Before the opening bell, the steel shipping company saw a sharp double digit drop before shooting back up.
Late Thursday night Genco announced it had reached "a restructuring agreement with a majority of lenders that gives it a road map for a Chapter 11 bankruptcy reorganization," Bloomberg reported.
The deal includes the conversion of a 2007 credit line into 81.1% of the equity in the company once it is restructured. The $125 million of convertible securities the company has would be switched out for 8.4% of the equity, according to a Genco regulatory filing.
Genco said it needs to reach a "definitive agreement" by Friday in order to keep the deal with lenders in place.
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TheStreet Ratings team rates GENCO SHIPPING & TRADING as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENCO SHIPPING & TRADING (GNK) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself."