Genco Shipping & Trading is defending its strategy as Greek magnate George Economou takes aim at the company’s board.
Chief executive John Wobensmith and chairman James Dolphin said in a letter to shareholders that the New York bulker owner continues to deliver “sustainable, long-term shareholder value” by paying dividends, deleveraging and investing in its fleet.
“We developed this strategy with the goal of ensuring that Genco is well positioned to drive value through dry bulk shipping market cycles by enhancing the company’s potential to deliver returns to shareholders, reducing the company’s financial risks and maximising the company’s ability to pursue accretive growth opportunities,” the letter, published on Monday, read.
It said it has paid 17 consecutive quarterly dividends, paid off $300m in debt between the first quarter of 2021 and the third quarter of 2023 and spent $520m adding 17 ships to its fleet.
Further, Genco closed on a $500m credit facility and has $290m in an undrawn revolver available.
It also trumpeted its top ranking in Weber Research’s ESG scorecard three years running.
“We believe that achieving low net leverage and, in turn, reduced cash flow breakeven levels provides the most flexibility and optionality for the company to pursue accretive growth opportunities while maintaining meaningful capital returns during times of strong markets, as well as through periods of downward volatility in our highly cyclical business,” Wobensmith and Dolphin said.
“We believe that Genco’s low leverage, high dividend payout model executed in this scale is industry-leading in the dry bulk shipping public markets, which is a core differentiator of the company, making Genco a highly attractive platform for you, our valued shareholders.”
The letter comes nearly two weeks after Economou nominated shipping finance veteran Randee Day and Spartan Advisors chief executive Robert Pons to Genco’s board.
The move follows a disclosure in late September that the shipowner had nabbed a 5.4% stake in Genco.
Economou is not a stranger to public markets.
He had his DryShips bulker-owning vehicle listed in New York from 2005 to 2019, when he took the company private.
The company ran into controversy prior to the take-private offer for its dealings with financier Kalani Investments, which resulted in a shareholder lawsuit.
On Friday, Genco shares closed $0.12 higher to $17.10.
Over the weekend in after-hours trading, the share rose $0.17 higher to $17.27.
