Genco Shipping & Trading is to acquire its separately quoted offshoot, Baltic Trading, in a deal that will see relatively little cash changing hands.
Under the terms of the agreement, Baltic Trading will become an indirect wholly-owned subsidiary of Genco.
Baltic Trading shareholders will receive 0.216 shares of Genco common stock for each share of Baltic Trading common stock they own at closing, with fractional shares to be settled in cash.
Genco shareholders are expected to own approximately 84.5% of the combined company and Baltic Trading shareholders 15.5% with the combined venture aiming to be a New York stock exchange listed company.
The combined company will own a combined fleet of 70 dry bulk vessels with an average age of 8.8 years and a total capacity of 5.16m dwt.
“This transaction is a natural evolution for Genco and Baltic Trading, and we are confident that it will deliver superior value to the shareholders of both companies,” said Georgiopoulos, who is chairman of both companies.
Georgiopoulos said the combined company would be well positioned to be an industry consolidator.
The deal amounts to confirmation of a corporate combination forecast in the last edition of TradeWinds.
