Why Genco Shipping & Trading (GNK) is Tumbling on Thursday

Updated from 3:50 p.m. to include latest SEC filing. 

NEW YORK (TheStreet) -- Genco Shipping & Trading (GNK) shares are tumbling after The New York Post published a report that the shipping company would soon file for Chapter 11 bankruptcy protection. The newspaper cited an unnamed person familiar with the situation but has not disclosed its source.

By late afternoon, shares had taken off 18.6% to $1.31. Trading volume of 14.2 million was more than 8 times its three-month daily average. 

A spokesperson for Genco Shipping & Trading has yet to respond to a request for comment.

On Thursday, the company filed an 8-K Form with the SEC, informing that it had made the scheduled semi-annual interest payment of around $3.1 million originally due Feb. 18 owed on its 5% convertible senior notes due August 15, 2015. 

In February, the deep-sea freighter disclosed that it had entered into a limited waiver of default on that loan agreement but that under the terms of the indenture, a failure to pay interest does not constitute a default until a grace period of 30 days expires (March 21).

In its filing Thursday, the company said it "continues to be in discussions with representatives of its secured lenders and certain holders of the Notes concerning a potential restructuring of its indebtedness. The company does not intend to provide updates or details of the restructuring discussions."

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