Genco Shipping & Trading's second-largest investor may be about to pull the plug on its $60m position in the New York-based bulker owner.
Strategic Value Partners (SVP) is making negative noises about the John Wobensmith-led outfit after its representative on Genco's board abruptly resigned on Tuesday.
The Greenwich, Connecticut-based hedge fund said it had "recently become less constructive on their investment in the securities of the issuer, and ... may seek to dispose of some or all of such securities".
With a holding of more than 8.1m shares reflecting a stake of nearly 20%, SVP trails only Centerbridge Partners as a Genco investor. Centerbridge at last reporting held nearly 10.5m shares and a 25% stake.
Genco management was not immediately available for comment on the SVP actions.
SVP and Centerbridge are two of the three private equity firms that backed a November 2016 financing restructuring of Genco during a downturn in the dry market, gaining large equity positions in the process.
The third is Apollo Global Management, which recently sold off some of its stake in the New York-listed owner.
Apollo funds sold just over 1m Genco shares on 11 December at an average $7.15 per share. Apollo retains about 4.4m shares and a 10.5% stake, keeping its position as the owner's third-largest holder.
Lone representative
The week's events saw the resignation of Christoph Majeske, an SVP director who was the hedge fund's lone representative on the Genco board.
At its current level of shareholding, SVP remains entitled to a board seat unless it further reduces its position. The distressed-assets specialist had held two seats until November last year, when it sold about 2m shares to bring its position to slightly below 20%.
Genco shares were trading at $7.24 on Friday morning in New York, down a penny on the day. They have seen a 52-week low of $4.27 and a high of $11.22.
The owner has a current market capitalisation of just over $300m.
Genco operates 48 capesize, ultramax, supramax and handysize bulkers.
SVP has about $10bn in assets under management globally.
