Stanislav Oleynikov

Genco Shipping: A New Bubble in the Making?

To Tim Plaehn:

The question is, whether China revival will be sufficient to emply drybulk all the drybulk ships. I didn't expect that China growth will be sufficient even during the boom. The vast majority of ships in the orderbook for 2009 will delivered and 2010 is not going to fall far behind even after all cancellations.

Of course, GNK cashflow in 2009 is probably going to be sufficient to pay dividends (if charter contracts will be honored), however I don't think than is going to pay any dividends for the foreseeable future. It is clearly in violation of loan covenants and a typical deal with lenders in such cases invovle restrictions on paying dividends. Have a look at EGLE and OCNF.