• |
Paying 18 consecutive quarterly dividends since 2019, the longest stretch in our drybulk peer group. Over this period, the Company has paid dividends of
$5.155 per share, or approximately 25% of the current share price as of April 12, 2024;
|
• |
Lowering our debt by 55% since 2021 and reduced our cash flow breakeven rate to the lowest in the peer
group; and
|
• |
Investing in our fleet to drive growth and earnings power. We have invested $520 million over the last five years in fleet expansion and
modernization, adding 17 high specification, fuel efficient vessels to our fleet. Through targeted ship purchases and investments in our vessels, we are modernizing our fleet and increasing our
earnings capacity, while reducing costs and improving fuel efficiency.
|
• |
Genco’s TSR (total shareholder return) as of the closing price on April 12, 2024, for the past 1-, 3- and 5-year periods, are 37.7%, 146.9% and 237.6%,
respectively, significantly higher than the median TSR of our proxy statement shipping performance peers which were 16.4%, 134.4% and 148.3% for the past 1-, 3- and 5-year periods,
respectively, and also significantly higher than the TSR of the S&P 500 which were 27.2%, 30.1% and 91.6% for the past 1-, 3- and 5-year periods, respectively.1
|
James G. Dolphin
|
✔ |
Serves as Managing Director and President of a leading shipping and offshore merchant bank, and formerly a principal of a commercial freight management and consultancy practice
|
Paramita Das
|
✔ |
Served as Global Head of Marketing, Development and ESG, Metals and Minerals for a leading global mining group
|
Kathleen C. Haines
|
✔ |
Served as CFO and Treasurer of a company that manages a fleet of oil tankers and brings strategic and marketing experience
|
Basil G. Mavroleon
|
✔ |
46 years of shipping industry experience, serving as a Managing Director at a comprehensive sale and purchase, newbuilding, marine projects and ship finance brokerage
|
Karin Y. Orsel
|
✔ |
Shipping executive and entrepreneur with over 33 years of experience in the industry
|
Arthur L. Regan
|
✔ |
30-plus years of shipping experience in executive roles and managing and investing across the industry
|
John C. Wobensmith
|
✔ |
Genco’s CEO, who brings more than 30 years of shipping industry experience and expertise in every aspect of the business including capital allocation, M&A, commercial, technical and operations
|
• |
Abrupt and perplexing deviations of corporate strategy;
|
• |
High financial leverage at peak market cycles;
|
• |
A litany of related-party transactions;
|
• |
Self-dealing and poor corporate governance.
|
Conducting a series of large-scale highly dilutive equity offerings in 2016 and 2017 that resulted in a complete washout of shareholder value.5
|
Entering a series of related party transactions that gave control of DryShips to Economou without other shareholders receiving any control premium.6
|
Buying out the remaining 17% in 2019, taking DryShips private, but at a significant discount to net asset value.7
|
• |
Setting the record straight on our engagement: Members of our Board and management team sought to engage constructively with Economou since his investment became public. This includes
numerous communications promptly responding to Economou and his advisors and offering to meet in-person to thoroughly discuss his views.
|
• |
Economou’s self-serving and short-sighted share repurchase demands: Over the course of these interactions, Economou has pushed the Company to sell
vessels and pursue large share repurchases in amounts exceeding Genco’s cash on hand.
|
o |
Meaningfully increase financial leverage;
|
o |
Reduce market capitalization and trading float;
|
o |
Reduce our available liquidity for opportunistic fleet growth;
|
o |
Increase our cash flow breakeven rate;
|
o |
Impact our ability to pay dividends; and
|
o |
Diminish real earnings in this strong current market.
|
• |
Economou flip-flops and demands Genco launch a premium self-tender in which he would likely be a seller: When presented with the analysis on March 26, 2024, Economou agreed that ideas about
share repurchases and selling vessels would not create value in the present market. As part of that conversation, Economou indicated he would exit his position if the shares reached a certain level (we note that these details of
this conversation were conspicuously omitted from GK Investor’s proxy materials). Later that day, he insisted Genco commence a tender offer for $100 million of its own shares at a significant premium to the trading price. The Board
reviewed the idea with its external financial advisors and determined this type of premium repurchase is not in the best interest of the Company or its shareholders, as it would
require an increase in Genco’s leverage, decrease our earnings potential, impact our ability to pay out future dividends, reduce the Company’s market cap and impact trading liquidity. The analysis also showed that there are better
uses of Genco’s cash, such as potential vessel purchases, that the Company believes can create more value for shareholders than a self-tender.
|
• |
Adding Economou’s nominee to the Genco Board is not in the best interest of Genco shareholders: Economou originally nominated two directors for election to the Board to further his
influence on the Company: Randee Day and Robert Pons. He later withdrew Day’s nomination without giving a reason for doing so in his preliminary proxy materials.
|
• |
Pons has been a professional pawn to activists with shady track records throughout his career and we believe he has demonstrated no ability to exercise independence. He has served as a
director nominee on behalf of the family of Gary Singer, a convicted felon permanently barred by the SEC from acting as an officer or director of a public company, as well as on four other dissident slates proposed by activist
shareholders, including Murchinson Ltd., a Canadian activist fund that settled charges of violations of short sale rules with the SEC in 2021 and whose owner, Marc Bistricer, was the subject of enforcement action by the Ontario
Securities Commission.8 As a director, he’s overseen self-dealing transactions that have benefited his activist sponsors, including selling assets to
Singer-controlled companies and entering into management agreements with the Singers.9 Given Economou’s record, we believe Genco shareholders should be
concerned with whom he is truly loyal.
|
• |
Pons’ lack of relevant experience and record of value destruction stands in stark contrast to that of Jim Dolphin, Genco’s Chairman that Economou is targeting as part of his proxy fight. Jim
Dolphin has played a key role in developing and refining the Company’s Comprehensive Value Strategy as a member of the Board. He brings a strong understanding of cyclical businesses and rigorous reviews of capital spending given his
experience in shipping and the oil and gas industries. Over his career he has provided advice on transportation strategy and capital allocation to companies such as the resource giant BHP, the oil major BP, the Union Pacific
Railroad and the Panama Canal Commission. He was instrumental in creating Oceania Cruises and as a director, he helped grow the business which was eventually sold to Apollo Management for $850 million. At OSG America he helped the
company preserve value amidst the 2008 market downturn. Like the other directors on the Genco Board, he is open minded with respect to any and all opportunities for value creation, and he leads the Company’s shareholder engagement.
|
James G. Dolphin
Chairman of the Board
|
John C. Wobensmith
Chief Executive Officer
|
If you have any questions or require any assistance with voting your shares, please call or email Genco’s proxy solicitor:
MacKenzie Partners, Inc.
Toll Free: 800-322-2885
Email: proxy@mackenziepartners.com
|
• |
Genco is successfully executing on its Comprehensive Value Strategy to deliver compelling quarterly dividends for shareholders, reduce our debt and
invest in growth opportunities to drive value through drybulk cycles.
|
• |
Genco’s highly qualified, active and engaged director nominees bring vast experience and expertise in shipping, fleet management, commercial and technical management, drybulk commodities, capital
allocation management, financial reporting and M&A.
|
• |
Economou is a competitor seeking access to Genco’s Board room. Economou has a distinct track record of self-dealing to the detriment of other investors and a history of poor corporate
governance practices.
|
• |
Economou’s nominee lacks relevant experience and has overseen significant value destruction at companies on which he has served on the board. He has been a professional pawn to activists
with shady track records throughout his career and we believe he has demonstrated no ability to exercise independence. The Genco Board unanimously concluded that he would not be additive to our already strong, focused and
experienced Board.
|
• |
The proposals Economou has made to the Genco Board have been self-serving. They have been thoroughly assessed and would double Genco’s net debt and impair our future ability to pay dividends with
no discernable long-term benefit to all of our shareholders.
|
• |
Paying 18 consecutive quarterly dividends since 2019, the longest stretch in our drybulk peer group. Over this period, the Company has paid dividends of
$5.155 per share, or approximately 25% of the current share price as of April 12, 2024;
|
• |
Lowering our debt by 55% since 2021 and reduced our cash flow breakeven rate to the lowest in the peer
group; and
|
• |
Investing in our fleet to drive growth and earnings power. We have invested $520 million over the last five years in fleet expansion and
modernization, adding 17 high specification, fuel efficient vessels to our fleet. Through targeted ship purchases and investments in our vessels, we are modernizing our fleet and increasing our
earnings capacity, while reducing costs and improving fuel efficiency.
|
• |
Genco’s TSR (total shareholder return) as of the closing price on April 12, 2024, for the past 1-, 3- and 5-year periods, are 37.7%, 146.9% and 237.6%,
respectively, significantly higher than the median TSR of our proxy statement shipping performance peers which were 16.4%, 134.4% and 148.3% for the past 1-, 3- and 5-year periods,
respectively, and also significantly higher than the TSR of the S&P 500 which were 27.2%, 30.1% and 91.6% for the past 1-, 3- and 5-year periods, respectively.1
|
James G. Dolphin
|
✔
|
Serves as Managing Director and President of a leading shipping and offshore merchant bank, and formerly a principal of a commercial freight management and consultancy practice |
Paramita Das
|
✔
|
Served as Global Head of Marketing, Development and ESG, Metals and Minerals for a leading global mining group |
Kathleen C. Haines
|
✔
|
Served as CFO and Treasurer of a company that manages a fleet of oil tankers and brings strategic and marketing experience |
Basil G. Mavroleon
|
✔
|
46 years of shipping industry experience, serving as a Managing Director at a comprehensive sale and purchase, newbuilding, marine projects and ship finance brokerage |
Karin Y. Orsel
|
✔
|
Shipping executive and entrepreneur with over 33 years of experience in the industry |
Arthur L. Regan
|
✔
|
30-plus years of shipping experience in executive roles and managing and investing across the industry |
John C. Wobensmith
|
✔
|
Genco’s CEO, who brings more than 30 years of shipping industry experience and expertise in every aspect of the business including capital allocation, M&A, commercial, technical and operations |
• |
Abrupt and perplexing deviations of corporate strategy;
|
• |
High financial leverage at peak market cycles;
|
• |
A litany of related-party transactions;
|
• |
Self-dealing and poor corporate governance.
|
Conducting a series of large-scale highly dilutive equity offerings in 2016 and 2017 that resulted in a complete washout of shareholder value.5
|
Entering a series of related party transactions that gave control of DryShips to Economou without other shareholders receiving any control premium.6
|
Buying out the remaining 17% in 2019, taking DryShips private, but at a significant discount to net asset value.7
|
• |
Setting the record straight on our engagement: Members of our Board and management team sought to engage constructively with Economou since his investment became public. This includes
numerous communications promptly responding to Economou and his advisors and offering to meet in-person to thoroughly discuss his views.
|
• |
Economou’s self-serving and short-sighted share repurchase demands: Over the course of these interactions, Economou has pushed the Company to sell
vessels and pursue large share repurchases in amounts exceeding Genco’s cash on hand.
|
o |
Meaningfully increase financial leverage;
|
o |
Reduce market capitalization and trading float;
|
o |
Reduce our available liquidity for opportunistic fleet growth;
|
o |
Increase our cash flow breakeven rate;
|
o |
Impact our ability to pay dividends; and
|
o |
Diminish real earnings in this strong current market.
|
• |
Economou flip-flops and demands Genco launch a premium self-tender in which he would likely be a seller: When presented with the analysis on March 26, 2024, Economou agreed that ideas about
share repurchases and selling vessels would not create value in the present market. As part of that conversation, Economou indicated he would exit his position if the shares reached a certain level (we note that these details of
this conversation were conspicuously omitted from GK Investor’s proxy materials). Later that day, he insisted Genco commence a tender offer for $100 million of its own shares at a significant premium to the trading price. The Board
reviewed the idea with its external financial advisors and determined this type of premium repurchase is not in the best interest of the Company or its shareholders, as it would
require an increase in Genco’s leverage, decrease our earnings potential, impact our ability to pay out future dividends, reduce the Company’s market cap and impact trading liquidity. The analysis also showed that there are better
uses of Genco’s cash, such as potential vessel purchases, that the Company believes can create more value for shareholders than a self-tender.
|
• |
Adding Economou’s nominee to the Genco Board is not in the best interest of Genco shareholders: Economou originally nominated two directors for election to the Board to further his
influence on the Company: Randee Day and Robert Pons. He later withdrew Day’s nomination without giving a reason for doing so in his preliminary proxy materials.
|
• |
Pons has been a professional pawn to activists with shady track records throughout his career and we believe he has demonstrated no ability to exercise independence. He has served as a
director nominee on behalf of the family of Gary Singer, a convicted felon permanently barred by the SEC from acting as an officer or director of a public company, as well as on four other dissident slates proposed by activist
shareholders, including Murchinson Ltd., a Canadian activist fund that settled charges of violations of short sale rules with the SEC in 2021 and whose owner, Marc Bistricer, was the subject of enforcement action by the Ontario
Securities Commission.8 As a director, he’s overseen self-dealing transactions that have benefited his activist sponsors, including selling assets to
Singer-controlled companies and entering into management agreements with the Singers.9 Given Economou’s record, we believe Genco shareholders should be
concerned with whom he is truly loyal.
|
• |
Pons’ lack of relevant experience and record of value destruction stands in stark contrast to that of Jim Dolphin, Genco’s Chairman that Economou is targeting as part of his proxy fight. Jim
Dolphin has played a key role in developing and refining the Company’s Comprehensive Value Strategy as a member of the Board. He brings a strong understanding of cyclical businesses and rigorous reviews of capital spending given his
experience in shipping and the oil and gas industries. Over his career he has provided advice on transportation strategy and capital allocation to companies such as the resource giant BHP, the oil major BP, the Union Pacific
Railroad and the Panama Canal Commission. He was instrumental in creating Oceania Cruises and as a director, he helped grow the business which was eventually sold to Apollo Management for $850 million. At OSG America he helped the
company preserve value amidst the 2008 market downturn. Like the other directors on the Genco Board, he is open minded with respect to any and all opportunities for value creation, and he leads the Company’s shareholder engagement.
|
James G. Dolphin
Chairman of the Board
|
John C. Wobensmith
Chief Executive Officer
|
If you have any questions or require any assistance with voting your shares, please call or email Genco’s proxy solicitor:
MacKenzie Partners, Inc.
Toll Free: 800-322-2885
Email: proxy@mackenziepartners.com
|
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