Uncertainty haunts Genco

Wall Street appears to be growing increasingly concerned about the future of Genco Shipping & Trading (Genco).
Genco is led by chairman Peter Georgiopoulos.

Genco is led by chairman Peter Georgiopoulos.

The US bulker owner’s New York-listed shares plummeted 26% before bottoming out at around $1.19 in the hour leading up to the close.

Nearly 13 million shares had changed hands by 3:00 Thursday afternoon, which is well above a typical daily average of around 1.6 million.

Many believe the sell-off was sparked by growing speculation that a Chapter 11 bankruptcy filing may be imminent.

While uncertainty has haunted the Peter Georgiopoulos-led operator’s stock for some time observers note investors were really spooked this afternoon when the New York Post published an article that suggested a petition might come in less than 24 hours.

A leading market researcher who has been warning clients about the possibility of a Chapter 11 filing for some time says he is not surprised by the sell-off since Friday marks the expiration of a 30-day grace period linked to a lapsed bond interest payment.

In a recent regulatory filing Genco acknowledged that bankruptcy is a possibility but sources with close ties to the bulker owner’s management team have noted they would prefer to clean up its balance sheet on its own terms without the aid of a federal judge.

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