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Genco founder Georgiopoulos resigns, Apollo's Regan steps in as chairman

Genco founder Georgiopoulos resigns, Apollo's Regan steps in as chairman
In the wake of last week’s equity infusion at of Genco Shipping & Trading by three private equity (PE) holders, Peter Georgiopoulos, who founded the company in 2005, has now stepped down as chairman.

In a tersely worded regulatory filing, the company announced that Arthur L. Regan, who is currently a director of the company, would step in as interim executive chairman of the board. Peter Georgiopoulos will receive a one time severance payment plus full vesting of various equity grants.

Regan, presently operating partner at Apollo Global Management, is best known for his previous roles as the top man at Principal Maritime Management, an Apollo sponsored entity whose fleet of suezmax tankers was sold to Teekay Corp in late 2015. Prior to his time at Principal Maritime, beginning in 2010, Regan came out of the Stena organization, serving as ceo of Arlington Tankers, a listed company which had acquired vessels from Stena companies at its outset.

A group of funds within the Apollo universe were part of a preferred equity deal announced last week; the Apollo companies, along with funds tied to Centrebridge Partners and Strategic Value Partners, agreed to invest an aggregate of $125m, in a purchase of preferred shares. Bank lenders, in turn, agreed to amend the terms of company bank debt. Reflecting the predilection of PE executives to fly first class, the deals are expected to give Genco a “runway” out through 2018, by which time the bulk carrier market might have turned upward.

Genco’s fleet consists 70 vessels totaling 5.2m dwt - 13 capesize, eight panamax, four ultramax, 21 supramax, six handymax and 18 handysize, after the expected delivery of two ultramax newbuilds.

It is premature to predict the exact nature of changes at Genco, which merged with a related company, Baltic Trading, in 2015. However, the recent evolution of Genco’s balance sheet has similarities to recent happenings at another listed drybulk outfit, Eagle Bulk Shipping, also originally founded by Greek-American principals, where financial investors have restructured debt and taken control of the company.

Eagle has re-invented itself as a company with operational smarts, instead of the circa 2005 model of placing vessels on period time charters.  Regan, one of the few executives in the New York market who can navigate the worlds of shipping and PE investing, is certainly the right man for this tough role.