Acquisitions and Dispositions for further detail regarding the vessel sale. |
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Loss (gain) on sale of vessels | Loss (gain) on sale of vessels During the six months ended June 30, 2020, the Company recorded a net loss of $486 related to the sale of vessels. The net loss of $486 recorded during the six months ended June 30, 2020 related primarily to the sale of the Genco Charger and Genco Thunder. During the six months ended June 30, 2019, the Company recorded a net gain of $611 related to the sale of vessels. The net gain of $611 recorded during the six months ended June 30, 2019 related primarily to the sale of the Genco Vigour. There were no vessels sold during the three months ended June 30, 2020 and 2019.
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Recent accounting pronouncements | Recent accounting pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, “Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-03”),” which change the disclosure requirements for fair value measurements by removing, adding, and modifying certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, and for interim periods within that year. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company has evaluated the impact of the adoption of ASU 2018-03 and has determined that there is no effect on its condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses" ("ASU 2016-13"). ASU 2016-13 amends the current financial instrument impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 was effective on January 1, 2020, with early adoption permitted. The Company adopted ASU 2016-13 during the first quarter of 2020 and it did not have a material impact on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”).” ASU 2020-04 provides temporary optional expedients and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for adoption at any time between March 12, 2020 and December 31, 2022. The Company is currently evaluating the impact of this adoption on its condensed consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restricted cash and cash equivalents |
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CASH FLOW INFORMATION (Tables) |
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Schedule of cash flow information related to operating leases |
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NET LOSS PER SHARE (Tables) |
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Components of denominator for calculation of basic and diluted net (loss) earnings per share |
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DEBT (Tables) |
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Schedule of components of Long-term debt |
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Schedule of effective interest rate and the range of interest rates on the debt |
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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
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FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values and carrying values of the Company's financial instruments |
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) |
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Schedule of accounts payable and accrued expenses |
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VOYAGE REVENUES (Tables) |
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Schedule of voyage revenue |
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STOCK-BASED COMPENSATION (Tables) |
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2014 MIP Plan | Warrants | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of warrant activity and warrants outstanding | The following table summarizes certain information about the warrants outstanding as of June 30, 2020:
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2015 EIP Plan | Stock Options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of nonvested stock amortization expense |
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Schedule of stock option activity |
The following table summarizes certain information about the options outstanding as of June 30, 2020:
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2015 EIP Plan | Restricted Stock Units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of nonvested stock amortization expense |
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Summary of nonvested restricted stock units |
The total fair value of the RSUs that vested during the six months ended June 30, 2020 and 2019 was $352 and $230, respectively. The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date. The following table summarizes certain information of the RSUs unvested and vested as of June 30, 2020:
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GENERAL INFORMATION (Details) |
6 Months Ended |
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Jun. 30, 2020
segment
item
t
| |
Segment reporting | |
Number of reportable segments | segment | 1 |
Drybulk Vessels | |
Segment reporting | |
Number of vessels in fleet | 53 |
Capacity of vessels | t | 4,837,000 |
Average age of vessels | 10 years |
Capesize Drybulk Carriers | |
Segment reporting | |
Number of vessels in fleet | 17 |
Ultramax Drybulk Carriers | |
Segment reporting | |
Number of vessels in fleet | 6 |
Supramax Drybulk Carriers | |
Segment reporting | |
Number of vessels in fleet | 20 |
Handysize Drybulk Carriers | |
Segment reporting | |
Number of vessels in fleet | 10 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Restricted Cash | ||||
Cash and cash equivalents | $ 127,722 | $ 155,889 | ||
Restricted cash - current | 14,855 | 6,045 | ||
Restricted cash - noncurrent | 315 | 315 | ||
Cash, cash equivalents and restricted cash | $ 142,892 | $ 162,249 | $ 165,436 | $ 202,761 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Voyage Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Voyage expense recognition | ||||
Net loss (gain) on purchase and sale of bunker fuel and net realizable value adjustments | $ 958 | $ (113) | $ 1,800 | $ 237 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Sale of Vessels (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2020
item
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Jun. 30, 2019
item
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Jun. 30, 2020
USD ($)
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Jun. 30, 2019
USD ($)
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Gain on sale of vessels | ||||
(Loss) gain on sale of vessels | $ (486) | $ 611 | ||
Number of vessels sold | item | 0 | 0 | ||
Genco Charger and Genco Thunder | ||||
Gain on sale of vessels | ||||
(Loss) gain on sale of vessels | $ (486) | |||
Genco Vigour | ||||
Gain on sale of vessels | ||||
(Loss) gain on sale of vessels | $ 611 |
CASH FLOW INFORMATION - Non-cash (Details) - USD ($) $ in Thousands |
6 Months Ended | |
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Jun. 30, 2020 |
Jun. 30, 2019 |
|
Non-cash investing and financing activities | ||
Cash paid for interest | $ 10,457 | $ 14,946 |
Cash paid for estimated income taxes | 0 | 0 |
Reclassification from vessels to vessels held for sale | 23,252 | |
Accounts payable and accrued expenses | ||
Non-cash investing and financing activities | ||
Purchase of scrubbers | 33 | 4,104 |
Purchases of vessels and ballast water treatment systems | 1,726 | 2,383 |
Purchase of other fixed assets | 490 | $ 77 |
Non-cash financing activities net proceeds from sale of assets | 13 | |
Non-cash financing activities cash dividends paid | 103 | |
Non-cash financing activities for deferred financing costs | $ 179 |
CASH FLOW INFORMATION - Stock-Based Compensation (Details) - 2015 EIP Plan - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Feb. 25, 2020 |
May 15, 2019 |
Mar. 04, 2019 |
Jun. 30, 2020 |
|
Restricted Stock Units | ||||
Non-cash investing and financing activities | ||||
Granted (in shares) | 173,749 | 29,580 | 106,079 | 178,385 |
Aggregate fair value | $ 1,227 | $ 255 | $ 890 | |
Stock Options | ||||
Non-cash investing and financing activities | ||||
Options to purchase (in shares) | 344,568 | 240,540 | 344,568 | |
Exercise price | $ 7.06 | $ 8.39 | $ 7.06 | |
Aggregate fair value | $ 693 | $ 904 |
CASH FLOW INFORMATION - Lease payments (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flow payments | $ 1,115 | $ 1,115 |
NET LOSS PER SHARE (Details) - shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 10, 2014 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Common shares outstanding, basic: | |||||
Weighted average common shares outstanding-basic | 41,900,901 | 41,742,301 | 41,883,629 | 41,734,248 | |
Common shares outstanding, diluted: | |||||
Weighted average common shares outstanding-basic | 41,900,901 | 41,742,301 | 41,883,629 | 41,734,248 | |
Weighted-average common shares outstanding, diluted (in shares) | 41,900,901 | 41,742,301 | 41,883,629 | 41,734,248 | |
Restricted Stock Units | |||||
Anti-dilutive shares (in shares) | 288,319 | 258,084 | 288,319 | 258,084 | |
Stock Options | |||||
Anti-dilutive shares (in shares) | 837,338 | 496,148 | 837,338 | 496,148 | |
MIP Warrants | |||||
Anti-dilutive shares (in shares) | 0 | 0 | 0 | 0 | |
Equity Warrants | |||||
Anti-dilutive shares (in shares) | 3,936,761 | 3,936,761 | 3,936,761 | 3,936,761 | |
Equity warrant term | 7 years | ||||
Equity Warrants | |||||
Number of shares of new stock in which each warrant or right can be converted | 0.10 |
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
RELATED PARTY TRANSACTIONS | ||||
Related party transactions | $ 0 | $ 0 | $ 0 | $ 0 |
DEBT - Components of Long-term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Line of Credit Facility | ||
Principal amount | $ 494,474 | $ 495,824 |
Less: Unamortized debt financing costs | (11,648) | (13,094) |
Less: Current portion | (79,522) | (69,747) |
Long-term debt, net | 403,304 | 412,983 |
Secured Debt | $495 Million Credit Facility | ||
Line of Credit Facility | ||
Principal amount | 373,654 | 395,724 |
Less: Unamortized debt financing costs | (9,941) | (11,642) |
Secured Debt | $133 Million Credit Facility | ||
Line of Credit Facility | ||
Principal amount | 120,820 | 100,100 |
Less: Unamortized debt financing costs | $ (1,707) | $ (1,452) |
DEBT - Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
DEBT | ||
Deferred financing costs, noncurrent | $ 11,648 | $ 13,094 |
DEBT - Interest Rates (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Interest rates on debt | ||||
Effective Interest Rate (as a percent) | 3.62% | 5.43% | 4.22% | 5.50% |
Minimum | ||||
Interest rates on debt | ||||
Range of interest rates (excluding unused commitment fees) | 2.67% | 4.90% | 2.67% | 4.90% |
Maximum | ||||
Interest rates on debt | ||||
Range of interest rates (excluding unused commitment fees) | 4.57% | 5.50% | 5.05% | 5.76% |
FAIR VALUE OF FINANCIAL INSTRUMENTS - RECURRING (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair value of financial instruments | ||
Principal amount of floating rate debt | $ 494,474 | $ 495,824 |
Carrying Value | ||
Fair value of financial instruments | ||
Cash and cash equivalents | 127,722 | 155,889 |
Restricted cash | 15,170 | 6,360 |
Principal amount of floating rate debt | 494,474 | 495,824 |
Fair value | ||
Fair value of financial instruments | ||
Cash and cash equivalents | 127,722 | 155,889 |
Restricted cash | 15,170 | 6,360 |
Principal amount of floating rate debt | $ 494,474 | $ 495,824 |
FAIR VALUE OF FINANCIAL INSTRUMENTS - NONRECURRING (Details) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
item
|
Jun. 30, 2020
USD ($)
item
|
Jun. 30, 2019
USD ($)
item
|
Dec. 31, 2019
USD ($)
|
|
Fair value of financial instruments | |||||
Impairment of operating lease right of use asset | $ 223,000 | $ 223,000 | |||
Fair Value, Measurements, Nonrecurring | |||||
Fair value of financial instruments | |||||
Number of vessels written down as part of impairment | 0 | 3 | 14 | 3 | |
Impairment of operating lease right of use asset | $ 0 | $ 0 | |||
Fair Value, Measurements, Nonrecurring | Level 3 | |||||
Fair value of financial instruments | |||||
Financial assets | 0 | 0 | $ 0 | ||
Financial liabilities | $ 0 | $ 0 | $ 0 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
ACCOUNTS PAYABLE AND ACCRUED EXPENSES. | ||
Accounts payable | $ 11,206 | $ 26,040 |
Accrued general and administrative expenses | 2,849 | 4,105 |
Accrued vessel operating expenses | 10,016 | 19,459 |
Total accounts payable and accrued expenses | $ 24,071 | $ 49,604 |
VOYAGE REVENUES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income statement | ||||
Lease, Practical Expedient, Lessor Single Lease Component | true | true | ||
Lease revenue | $ 11,983 | $ 25,852 | $ 31,134 | $ 49,242 |
Voyage Revenue | 62,223 | 57,698 | 141,408 | 127,772 |
Total voyage revenues | 74,206 | 83,550 | 172,542 | 177,014 |
Voyage | ||||
Income statement | ||||
Total voyage revenues | $ 74,206 | $ 83,550 | $ 172,542 | $ 177,014 |
LEASES - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
LEASES | ||||
Sublease income | $ 306 | $ 0 | $ 612 | $ 0 |
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 21, 2018
item
|
Dec. 31, 2018
USD ($)
item
|
Dec. 31, 2019
USD ($)
item
|
Jun. 30, 2020
USD ($)
|
|
Purchase commitment | ||||
Vessel assets | $ 1,273,861 | $ 1,109,341 | ||
Purchase Agreements for BWTS | ||||
Purchase commitment | ||||
Number of vessels to receive ballast water treatments systems | item | 42 | |||
Vessel assets | $ 12,783 | 16,049 | ||
Purchase Agreement of BWTS for Capesize Vessels | ||||
Purchase commitment | ||||
BWTS purchase price | $ 900 | |||
Purchase Agreement of BWTS for Supramax Vessels | ||||
Purchase commitment | ||||
BWTS purchase price | 600 | |||
Purchase Agreement of BWTS for Handysize Vessels | ||||
Purchase commitment | ||||
BWTS purchase price | $ 500 | |||
Scrubber Installation Agreements | ||||
Purchase commitment | ||||
Number of Capesize vessels to receive scrubber installations | item | 17 | |||
Number of completed scrubber installations | item | 16 | |||
Vessel assets | $ 41,270 | $ 42,621 |