309 - Genco - Colemen Declaration

14-11108-shl Doc 309 Filed 06/20/14 Entered 06/20/14 23:14:16 Main Document
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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK
— —X
In re: : Chapter 11
GENCO SHIPPING & TRADING LIMITED, et aL, : Lead Case No. 14-11108 (SHL)
Debtors. : Jointly Administered
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DECLARATION OF TIMOTHY R. COLEMAN IN SUPPORT OF CONFIRMATION

OF THE FIRST AMENDED PREPACKAGED PLAN OF REORGANIZATION
OF THE DEBTORS UNDER CHAPTER II OF THE BANKRUPTCY CODE
I, Timothy R. Coleman, hereby declare as follows under penalty of perjury pursuant to 28
U.S.C. § 1746:
1. I am over 21 years of age. I am a senior managing director and head of the
Restructuring & Reorganization Group of Blackstone Advisory Partners L.P. ("Blackstone"), a
financial advisory services firm that maintains offices located at 345 Park Avenue, New York, NY
10154. By order dated May 16, 2014, the Bankruptcy court for the Southern District of New York
authorized Genco Shipping & Trading Limited ("Genco") and certain of its affiliates (collectively,
the "Debtors" or the "Company") in the above captioned chapter 11 cases (the "Chapter 11 Cases")
to employ and retain Blackstone as financial advisor to the Debtors [Docket No. 177].
2. I submit this declaration (the "Declaration") in support of confirmation of the
First Amended Prepackaged Plan of Reorganization of the Debtors under Chapter 11 of the
Bankruptcy Code (as it may be further modified or amended, the "Prepack Plan")
[Docket No. 284].1
1 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Prepack
Plan.
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3. I have reviewed and am generally familiar with the terms and provisions of the
Prepack Plan and the Disclosure Statement for the Prepack Plan, dated April 16, 2014 (the
"Disclosure Statement"') [Docket No. 15], as well as with certain of the documents comprising the
Plan Supplement (as may be further modified or amended, the "Plan Supplement") [Docket Nos.
166, 287].
4. Except as otherwise indicated, I have personal knowledge of the matters set
forth herein. I am authorized to submit this declaration on behalf of Blackstone, and if called as a
witness, would testify competently to the facts set forth in this Declaration.
BACKGROUND AND QUALIFICATIONS3
A. General Background
5. Since joining Blackstone in 1992, I have worked on a broad range of
restructuring and reorganization assignments for companies, creditor groups, special committees of
corporate boards, corporate parents of troubled companies, and acquirers of distressed assets. Over
the course of my career, I have advised senior management and boards of directors of companies in a
wide variety of industries in connection with restructurings, mergers and acquisitions, and financing
transactions. In particular, I have been involved in numerous restructurings, including, without
limitation, Adelphia, Bidermann Industries USA, Cable & Wireless Holdings, RCN, Delta Air Lines,
Excel Maritime Carriers, the Los Angeles Dodgers, Residential Capital, and the City of Detroit.
6. I hold a Bachelor of Arts degree from the University of California at Santa
Barbara and a Master of Business Administration degree from the University of Southern California.
2 Certain of the disclosures herein relate to matters within the knowledge of other professionals at Blackstone and rely
in part on information and materials that the Debtors' personnel and other advisors have gathered, prepared, verified, and
provided.
3 A detailed description of the Company's operations, capital structure and the events leading up to the commencement
of these Chapter 11 Cases is contained in the Declaration of John C. Wobensmith Pursuant to Local Bankruptcy Rule
1007-2 and In Support of First Day Motions and Applications [Docket No. 3].
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Prior to joining Blackstone, I was for twelve years a vice president at Citibank N.A., where I divided
my time between corporate restructuring, real estate restructuring, and loan syndications. Some of
my professional accomplishments include the following: in 2014, I was honored by the M&A
Advisor with the 2014 Leadership Award; in 2013,1 was inducted into the Turnaround, Restructuring
and Distressed Investing Industry Hall of Fame; in 2011, I was named Global Investment Banker of
the Year by the Turnaround Atlas Awards; and in 2001 I was appointed a Fellow of the American
College of Bankruptcy and currently serve as an at large member of the Circuit Admissions Council.
I often speak on restructuring topics at conferences and seminars and have been a frequent guest
lecturer at Columbia University's Business School and Law School, as well as New York
University's Stern School of Business. Additionally, I have served as an expert witness on numerous
occasions, including instances involving valuation.
7. Blackstone is a leading global provider of financial advisory services and
alternative asset manager. Its restructuring and reorganization advisory operation is one of the
leading advisory services providers to companies and creditors in restructurings and bankruptcies.
Blackstone's professionals have extensive experience providing financial advisory and investment
banking services to financially distressed companies in complex financial restructurings. Since 1991,
Blackstone has advised on hundreds of distressed situations, both in and out of bankruptcy
proceedings, involving over $1 trillion of total liabilities. I personally have more than twenty years of
experience advising distressed companies regarding valuation and restructuring issues in a wide range
of industries.
B. Experience in the Shipping Industry
8. Blackstone and its professionals also have significant experience in the
shipping industry. I founded the shipping practice within Blackstone's restructuring group. Both my
team at Blackstone and I have substantial, direct, hands-on experience in prior shipping restructuring
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cases, and I am familiar with the economic characteristics and nuances of the shipping industry,
including how it differs from other industries.
9. More specifically, Blackstone has advised clients in several major
restructurings in the shipping industry. These restructurings include: Excel Maritime Carriers
(advised a $770 million bank syndicate in the company's chapter 11 proceeding); Overseas
Shipholding Group (advised a creditor in the company's chapter 11 proceedings); ZIM Integrated
Shipping Services (advising bondholder committee in an out-of-court restructuring); Cecon
ASA/Davie Shipyard (advised York Capital Management on the restructuring of Cecon and its initial
$108 million investment to restart operations at the Davie Shipyard in Canada to construct vessels
ordered by Cecon); and Ermis Maritime Shipping (advised company in out-of-court exchange).
Blackstone's restructuring group has also advised on other transactions in the shipping industry
involving debt and equity capital financings.
C. Blackstone's Engagement
10. Blackstone's engagement by the Debtors is more fully described in the
Declaration of John James O'Connell III in Support of Confirmation of the Prepack Plan [Docket No.
280], which is incorporated herein by reference. As a result of pre- and post-petition work performed
on behalf of the Debtors, Blackstone has acquired significant knowledge of the Debtors and their
businesses and is intimately familiar with the Debtors' financial affairs, debt structure, operations,
and related matters and assisted in the development and negotiation of the Prepack Plan.
11. During and in advance of these prepackaged Chapter 11 Cases, I and others
from Blackstone have analyzed the value of the Debtors. In developing its view on valuation
Blackstone relied upon several external sources of information:
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Clarksons: Clarksons, including Clarksons Shipping Intelligence

Network and Clarksons Shipping Intelligence Weekly , is a leading
provider of integrated shipping services, with capabilities in shipbroker,
ship financing, port services, and research - providing data on over
100,000 vessels either in service or on order, as well as extensive trade
and commercial data.
Maritime Strategies International ("MSI"): MSI offers independent

market forecasting and business advisory services for shipping clients,
with a particular focus on maritime economics and econometric
modeling.
Marsoft; Marsoft is a leading maritime industry consultant that provides

market research and forecasting services based on quantitative analysis of
market developments and analysis of risk and financial performance.
S&P Capital IO ("CapIQ"): CapIQ, a business unit of McGraw Hill

Financial, tracks information and filings of companies, equity research
reports, and other market data and is a leading provider of multi-asset
class and realtime data, research, and analytics. All public market data
from CapIQ used in our reports is quoted as of May 22, 2014
12. Blackstone also (a) reviewed the Debtors' financial projections, which are
attached as Appendix H to the Disclosure Statement (the "Projections") and (b) assisted with the
preparation of a liquidation analysis for the Debtors, which is attached as Exhibit I to the Disclosure
Statement (the "Liquidation Analysis"). I describe below Blackstone's views on valuation, whether
the Prepack Plan is in the best interests of all creditors and interest holders, and whether the Prepack
Plan is feasible.
4 Clarksons Shipping Intelligence Network is a comprehensive shipping database that includes market information,
periodic reports, time series, orderbook specifics, and fleet and vessel details.
5 Clarksons Shipping Intelligence Weekly is a report covering developments across all shipping markets that includes
industry commentary, vessel specifications, owner and manager details, and fleet statistical analysis.
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INDUSTRY OVERVIEW
A. General Overview
13. The Debtors' industry - global drybulk shipping - is a highly competitive and
fragmented market. The market for drybulk vessels is also a highly competitive commodity market
in and of itself. The primary customers of the drybulk market are diversified natural resource
companies, electric utilities, agriculture producers, and commodities traders and distributors. The
demand for drybulk transportation services is affected by the underlying demand for the commodities
shipped and is strongly dependent on the growth of the global economy, including gross domestic
product and industrial production.
14. Fleet operators lease out their drybulk vessels through a number of different
contracting methods, with owners generally receiving semi-monthly charter-hire payments and being
responsible for operating expenses (some exceptions exist). The two major leasing methods are:
a. Spot Charter: A spot charter involves the carriage of a specific amount and
type of cargo from one port to another. Spot charters are short-term (one to
three months) and include a single voyage. In such an arrangement, owners
pay for commissions, port costs, and fuel expenses. An operator that leases out
vessels in the spot market is vulnerable to short-term rate fluctuations.
b. Time Charter: A time charter involves the use of a vessel for a number of
months or years (generally greater than four months in duration). In these
types of arrangements, customers pay for commissions, port costs, and fuel
expenses. Time charter rates are quoted on a time charter equivalent ("TCE")
basis, which is net of commissions, port costs, and fuel expenses, in order to
allow for comparability between spot charter and time charter rates. An
operator that uses fixed-rate time charters locks in stable contractual revenues
for the duration of the time charter.
15. Drybulk vessels can be subdivided into four main vessel size categories based
on cargo carrying capacity:
a. Handvsize Vessels: Handysize vessels carry less than 40,000 deadweight

tonnage ("DWT") and almost exclusively carry minor bulk6 cargoes. They are
•'Minor bulks" include such cargoes as steel products, forest products, fertilizers, and minerals.
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generally suitable for regional trading and small ports with size restrictions.
The Debtors have thirteen of these vessels.
b. Handvmax Vessels: This class includes (i) Handymax, which carry 40,000
60,000 DWT and (ii) "Supramax", which carry 50,000-60,000 DWT. The
Debtors have seventeen Supramax and six Handymax vessels. These vessels
carry mainly grains and minor bulks. They are frequently built with on-board
cranes that enable them to load and discharge cargo in countries and ports with
limited infrastructure.
c. Panamax Vessels: the Debtors have eight of these vessels, which carry
between 60,000-80,000 DWT. These are the largest drybulk vessels able to
traverse the Panama Canal and carry mainly coal, grain, and, to a lesser extent,
minor bulks.
d. Capesize Vessels: Debtors have nine of these vessels, which carry in excess of
100,000 DWT. The Capesize sector is focused primarily on long haul iron ore
and coal trade routes between China, Brazil, and Australia.7
B. Drybulk Shipping Economics
16. Several features of the drybulk shipping industry have a profound impact on its
economics and are fundamental considerations for any valuation of a drybulk shipping company. As
an initial matter, the drybulk shipping industry is highly fragmented, with low barriers to entry and
commoditized assets and services. Over 1,700 independent drybulk carriers operate over 10,000
vessels.8 At the same time, there is little concentration of ownership; the top twenty owners hold less
than 20% of the global dry bulk fleet.
17. Drybulk transport is, moreover, a largely commoditized service, with little to
differentiate competitors. International regulations, such as those enforced by the International
Maritime Organization, require that all vessels adhere to common standards. As a result, a mining
company seeking to transport 120,000 tons of iron ore from Australia to China can call on any of
hundreds of Capesize bulkers to complete the task. That vessel owners provide substantially identical
services inhibits individual firms form earning a premium to the market. Brand loyalty is limited and
7 Relatively few ports around the world have the infrastructure to accommodate Capesize vessels.
8 See Clarkson PLC, Shipping Intelligence Network 2010 (May 21, 2014) (listing vessels by owners).
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provides no basis to negotiate on price. In fact, companies are unable to set their own pricing
schedules. Rather, rates are determined on a daily basis by supply and demand in the market.
Consequently, a company's ability to predict long term revenues is severely constrained.
18. The dry bulk market also has low barriers to entry. Given access to capital,
prospective entrants can quickly assemble fleets and compete with incumbent operators. Since 2011,
over 240 shipyards have constructed and delivered more than 3,500 drybulk vessels.9 At the same
time, there is a liquid and active market for the purchase of drybulk vessels. Since the beginning of
2013, over 600 vessel sales have been reported.10 In light of these factors, it is not surprising that, in
the last five years, the industry has only fragmented further, with the number of vessel owners
increasing by 30%.
19. In addition, investors in drybulk shipping need not even directly manage
shipping assets. Rather, they can readily engage third-party ship managers or contribute their vessels
to a pool and compete with incumbents.11 A lack of existing infrastructure, brand recognition, or
scale is not a significant hindrance to new entrants in the industry - and thus little value resides in
such features. Consequently, when day rates rise and drybulk vessels are able to earn a higher return,
market participants respond by ordering more ships, thereby increasing overall supply and lowering
returns back to the cost of capital. Potential entrants with access to capital can become viable
competitors in short order.
9 See id. (listing vessels by shipyard).

10 See id. (describing sales).
11 See Martin Stopford, Maritime Economics 324 (3d ed. 2009) ("In many ways shipping companies are very similar to
the 'firms' which classical economists had in mind when they developed their theory of perfect competition. . . . Over
5,000 companies compete fiercely in a market place where barriers to free competition such as tariffs, transport costs and
product branding hardly exist."); Richard A. Brealey et al., Principles of Corporate Finance 286 (11th ed. 2014) (without
specific regard for industry, advising suspicion of "any investment proposal that predicts a stream of economic rents into
the indefinite future. Try to estimate when competition will drive the NPV down to zero, and think of what that implies
for the price of your product.").
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20. These characteristics of the drybulk shipping industry distinguish it from other
markets that may appear similar at first glance, but involve services that are less commoditized or
feature more barriers to entry and less competition.12 For example, the shipping of containers, as
opposed to drybulk goods, requires sophisticated logistical services in order to carry thousands of
customers' containers simultaneously and efficiently deliver individual containers to their respective
destinations throughout the world. Similarly, shipping companies that operate between U.S. ports
under the Jones Act - which is limited to American-made ships, owned by Americans, with American
crews - face limited competition from new entrants.13 Companies in these industries may well
generate enterprise value independent of the value of operating assets and achieve reliable profit
margins over the long haul.14
21. Drybulk shipping is fundamentally different. It is an example of an industry
that approaches "perfect competition" - a state identified by classical economists over two hundred
years ago but rarely seen in the global economy.15 As explained by Maritime Economics, a leading
industry treatise: "Although few modern industries conform to the famous perfect competition model
developed by the classical economists in the nineteenth century, it fits shipping like a glove. . . .
Basically companies keep investing until marginal cost equals price and in the long term marginal
12 See id. ("Admittedly, the specialized markets (see Chapter 12) and the liner business (see Chapter 13) do not fit this
description so well, but bulk shipping certainly fits the classical economic model.").
13 See, e.g., In re Overseas Shipholding Grp., Inc., Case No. 12-20000 (PJW), First Day Affidavit at 11 (Bankr. D. Del.
Nov. 14. 2012) [Docket No. 2, 11] (noting that shipping under Jones Act "is highly concentrated and has high barriers to
entry").
14 See Brealey at 274 ("Many capital assets are traded in a competitive market, so it makes sense to start with the market
price and then ask why these assets should earn more in your hands than in your rivals'.").
15 See Stopford at 338 (observing that shipping (dry bulk and otherwise) is vulnerable to weak profits due to hallmarks of
"the perfect competition model," e.g., "new entrants bring new capacity and seek market share, pushing down margins,
whilst powerful buyers or suppliers bargain away the profits for themselves. The presence of close substitute products
limits the price competitors can charge without inducing substitution. . . . Anyone who has studied the shipping market
knows how vulnerable it is in these respects."); Brealey at 281 ("Positive NPVs are suspect without some long-run
competitive advantage.").
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cost is the cost of capital."16 On top of this, operating costs are high and the earnings that a vessel can
produce - in the form of charter rates - fluctuate on a daily basis in ways that are very difficult to
predict.
22. The result is that historical returns in the shipping industry have been
lackluster. Historical surveys reveal that "over the last fifty years [return on shipping investment] has
fluctuated around the cost of interest."17 In other words, despite occasional (but unpredictable) boom
years, and anomalous success stories, shipping has historically failed to sustain returns in excess of its
cost of capital - consistent with its exceptional features of "perfect competition," fixed costs, and
18
highly volatile revenue streams.
23. In addition, the earnings of a drybulk shipping operation cannot be reliably
projected with accuracy, particularly in the latter months and years of a forecast. A ship owner that
buys a vessel at a low price and sells at a high one will see profits. So will an owner that successfully
locks in high charter rates before they decline. But both outcomes are difficult to achieve and even
more difficult to credibly predict.
24. Given these economic features, independent appraisals provide the most
credible and informed grounds on which to assess the future earnings potential of a drybulk shipping
business. An appraisal reflects an assessment of what a willing buyer would pay a willing seller in an
arms'-length, good faith transaction. Because vessels generate income, that price will reflect the
intersection of a seller's bearish view of future earnings and the buyer's sanguine expectation.
16 Stopford at 342.
17 See id.
18 See Stopford at 320-27. Between 1975 and 2004, Bulk Shipping earned a 7.2% annual return on investment. Over the
same period, the S&P 500 grew at 14.1% per year, LIBOR averaged 8.5% per year, and Treasury Bills yielded 6.6% per
year. A separate, independent analysis of the Drybulk Industry between 1975 and 2006 and determined that the average
return on shipping investment was 7.6%, more than 2% below both Rothschild and Blackstone's estimate of Genco's cost
of capital despite much higher interest rates over the surveyed period.
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Importantly, appraisals for drybulk vessels are not merely subjective, because vessels are
standardized and the sales market is highly liquid. In other words, the active market in drybulk vessel
sales - which occur on a practically daily basis - gives appraisers concrete evidence of what sellers
are actually paying and actually buying. Appraisals therefore reflect a consensus view among parties
with no ulterior motive, based on the high volume of actual transactions, of what each type of vessel
is expected to earn.
25. It is therefore recognized in the drybulk shipping industry that net asset value
("NAV") is the best metric by which to value a drybulk shipping company. In this industry, NAV is
calculated based on independent appraisals that incorporate an impartial assessment of the broadest,
most concrete consensus regarding future earnings. Investors, financing providers, and equity
research analysts commonly value drybulk companies based on NAV. The Company itself
historically used NAV in each of its acquisitions, in negotiating each of the outstanding debt
facilities, and throughout all negotiations with creditors in respect of the current restructuring.
Likewise, the few public transactions involving competitors with a sole focus on drybulk have
occurred near NAV.
VALUATION METHODOLOGY
A. Valuation - Overview
26. Having analyzed the drybulk industry and considered a range of valuation
methodologies to the Debtors (as described below), it is Blackstone's conclusion that there is no
equity value in the Debtors.19
27. Based on NAV, the total distributable value of the reorganized Debtors is
between $1.36 billion and $1.44 billion, which is less than the $1.48 billion20 in value required to pay
19 DX 277 is a true and correct copy of the Expert Valuation Report of Timothy R. Coleman of Blackstone Advisory
Partners L.P. dated May 28, 2014 (the "Blackstone Expert Report"), a copy of which is also attached hereto as Exhibit
A.
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the claims of all creditors in full so that the holders of Genco's equity can receive a recovery. I
understand that the Equity Committee does not dispute Blackstone's conclusion that the Debtors'
NAV does not support a recovery for equity holders. When further taking into account the $32.9
million in value of the New Genco Equity Warrants that impaired creditors are gifting to Equity
Holders under the Prepack Plan, the Equity Committee must establish an even higher valuation
(exceeding $1.51 billion) before Equity Holders would be entitled to any additional recovery beyond
that provided by the Prepack Plan.
28. In addition to the NAV approach, Blackstone also considered four other
valuation assessments (comparable transactions, comparable companies TEV/NAV, comparable
companies TEV/EBITDA, discounted cash flow), each of which shows values near or below NAV
and all of which show that holders of Equity Interests in Genco are out-of-the-money. As set forth
below, using these methodologies - the very methodologies 1 understand are advocated by the Equity
Committee - results in a total distributable value of reorganized Genco of between $1,106 billion and
$1,418 billion, amounts lower than NAV. The following chart illustrates the results of the various
methodologies:
20 This claims total comprises $1,069 million under the 2007 Credit Facility, $176 million under the DB Facility, $74
million under the CA Facility, $125 million of Convertible Notes, $4 million of accrued interest, $6 million in swap
liability, $1 million unsecured claims, and $26 million of other administrative claims. I believe the Equity Committee
understates these liabilities by misreporting the amount owed under the 2007 Credit Facility and omitting over $25
million of administrative claims. See Equity Obj. at 10-11.
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Chart: Summary of Valuation Approaches - Total Value of Debtors
Based on four Independent

Asset-Based appraisals, a further Indication
$1,364 $1,444 from. , and projected
Valuation
balance sheet upon emergence
Precedent Analysis of six precedent

$1,297 $1,404 transactions announced In the past
Transactions five years
Analysis of trading prices of

Comp. Companies
© TEV/NAV $1,202 $1,324 comparable companies and asset
valuation using .

Comp. Companies comparable companies, estimates
$1,170 $1,418 perCaplQ, and adjustments for
' TEV / 201SE EBITDA
differences In fleet age
WACC ranging from 9.1-11.1% and

, Discounted assuming the Company Is valued
$1,106 $1,335 on a NAV basis at exit with fleet
Cash Flows
depreciating at 0-6.5% p.a.
$1,000 $1,150 $1,300 $1,450 $1,600
Current Claims +
Note: $ in millions.
(1) Includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Warrants Granted:
Facility, $74 million related to the CA Facility, $125 million of Convertible Notes, $4 million of $1.513 billion®
accrued interest, $6 million Swap Liability, $1 million of unsecured claims, and $26 million of
other administrative claims. Current Claims:
(2) Includes warrants valued at $32.9 million, per page 85 of the Disclosure Statement. $1.480 billion(l)
B. Net Asset Value Approach
29. Blackstone employed an NAV approach as its principal methodology to value
the Debtors because (a) the particular characteristics of the drybulk shipping industry discussed in
detail above make it the most appropriate and reliable means of determining value and (b) it is, in
fact, the method customarily applied to determine value in the drybulk shipping industry.
30. More specifically, it is difficult to build enterprise value independent of asset
value because of the fragmented nature of the industry, the low barriers to entry, and the
commoditized assets and services. As a result, vessels are not seen as materially more valuable
because they are owned alongside other vessels - a condition that any competitor could and would
imitate if such value existed. In addition, vessels do not gain intrinsic worth above their appraised
value in the hands of owners who are popular or respected in the industry. For all of these reasons,
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all value of a drybulk shipping enterprise is captured through an NAV analysis. NAV is therefore the
methodology used in virtually all drybulk financing, mergers and acquisitions, and restructuring
transactions. Alternative methodologies based on cash flow or EBITDA are speculative and less
reliable for the purpose of valuation.
31. The use of NAV to value a drybulk shipping company is also straightforward.
In computing NAV, Blackstone used independent appraisals from four well known third-party
appraisal firms, which reflect the consensus among actual buyers and sellers on what the future
earning capacity of the vessels will be. Blackstone further consulted
These sources are regularly relied
upon by shipping companies, their lenders, and other knowledgeable players. The resulting fleet
valuations ranged from $1,182 billion to $1,262 billion, with a median value of $1,211 billion.
Blackstone also accounted for the fair market value of the Debtors' other assets: ownership stakes in
two publicly traded companies (Baltic Trading Limited ("Baltic Trading") and Jinhui Shipping &
Transportation Limited ("Jinhui"): service contracts with Maritime Equity Partners ("MEP") and
Baltic Trading; cash; net working capital; and minimal fixed assets.
32. Based on this analysis, Genco's equity interests have no residual value,
regardless of which appraisal is used. The lowest appraisal shows that Equity Holders are underwater
by $116 million. The highest shows a deficiency of $36 million. And the midpoint of the five
appraisal data points shows that claims against the Debtors exceed the Debtors' value by $87 million.
As a result, even under the most generous valuation, Equity Holders are out-of-the-money and not
entitled to any distribution. Moreover, since equity is being provided with a distribution under the
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Prepack Plan, the valuation necessary to support an increased recovery would be correspondingly
higher. The above is illustrated by the following chart:
Chart: Asset-Based Valuation

MSI Marsoft Shipbroker A'1' Shipbroker BW Median
Date: May 2014 May 2014 March 2014 March 2014 N/A
lAppraised Value of Fleet $1,211 $1,198 $1,182 $1,227 $1,262 $1,211 1

Excess Cash'2' - - - - -
Net Working Capital'3' 40 40 40 40 40 40

Stake in Jinhui Shipping 56 56 56 56 56 56
Stake in Baltic Trading'5' 42 42 42 42 42 42
MEP / BALT Service Contracts'6' 40 40 40 40 40 40
Other Fixed Assets 4 4 4 4 4 4
Total Value $1,393 $1,380 $1,364 $1,410 $1,444 $1,393
Less: Total Debt'7' (1,447) (1,447) (1,447) (1,447) (1,447) (1,447)
Less: Other Claims'8' (33) (33) (33) (33) (33) (33)
\ Residual Value for Current Equity ($87) ($100) ($116) ($70) ($36) ($87),
$ in millions unless otherwise noted.

(1) Contractual arrangements preclude Genco from sharing the identity of these appraisers.
(2) No excess cash, as projected June 30, 2014 cash balance of $37 million is less than the estimated required
operating cash of $750,000/vessel.
(3) Includes $37 million of cash projected as of June 30 2014, $7 million due from charterers,
$20 million of prepaid expenses, $20 million of accounts payable and accrued liabilities,
and $4 million of other net current operating liabilities.
(4) Based on 16.3mm shares owned, 20.50 NOK share price, and exchange rate of 5.95 NOK per USD as of
Thursday, May 22, 2014.
(5) Based on 6.4mm shares owned at $6.65 per share as of Thursday, May 22, 2014.
(6) Further detail on valuation of service contracts provided in the Appendix.
(7) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to
the DB Facility, $74 million related to the CA Facility, $125 million of Convertible Notes and
$4 million of accrued interest.
(8) Other Claims includes the $6 million Swap Liability, $1 million of other unsecured claims, and
$26 million of other administrative claims.
C. Other Methodologies Confirm the Debtors' Insolvency
33. In addition to the NAV approach, Blackstone also considered the following
approaches: Comparable Transactions, Comparable Companies, and Discounted Cash Flow ("DCF")
analysis. Each yielded a valuation at or below NAV.
i. Comparable Transactions
34. A valuation based on comparable precedent transactions merely underscores
the merit of using NAV to value a drybulk shipping business. As an initial matter, virtually all
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transactions in this industry are based on vessel sales.21 Blackstone identified only three public
change-of-control transactions involving share purchases for a drybulk shipper in the last 10 years.
These three transactions occurred at .94x, 1 .Ox and 1.04x NAV. Tellingly, the only sale transaction
that occurred in excess of NAV was executed at the height of the drybulk market (2008) and
ultimately led to the buyer's bankruptcy. Of the three change-of-control transactions identified, the
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most recent was announced on June 16, 2014, with the price expressly set on the basis of NAV. In
contrast to these three transactions, Marsoft has recorded no fewer than 4,422 drybulk vessel sales
during the same period. This contrast confirms that it clearly indicates that when operators build or
sell drybulk fleets, they look to the market for capital assets rather than the market for corporate
control.
35. Accordingly, Blackstone identified six fleet sale transactions in the past five
years for comparison purposes, illustrated in the chart below.23
21This reflects the reality that "infrastructure" is not a major factor in a commoditized industry with low barriers to entry
and no appreciable economies of scale. See Stopford at 338.
22 Star Bulk Press Release, dated June 16, 2014 (announcing Star Bulk's acquisition of Oceanbulk, noting that: "The
Transaction Committee negotiated the Transaction value on a net asset value for net asset value basis using the average of
three reputable appraisal providers.").
23Note: this does not include Star Bulk's acquisition of Oceanbulk, announced on June 16, 2014. This transaction is
described in the previous footnote.
- 16-
Chart: Precedent Transactions

Announced Purchase Price / # of
Acquirer Target / Seller Date Price Fleet Vessels Description Note
Knightsbridge purchased Frontline 2012's fleet of 25
Knightsbridge Frontline 2012 Apr-14 $777 l.OOx 25 Capesize newbuildings with estimated delivery between Sep- A
14 and Sep-16.
Knightsbridge purchased five capesize newbuildings (2014
Frontline 2012 and
Knightsbridge Mar-14 $210 l.Olx 6 delivery) from Frontline 2012 and one Capesize bulk carrier B
Karpasia from Karpasia.
Navios entered into a JV with a Japanese affiliate. The new
Navios Holdings Navios Asia LLC May-13 $114 l.OOx 6 company agreed to acquire 5 Panamax vessels and 1 C
Kamsarmax vessel for $114 million.
DryShips agreed to acquire shares of OceanFreight, a drybulk
DryShips OceanFreight Jul-11 $262 0.92x 10 company with a fleet of 4 Capesize vessels, 2 Panamax and 4 D
newbuilding VLOCs.
Genco acquired 16 Supramax bulkers from Bourbon S.A. for
Genco Shipping &
Bourbon Jun-10 $440 0.95x 13 $545 million, with 3 of the vessels immediately resold to E
Trading Maritime Equity Partners LLC for $105 million.
GNK acquired 2 newly built vessels and 3 newbuilding
Genco Shipping &
Metrostar Jun-10 $166 l.OOx 5 contracts for $166 million en bloc (avg of $33.3 million each) F
Trading from Metrostar.
Median l.OOx
Average 0.98x
A. Under the agreement, "the exchange ratio for the acquisition and share issuance will be based on NAY using
March 31. 2014 broker values."24
B. Fleet value calculated using V as of March 10, 2014, the day before the transaction was
announced.
C. Navios Holdings' Ql-2013 Earnings Presentation stated that fleet valuation and purchase price were both $114
million.
D. Morgan Stanley (July 27, 2011) estimated the charter-adjusted fleet value of OceanFreight at $525 million,
less $241 million of CapEx commitments.
E. Based on third-party appraisals performed for the Company at the time of the transaction.
F. Based on third-party appraisals performed for the Company at the time of the transaction.
36. In each case, the sale was effectuated at a price that matched or nearly matched
the aggregate vessel value - confirming the controlling significance of NAV in this industry.25 The
largest premium above vessel valuation in the cohort of transactions is 1%; the largest discount is 8%;
and the average pricing reflects a 2% discount. As illustrated by the chart below, even based on the
most optimistic price-to-fleet ratio evidenced by this sample, Genco is insolvent by $76 million.
Based on the "low" scenario, the deficiency grows to $183 million.
24 Per Knightsbridge Tankers Ltd. Press release issued April 24, 2014.
25 The most recent transaction, an acquisition of 25 vessels by Knightsbridge that was announced in April 2014, was
expressly based on NAV using March 31, 2014 broker values. Another Knightsbridge transaction announced in March
2014 reflected only a 1% premium over an aggregation of the vessel values reported by on the day
before the deal was unveiled. Two fleet acquisition transactions conducted by Debtors - for 13 and five vessels,
respectively - were priced based on third-party appraisals performed for the company at the time of the transaction. The
purchase of 13 vessels reflected a 5% discount to aggregate vessel value; the smaller purchase matched the appraised
prices exactly.
- 17-
Chart: Application of Price/Fleet Ratio from Precedent Transactions to Debtors

Low Mid High |
Price / Fleet Value 0.92x l.OOx l.Olx

Genco Fleet Value (Median) $1,211 $1,211 $1,211
Implied Fleet Value (Precedent Tx.) $1,115 $1,211 $1,221
Plus: Net Working Capital' 1 ' 40 40 40
Plus: Other Fixed Assets 4 4 4
Plus: Excess Cash' 2 ' - - -
Plus: Stake in Jinhui Shipping 56 56 56

Plus: Stake in Baltic Trading 42 42 42
Plus: MEP / BALT Service Contracts 40 40 40
Total Value $1,297 $1,393 $1,404
Less: Total Debt' 3 ' (1,447) (1,447) (1,447)
Less: Other Claims' 4 ' (33) (33) (33)
Residual Value for Current Equity ($183) ($87) ($76)
(1) Includes $37 million of cash projected as of June 30, 2014, $7 million due from charterers, $20 million of prepaid
expenses, $20 million of accounts payable and accrued liabilities, and $4 million of other net current operating
liabilities.
(2) No excess cash, as projected June 30, 2014 cash balance of $37 million is less than the estimated required operating
cash of $750,000/vessel.
(3) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility, $74
million related to the CA Facility, $125 million of Convertible Notes and $4 million of accrued interest.
(4) Other Claims includes the $6 million Swap Liability, $ 1 million of other unsecured claims, and $26 million of other
administrative claims.
ii. Comparable Companies
37. While NAV is the most appropriate methodology for valuing the Debtors,
Blackstone also considered a comparable company approach to value the Debtors. However, this
approach requires numerous adjustments to enable comparability. For example, fleet age varies
among drybulk shipping firms, causing variance in overall fleet earnings capacity and the remaining
duration of such capacity. Companies also have different "charter coverage," i.e., exposure to
fluctuating market rates based on when their existing charters expire. Charter coverage in a given
year can dramatically affect EBITDA and create large value disparities between otherwise similar
firms. But such EBITDA may not be probative of a fleet's long-term earnings capacity. The
Debtors, in particular, do not have any fixed charters extending beyond October 2014. This spot
- 18-
market exposure not only complicates post-confirmation projections; it also means that an EBITDA
multiplier cannot produce reliable evidence of value.
38. Blackstone evaluated the following six criteria in order to identify a set of
comparable companies: (i) business model, (ii) charter coverage, (iii) fleet age, (iv) newbuild orders,
(v) capital structure, and (vi) size and market cap. The following chart identifies how the Debtors and
an ideal comparable company relate to each of the six criteria.
Chart: Comparable Companies - Selection Criteria

Criteria Genco / Ideal Comp
E Business Model
Charter Coverage
• Pure-play drybulk owner / operator
• Vessels are owned with no / limited vessels Chartered-ln
• Low Charter Coverage, with virtually all vessels in the spot market or
on Index-Linked Time Charters
C Fleet Age • Average age of 9 years
• Limited orderbook of newbuild vessels, with all of the fleet currently

O Newbuild Orders
"on the water"
E Capital Structure
0 Size and Market Cap

• Healthy capital structure
• Large fleet and market capitalization
39. Based on these criteria, Blackstone identified six companies that are
comparable enough to the Debtors to include in the same peer group: (i) Baltic Trading, (ii) Diana
• • • • • • • • • • • 9 6
Shipping, (iii) Jinhui, (iv) Paragon Shipping, (v) Safe Bulkers, and (vi) Star Bulk Carriers. The
26 As further explained in the Appendix to the Expert Valuation Report of Timothy R. Coleman of Blackstone Advisory
Partners L.P., dated May 28, 2014 (the "Blackstone Report Appendix"! seven companies were considered and excluded
from the cohort due to their lack of comparability.
- 19-
following chart identifies the similarities shared by each of the comparable companies and the
Debtors.
Chart: Analysis of Comparable Companies

Similarities Differences Recommendation
Pure-play bulker company with no • Average age of 4.0 years; young

Chartered-ln vessels compared to Genco Include in Comp Set
Low Charter Coverage, with only 5% • Smaller than Genco (number of ves icls Straightforward pure-play
Charter Coverage in 2014 and none in andTEV)
Relatively small orderbook
2015
Low Charter Coverage
Most vessels currently in service
Conservative capitalization
• 13 vessels on the water with only 4
Smaller market cap
newbuilds on order
Smaller and younger fleet
Large, drvbulkfleet with no Chartered-ln *• High Charter Coverage, with 81%

vessels coverage in 2014 and 26% in 2015 Include in Comp Set
Most vessels currently in service • Several charters are below market, *• Straightforward pure-play
Diana • 38 vessels on the water with only 3 temporarily depressing EBITDA and
• Large fleet and market cap
Shipping newbuilds on order inflating valuation multiples
• Relatively small orderbook
Market cap of approximately $900 • Charterer options exist to extend
• Conservative capitalization
million and increase coverage further
• Higher Charter Coverage
Most vessels currently in service • Smaller than Genco (TEV)

• 36 vessels on the water with only 1 *• Several other assets, including
Include in Comp Set
Jinhui newbuild order investments in listed equity securities, • Relatively small orderbook
Average age of 7.1 years compares well debt instruments, and properties
Shipping *• Similarly aged fleet
with Genco
• Smaller market cap
No Chartered-ln vessels
Low Charter Coverage, with only 13% in Orderbook of 7 newbuilds represents

2014 and none in 2015 50% of 14 vessels currently on the water Include in Comp Set
Similar fleet with Handysize through Smaller than Genco (vessels and TEV) • Straightforward pure-play
Kamsarmax vessels
Paragon • Low Charter Coverage
• However, no Capgskgs owned
• Similarly aged fleet
Shipping Average age of 7.5 years
*• Smaller fleet size end
market cap
Pure-play bulker company with no Slightly larger vessels on average

Chartered-ln vessels (Panamax and Capesize) Include in Comp Set
Large fleet of vessels on the water Average fleet age of 5.2 years, younger *• Straightforward pure-play
Safe • 31 vessels on the water with 13 than Genco
newbuilds on order Charter Coverage of 35% in 2014 and
Bulkers • ~$700 million market cap
Meaningful liquidity with marke: cap of 14% in 2015
~$700 million
• Younger fleet
Pure-play bulker company with no Meaningful Charter Coverage, with 44%

Chartered-ln vessels coverage in 2014 and 18% in 2015 Include in Comp Set
Average age of 8.9 years for vessels Orderbook of 11 newbuilds represents Straightforward pure-play
Star Bulk currently on the water 65% of the 17 vessels currently on the
Similarly aged fleet
In-house ship management and water
Carriers Conservative capitalization
management for 14 third-party vessels Smaller than Genco (number of vessels
andTEV) Higher Charter Coverage
Meaningful orderbook
-20-
40. After identifying the six comparable companies, Blackstone then assessed the
total enterprise value ("TEV") of the comparable companies based on publicly available data to
ascertain whether the comparable companies trade at a premium or discount to NAV. This analysis,
which is illustrated below, revealed that investors tend to value pure-play drybulk shipping operations
at a discount to asset value, not a premium.27 Based on this TEV/NAV analysis, Genco is insolvent
by at least $156 million and as much as $278 million.
Chart: Comparable Companies - TEV/ NAV

Comparable Companies: TEV / NAV Low Mid High
Paragon Shipping 0.88x TEV/NAV Multiple 0,87x 0,92x 0.97x
Baltic Trading 1.18x Genco NAV $1,226 $1,226 $1,226
Safe Bulkers 1.17x Implied TEV $1,064 $1,125 $1,186
Jinhui Shipping and Transportation 0.60x Plus: Excess Cash'2' - - -
Star Bulkers 0.92x Plus: Stake in Jinhui Shipping 56 56 56

Diana Shipping 0.92x Plus: Stake in Baltic Trading 42 42 42
Average 0.94x Plus: MEP / BALT Service Contracts 40 40 40
Median 0.92x Total Value $1,202 $1,263 $1,324
Less: Total Debt'3' (1,447) (1,447) (1,447)

Less: Other Claims'4' (33) (33) (33)
Genco Shipping & Trading: IMAV
Residual Value for Current Equity ($217) ($156$
Net Working Capital'1' 40
Current Fleet 1,182
Other Fixed Assets 4
Net Asset Value $1,226
(1) Includes $37 million of cash projected as of June 30, 2014, $7 million due from charterers, $20 million of prepaid
expenses, $20 million of accounts payable and accrued liabilities, and $4 million of other net current operating liabilities.
(2) No excess cash, as projected June 30, 2014, cash balance of $37 million is less than the estimated required operating cash
of $750,000/vessel.
(3) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility, $74 million
related to the CA Facility, $125 million of Convertible Notes and $4 million of accrued interest.
(4) Other Claims includes the $6 million Swap Liability, $1 million Lease Liability, and $26 million of other administrative
claims.
41. Blackstone also utilized TEV/EBITDA multiples in performing a comparable
companies analysis. First, as illustrated in the following chart, Blackstone calculated the
TEV/EBITDA multiples for each of the six comparable companies.
27 Of the six companies in the cohort, Baltic and Safe Bulkers have a TEV equal to 118% and 117% of NAV,
respectively (based on values from ). The other four companies - Paragon Shipping, Jinhui, Star
Bulkers, and Diana Shipping - trade at discounts of 40% to 8%. The median TEV/NAV ratio is 94% and the median is
92%.
-21 -
Chart: Comparable Companies: TEV/EBITDA

Financial Non- 2015E Fleet Avg Newbuilds 2015
Market Liabilities & Operating CaplQ 2015E EBITDA Age as % of Charter
Cap Pref Stock Assets'1' TEV EBITDA Multiple (Mar 31) Current Fleet Coverage
Paragon Shipping $136 $200 ($25) $311 $54 5.8x 7.5 50% -
Baltic Trading 383 167 (30) 520 61 8.5x 4.0 31% -
Star Bulkers 323 260 (43) 539 74 7.3x 8.9 65% 18%
Safe Bulkers 694 610 (127) 1,178 162 7.3x 5.2 42% 14%
Jinhui Shipping 290 493 (264) 519 96 5.4x 7.1 3% -
Diana Shipping 917 525 (339) 1,103 124 8.9x 6.7 8% 26%
Average 7.2x 6.6
Median 7.3x 6.9
Note: $ in millions unless otherwise noted.
Sources: CaplQ and Company Filings.
(1) Assumes $750,000 per vessel of operating cash.
42. In calculating the TEV/EBITDA multiples for the six comparable companies,
Blackstone recognized that, all else being equal, older fleets with fewer remaining years of service
should trade at a discount to younger fleets - even though both types of fleets may have similar
EBITDA in a given year - because younger ships have additional years of earnings capacity. This is a
necessary step because, for example, a fleet of 24-year old vessels with one remaining year of
expected use has a lower value than a fleet composed of brand new vessels. While this relationship
between multiples and fleet age is not easily observed due to the many other variables that impact
trading multiples (e.g., fleet composition, charter coverage, etc.), the relationship between age and
value is undisputed. As shown below, when controlling for other variables, the relationship between
age and value is clear - the older a fleet, the less valuable the fleet.
-22-
Chart: Price of a 10-year Old Vessel as a Percentage of the Price of a 5-year Old Vessel
100.0%
95.0%
55.0%
50.0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Capesize Handymax
Source: Clarksons
43. Due to the impact of age on value, Blackstone adjusted the TEV/EBITDA
multiples to account for fleet age based on data that show the actual prices paid for vessels declines
by 4.5% to 6.5% per year. As described in the below chart, following the adjustment for fleet age in
the low scenario, Blackstone calculated a median EBITDA multiple of 5.9x. For the "high" scenario,
however, Blackstone did not adjust for fleet age and calculated a median multiple of 7.3x.
Chart: Age-Adjusted EBITDA Multiple

GNK Age BaseTEV/
Difference EBITDA Low Mid High
Depreciation per year 6.5% 4.5% 0.0%
Paragon Shipping 1.4 5.8x 5.3x 5.4x 5.8x

Baltic Trading 4.9 8.5x 6.1x 6.8x 8.5x
Star Bulkers - 7.3x 7.3x 7.3x 7.3x
Safe Bulkers 3.7 7.3x 5.7x 6.1x 7.3x
Jinhui Shipping 1.8 5.4x 4.8x 5.Ox 5.4x
Diana Shipping 2.2 8.9x 7.7x 8.Ox 8.9x
Median 7.3x 5.9x 6.5x _ J
-23 -

Sources: CapIQ and Company Filings.
(1) Assumes $750,000 per vessel of operating cash.
44. These EBITDA multiples were applied to the $175 million EBITDA projected
for 2015 in the Debtors' business plan. As illustrated in the chart below, this showed that Genco was
insolvent by $62 million to $310 million. As highlighted earlier, the mix of vessel types and charter
coverage may also distort comparisons based on EBITDA, but a model is not readily adjusted for
these features - highlighting the deficiencies of this method.
Chart: Comparable Companies: TEV/EBITDA - Debtors' Valuation

|Genco Valuation Low Mid High
Genco 2015E EBITDA 11 ' $175 $175 $175
Adjusted 2015E EBITDA Multiple' 21 5.9x 6.5x 7.3x
Value of Vessel Operations $1,032 $1,131 $1,280
Add: Excess Cash' 3 ' - - -
Add: MEP / BALT Service Contracts 40 40 40

Add: Value of Jinhui 56 56 56
Add: Value of Baltic 42 42 42
Total Value $1,170 $1,269 $1,418
Less: Total Debt' 41 (1,447) (1,447) (1,447)
Less: Other Claims' 5 ' (33) (33) (33)
Residual Value for Current Equity ($310) " ($211)

. J*!2!
(1) Genco's projected EBITDA excludes service revenues, as the estimated value of these contracts is added back
separately.
(2) Multiple is adjusted to account for the differences in Genco's fleet age and those of the comparable
companies. See previous page for further detail.
(3) No excess cash, as projected June 30, 2014 cash balance of $37 million is less than the estimated required
operating cash of $750,000/vessel.
(4) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB
Facility, $74 million related to the CA Facility, $125 million of Convertible Notes and $4 million of
accrued interest.
(5) Other Claims includes the $6 million Swap Liability, $1 million Lease Liability, and $26 million of other
iii. Discounted Cash Flow
45. Relying on a DCF analysis for valuation is inappropriate where cash flow
projections are speculative or subject to high volatility. In the global drybulk shipping industry,
-24-
charter rates are inherently volatile and can change drastically on a daily basis. This makes charter
rates difficult to predict and cash flow projections inherently unreliable, particularly in the outer years
of a forecast that are intended to be captured by a DCF analysis. As a result, DCF analyses are
fundamentally unreliable for valuing companies in the drybulk shipping industry, including the
Debtors. The math can be done, but conclusions are not indicative of value because the underlying
assumptions are too speculative and uncertain.
46. While it is uncommon to use a discounted cash flow analysis to value a
drybulk shipping company, Blackstone has performed a DCF analysis for the sake of completeness.
The analysis suggests that existing equity holders are not entitled to a recovery.
47. DCF valuation calls for forecasted cash flows to be discounted to present value
using a company's weighted average cost of capital ("WACC") to account for the riskiness of cash
flows and the time value of money. At the end of the projection period, a terminal value is calculated
to capture the value of the enterprise beyond the projection period. DCF analysis is less helpful and
reliable when cash flow projections are speculative or subject to high volatility, as they generally are
in drybulk shipping. To apply DCF analysis here, cash flow projections were extracted from the
Debtors' business plan, which in part relied on the expert rate forecasts provided by Marsoft.
48. Blackstone derived a WACC for the Debtors of 10.1%, sensitized to 9.1% and
11.1%, as depicted below:
-25-
Chart: WACC Estimation

Market Net Debt / Levered Illustrative Unlevered
Company Cap. Net Debt"1 Total Cap. Beta |2) Tax Rate Beta 131
Baltic Trading Limited $383 $137 26.4% 0.94 - 0.69
Diana Shipping Inc. 917 186 16.8% 1.44 - 1.20
Jinhui Shipping & Transportation Ltd. 290 229 44.2% 1.20 - 0.67
Paragon Shipping Inc. 136 175 56.2% 2.85 - 1.25
Safe Bulkers, Inc. 694 447 39.2% 1.64 - 1.00
Star Bulk Carriers Corp. 323 217 40.2% 1.40 - 0.83
1 Average 37.2% 1.58 - 0.94 |
Relevered Equity Beta Weighted Average Cost of Capital (WACC)

Adjusted Unlevered Beta 0.94 Target Debt / Total Cap. 16.4%
Target Leverage Ratio (D / E) 20% Tax Rate
(G)
Tax Rate Cost of Debt 4.8%
(3) 1.12 83.6%
Levered Beta Target Equity / Total Cap.(7)
Cost of Equity 11.2%
Theoretical WACC - Reference Point 10.1%
Cost of Equity Based on CAPM WACC Sensitivity

Market Risk Premium (Rm - Rf)141 7.0% Debt /
Multiplied by: Levered Beta 1.12 Total Cap Cost of Equity
Equals: Adjusted Market Risk Premium 7.8% 9.2% 11.2% 13.2% 15.2%
Plus: 10-Yr Risk-free Rate (Rf) 2.5% 6.4% 8.9% 10.8% 12.7% 14.5%
Plus: Size Premium 151 0.9% 16.4% 8.5% 10.1% 11.8% 13.5%
Cost of Equity - Reference Point 11.2% 26.4% 8.0% 9.5% 11.0% 12.4%

Source: Risk premium assumptions based on historical data provided in Duff & Phelps' 2014 Valuation Handbook.
(1) Financial liabilities plus preferred stock less financial assets.
(2) "Adjusted Beta" per CapIQ on 5/22/2014. Represents five years of monthly data (when available) vs. the overall
market.
(3) Unlevered Beta = Levered Beta/(l+((Debt/Equity)*(l-Tax Rate))).
(4) Historical Long-Term Equity Risk Premium, as provided in Duff and Phelps' 2014 Valuation Handbook.
(5) Size premium corresponds with Genco's estimated market capitalization. Per Duff & Phelps' 2014 Valuation
Handbook.
(6) Genco's secured exit financing bears interest at L + 3.5%. Assumes LIBOR equal to 1.25%.
(7) Based on plan equity value of $1,230 million and post-reorg debt of $242.2 million.
49. As noted, a DCF analysis also requires a terminal value, which is calculated to
capture the value of the enterprise beyond the projection period. However, due to rate volatility in
drybulk shipping, traditional methods of calculating a terminal value are difficult if not impossible to
apply. For example, a terminal multiple approach28 is problematic given (i) the historical volatility of
28 The terminal multiple method of estimating terminal value assumes that operations will be worth a multiple of the
EBITDA generated in the last forecasted year. This method requires the selection of an appropriate EBITDA multiple at
exit and corresponding EBITDA level.
-26-
multiples and (ii) the unreliability of EBITDA forecasted four years into the future, (iii) the fact that
vessels are fixed-life assets. Similarly, a perpetuity growth approach29 is problematic because (i)
vessels are limited-life assets, (ii) vessels do not have "steady-state" earnings or exhibit steady
earnings growth, and (iii) it is difficult to predict future fleet renewal costs.
50. To address the fact that (i) there is no such thing as "steady state earnings" in
the drybulk industry, and (ii) vessels are fixed-life assets, Blackstone based its terminal value
calculation on projected future asset values, which can be projected with greater reliability based on
depreciation rates derived from drybulk vessel life cycles. Notably, the alternative approach adopted
by Blackstone reflects an implied multiple between 18x and 22.2x, itself a very high multiple range
for a fleet with only 12.5 years of average remaining life.
51. The following chart illustrates Blackstone's DCF calculation - showing that
Debtors are insolvent by $145 million in the "high" scenario and $374 million in the "low."
29 The perpetuity growth method of estimating terminal value is applicable when the unlevered cash flows generated in
the last year of the forecast can be expected to grow at a steady rate in perpetuity. This method requires several
assumptions, including the appropriate steady-state growth rate and the required re-investment rate to maintain such
growth.
-27-
Chart: DCF - Projections and Valuation

DCF Projections (Vessel Operations Only) DCF Valuation
($ in millions) 2014
Q3-Q4 2015 2016 2017 | Low Mid Mieh
Net Revenue $121 $303 $214 $189 WACC 11.1% 10.1% 9.1%
OpEx (51) (104) (106) (108) Vessel Dep'n Rate 6.5% 4.5% -
G&A (11) (17) (17) (17)

Technical Services Cost (3) (7) (7) (7) 2017 Est. Fleet Value $971 $1,038 $1,211
Cash EBITDA $56 $175 $84 $56 Working Capital11' 43 43 43
Drydock Cost (9) (13) (24) (19) Future Gross Asset Value $1,014 $1,080 $1,254
Sale of Vessels - - - - Discount Factor 0.692 0.714 0.737
Purchase of Vessels - - - - Terminal Value $701 $771 $924
Unlevered FCF $47 $162 $60 $37 Implied LTM Multiple at Exit lS.Ox 19.2x 22.2X
PV of Unlevered Cash Flows Terminal Value $701 $771 $924

Case Total PV of Projected Cash Flows 267 270 273
Low (WACC = 11.1%) $267 $46 $145 $49 $27 Baltic Stake 42 42 42
Mid (WACC = 10.1%) 270 46 146 50 28 Jinhui Stake 56 56 56
High (WACC = 9.1%) 273 46 148 51 29 Excess Cash121 - - -
MEP / BALT Service Contracts 40 40 40

Projected Fleet Value (End of Period) Total Value $1,106 $1,180 $1,335
Case Less: Total Debt13' (1,447) (1,447) (1-447)
Low (Dep'n = 6.5%) $1,173 $1,102 $1,034 $971 Less: Other Claims'4' (33) (33) (33)
Mid (Dep'n = 4.5%) 1,184 1,133 1,085 1,038 Residual Value to Current Equity " (£374) Wif- "Wsfl
High (Dep'n = 0.0%) 1,211 1,211 1,211 1,211
• in millions unless otherwise noted.

(1) Includes $37 million of cash projected as of June 30, 2014, $7 million due from charterers, $20 million of
prepaid expenses, $20 million of accounts payable and accrued liabilities, and $4 million of other net current
operating liabilities. Additionally, includes $3 million of projected other fixed assets.
(2) No excess cash, as projected June 30, 2014, cash balance of $37 million is less than the estimated required operating
cash of $750,000/vessel.
(3) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility,
$74 million related to the CA Facility, $125 million of Convertible Notes and $4 million of accrued interest.
(4) Other Claims includes the $6 million Swap Liability, $1 million Lease Liability, and $26 million of other
-28 -
50. The DCF calculation assumes that the Debtors' fleet will depreciate by 0%-
6.5% per year. As shown below, implied annual depreciation for a fleet similar to Genco's has
historically ranged 4.5-6.5% per year.
Chart: Implied Annual Fleet Depreciation

12.0%
10.0%
<v
<
2.0%
0.0%
Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14
Source: Clarksons.
RESPONSE TO ROTHSCHILD VALUATION REPORTS
51. I have reviewed the valuation report and rebuttal report (together, the
"Rothschild Reports") of Rothschild Inc. ("Rothschild"), which contain fundamental flaws,
numerous mistakes, and internal inconsistencies. These errors are summarized below and further
detailed in my Rebuttal Report, dated June 16, 2014.30
A. Rothschild's Valuation is Divorced from Reality
52. The accuracy of Blackstone's valuation is confirmed by the absence of any
competing bids or even expressions of potential interest by any party, including the members of the
Equity Committee, in the many months (and even years) in which the Debtors' financial plight has
30 DX 278 is a true and correct copy of the Rebuttal Report of Timothy R. Coleman of Blackstone Advisory Partners L.P.
dated June 16, 2014 (the "Rebuttal Report"), a copy of which is also attached hereto as Exhibit B.
-29-
been common knowledge in the marketplace. If the Equity Committee's view of valuation were
correct, some party would surely have surfaced to propose a plan or transaction based on a higher
valuation. Rothschild's mid and high valuations are approximately 17% and 29% above the Debtors'
$1,480 million of total debt and other claims.31 Rothschild's valuation implies that if an investor
were to support plan value in excess of the Prepack Plan (including the $32.9 million of value granted
to equity and the $26.5 million breakup fee) the investor would immediately realize - on day one - an
appreciation in value of 12% to 24%. To be clear, that gain would not require any of Rothschild's
speculation about future value to be realized.
53. This has been a highly publicized pre- and post-petition restructuring process
- widely publicized for two years in the financial press, industry reports, and the Debtors' own SEC
filings. The Debtors were always open to better offers - they expressly retained the ability to receive
and negotiate proposals for an alternative to the Prepack Plan and highlighted that right on many
occasions. Additionally, Rothschild paints a picture, which if true, would suggest investors should be
lining up to bid on Genco. Rothschild emphasizes (i) the industry is strengthening, (ii) significant
capital is being deployed in drybulk, and (iii) Genco's management has substantial access to capital
markets.32 Nonetheless, despite Rothschild's valuation, not a single bid has been submitted.
Furthermore, the Equity Committee has not indicated interest in sponsoring a plan that values the
Debtors in excess of the Prepack Plan. The absence of any indication of interest during this months-
long period underscores that the Prepack Plan embodies the best achievable outcome for all
stakeholders.
31 The claims total comprises $1,069 million under the 2007 Credit Facility, $176 million under the DB Facility, $74
million under the CA Facility, $125 million of Convertible Notes, $4 million of accrued interest, $6 million in swap
liability, $1 million in unsecured claims, and $26 million of other administrative claims.
32 Rothschild Expert Report 4, 14,18 and 22.
-30-
B. Rothschild Misinterprets Southern District of New York Shipping Bankruptcies
54. Rothschild erroneously dismisses the Excel Maritime ("Excel") and General
Maritime ("Genmar") bankruptcies as not informative regarding the valuation of shipping
companies. However, those cases directly contradict Rothschild's dismissive view of the asset value
methodology and incorrect views of valuation.33 As shown below, both cases were confirmed with
valuations below NAV: Excel's disclosure statement valuation was 3% below Excel's NAV34 and the
Genmar market test resulted in a plan valuation 5% below Genmar's NAV. Thus, both cases
undermine Rothschild's assertion that asset value is a "floor value"35 and instead confirm that
sophisticated investors have not valued commoditized shipping companies in excess of appraised
value.
Chart: SDNY Bankruptcy Precedents

1 Excel Maritime TEV/NAV Calculation
Asset Value Notes
Vessel Value $576 Mid-Point point appraisal; page 5 of Appendix D to Excel Disclosure Statement
Excel's Stake In M/V Christine 16 Mid-Point point equity value based on appraisals; page 4 of Appendix D to Excel Disclosure Statement
Cash 51 Page 9 of Appendix E to Excel Disclosure Statement
Net Working Capital 10 Page 9 of Appendix E to Excel Disclosure Statement
Net Asset Value $653
Memo:
Disclosure Statement Valuation $630 Page "i" of Excel Disclsoure Statement (Introduction and Disclaimer)
™ "097x1
33 Rothschild Expert Report 33.

34 Although the Excel disclosure statement cites NAV, DCF, comparable company and precedent transaction analysis,
the Excel restructuring was negotiated on the basis of NAV.
-31 -
($ in millions)
General Maritime TEV / NAV Calculation
Asset Value Notes
Vessel Value $1,033 Mid-point apraisal; page 101 of Genmar Disclosure Statement
Cash 22 Page 101 of Genmar Disclosure Statement
Property, Plant Equipment 10 Page 101 of Genmar Disclosure Statement
Working Capital 55 Page 101 of Genmar Disclosure Statement
Memo:
Disclosure Statement Valuation $1,062 Mid-pont plan value; page 100 of Genmar Disclosure Statement
£eZEn^y_ZZ_ZZZZZ~~*3^53
C. Rothschild Misunderstands NAV
55. Rothschild appears to have a basic misunderstanding of NAV as it relates to
the drybulk shipping sector. Rothschild blindly dismisses NAV based on its experience in unrelated
industries - relying on cherry-picked anecdotes from sell-side analysts without understanding the
industry's history, let alone the effects of current sentiment on future industry conditions. To support
its dismissal of NAV, Rothschild cites a textbook which regards the asset value approach as a "floor
36
value." But that source neither references the drybulk shipping industry nor its industry structure. It
is merely a commentary on generic valuation.
56. The reality is that NAV is not a static, historical cost basis or liquidation
approach, but is instead a forward-looking, market-based approach driven by the assets' expected
future earnings capacity at that time. Notably, liquidation of the drybulk company Deiulemar earlier
this year (where the company sold its fleet at auction for only about 60% of NAV)37 proves that the
floor to a drybulk company valuation is a significant discount to NAV.38 As recently as June 16,
2014, Star Bulk (a drybulk company) announced its acquisition of Oceanbulk (also a drybulk
36 Id.
37 Vessels were sold for $111 million and were valued at $184 million by
38 Thus, NAV is not the same as liquidation value, which tends to reflect a discount to NAV for various reasons. See,
e.g., Ian L. London, Creditors of Deiulemar Shipping Ponder Block of Bulker Fleet Sale, Tradewinds, Feb. 7, 2014 (12
bunkers sold through liquidation at 60% of market value).
-32-
company) through a transaction explicitly priced at NAV. Moreover, the sophisticated investors that
are able to participate in IPOs have been unwilling to invest at or above NAV. For example, the IPO
of Diamond S Shipping, a shipping company with highly regarded management and a prominent
sponsor in Wilbur Ross, was aborted in March 2014 when the underwriter determined that proceeds
would fall below NAV. Similarly, both the Excel Maritime and General Maritime chapter 11
bankruptcies in the Southern District of New York confirmed plans based on enterprise values below
NAV.
57. Rothschild further mistakenly asserts that relying on asset value disregards
supposed value to be found in the franchise, management expertise, and growth.39 In reality, many
public drybulk companies with established franchises and reputable management teams trade below
NAV, and approximately 92% of the analysts cited by Rothschild employ asset-based valuation
techniques (likely NAV).40 Furthermore, the sale prices in the vessel sale and purchase market, which
provides the basis for the appraisals underlying the asset-based approach, implicitly take into account
the buyer's (a) view on future rates, (b) outlook on growth and (c) ability to take advantage of
expertise to realize those rates and growth. The scenarios in which a drybulk company - as opposed
to another type of shipping firm in a less competitive industry - trade at a small premium to NAV is
usually attributable to advantageous long-term charter coverage (which the Debtors do not have).
58. In attempting to rebut the NAV approach, Rothschild claims, among other
things, that the Debtors' scale is a competitive advantage.41 If shipping companies were able to
purchase individual vessels at NAV and consistently generate excess value above the market price,
then the largest operators would dominate the industry. However, as shown below, this is not the case
39 Rothschild Expert Report 22, 23, 25 and 32.

-33 -
in the drybulk industry, where the top 10 drybulk fleets account for less than 15% of the global fleet
and there are around 1,700 other owners.
Chart: Ownership Concentration in the Drybulk Industry

Number % of Total
Rank Owner of Vessels Vessels
1 COSCO Group 266 2.6%
2 Nippon Yusen Kaisha 250 2.5%
3 China Shipping Group 180 1.8%
4 K-Line 158 1.6%
5 Mitsui O.S.K. Lines 146 1.4%
6 Sinotrans & CSC 90 0.9%
7 Pacific Basin Shpg. 81 0.8%
8 Daiichi Chuo 74 0.7%
9 Shoei Kisen K.K. 68 0.7%
10 Pan Ocean 66 0.7%
Remaining 1722 Owners 8,768 86.4%
Total Vessels 10,147
Source: Clarksons.
59. Additionally, "competitive strengths" cited by Rothschild are not unique or
meaningful and do not create value in excess of asset value. Each is rebutted in the following chart:
Alleged Competitive Inconsistency / Error

Advantage
New York Based • "Speaking of NAV, it remains a real hurdle for mainstream shipping offerings hoping to float in
Management Team with New York, says Global Hunter Securities analyst Omar Nokta. 'I agree [the IPO market is
Substantial Access to closed], unless companies want to sell stock below NAV,' Nokta said this week"42
Investors
• Despite Rothschild listing geographic positioning as Genco's strength, CMG has suggested the
Company relocate its headquarters43
• As discussed earlier, the Company's "access to capital" is directly contradicted by the absence of
investors committing capital to purchase the company at even a discount to Rothschild's
valuation
42 Holidays May Have Come Early for Mainstream Shipping IPOs, Tradewinds, May 16, 2014.
43 CMG Expert Report 4.
-34-
Alleged Competitive Inconsistency / Error

Advantage
One of the Largest, Most • Genco does not have one of the top 10 largest fleets in the industry
Diversified Fleets
• The fragmented industry landscape proves that drybulk shipping companies do not achieve
returns to scale
• Rothschild does not explain the logic supporting any claim that a diversified fleet is worth more
than the sum of its assets (or what is inimitable about this feature)
Strong Relationship with • While the list below is far from complete, it illustrates that relationships with regarded charterers
Members of the Shipping are anything but unique
Industry and Established
Dry Bulk Charterers o Diana Shipping - Cargill, BHP Billiton, EDF Trading
o Safe Bulkers - Cargill, Daiichi, and Kawasaki Kisen Kaisha
o Star Bulk Carriers - Cargill, Rio Tinto, EDF Man Shipping
o Paragon - Cargill, Pacific Basin
o Navios Holdings - BHP Billiton, Cargill, Glencore Grain
• Rothschild provides no proof or logic as to how Genco's relationships would actually impact
earnings capacity
• As discussed in the Blackstone Expert Report, drybulk vessel operators are price-takers
• Rothschild touts Genco's relationships with its technical managers, but shortly thereafter
concedes that these relationships are far from distinctive
• The noted managers cover "all major ports" and provide services to over 1,000 vessels44
Low-cost and Highly • Genco derives much of its efficiencies through the outsourcing of its technical management
Efficient Operations responsibilities to Wallem Ship Management Limited, Anglo-Eastern Group and V.Ships
Limited
• Rothschild admits that these managers provide services to over 1,000 other vessels45
• Rothschild's assertion directly contradicts CMG's report, which states that "there are clearly
areas for cost savings" in the Company's G&A46
Flexible Chartering • Chartering strategy is a risk allocation tool available to every drybulk shipping company
Strategy Takes Advantage
of Market Conditions • "[Shipowners] can trade in the spot market and become risk managers or become subcontractors
and ship managers, focusing on cost and management... the distribution of risk between the spot
and period markets is a matter of policy, and the balance will change with circumstances."47
60. Finally, Rothschild does not dispute the academic theory that justifies the NAV
approach for drybulk companies. It is well understood that when a Company cannot generate returns

45 Id.
46 CMG Expert Report 4.
47 Stopford at 104.
-35 -
in excess of its cost of capital, it should be valued based on its asset value.48 Additionally, a wealth of
historical evidence proves that drybulk companies have failed to sustain returns in excess of their cost
of capital.49 Lastly, Rothschild ignores the fact that the Debtors' management has used NAV for
every transaction that it has historically analyzed.
D. Rothschild Misinterprets and Uses Precedent Transactions in a Biased Manner
61. Rothschild both (a) misinterprets and (b) uses a biased application of the
precedent transaction approach. The Equity Committee articulates only one issue with Blackstone's
comparable transaction analysis - criticizing Blackstone for relying primarily on asset sales rather
than sales of going concern shipping companies. This ignores, of course, that virtually all
transactions in this industry are asset sales. The dearth of recent change of control transactions
involving drybulk companies - three transactions as compared to 4,422 vessel sales since 2004 -
demonstrates that investors in the drybulk sector are not willing to pay a premium to NAV. As noted
above, on June 16, 2014, Star Bulk, a drybulk company, announced a stock-based acquisition of
Oceanbulk, another drybulk company.50 As stated publicly by the two companies, the transaction
was negotiated based on "a net asset value for net asset value basis using the average of three
reputable appraisal providers."51
62. Even in the two transactions that Rothschild cherry-picks to calculate asset
value multiples, Dryship's acquisition of OceanFreight and Excel's acquisition of Quintana Maritime,
48 " When future economic profit is expected to be zero, the value of the operations will equal invested capital. If a
company's value of operations exceeds its invested capital, be sure to identify the sources of competitive advantage that
allows the company to maintain superior financial performance." Tim Roller & Marc H. Goedhart, Valuation: Measuring
and Managing the Value of Companies 117 (5th ed., 2010). Note that (i) "economic profits" refers to returns in excess of
the cost of capital and (ii) invested capital is synonymous with asset value.
49 Stopford at 320-27.
50 Star Bulk Press Release, dated June 16, 2014.
-36-
the resulting multiples were .94x and 1.04x, respectively, both very close to NAV.52 The Excel
transaction is also an inappropriate comparable because it occurred in the first half of 2008, during a
boom in drybulk rates, and in any event was so disadvantageous that it ultimately led to Excel's
bankruptcy. It is only by assigning an arbitrary 75% weighting to the obviously unrepresentative
Excel transaction that Rothschild is able to generate a precedent transaction analysis that puts Equity
Holders in the money. Had Rothschild simply applied its two precedent transactions in an unbiased
way, holding all other erroneous assumptions constant and simply weighting the Excel and Dryships
TEV/NAV comparables equally, its analysis would have yielded values $145 million to $206 million
lower, resulting in no value for Equity Holders.
63. Lastly, Rothschild attempts to discredit Blackstone's selection of comparable
companies and transactions by claiming that Blackstone selected "transaction involving ship sales,
rather than assessing the sale of going concern shipping companies with full operating
infrastructure."53 But this objection ignores the reality that Rothschild acknowledges: virtually all
transactions in this sector are vessel based - which itself reflects the reality that "infrastructure" is not
a major factor in a commoditized industry with low barriers to entry and no appreciable economics of
scale. The Equity Committee articulates no other issues with Blackstone's comparable transaction
analysis.
E. Rothschild Improperly Relies on Non-Expert "Adjusted Projections"
64. Rothschild's most heavily weighted valuation methodologies - DCF and
EBITDA multiples - rely on the "adjusted projections" of CMG Advisory Services LLC ("CMG"),
the Equity Committee's advisor. CMG's projections do not include any expert opinion and are
instead simply averages of non-expert equity research projections and historical results. There is

53 Equity Obj. at 26.
-37-
neither discussion nor analysis that shows CMG's view on the various drivers of drybulk rates and
how those drivers correspond to those of the analysts on whom CMG relies. CMG additionally makes
no attempt to control for the easily observed biases in the analyst projections and historical averages
on which it relies. As shown below, using 10-year average rates artificially distorts rates upwards as
the period includes 2003-2008, which is called the "super cycle" due to the unprecedented uptick in
the drybulk market. Notably, had CMG used 5-year or 20-year average rates instead of the 10-year
average rates that it relied upon, its terminal-year unlevered free cash flow would have been
approximately 58% and 53% lower, respectively, leaving no recovery for Equity Holders.
Chart: Ownership Concentration in the Drybulk Industry

Baltic Dry Index Levels
12,000 % of CMG 1
Various Long-Term Averages BDI Period
10Y Avg. (2004-2013 Excl. '07-08) 2,516 N/A
5Y Avg. (2009-2013 ) 1,811 72.0%
20Y Avg. (1994-2013 Excl. '07-08) 1,932 76.8%
6,000
3,000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
65. Similarly, CMG ignores the easily observed upward bias that is prevalent in
equity research. On average, equity analysts have historically projected price targets 45% higher than
then-existing prices.54
54 For a more complete analysis, please see slides 38-40 of the Blackstone Expert Report.
-38-
Chart: Equity Research Price Target Bias Since June 30, 2010
Diana Shipping 22%

Baltic Shipping 59%
Safe Bulkers 23%
Jinhui Shipping & Trading 23%
Paragon Shipping 94%
Star Bulk Carriers 50%
Average 45%
66. In contrast, Blackstone relied on the most neutral and reliable projections
available and, contrary to the Equity Committee's suggestions, did not intentionally skew towards
"conservative" projections. The Debtors contacted Marsoft and MSI, two of the leading sources for
impartial expert rate forecasts to include in the business plan primarily for feasibility purposes - and
ultimately chose to use Marsoft because it had projected higher rates than MSI.55 Moreover, unlike
sell-side equity analysts, expert firms like Marsoft do not have an economic interest in driving up
trading volumes in the equity of drybulk companies, nor are they bound by the naive assumption that
the marketplace has not changed in the last ten years. Unsurprisingly, Marsoft has a track record of
superior accuracy - its business depends on it.56 For example, from February 2014 to June 2014 - the
first months of the Company's business plan - Marsoft's supposedly pessimistic projections were
actually 9% higher than realized rates. In contrast, the ten-year averages (excluding the same two
outlier years that CMG excluded) were 85% too high. If the two outliers, 2007 and 2008, were
included, the inaccuracy of ten-year averages would be even greater. The Company relies on analyst
55 The Debtors are not in the business of forecasting; management historically adopted readily available proxies for rate
forecasts for short-term projections, tax accounting, and other day-to-day business purposes, but they would not claim to
have ever made their own analytically rigorous projections and responsibly sought out more rigorous and reliable
forecasts when the time came to value the Company in reorganization.
56 Mr. Sterling will testify that Marsoft's regular reports and forecasts are widely relied upon by customers seeking
accurate and objective forecasts, including a core of over 100 clients. An extensive list of financial institutions, leading
charter companies, and fleet owners rely on Marsoft for the same expertise and analysis that the Company requested.
-39-
estimates for the years 2014 and 2015, but equity research analysts are not only inexpert but also self-
interested and typically bullish. Therefore, the Company uses the bottom half of such estimates.
Even still, the lower half is still too exuberant by 40% for the period February 2014 through June
2014. Had the Company used Marsoft for the first few months of 2014, its business plan would have
been materially more accurate.
F. Rothschild Misleadinglv Portrays the Drvbulk Industry
67. Rothschild's overly optimistic view of the drybulk industry biases its valuation
upwards. As shown below, Rothschild has selectively included only bullish commentary from recent
earnings reports and call transcripts. Similar "cherry picking" can be conducted to suggest a less
positive outlook.
-40-
Rothschild's "Cherry-Picked" Quote "Cherry-Picked" Counter

"It is our opinion that overall fleet growth will "I think where there is a disconnect though
decelerate over the next 2 years from previous is you got the Capesize sector which is
i9 1
levels. We believe this could be an essential step
towards the establishment of balance, supply and
demand fundamentals within the dry bulk
industry."
- Q4 2013 earnings call February 27, 2014
heavily dependent on iron ore and coal
versus the smaller ships the Panamaxes
and Supramaxes, which I still think are in
over supply situation and we are not
seeing that contango in the Panamax and
Supramax one year rates. "
- Q1 2014 earnings call May 12, 2014
"Diana Shipping continued to pursue the strategy "Therefore, over the next 18 to 24 months,
designed to position the company for future which are going to include the periods of
|£ opportunities and eventual upturn in the dry bulk

shipping cycle."
- Simeon P. Palios, Chairman and CEO, Q4
high deliveries, great numbers of ships
joining the fleet again. Unless we get an
extraordinary number of scrapping
DIANA SHIPPING INC. 2013 earnings press release tonnage coming through, which will not
happen unless rates drop, as you can
imagine, we're going to have soft
markets."
- Anastasios C. Margaronis, President,
Q1 2014 earnings call
"We believe our ongoing efforts to renew and "...Because of the drop of the spot markets
Aj
SAFE E3ULXERS
gradually expand our fleet has positioned us well
this early stage of the forthcoming shipping
cycle."
all the buyers are skeptical. They are
trying to get a better price and they are
trying to negotiate harder... we have to
- Dr. Loukas Barmparis, President, Q4 2013 wait when we see a recovery of spot
earnings press release market... "
- Polys Hajioannou, Chairman and
CEO, Q1 2014 earnings call
"...will allow us to capture the maximum benefits "The current low charter rates in the
from the shaping dry bulk market recovery ... the drybulk market, along with the
supply demand balance for the dry bulk sector oversupply of drybulk carriers and the
fstsrBulkwmm over the next two years looks favorable. "

- Spyros Capralos, President and CEO , Q1
2014 earnings release
prevailing difficulty in obtaining
financing for vessel purchases, have
adversely affected drybulk vessel values,
including the vessels in our fleet"
- 2013 20-F filed March 21, 2014
68. Moreover, the bullishness of equity research reports is an unreliable indicator
of future market direction. For example, at the beginning of the year, many equity analysts projected
a rebound in the market. However, since that time, the Baltic Dry Index57 has dropped nearly 60%.
Finally, Rothschild improperly concludes that significant investment in the drybulk sector must be an
indication that values in the sector are rising. As described in the Declaration of Arlie G. Sterling in
Support of Confirmation of the Prepack Plan, the increase of funds flowing into the drybulk market
57 The Baltic Dry Index is a shipping and trade index created by the Baltic Exchange that measures changes in the cost to
transport raw materials, such as metals, grains, and fossil fuels, by sea. The Baltic Exchange directly contacts shipping
brokers to assess price levels for a given route, cargo type, and time to delivery (speed).
-41 -
can actually be a predictor of future market weakness, because increased funds lead to increased
vessel orders and the increased supply of new vessels results in continued low rates.
G. Rothschild Manipulates its Presentation of the Debtors' Earnings Power
69. Rothschild states that Debtors' "historical earnings power further highlights the
conservative nature of the [Debtors'] projections."58 However, Rothschild makes four fundamental
errors in arriving at this conclusion. First, Rothschild compares the Debtors' historical EBITDA,
which includes the earnings of Baltic Trading's59 vessels, with the Debtors' projected EBITDA,
which excludes the earnings of Baltic Trading's vessels. Second, Rothschild, like CMG, erroneously
assumes that historical performance during boom drybulk years is indicative of future performance.
Third, Rothschild fails to realize that the variability of the Debtors' EBITDA demonstrates that
drybulk companies are "price takers" to prevailing market rates. Finally, Rothschild ignores that the
projected average annual EBITDA according to the Debtors' business plan (nearly $115 million) is
nearly 50% higher than the Debtors' average 2012 and 2013 EBITDA.
H. Rothschild Makes Misstatements About Blackstone's Investments in the Drybulk Sector
70. Rothschild erroneously claims that Blackstone has been a significant investor
in the drybulk space.60 However, the three investments identified by Rothschild are not drybulk
companies: (a) Eletson Gas is a liquefied petroleum gas shipping company; (b) American Petroleum
Tankers is a Jones Act tanker company; and (c) BTS Tanker Partners is a portfolio of product tankers
that was merged into Hafnia Tankers. In any case, it is unclear what relevance this could have.
58 Rothschild Rebuttal Report 6.

59 Neither Baltic Trading Limited nor its subsidiaries are debtors in the Chapter 11 Cases.
-42-
I. Rothschild Improperly Dismisses the Relevance of a Vessel's Age
71. Rothschild rejects Blackstone's thesis that older fleets have shorter remaining
useful lives and therefore lower aggregate earning capacity,61 which is illogical and inconsistent with
empirical evidence. Vessels have finite lives and, all other things being equal, the value of a younger
fleet is greater than that of an older fleet. For example, a fleet of 5-year old vessels will have five
more years of earnings capacity relative to a fleet of 10-year old vessels. Rothschild attempts to rebut
this undisputed concept by running a correlation analysis of EBITDA multiples and age that does not
control for the many other variables that Rothschild concedes can impact EBITDA multiples
(including fleet composition, vessel size, enterprise value, access to capital, management expertise,
etc.).
J. Rothschild Arbitrarily Assigns Weight to the Valuation Methodologies
72. Rothschild arbitrarily assigns weight to the valuation methodologies in a
manner that seems calculated to achieve higher values. Specifically, Rothschild assigned the
following weights: (a) 37.5% to DCF, (b) 37.5% to comparable companies, (c) 15% to NAV, and (d)
10% to precedent transactions.62 This weighting puts a significant emphasis on methodologies that
require subjective and difficult to calculate assumptions, rather than the objective NAV approach -
which does not require subjective assumptions. Use of Rothschild's weights effectively eliminates
the industry-standard, academically-supported and management-employed NAV approach - which
Rothschild concedes yields no incremental value to equity, even in its high case.63 This weighting
yields an overall valuation that overemphasizes CMG's unsupported, non-expert adjustments to the
Debtors' business plan.

62 Id.
-43 -
K. Rothschild's Valuation Errors
73. Rothschild makes the following errors in its valuations:
a. Comparable Companies: Rothschild accepts Blackstone's set of
comparable companies, except for the two companies with the lowest trading values: Paragon
Shipping and Jinhui, both of which are similar to the Debtors and the other companies included by
Rothschild.64 Rothschild's justification for excluding those two comparable companies is, among
other things, internally inconsistent with its own selections. For example, one of the reasons that
Rothschild excludes Jinhui is because it has "[l]imited float/liquidity (HoldCo owning over 50%)."65
However, the limited float and liquidity is similar to the post-reorganization Debtors, and two other
companies that Rothschild accepted as comparable - Baltic Trading and Safe Bulkers - have
controlling shareholders owning more than 50%.66 Similarly, Rothschild excluded Paragon because
of, among other things, "[h]igh exposure to newbuilds (seven new vessels expected FY14, or over
50% of current fleet"; whereas two of the comparables included by Rothschild - Star Bulk and Safe
Bulkers - also have high exposure to newbuilds, 65% and 42%, respectively.
64 Although I understand the Equity Committee alleges that Blackstone's comparables reflect "selection bias" (Equity
Obj. at 29), the Equity Committee fails to explain how Blackstone does so in even the most general terms. In contrast,
Blackstone provided a detailed explanation as to why each of the 13 drybulk companies it considered was included or
excluded, as described in the Blackstone Report Appendix.
66 The Debtors have a controlling interest in Baltic Trading via their 65.1% voting rights.
-44-
Chart: Unjustified Exclusion of Comparable Companies

Unjustified Exclusion of Jinhui
Rothschild Rationale for Exclusion Inconsistency / Error

1
• "Limited broker coverage (less than 3) preventing use of • Arbitrarily conclude that 2 sets of projections are inadequate
estimates"
• Rothschild itself uses a single TEV / EBITDA multiple in its
precedent transactions analysis
• Rothschild excludes J inhui in TEV/ NAV analysis even

though projections are not necessary
»• "Limitedfloat / liquidity (HoldCo owning over 50%)" • Limited float and liquidity is similar to the Post-Reorg Genco
*• Two other companies that Rothschild accepts as comparable -

Baltic Trading and Safe Bulkers - have controlling shareholders
owning more than 50%
*• "Reduced corporate transparency / reporting requirements • Jinhui makes information available through annual and
with NOK/ HK listing" quarterly reports, earnings releases, and other information, all
of which are publicly available on its website
Rothschild also ignores other similarities when excluding Jinhui

• Large fleet (36 vessels) with only 1 newbuild (Genco owns 53 vessels with no newbuilds)
• No chartered-in vessels (Genco also has no chartered-in vessels)
• 7.1 year average fleet age (Genco's fleet has an average age of 9.1 years)
Unjustified Exclusion of Paragon
Rothschild Rationale for Exclusion Inconsistency / Error

1
> "High exposure to newbuilds (7 new vessels expected FY14, or Star Bulk and Safe Bulkers, which are both included in
over 50% of current fleet" Rothschild's comps, also have high exposure to newbullds
• 65% and 42% of fleet, respectively
• "Externalized Management Function" Baltic Trading, which is included in Rothschild's comps, also
has externalized management
• "Low market capitalization ($299 million TEV) and equity Both Baltic Trading and Star Bulk, which are included In
trades at a discount due to low trading liquidity" Rothschild's comps, have TEVs well below that of the Post-
Reorg Genco
• $520 million and $539 million, respectively
Rothschild unjustifiably states that low trading liquidity causes

Paragon to trade at a discount, without any supporting
analysis
• "Low margin due to limited scale" Paragon's 2015 EBITDA margin of 52.7% is higherthan that of
Diana Shipping and only 5% lower than those of Baltic and
Star Bulk, all of which are included in Rothschild's Comps'3!
Rothschild also ignores other similarities when excluding Paragon

• Lower charter coverage (same as Genco)
• Operates diversified fleet of dryt?y|ker§ (same as Genco)
• Average age of 7.5 years (Genco's fleet has an average age of 9.1 years)
-45-
b. DCF: In criticizing Blackstone's DCF analysis, the Equity
Committee assails Blackstone for using an asset-based terminal value and for taking account of vessel
depreciation even though "vessels purchased at low points in the business cycle can actually
appreciate in value as they age."67 Once again, the Equity Committee either ignores the attributes of
the drybulk shipping industry or distorts the facts. In attempting to apply a methodology that is
unsuited to the industry because of the difficulty of generating accurate long term projections,
Blackstone placed the DCF calculation on firmer ground. Blackstone used terminal values that could
be more readily calculated based on drybulk vessel useful lives. The Equity Committee does not
challenge the manner in which Blackstone calculated average depreciation rates based on published
historical data, and Rothschild fails to offer a method of calculating terminal value that is remotely as
reliable.
c. Projections: In preparing its DCF, Rothschild adopts CMG's
projections, which in turn are premised upon the simplistic assumption that charter rates will revert to
the mean in the final year of its forecast. For this reason, Rothschild computes the final year of the
projections and the terminal value of its DCF based on a simple average of rates during the ten years
from 2004-2013. However, Rothschild fails to acknowledge that this method of computing the
reversion to the mean is upwardly biased and dramatically inflates the enterprise value conclusion of
its DCF. The use of any of three less biased, alternate methodologies - an average of the last five
years, an average of the last twenty years or the median of the last twenty-three years - would have
reduced Rothschild's DCF value by approximately $770 million, $700 million, and $1.25 billion,
respectively, resulting in no value for existing equity holders. Moreover, Rothschild's DCF fails a
basic "sanity check", even using its own assumptions: Rothschild's terminal value of approximately
61 Equity Obj. at 30.
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$1.8 billion, as of December 2017, for a then-12-year average aged Debtors' Fleet is approximately
equal to Rothschild's assumed cost to replicate the Debtors' entire fleet with brand new vessels. This
demonstrates that either (i) Rothschild's assumptions are flawed or (ii) Rothschild believes that a fleet
of 12-year old vessels has the same remaining useful life and earnings capacity as a fleet of brand
new vessels.
d. TEV/EBITDA Multiples: As discussed earlier, in addition to
excluding the comparable companies with the lowest valuations from Blackstone's set of comparable
companies, Rothschild ignores the impact of fleet age on a company's value. Rothschild further
applies its erroneously inflated TEV/EBITDA multiples to CMG's unsubstantiated EBITDA
calculations.
e. Overvaluation of MEP/Baltic Trading Services Contracts:
Rothschild aggressively assumes that the MEP service contract will continue in perpetuity, inflating
the terminal value of the contract by over 850%. However, the contract can be cancelled (a) with no
fee upon a change of control or (b) with an approximately $3 million fee upon sixty days' notice.
Since MEP is controlled by Oaktree Capital Management, a private equity fund that needs to exit its
investments over a several year period to return capital to its investors, it is unreasonable to assume
that Oaktree will hold this investment or an acquiring party will pay the Debtors' services fees in
perpetuity. Additionally, without any supporting justification, Rothschild inexplicably applies a
nearly 50% reduction to the variable costs associated with the MEP and Baltic Trading service
contracts, as compared to the Debtors' managements' estimate of these costs ($1.7 million per year).
Blackstone believes that management is best suited to understand these expenses, and Rothschild
offers no credible rationale for its deviation.
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f. Control Premium on Baltic Trading Stake: Finally, Rothschild
assigns a 30-35% control premium to the Debtors' ownership of Baltic Trading. This assumption is
premised on Rothschild's erroneous belief that there are no restrictions on the Debtors' ability to sell
their controlling stake. In fact, the control feature in the Debtors' shares would be eliminated if they
ceased to beneficially own those shares. If Genco were to sell its Class B shares representing 65%
voting control, the shares would convert to Class A and represent only an 11% voting interest.
Clearly a control premium is not warranted for an 11% position. Rothschild's assumption is also
inapplicable within the drybulk industry because it is unreasonable to assume that an investor would
place a 30-35% premium on a company that consists solely of fourteen vessels that could be
purchased at NAV. Finally, Rothschild's calculation of control premium exhibits selection bias
because: (i) Rothschild excludes from its analysis transactions involving real estate and financial
institutions, two industries that, like drybulk shipping, are often valued based on asset value;68 and (ii)
Rothschild further excludes negative premiums, which artificially increases the average premium.69
THE PREPACK PLAN WAS NEGOTIATED AND FORMULATED IN GOOD FAITH
74. I led the Blackstone team in negotiations and, together with management and
representatives from the Debtors' legal advisors, led the restructuring negotiation process on the
Debtors' behalf. As a result, I can state that the negotiations were pursued openly, honestly,
vigorously, and in good faith and with the goal of achieving the core purposes of the bankruptcy
process - to preserve the Debtors as a going concern and maximize value for all stakeholders. The
Prepack Plan will result in a substantial deleveraging of the Debtors' balance sheet through the
conversion of approximately $1.2 billion in debt to equity; a $100 million capital infusion through a
fully backstopped rights offering; a negotiated resolution involving 100% of the Debtors' financial

69 Id.
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creditors; payment in full to trade creditors; and a distribution to equity holders who are not entitled
to a recovery on an absolute priority basis. These benefits resulted from substantial, hard-fought
efforts by the Debtors, the Debtors' professionals, and each of the Supporting Creditors and their
respective advisors.
75. Blackstone was engaged by the Debtors in December 2013 in connection with
negotiating a potential comprehensive restructuring and deleveraging of the Debtors' balance sheet.
Following its engagement, Blackstone conducted a significant amount of diligence and worked with
the Debtors' management to formulate a proposed business plan and restructuring framework to
present to creditors in negotiations. The restructuring framework, which was premised on vessel
appraisals obtained as of January 2014, demonstrated that the Company's secured and unsecured
indebtedness far exceeded the value of the Company's assets. Under this analysis, holders of
Prepetition 2007 Facility Claims were undersecured and holders of Convertible Note Claims were
entitled to a recovery of up approximately 2%, leaving no distribution available for holders of Equity
Interests.
76. Negotiations with creditors regarding a comprehensive restructuring began in
earnest in January 2014, initially with certain holders of Prepetition 2007 Facility Claims and holders
of claims under the Prepetition Term Loan Facilities and thereafter with certain of the Convertible
Noteholders. Even though distributions to holders of Equity Interests were not supported by (or even
remotely possible) under the then-current valuation analysis, as early as January 2014 the Debtors'
board of directors (the "Board") began discussions aimed at obtaining a distribution to Equity
Interest holders. Blackstone and the Debtors' legal advisors advised the Board of the difficulty in
obtaining such a distribution for an out-of-the-money constituency. Nevertheless, at the instruction of
the Board, the restructuring framework presentations shared with creditors in negotiations left open
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the possibility of obtaining a distribution for holders of Equity Interests, noting that their treatment
remained to be determined.
77. During negotiations in January and early February 2014, the idea of providing
any distribution to holders of Equity Interests was met with significant resistance from the Prepetition
2007 Facility Lenders. During this time, Blackstone had numerous telephone calls and in-person
meetings with the holders of Prepetition 2007 Facility Claims regarding the proposed restructuring
framework including, in particular, the element of providing a recovery for holders of Equity
Interests. Blackstone and the Debtors' legal advisors informed the Board on February 3, 2014 that
the Prepetition 2007 Facility Lenders rejected any distribution to equity. Nevertheless, throughout
the course of subsequent Board meetings in February, the Board continued to insist on obtaining such
a distribution.
78. As restructuring negotiations continued, the Debtors obtained updated vessel
appraisals in March 2014, and Blackstone accordingly updated the restructuring framework. The
updated valuation analysis again did not support a recovery for holders of Equity Interests, but did
allow for payment in full of the Prepetition 2007 Facility Claims and increased distributions (but not
payment in full) to holders of Convertible Note Claims. The increased creditor recoveries
significantly changed the negotiating dynamics. Blackstone believed that, although not supported by
valuation, the Debtors now had increased leverage to attempt to negotiate a "gift" to holders of Equity
Interests.
79. In the latter half of March, at the instruction of the Board, the Debtors
proposed that holders of Equity Interests receive warrants for up to 15% of equity in the Reorganized
Company struck at a value equal to the par value of the outstanding debt (marginally in excess of plan
value). The Prepetition 2007 Facility Lenders countered with warrants for 1.5% of the equity in the
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Reorganized Company. Following further negotiations, numerous calls, Board meetings, and
discussions with the Supporting Creditors, the parties ultimately agreed on a distribution of seven-
year warrants for 6% of the equity in the Reorganized Company for holders of Equity Interests. The
Debtors also negotiated a broad fiduciary out, authorizing the Company to receive, consider, and
negotiate with respect to unsolicited proposals. All parties to the negotiations agreed that holders of
Equity Interests were not entitled to any recovery under the Debtors' valuation analysis. To facilitate
the distribution of warrants to Equity Holders, and to allow all other General Unsecured Claims
(consisting primarily of trade claims) to "ride through" the bankruptcy case and receive payment in
full, the Prepetition 2007 Facility Lenders and Convertible Noteholders gave up recoveries to which
they would otherwise be entitled.
80. The concessions from all parties to the negotiations culminated in the RSA and
Prepack Plan, which allow the Debtors to emerge from bankruptcy expeditiously, preserving
operations and value for all stakeholders. Achieving this result required months of contentious,
multi-lateral negotiations, participation in twelve board meetings, and participation in countless
meetings and calls both with representatives of the Debtors and Debtors' management as well as with
each of the four groups of Supporting Creditors and their advisors. I believe that the results achieved
and the settlements embodied in the Prepack Plan - which enjoy the unanimous support of the
Debtors' secured and unsecured creditors - represent the best outcome available in the circumstances.
Indeed, no party has presented a viable alternative to the Prepack Plan, even though the Debtors' need
for a restructuring had been highly publicized for months before the RSA announcement and the
terms of the current Prepack Plan have been public since at least April. In fact, vessel values have
declined since the Company obtained new valuations in March 2014,70 but the Debtors continue to
70 See Clarkson PLC, Shipping Intelligence Network 2010 (June 8, 2014).
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use the March appraisals as part of the basis for the Prepack Plan. If the Prepack Plan were to fail, I
would have serious concerns about the Debtors' ability to obtain any recovery for holders of Equity
Interests.
81. Based on the foregoing, I believe the Prepack Plan was negotiated and
proposed in good faith and with the honest intention of facilitating a viable reorganization and
maximizing recoveries for all stakeholders - including holders of Equity Interests. Accordingly, the
Prepack Plan satisfies the good faith requirements of the Bankruptcy Code.
THE PREPACK PLAN IS IN THE BEST

INTERESTS OF CREDITORS AND INTEREST HOLDERS
82. It is my understanding that a plan must comply with the "best interest" test of
section 1129(a)(7) of the Bankruptcy Code, which requires that each holder of a claim or equity
interest in an impaired class must either (i) vote to accept the plan, or (ii) receive under a plan no less
than what they would receive if the debtor were liquidated under chapter 7 of the Bankruptcy
Code. To determine whether the Prepack Plan complies with the "best interest" test, the Debtors,
with the assistance of Blackstone, prepared the Liquidation Analysis, which estimates recoveries that
holders of Claims and Equity Interests would receive if the Debtors were liquidated under chapter 7
of the Bankruptcy Code. The Liquidation Analysis is subject to all the assumptions, qualifications
and limitations set forth therein and in the Debtors' Disclosure Statement.
83. As described in the Disclosure Statement, the Liquidation Analysis assumes a
chapter 7 liquidation in which a trustee appointed by the Court would liquidate the assets of the
Debtors' estates, as compared to the reorganization of the Debtors' estates contained in the Prepack
Plan. To prepare the Liquidation Analysis, the Debtors, with the assistance of Blackstone,
determined the aggregate cash proceeds that would be available to creditors and interest holders if
these chapter 11 cases were converted to chapter 7 cases. The estimated cash proceeds that could be
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realized from the liquidation of the Debtors' assets, consist of (i) the Debtors' fleet of drybulk
vessels, (ii) equity interests in Baltic Trading and Jinhui, and (iii) any additional operating assets such
as customer receivables and other current assets. The Liquidation Analysis then estimates the
distribution that would be available to creditors and/or equity holders resulting from the liquidation,
after accounting for estimated chapter 7 liquidation-related costs, including attorneys' fees and other
fees payable to a chapter 7 trustee, and other wind-down costs and expenses.
84. The following table provides a consolidated overview of recoveries to holders
of Claims and Interests under the Liquidation Analysis on an aggregate basis as compared to
contemplated recoveries under the Prepack Plan:
Estimated Percentage of Recovery

Class Prepack Plan71 Liquidation
Class 1 - Other Priority Claims 100% 100%
Class 2 - Other Secured Claims 100% 100%
Class 3 - Prepetition 2007 Facility
91.5% 54.7 - 78.6%
Claims
Class 4 - Prepetition $253 Million
100% 100%
Facility Claims
Class 5 - Prepetition $100 Million
100% 100%
Facility Claims
Class 6 - Prepetition Swap Claims 100% 1.7-2.1%
Class 7 - General Unsecured Claims 100% 1.7-2.1%
Class 8 - Convertible Note Claims 80.3% 1.7-2.1%
Class 9 - Intercompany Claims 100% N/A
Class 10 - Subsidiary Equity
100% N/A
Interests
Class 11 - Equity Interests in Genco $32,900,000 $0
85. The Liquidation Analysis demonstrates that all holders of Claims and Interests
will receive a recovery under the Prepack Plan that is greater than or equal to what they would receive
under a chapter 7 liquidation of the Debtors' estates. The Claims and Interests in Classes 1, 2, 4 and
71 The projected recoveries described herein account for dilution from the New Genco Equity Warrants but are prior to
dilution from the warrants issued under the Management Incentive Plan.
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5, 6, 7, 9, and 10 are receiving a 100% recovery under the Prepack Plan, and therefore could receive
no greater recovery in a chapter 7 liquidation of the Debtors' estates. In addition, based on the
Disclosure Statement, Claims in Classes 3 and 8 will receive no greater recovery in a chapter 7
liquidation. As set forth in the Liquidation Analysis, in a chapter 7 liquidation the maximum recovery
to holders of Prepetition 2007 Facility Claims is 78.6% and the maximum recovery to Convertible
Note Claims is 2.1%, whereas under the Prepack Plan the estimated recovery to the Prepetition 2007
Facility Claims is 91.5% and the estimated recovery to Convertible Note Claims is 80.3%. Lastly, as
set forth in the Liquidation Analysis, the "best interest" test is satisfied with respect to each holder of
an Equity Interest in Genco in Class 11. In a hypothetical chapter 7 liquidation, holders of Equity
Interests in Class 11 would receive no recovery on account of their Equity Interests, as there would be
no remaining assets available for distribution to holders of Equity Interests in Genco after satisfaction
of administrative expenses relating to the liquidation and a distribution to senior secured and
unsecured Claims. Under the Prepack Plan, by contrast, holders of Equity Interests in Class 11 are
receiving a recovery on account of their Claims from consideration to which holders of Prepetition
2007 Facility Claims and Convertible Note Claims would otherwise be entitled.
86. Based on the foregoing, I believe that, as of the Effective Date, the Prepack
Plan satisfies the "best interest" test because estimated recoveries for each impaired Class of Claims
and Equity Interests under the Prepack Plan are likely to be greater than or equal to the distributions
they would likely receive in a hypothetical chapter 7 liquidation.
THE PREPACK PLAN IS FEASIBLE
87. Based upon my knowledge and prior experience in other chapter 11 cases, I am
aware that the Bankruptcy Code permits a plan to be confirmed only if it is feasible, i.e., it is not
likely to be followed by liquidation or the need for further financial reorganization. For purposes of
determining whether the Prepack Plan meets the feasibility requirements, Blackstone and the Debtors
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have analyzed the ability of the Debtors to satisfy their obligations under the Prepack Plan, as well as
the ability of the Reorganized Debtors to satisfy all of their future obligations on an ongoing basis.
88. As part of the feasibility analysis, I reviewed the Debtors' business plan and
the Financial Projections for the Reorganized Debtors' financial performance for the years 2014
through 2017, as prepared by the Debtors' management team, which are attached as Exhibit H to the
Disclosure Statement and discussed in Article IX of the Disclosure Statement. The Debtors have
relied on Marsoft to ensure the accuracy of these projections, as well. In my opinion, the Financial
Projections (subject to the assumptions and methodology underlying such projections) demonstrate
that the Prepack Plan is feasible and satisfies the requirements of the Bankruptcy Code, subject to all
closing conditions being satisfied.
89. The Prepack Plan will substantially deleverage the Debtors' balance sheet
through the conversion of 100% of the Prepetition 2007 Facility and the Convertible Note Claims into
equity in the Reorganized Company. The Debtors will also enter into the Amended and Restated
Term Loan Facilities, which extend the prepetition credit facilities' maturity dates to August 2019
and amend certain financial and operational covenants thereunder. The Amended and Restated Term
Loan Facilities will leave the Debtors with approximately $250 million in secured debt on their
balance sheet following the Effective Date. This will not only reduce the Debtors' funded
indebtedness but will also improve cash flow by over $200 million annually through reductions in
interest expense and amortization payments. Through the Prepack Plan, the Debtors will also
consummate a $100 million Rights Offering that is fully backstopped by certain of the Prepetition
2007 Facility Lenders and Convertible Noteholders to provide for adequate operating liquidity. It is
also my understanding that, following the Effective Date and consummation of the Prepack Plan, the
Debtors will have approximately $100 million in cash on hand. Indeed, the Financial Projections
-55 -
forecast that the Reorganized Debtors will be able to meet their future obligations in the operation of
their businesses during the period covered by the Financial Projections, subject to all closing
conditions being satisfied. I therefore believe that the Debtors will have sufficient liquidity and cash
flow to satisfy their debt obligations, fund operations, and provide for future growth of the
Reorganized Debtors.
90. Based upon the foregoing, I believe that the Prepack Plan is feasible as
confirmation of the Prepack Plan is not likely to be followed by liquidation or the need for further
reorganization. Thus I believe that the Prepack Plan satisfies the requirements of the Bankruptcy
Code.
CONCLUSION
91. The above analysis is based upon information available to, and analyses
undertaken by, Blackstone and reflects, among other factors discussed above, information from the
Debtors' financial projections and current financial market conditions. This analysis also reflects the
Prepack Plan becoming effective in accordance with its terms on a basis consistent with the estimates
and other assumptions relied upon in connection with the analysis performed by Blackstone.
92. I hereby reserve the right to amend and supplement the testimony set forth
herein as necessary at the confirmation hearing, as well as to create additional exhibits, as
appropriate.
I declare under penalty of perjury that the foregoing is true and correct to the best of
my knowledge, information, and belief.
Executed: New York, New York

June 20, 2014
/s/ Timothy R. Coleman

Timothy R. Coleman
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14-11108-shl Doc 309-1 Filed 06/20/14 Entered 06/20/14 23:14:16 Exhibit A
Pg 1 of 48 REDACTED
EXHIBIT A
COLEMAN EXPERT REPORT

Pg 2 of 48 REDACTED
Confidential
Genco Shipping & Trading Limited
Expert Valuation Report of Timothy R. Coleman

of Blackstone Advisory Partners L.P.
May 28, 2014
Pg 3 of 48 REDACTED
Confidential
Disclaimer
This expert report (the "Expert Report") of Genco Shipping and Trading Limited ("Genco" or the "Company"), has been
prepared solely for informational purposes using certain information provided by the Company and publicly available
sources (collectively, the "Sources").
Blackstone Advisory Partners ("Blackstone") makes no representation or warranty, express or implied, as to the
accuracy or completeness of the information obtained from the Sources, and nothing contained herein is, or should be
relied on as a promise or representation, whether as to the past or the future. Blackstone has not independently
verified information obtained from the Sources.
By accepting the Expert Report, each recipient agrees that Blackstone shall have no liability on any basis (including,
without limitation, in contract, tort, under United States or other countries' federal or state securities laws or
otherwise) for any representations, express or implied, contained in, or for any omissions from, this Expert Report or
any other written or oral communications transmitted to the recipient by or on behalf of the Counsel, the Company or
Blackstone in the course of the recipient's evaluation of the Expert Report. The information contained herein has been
prepared to assist the recipients in making their own evaluation and does not purport to be all-inclusive.
The information and data contained herein are confidential and may not be divulged to any person or entity or
reproduced, disseminated, or disclosed, in whole or in part, except as required by applicable law or regulation, as
requested by regulatory authorities, or with the consent of Blackstone.
This presentation is not intended to furnish legal, regulatory, tax, accounting, investment or other advice to any
recipient. This presentation should be reviewed by each recipient and its legal, regulatory, tax, accounting, investment
and other advisors. Recipients should not regard it as a substitute for the exercise of their own judgment.
Blackstone i
Pg 4 of 48 REDACTED
Confidential
Table of Contents
I. Introduction 3
II. Industry Overview 8
III. Assumptions and Approach 13
IV. Valuation Analyses 21
V. Appendix 39
Blackstone 2
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Confidential
I. Introduction
Pg 6 of 48 REDACTED
Confidential
Introduction
• This Expert Report has been prepared by Timothy R. Coleman and others working under his supervision at
Biackstone at the request of Genco Shipping & Trading Limited and its affiliated debtors ("Genco"). now in Chapter
11 proceedings before the U.S. Bankruptcy Court for the Southern District of New York ("Bankruptcy Court")
• The Expert Report sets forth Mr. Coleman's opinions with respect to the valuation of Genco
• if required, Mr. Coleman will provide expert testimony related thereto
• Mr. Coleman's testimony is one of the services provided under Blackstone's engagement with Genco. The
compensation for such engagement is as follows:
• A monthly fee of $175,000, beginning December 10, 2013
- Commencing with the fourth monthly fee, 50% of the monthly fee shall be credited against the restructuring
fee
— Commencing with the seventh monthly fee, 100% of the monthly fee shall be credited against the
restructuring fee
• A restructuring fee of $5,750,000, payable upon the consummation of a restructuring transaction
• Reimbursement of all reasonable and documented out-of-pocket expenses incurred during the engagement
• Blackstone's compensation is in no way contingent on the conclusions reached in this Expert Report
Biackstone 4
Pg 7 of 48 REDACTED
Confidential
Timothy R. Coleman Qualifications
• Mr. Coleman is a Senior Managing Director, Head of the Restructuring and Reorganization Group, and a member of
Blackstone's Executive Committee
• Since joining Blackstone in 1992, Mr. Coleman has worked on a variety of restructuring and reorganization
assignments for companies, creditor groups, special committees of corporate boards, corporate parents of troubled
companies and acquirers of distressed assets
• Previously, Mr. Coleman was a Vice President at Citibank N.A. for twelve years, where he divided his time
between corporate restructuring, real estate restructuring, and loan syndications
• Mr. Coleman has been recognized for his achievements in the restructuring industry by various parties
• Inducted into the Turnaround, Restructuring, and Distressed Investing Industry Hall of Fame in 2013
• Named Global Investment Banker of the Year by the Turnaround Atlas Awards in 2011
• Honored by the M&A Advisor with the 2014 Leadership Award
• Appointed Fellow of the American College of Bankruptcy in 2001; currently serves as an at large member of the
Circuit Admissions Council
• Mr. Coleman holds a Bachelor of Arts degree from the University of California at Santa Barbara and a Master of
Business Administration degree from the University of Southern California
• Mr. Coleman often speaks on restructuring topics at conferences and seminars and has been a frequent guest
lecturer at Columbia University's Business School and Law School as well as New York University's Stern School of
Business
Blackstone 5
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Confidential
Timothy R. Coleman Qualifications (cont.)
Prior Testimony • Other Notable Publicly Disclosed Assignments
• Hechinger Company
• Bidermann Industries USA • Adelphia
• Alliance Entertainment Corporation • Koll Real Estate
• Cable & Wireless Holdings • AMBAC • Lee Enterprises
• Asian Art Museum - MBIA • MBIA - Bank of America

• Delta Air Lines • AT&T Re: AT&T Canada, Alestra, AT&T • Mohegan Sun
Broadband and Excite@Home Nortek Inc.
• FLAG Telecom • Barney's Inc. • Overseas Shipholding Group
• Bear Steams Asset Management • Quad/Graphics (Re: Vertis)
• Geneva Steel Company • Caterair International Corporation • Rescap - MBIA
• Cecon ASA (re: Davie Shipyard) • R.H. Macy & Co.
• Goss Graphics Central European Distribution Corp. »• Russell-Stanley Holdings, Inc.
• Credit-Based Asset Servicing and • State of Kansas
• Harnischfeger Industries Securitization LLC ("C-BASS") • Stokely USA
• CRIIMI MAE • Supercanal Holdings, S. A.
• Los Angeles Dodgers • Delta Re: Pinnacle Airlines • The Weinstein Company
• Detroit - MBIA • Trans World Airlines
• Molten Metal Technology, Inc.
Edison Brothers Stores, Inc. • Travelport
Ermis Maritime Shipping • Teligent, Inc.
• RCN
• Excel Maritime Carriers Tribune
» Financial Guaranty Insurance Company • Vencor, Inc.
• Specialty Products Holding Corp.
• Ford Motor Company • Wherehouse Entertainment, Inc.
• Garden Way, Inc.
• Stratosphere Corporation • Xerox Corporation
• Guangdong Enterprises • XL Capital
Williams Communications • Hammonia Shipping • ZIM Integrated Shipping Services
Blackstone 6
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Confidential
Signature Page
• I reserve the right to supplement the opinions, analyses and conclusions presented in this Expert Report based on
any subsequently obtained information, including but not limited to, any objections, testimonies, reports of other
experts and new market information
• I further reserve the right to create additional exhibits, as appropriate
Date
Senior Managing Director
Blackstone Advisory Partners LP.
Blackstone 7
Confidential
II. Industry Overview

Confidential
Overview of the Drybulk Industry
industry Overview
• The global drybulk market consists of over 10,000 vessels and is fragmented with over 1,700 independent owners
• The market for drybulk vessels is highly competitive and a commodity market in and of itself
• The primary customers include diversified natural resource companies, electric utilities, agriculture producers and
commodities traders and distributors
• The demand for drybulk transportation services is impacted by the underlying demand for the commodities
shipped and is strongly dependent on the growth of the global economy (GDP and industrial production)
Fleet Operations
• Fleet operators lease out their drybulk vessels via a number of different contracting methods
• Owners generally receive semi-monthly charter-hire payments (rates are quoted in dollars per day) and are
responsible for operating expenses (some exceptions exist)
• A Soot Charter involves the carriage of a specific amount and type of cargo from one port to another. Spot charters
are short-term (1-3 months) and include a single voyage
• Owners pay for commissions, port costs, and fuel expense
• An operator that leases out vessels in the Spot Market is vulnerable to short-term rate fluctuations
• A Time Charter involves the use of a vessel for a number of months or years and is generally greater than 4 months
in duration
• Customers pay for commissions, port costs, and fuel expense
• As described later, rates are quoted on a Time Charter Equivalent ("TCE") basis (i.e., net of commissions, port
costs, and fuel expense) in order to allow for comparability between Spot Charter and Time Charter rates
• An operator that uses fixed-rate Time Charters locks in stable, contractual revenues
Blackstone 9
Confidential
Vessel Classes
The worldwide drybulk carrier fleet can be subdivided into four main vessel size # Owned by
categories, which are based on cargo carrying capacity. Genco
Capesize Vessels (Over 100,000 DWT<1})

• The Capesize sector is focused primarily on long haul iron ore and coal trade routes (between
China, Brazil and Australia) 9 Capesize
• There are only a comparatively small number of ports around the world with the
infrastructure to accommodate Capesize vessels
Panamax Vessels (60,000-80,000 DWT)

• Panamax vessels are the largest bulkers able to traverse the Panama Canal 8 Panamax
• These vessels mainly carry coal, grain and, to a lesser extent, Minor Bulks(2)
Handymax (40,000-60,000 DWT) also includes "Supramax" which are 50,000-60,000 DWT
• Handymax vessels operate in a large number of geographically dispersed trades, mainly
17 Supramax
carrying grains and Minor Bulks
6 Handymax
• These vessels are frequently built with on-board cranes that enable them to load and
discharge cargo in countries and ports with limited infrastructure
Handysize Vessels (Less than 40,000 DWT)

• Handysize vessels almost exclusively carry Minor Bulk cargoes 13 Handysize
• These vessels are suitable for regional trading and small ports with size restrictions
(1) DWT is an acronym for "deadweight tonnage" and serves as a measure of the weight a ship can safely carry. Blackstone 10
(2) Minor Bulks include cargoes such as steel products, forest products, fertilizers, and mineral cargoes.
Confidential
Key Sources
In developing its view on valuation, Blackstone has relied upon several external sources:
• Clarksons: Clarksons is a leading provider of integrated shipping services, with capabilities in shipbroking, ship financing,
port services and research. Clarksons' research division provides data on over 100,000 vessels either in service or on order,
as well as extensive trade and commercial data.
• Clarksons Shipping Intelligence Network: A comprehensive shipping database including market information, periodic
reports, time series, orderbook specifics, and fleet and vessel details.
• Clarksons Shipping Intelligence Weekly: A report covering developments across all shipping markets that includes
industry commentary, vessel specifications, owner and manager details, and fleet statistical analysis.
• Maritime Strategies international ("MSP: MSI offers independent market forecasting and business advisory services for
shipping clients, with a particular focus on maritime economics and econometric modelling.
• Marsoft: Marsoft is a leading maritime industry consultant that provides market research and forecasting. Marsoft's
services are based upon quantitative analysis of market developments and analysis of risk and financial performance.
• S&P Capital IQ ("CapIQ"): CapIQ, a business unit of McGraw Hill Financial, is a leading provider of multi-asset class and real
time data, research and analytics. CapIQ tracks information and filings of companies, equity research reports, and other
market data. All public market data from CapIQ is quoted as of May 22, 2014.
Blackstone u
Confidential
Key Definitions
Baltic Dry Index ("BDD: A shipping and trade index created fay the Baltic Exchange that measures changes in the cost to transport raw materials, such
as metals, grains and fossil fuels, by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, cargo type and
time to delivery (speed). Sub-indices also exist for the Handysize, Supramax, Panamax and Capesize segments that measure the daily rate for each of
those vessel classes.
Charter Coverage: The portion of days over a given period in which a vessel or fleet has been contracted under long-term fixed-rate charters as
opposed to operating in the spot market or on Index-Linked Time Charters. Companies manage their Charter Coverage to lock-in stable cash flows or,
alternatively, gain exposure to short-term rate changes.
Charter-In / Charter-Out: A drybulk operator primarily leases out its owned vessels to customers and other shipping companies ("Charter-Out"). In
order to gain exposure to the drybulk markets without the capital commitment required to purchase a vessel, some operators may lease vessels from
other drybulk companies ("Charter-in") under fixed-rate contracts and subsequently sublease these vessels to customers.
Deadweight Tonnage ("DWT"): A measure of how much weight a can safely carry. It is the sum of the weights of cargo, fuel, fresh water, ballast water,
provisions, passengers, and crew.
Gross Asset Value ("GAV"): Net Asset Value plus the value of non-operating assets.
Index-Linked Time Charter: A time-charter in which the daily rate is linked to levels of the relevant Baltic Dry Sub-Index. For example, a Capesize vessel
might be leased to a customer for 6 months at a rate equal to 101% of the Baltic Capesize Index. This contrasts with a fixed-rate time charter under
which a static rate is paid (e.g., $12,000 per day).
Major Bulks: Constitute the vast majority of drybulk cargo by weight and include, among other things, iron ore, coal and grain.
Minor Bulks: Include products such as agricultural products, mineral cargoes, cement, forest products and steel products.
Net Asset Value ("NAV"): The fair value of a company's operatingassets less the fair value of its operating liabilities. Non-operating assets such as
excess cash and stakes in public equity securities are excluded from the calculation of NAV.
Spot Market: When a vessel is not contracted under a charter, it is assumed to engage inSpot Charters and, on average, earn a percentage of the
relevant Baltic Sub-fndex (e.g., 100% of the Baltic Supramax Index for a Supramax vessel of standard age, size and buiid quality).
Time-Charter Equivalent ("TCE") Basis: A shipping industry standard used to calculate or quote the average daily revenue performance of a vessel. On a
TCE basis, daily shipping rates are quoted assuming the customer pays for commissions, port costs, and fuel expense separately.
Total Enterprise Value ("TEV"): An economic measure reflecting the market value of a whole operating business. TEV is calculated as the market value
of financial liabilities, plus the market value of common and preferred equity, less the value of non-operating assets such as excess cash and financial
securities.
Blackstone 12
Confidential
III. Assumptions and Approach
Blackstone
Confidential
Overview
• Before determining the appropriate valuation methodologies for a given company, it is necessary to consider the
economic characteristics of its industry, as weli as company-specific factors
• Where the industry structure enables a company to achieve and sustain returns in excess of its cost of capital, the
value of the company can most accurately be assessed by analyzing the company's future cash flows
• Analysis of future cash flows is commonly performed through a discounted cash flow analysis ("DCF")
• Under these circumstances, it is also common to analyze the ratio of comparable companies' market value
relative to their earnings {e.g., TEV / EBITDA, Price / Earnings) to assess a company's valuation vis-a-vis its
competitors
• Importantly, high barriers to entry allow established firms to sustain competitive advantages because prospective
entrants are unable to compete with incumbents on an equal footing
• Competitive advantages are manifested in a company's ability to (i) charge a price premium, (ii) sell products
and services at a lower cost, or (iii) use assets more efficiently
• Where the industry structure prevents a company from achieving and sustaining returns in excess of its cost of
capital, the value of the company in question can most accurately be assessed by analyzing the company's asset
value
• Companies operating in fragmented industries with low barriers to entry and commoditized assets, products, and
services find it difficult to sustain returns in excess of the cost of capital
• If a company were able to earn returns in excess of its capital costs in such a market, new participants would
enter the market, increase supply, and drive down the returns such that they equal the cost of capital*1*
(1) Koller, Tim, and Marc H. Goedhart. Valuation: Measuring and Managing the Value of Companies. 5th ed. Hoboken, N.J.: John Wtfey & Sons, Blackstone 14
Inc., 2010. Print,
Confidential
Economics of Drybulk Shipping industry
• The drybulk shipping industry is defined by (i) low barriers to entry, (ii) a diffuse and fragmented ownership
structure, and (iii) commoditized products and services
Low Barriers to Entry
• Given access to sufficient capital, prospective entrants can easily participate in the drybulk market
• Purchased vessels can be placed into pools and operated by third parties without a need for individual
management^'
- New entrants need not have existing operations, brand-name recognition, or scale to compete effectively
• Consequently, when day rates rise and drybulk ships are able to earn a higher return, market participants
respond by ordering more ships, increasing the overall supply and lowering the returns back to the cost of
capital
• Since 2011, over 240 different shipyards have constructed and delivered more than 3,500 drybulk vessels*2'
• Over the last five years, the number of vessel owners has increased by nearly 30%£3)
• There is a liquid and active market for the purchase of vessels, with over 600 reported sales since the beginning of
2013{2>
• New entrants can quickly assemble fleets and compete with incumbents
Source: Clarksons; MSI Expert Report.

(1) A shipping pool is an entity in which a commercial operator receives a fee to manage vessels for various shipowners. Resulting profits from
the operation of these vessels are then combined and distributed to owners according to a specified payout structure.
(2) Source: Clarksons Shipping intelligence Network. Btackstoae 15
(3) Source: MSI Expert Report (May 2014).
Confidential
Economics of Drybulk Shipping Industry (cont.)
Fragmented Industry
• There are over 1,700 independent drybulk carriers which collectively own over 10,000 vessels111
• Ownership is not concentrated: the top 20 drybulk owners collectively own less than 20% of the global drybulk
fleet(1)
Commoditized Product and Service
• Drybulk shipping is largely a commoditized service, with little differentiation in the services provided
• For example, a mining company seeking to transport 120,000 tons of iron ore from Australia to China can call on
any one of hundreds of Capesize vessels to perform the task
• International regulations, such as those enforced by the International Maritime Organization, require that all
vessels adhere to common standards
• That vessel owners provide substantially identical services inhibits individual firms from earning a premium to the
market; as a result, fleet owners are generally price-takers
Blackstone 16
{1} Source: Oarfcsons Shipping Intelligence Network.
Confidential
Economics of Drybulk Shipping Industry
"Although few modern industries conform to the famous perfect competition model developed by the
classical economist in the nineteenth century, itfits shipping like a glove. With its many small
companies, easy entry and exit, and flat medium-term supply curve, the shipping market operates like
a pump, alternatively sucking new ships in and pushing old ships out. The 'normal' profit is the
lubricant needed to keep the pump operating efficiently. Basically companies keep investing until
marginal cost equals price and in the long term marginal cost is the cost of capital/'
- Martin Stopford, Maritime Economics
Source: Stopford, Martin. Maritime Economics. 3rd ed. London: Routledge, 2009. Print. Page 342. Blackstone 17
Confidential
Valuation Approach
• Genco consists almost entirely of a fleet of drybuik vessels, with the remainder of its value comprised of stakes in
two actively traded, public drybuik companies and two service contracts
• Due to the characteristics of the drybuik shipping industry previously explained, the most appropriate valuation
methodology for Genco is asset-based valuation ("Asset-Based Valuation")
• The financial and economic theory underpinning this methodology is consistent with industry practice
• Investors and equity research analysts typically value drybuik companies based on asset value
• Precedent transactions demonstrate that pure-play drybuik operations are acquired at or below asset value
• NAV, an asset-based valuation approach, has been the basis for each of Genco's historical acquisitions
• Drybuik shipping concerns are rarely bought and sold as self-contained companies, as purchasers generally
effectuate transactions through ship and fleet sales
• Clarksons has recorded 1,115 drybuik vessel sales since 2011
• Conversely, Blackstone has identified only one public change-of-control transaction involving share purchases in
the same period; significantly, that transaction was priced at a discount to NAV(1)
• Finally, a number of shipping companies have recently attempted to complete IPOs, but investors have been
unwilling to invest in IPOs priced at or above NAV
(1) Dryships' acquisition of OceanFreight in July 2011. See page 25 for further detail Source: CaplQ screen of pure-play drybuik acquisitions of Blackstone l8
greater than $100 million.
Confidential
Valuation Approach (cont.)
• While Asset-Based Valuation is the most appropriate methodology for valuing Genco, certain equity analysts also
use comparable company analysis (TEV / EBITDA multiples) when valuing drybulk companies
• In calculating and applying TEV / EBITDA multiples, adjustments are required to enable comparability
• Comparable companies' fleets have different ages, impacting their fleets' remaining earnings capacity
— All other things being equal, an older fleet will have a shorter useful life and lower aggregate earnings
capacity
• Comparable companies can have significantly different Charter Coverage and the fixed rate of those charters
may vary materially from expected spot market rates
— Differences in Charter Coverage in any given year can lead to dramatic differences in EBITDA without
materially impacting the long-term earnings power of the fleet
— Genco does not have any fixed charters extending beyond October 2014
• Blackstone has addressed these factors by only selecting comparable companies with low Charter Coverage in
2015 and by adjusting multiples to account for different fleet ages
Blackstone 19
Confidential
Valuation Approach (cont.)
• While it is uncommon to use a discounted cash flow analysis to value a drybulk shipping company, Blackstone has
performed a DCF analysis for the sake of completeness
• In discounted cash flow analyses, forecasted cash flows are discounted to the present using a company's
weighted average cost of capital ("WACC") to account for the riskiness of cash flows and the time value of
money
- At the end of the projection period a terminal value is calculated to capture the value of the enterprise
beyond the projection period
• A primary difficulty in using a DCF analysis for a shipping company is forecasting cash flows because of the
volatility of day rates
• Blackstone has used projected future asset values to calculate Genco's terminal value, as traditional
methodologies are not applicable
- A terminal multiple approach'11 is problematic given (i) historical volatility of multiples and (ii) vessels are
fixed-life assets
- A perpetuity growth approach525 is problematic because {i} vessels are limited-life assets, (ii) vessels do not
have "steady-state" earnings and (iii) it is difficult to predict future fleet renewal costs
• Having analyzed the drybulk industry and applied a range of valuation methodologies, it is Blackstone's
conclusion that there is no equity value in Genco as of the date of this Expert Report
(1) The terminal multiple method of estimating terminal vaiue assumes that operations will be worth a multiple of the EBITDA generated in the
iast forecasted year. This method requires the selection of an appropriate EBITDA multiple at exit and corresponding EBITDA level.
{2} The perpetuity growth method of estimating terminal value is applicable when the unfevered cash flows generated in the iast year of the
forecast can be expected to grow at a steady rate in perpetuity. This method requires several assumptions, including the appropriate steady- Blackstone 20
state growth rate and the required re-investment rate to maintain such growth.
Confidential
IV. Valuation Analyses

Confidential
Summary of Valuation Approaches - Total Value of Genco
Based onfour independent

Asset-Based appraisals, afurther indication
$1,364 $1,444
Valuation from and projected
balance sheet upon emergence
Precedent Analysis of six precedent

$1,297 $1,404 transactions announced in the past
Transactions five years
Comp. Companies Analysis of trading prices of

$1,202 $1,324 comparable companies and asset
TEV/NAV valuation using i

Comp. Companies comparable companies, estimates
© TEV/2015E EBITDA
$1,170 $1,418 per CaplQ, and adjustments for
differences in fleet age
WACC rangingfrom 9.1-11.1% and

Discounted assuming the Company is valued
$1,106 $1,335 on a NAV basis at exit withfleet
Cash Flows
depreciating at 0-6.5% p.a.
$1,000 $1.150 $1,300 $1,450 $1,600

Current Claims +
Warrants Granted:
$1,513 billion'2'
Note: $ in millions.
Current Claims:
(1) Includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB $1.480 billion'1'
Facility, $74 million related to the CA Facility, $125 million of Convertible Notes, $4 million of
accrued interest, $6 million Swap Liability, $1 million Lease Liability, and $26 million of other
administrative claims. Blackstone 22
(2) Includes warrants valued at $32.9 million, per page 85 of the Disclosure Statement.
Confidential
O Asset-Based Valuation: Approach
• Genco's drybulk fleet comprises the majority of the Company's assets
• As stated earlier, the Company engaged four well known third-party appraisal firms to conduct asset-level
valuations of the Company's fleet and used as a fifth indication of value
- The resulting fleet valuations ranged from $1,182 million to $1,262 million
• The four third-party appraisal firms monitor a vast number of ship sales and have an up-to-date view of the
current market value for vessels
- Additionally, estimates valuation for each vessel using an algorithm that takes into account
vessel type (e.g., Capesize), age, capacity, and features (e.g., shipyard), as well as current market conditions
• The vessels have been valued individually, assuming an arm's length sale over a reasonable period of time
• The valuations are based on a variety of factors, including, among others, the type and age of the vessel, the
shipyard in which the vessel was built and the market outlook for the vessel type
• Genco's other assets consist of ownership stakes in two publicly traded companies and its two management
contracts, as well as cash, net working capital, and minimal other fixed assets
• Genco's 11.1% economic ownership of Baltic Trading and approximately 20% economic ownership of Jinhui are
valued based on the market values of their publicly traded securities
• Genco is party to service contracts with both MEP and Baltic Trading; the Company and Blackstone have
projected future cash flows for these contracts and valued them using discounted cash flow analyses
• The asset-value approach also includes projections of net working capital and other fixed assets as of June 30, 2014
(1) Per Clarksons. Blackstone 23

Confidential
Q Asset-Based Valuation
MSI Marsoft Shipbroker A'1' Shipbroker B'1' Median

Date: May 2014 May 2014 May 2014 March 2014 March 2014 N/A
lAppraised Value of Fleet $1,211 $1,198 ~$i,T87 "$1,227 $1,262 $1,211 1

Excess Cash'2' - - - - -
Net Working Capital13' 40 40 40 40 40 40

Stake in Jinhui Shipping'4' 56 56 56 56 56 56
Stake in Baltic Trading'^' 42 42 42 42 42 42
MEP / BALT Service Contracts'6' 40 40 40 40 40 40
Other Fixed Assets 4 4 4 4 4 4
Total Value $1,393 $1,380 $1,364 $1,410 $1,444 $1,393
Less: Total Debt'7' (1,447) (1,447) (1,447) (1,447) (1,447) (1,447)
Less: Other Claims'8' (33) (33) (33) (33) (33) (33)
t Residual Value for Current Equity ($87) ($100) ($116) ($70) ($36) ($87)]

(1) Contractual arrangements preclude Genco from sharing the identity of these appraisers.
(2) No excess cash, as projected June 30, 2014 cash balance of $37 million is less than the estimated required operating cash of $750k/vessel.
(3) Includes $37 million of cash projected as of June 30 2014, $7 million due from charterers, $20 million of prepaid expenses, $20 million of accounts
payable and accrued liabilities, and $4 million of other net current operating liabilities.
(4} Based on 16.3mm shares owned, 20.50 NOK share price, and exchange rate of 5.95 NOK per USD as of Thursday, May 22,2014.
(5) Based on 6.4mm shares owned at $6.65 per share as of Thursday, May 22, 2014.
(6) Further detail on valuation of service contracts provided in the Appendix.
(7) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility, $74 million related to the CA Facility, $125
million of Convertible Notes and $4 million of accrued interest
(8j Other Claims includes the $6 million Swap Liability, $1 million Lease Liability, and $26 million of other administrative claims.
Blackstone 24
Confidential
Q Precedent Transactions
As shown below, acquisitions of large fleets are generally effectuated at a Price / Fleet value of near l.Ox.
Announced Purchase Price / # of
Acquirer Target / Seller Date Price Fleet Vessels Description Note
Knightsbridge purchased Frontline 2012's fleet of 25
Knightsbridge Frontline 2012 Apr-14 $777 l.OOx 25 Capesize newbuildings with estimated delivery between Sep- A
14 and Sep-16.
Knightsbridge purchased five capesize newbuildings (2014

Frontline 2012 and
Knightsbridge Mar-14 $210 l.Olx 6 delivery) from Frontline 2012 and one Capesize bulk carrier B
Karpasia from Karpasia.
Navios entered into a JV with a Japanese affiliate. The new
Navios Holdings Navios Asia LLC May-13 $114 l.OOx 6 company agreed to acquire 5 Panamax vessels and1 C
Kamsarmax vessel for $114 million.
DryShips agreed to acquire shares of OceanFreight, a drybuik
DryShips OceanFreight Jul-11 $262 0.92x 10 company with a fleet of 4 Capesize vessels, 2 Panamax and 4 D
newbuilding VLQCs.
Genco acquired 16 Supramax bulkers from Bourbon S.A. for

Genco Shipping &
Bourbon Jun-10 $440 0.95x 13 $545 million, with 3 of the vessels immediately resold to E
Trading Maritime Equity Partners LLC for $105 million.
GNK acquired 2 newly built vessels and 3 newbuilding

Genco Shipping &
Metrostar Jun-10 $166 l.OOx 5 contracts for $166 million en bloc (avg of $33.3 million each) F
Trading from Metrostar.
Median l.OOx
Average 0.98x
A Under the agreement, "the exchange ratio for the acquisition and share issuance will be based on NAV using March 31, 2014 broker values."(1)
B. Fleet value calculated using as of March 10, 2014, the day before the transaction was announced.
C. Navios Holdings' Ql-2013 Earnings Presentation stated that fleet valuation and purchase price were both $114 million.
D Morgan Stanley (July 27,2011) estimated the charter-adjusted fleet value of OceanFreight at $525 million, less $241 million of CapEx
commitments.
E Based on third-party appraisals performed for the Company at the time of the transaction.
F. Based on third-party appraisals performed for the Company at the time of the transaction.
Note: $ in millions. Blackstone 25

(1) Per Knightsbridge Tankers Ltd. press release issued April 24, 2014.
Confidential
O Precedent Transactions (cont.)
Application of Price/Fleet ratio from precedent transactions to Genco

Low Mid High |
Price / Fleet Value 0.92x l.OOx l.Olx
Genco Fleet Value (Median) $1,211 $1,211 $1,211
Implied Fleet Value (Precedent Tx.) $1,115 $1,211 $1,221
Plus: Net Working Capital'1' 40 40 40
Plus: Other Fixed Assets 4 4 4
Plus: Excess Cash12' - - -
Plus: Stake in Jinhui Shipping 56 56 56

Plus: Stake in Baltic Trading 42 42 42
Plus: MEP / BALT Service Contracts 40 40 40
Total Value $1,297 $1,393 $1,404
Less: Total Debt(3! (1,447) (1,447) (1,447)
Less: Other Claims'41 (33) (33) (33)

(1) Includes $37 million of cash projected as of June 30, 2014, $7 million due from charterers, $20 million of prepaid expenses, $20 million of accounts
(2) No excess cash, as projected June 30, 2014 cash balance of $37 million is less than the estimated required operating cash of $750k/vesseL
(3) Total debt includes $1,069 million related to the 2007 Credit Facility, $175 million related to the DB Facility, $74 million related to the CA Facility, $125
million of Convertible Notes and $4 million of accrued interest.
(4) Other Claims includes the $6 million Swap Liability, $1 million tease Liability, and $26 million of other administrative claims.
BSackstone 26
Confidential
Q Comparable Companies: Selection Criteria
Blackstone has evaluated comparable companies on the basis of the criteria set forth below.
Criteria Genco / Ideal Comp
E Business Model
Q Charter Coverage
• Pure-play drybulk owner/operator
• Vessels are owned with no / limited vessels Chartered-ln
• Low Charter Coverage, with virtually all vessels in the spot market or
on Index-Linked Time Charters
E Fleet Age
O Newbuild Orders
• Average age of 9 years
• Limited orderbook of newbuild vessels, with all of the fleet currently

"on the water"
E Capital Structure
O Size and Market Cap

• Healthy capital structure
• Large fleet and market capitalization
Blackstone 27
Confidential
Q Comparable Companies Overview
• As discussed earlier, ownership of drybulk vessels is highly fragmented
• Blackstone has reviewed and analyzed dozens of public drybulk companies to identify a subset most similar to
Genco
• The following companies are most comparable to Genco (the "Comp Set"):
• Baltic Trading
• Diana Shipping
• Jinhui Shipping
• Paragon Shipping
• Safe Bulkers
• Star Bulk Carriers
• The following pages set forth an analysis of comparable companies ultimately included in the Comp Set
• Details on select drybulk companies considered and excluded from the Comp Set can be found in the
Appendix
Blackstone 28
Confidential
Q Analysis of Comparable Companies (1 of 2)

• Pure-play bulker company with no • Average age of 4.0 years; young
Chartered-ln vessels compared to Genco Include in Comp Set
• Low Charter Coverage, with only 5% * Smaller than Genco (number of vessels » Straightforward pure-play
Charter Coverage in 2014 and none in and TEV)
» Relatively small orderbook
2015
• Low Charter Coverage
• Most vessels currently in service
newbuilds on order
• Smaller and younger fleet
• Large, drybuik fleet with no Chartered-ln * High Charter Coverage, with 81%
vessels coverage in 2014 and 26% in 2015 Include in Comp Set
• Most vessels currently in service • Several charters are below market, » Straightforward pure-play
Diana • 38 vessels on the water with only 3 temporarily depressing EBITDA and
Shipping newbuilds on order inflating valuation multiples
• Market cap of approximately $900 • Charterer options exist to extend
million and increase coverage further
• Most vessels currently in service • Smaller than Genco (TEV)

• Several other assets, including
Include in Comp Set
Jinhui newbuild order investments in listed equity securities, • Relatively small orderbook
• Average age of 7.1 years compares well debt instruments, and properties
Shipping • Similarly aged fleet
with Genco
• No Chartered-ln vessels
Blackstone 29
Confidential
© Analysis of Comparable Companies (2 of 2)

Low Charter Coverage, with only 13% in Orderbook of 7 newbuilds represents
2014 and none in 2015 50% of 14 vessels currently on the water Include in Comp Set
Similar fleet with Handysize through Smaller than Genco (vessels and TEV) • Straightforward pure-play
Kamsarmax vessels
Paragon • Low Charter Coverage
• However, no Capesizes owned
» Similarly aged fleet
Shipping Average age of 7.5 years
• Smaller fleet size and
market cap
• Pure-play bulker company with no • Slightly larger vessels on average

Chartered-ln vessels (Panamax and Capesize) Include in Comp Set
• Large fleet of vessels on the water • Average fleet age of 5.2 years, younger • Straightforward pure-play
Safe • 31 vessels on the water with 13 than Genco
newbuilds on order * Charter Coverage of 35% in 2014 and
Bulkers • ~$700 million market cap
• Meaningful liquidity with market cap of 14% in 2015
~$700 million
• Younger fleet
• Pure-play bulker company with no • Meaningful Charter Coverage, with 44%

Chartered-ln vessels coverage in 2014 and 18% in 2015 Include in Comp Set
• Average age of 8.9 years for vessels • Orderbook of 11 newbuilds represents • Straightforward pure-play
Star Bulk currently on the water 65% of the 17 vessels currently on the
• tn-house ship management and water
Carriers • Conservative capitalization
management for 14 third-party vessels • Smaller than Genco (number of vessels
and TEV)
• Meaningful orderbook
Blackstone 30
Confidential
O Comparable Companies: TEV / NAV Methodology
• Blackstone has assessed the trading multiples of comparable companies to ascertain whether these companies
trade at a premium or discount to asset value
• The analysis is intended to reveal whether market participants assign value to pure-play drybulk operators in
excess of the value of the assets
• In calculating NAV, Blackstone has relied upon for fleet valuation
• As described earlier, is an internationally recognized provider of vessel sale and valuation

information
• provides a consistent source of valuation across the set of comparable companies for purposes of
the TEV / NAV analysis
• The median comparable TEV / NAV multiple using is then applied to the NAV valuation of Genco
based on to maintain a single, consistent approach and application of NAV multiples across the set
of comparable companies
Biackstone 31
Confidential
Q Comparable Companies: TEV / NAV
Comparable Companies: TEV / NAV Low Mid High

Paragon Shipping 0.88x TEV / NAV Multiple (using 0.87x 0.92x 0.97x
Baltic Trading 1.18x Genco NAV (using $1,226 $1,226 $1,226
Safe Bulkers 1.17x Implied TEV $1,064 $1,125 $1,186
Jinhui Shipping and Transportation 0.50x Plus: Excess Cash!i> - - -
Star Bulkers 0.92x Plus: Stake in Jinhui Shipping 56 56 56

Diana Shipping 0.92x Plus: Stake in Baltic Trading 42 42 42
Average 0.94x Plus: MEP / BALT Service Contracts 40 40 40
Median 0.92X Total Value $1,202 $1,263 $1,324
Less: Total Debt'3' (1,447) (1,447) (1,447)
Less: Other Claims'4' (33) (33) (33)
Genco Shipping & Trading: NAV
Residual Value for Current Equity ($278) ($217) ($156*
Net Working Capital'1' 40
Current Fleet 1,182
Other Fixed Assets 4

(1) Includes S37 million of cash projected as of June 30, 2014, $7 million due from charterers, $20 million of prepaid expenses, $20 million of accounts
(2) No excess cash, as projected June 3C, 2014, cash balance of $37 million is less than the estimated required operating cash of $75Ok/vessel.
{3] Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility, $74 million related to the CA Facility, $125
million of Convertible Notes and $4 million of accrued interest.
(4} Other Claims includes the $5 million Swap Liability, $1 million Lease Liability, and $25 million of other administrative claims.
Blackstone 3a
Confidential
© Comparable Companies: TEV / EBITDA Methodology
• As discussed earlier, adjustments are required to enable comparability among companies when calculating and
applying TEV / EBITDA multiples
• Older fleets have fewer remaining years of earnings and should therefore trade at a discount to younger fleets
• A 1-year old fleet and a 10-year old fleet may have relatively similar EBITDA in a given year
• However, all else being equal, the new fleet will be more valuable because of its incremental 9 years of earnings
capacity and will therefore trade at a higher TEV / EBITDA multiple
- Other items that may impact the observed TEV / EBITDA multiple include fleet composition and Charter
Coverage
• To estimate the impact of age on a fleet's value, Blackstone has analyzed time series data from Clarksons showing
the historical price differential between benchmark 5-year old and 10-year old vessels (see Appendix page 41)
• The historical difference implies annual depreciation in value of 4.5%-6.5%
• After calculating the current TEV / EBITDA multiple of each comparable company, Blackstone has adjusted the
multiple to reflect the difference in age between the comparable company's fleet and Genco's fleet
• As an example, assuming 4.5% annual depreciation, a 6.50x TEV / EBITDA multiple for an 8-year old fleet should
be adjusted to a 6.21x TEV / EBITDA multiple when applied to a 9-year old fleet'11
(1) Calculated as 6.50 x (1-4.5%) =6.21
Blackstone 33
Confidential
Q Comparable Companies; TEV / EBITDA
Financial Non- 2015E Fleet Avg Newbuilds 2015

Market Liabilities & Operating CaplQ 2015E EBITDA Age as % of Charter
Cap Pref Stock Assets'11 TEV EBITDA Multiple (Mar 31) Current Fleet Coverage
Paragon Shipping $136 $200 ($25) $311 $54 5.8x 7.5 50% -
Baltic Trading 383 167 (30) 520 61 8.5x 4.0 31% -
Star Bulkers 323 260 (43) 539 74 7.3x 8.9 65% 18%
Safe Bulkers 694 610 (127) 1,178 162 7.3x 5.2 42% 14%
Jinhui Shipping 290 493 (264) 519 96 5.4x 7.1 3% -
Diana Shipping 917 525 (339) 1,103 124 8.9x 6.7 8% 26%
Average 7.2x 6.6
Median 7.3x 6.9
Age-Adjusted EBITDA Multiple

GNKAge Base TEV/
Difference EBITDA Low Mid High
Depreciation per year 6.5% 4.5% 0.0%
Paragon Shipping 1.4 5.8x 5.3x 5.4x 5.8x

Baltic Trading 4.9 8.5x 6.1x 6.8x 8.5x
Star Bulkers - 7.3x 7.3x 7.3x 7.3x
Safe Bulkers 3.7 7.3x 5.7x 6.1x 7.3x
Jinhui Shipping 1.8 5.4x 4.8x 5.Ox 5.4x
Diana Shipping 2.2 8.9x 7.7x 8.Ox 8.9x
' Median 7.3x 5.9x 6.5x 7.3x

Sources: CaplQand Company Filings. Blackstone 34
(1) Assumes $750k per vessel of operating cash.
Confidential
o Comparable Companies: TEV / EBITDA (cont.)
Genco Valuation Low Mid High

Genco 2015E EBITDA(1) $175 $175 $175
Adjusted 2015E EBITDA Multiple'21 5.9x 6.5x 7.3x
Value of Vessel Operations $1,032 $1,131 $1,280
Add: Excess Cash'31 - - -
Add: MEP / BALT Service Contracts 40 40 40

Add: Value of Jinhui 56 56 56
Add: Value of Baltic 42 42 42
Total Value $1,170 $1,269 $1,418
Less: Total Debt'41 (1,447) (1,447) (1,447)
Less: Other Claims1*1 (33) (33) (33)

(1) Genco's projected EBITDA excludes service revenues, as the estimated value of these contracts is added back separately.
(2) Multiple is adjusted to account for the differences in Genco's fleet age and those of the comparable companies. See previous page for further
detail.
(3) No excess cash, as projected June 30, 2014 cash balance of $37 million is less than the estimated required operating cash of $750k/vessel.
(4) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility, $74 million related to the CA
Facility, $125 million of Convertible Notes and $4 million of accrued interest.
(5) Other Claims includes the $6 million Swap Liability, $1 million Lease Liability, and $26 million of other administrative claims. Blackstone 35
Confidential
Q DCF: Methodology
• General
• Projections are taken directly from Genco's Business Plan
- Only adjustment is to exclude the assumption that four vessels are acquired, as projected purchase
prices are speculative, the orders have not yet been placed, and the program is to be funded by new
capital investment
• Quarterly cash flows are discounted to June 30, 2014 using the mid-period convention
• WACC of 10.1%, sensitized between 9.1% and 11.1% (see next page for derivation)
• DCF projections forecast valuation of operating assets - other sources of value are then separately
added, including MEP and Baltic Trading contracts ($40 million) and ownership interests in Baltic Trading
and Jinhui Shipping ($42 million and $56 million, respectively)
• Terminal Value
• At the end of the forecast period, the Company is valued on a NAV basis by depreciating the fleet
between 0%-6.5% per annum
- As highlighted earlier and shown in the Appendix, current Clarksons time series imply that, all else
being equal, Genco's fleet will depreciate at a rate 4.5-6.5% per annum
- High case assumes that the fleet does not depreciate at all while advancing from an average age of 9.1
years to 12.6 years
Blackstone 36
Confidential
Q DCF: WACC Estimation
Market Net Debt / Levered Illustrative Unlevered
2
Company Cap. Net Debt "' Total Cap. Beta Tax Rate Beta !3)
Baltic Trading Limited $383 $137 26.4% 0.94 0.69
Diana Shipping Inc. 917 186 16.8% 1.44 1.20
Jinhui Shipping & Transportation Ltd. 290 229 44.2% 1.20 0.67
Paragon Shipping Inc. 136 175 56.2% 2.85 1.25
Safe Bulkers, Inc. 694 447 39.2% 1.64 1.00
Star Bulk Carriers Corp. 323 217 40.2% 1.40 0.83
Average 37.2% 1.58 0.94
Relevered Equity Beta Weighted Average Cost of Capital (WACC)
Adjusted Unlevered Beta 0.94 Target Debt/Total Cap. 16.4%
Target Leverage Ratio (D / E} 20% Tax Rate
(6)
Tax Rate Cost of Debt 4.8%
(3) 1.12 Target Equity/Total Cap.|7) 83.5%
Levered Beta
Cost of Equity 11.2%
Theoretical WACC Reference Point 10.1%
Cost of Equity Based on CAPM WACC Sensitivity
Market Risk Premium (Rm Rf)(4) 7.0% Debt /
Multiplied by: Levered Beta 1.12 Total Cap Cost of Equity
Equals: Adjusted Market Risk Premium 7.8% 9.2% 11.2% 13.2% 15.2%
Plus: 10Yr Riskfree Rate (Rf) 2.5% 6.4% 8.9% 10.8% 12.7% 14.5%
Plus: Size Premium |5! 0.9% 16.4% 8.5% 10.1% 11.8% 13.5%
Cost of Equity Reference Point 11.2% 26.4% 1 8.0% 9.5% 11.0% 12.4%
Source: Risk premium assumptions based on historical data provided in Duff & Phelps' 2014 Valuation Handbook.
(1) Financial liabilities plus preferred stock less financial assets.
(2) "Adjusted Beta" per CaplClon 5/22/2014. Represents five years of monthly data (when available) vs. the overall market
(3) Unlevered Beta = Levered Beta/il+((Debt/Equity)*(lTax Rate))).
(4) Historical LongTerm Equity Risk Premium, as provided in Duff and Phelps' 2014 Valuation Handbook.
(5) Size premium corresponds with Genco's estimated market capitalization. Per Duff & Phelps' 2014 Valuation Handbook.
Blackstone 37
(6) Genco's secured exit financing bears interest at L + 3.5%. Assumes LIBOR equal to 1.25%
(7) Based on plan equity value of $1,230 million and postreorg debt of $242.2 million.
Confidential
0
DCF: Projections and Valuation
OCF Projections (Vessel Operations Only) DCF Valuation
($ in millions) 2014 ($ in millions!
Q3Q4 2015 2016 2017 Low Mid High
Net Revenue $121 $303 $214 $189 WACC 11.1% 10.1% 9.1%

OpEx (51) (104) (106) (108) Vessel Dep'n Rate 6.5% 4.5%
G&A (11) (17) (17) (17)

Technical Services Cost (3) (7) (7) (7) 2017 Est. Fleet Value $971 $1,038 $1,211
Cash EBITDA $56 $175 $84 $56 Working Capital'1' 43 43 43
Drydock Cost (9) (13) (24) (19) Future Gross Asset Value $1,014 $1,080 $1,254
Sale of Vessels Discount Factor 0.692 0.714 0.737
Purchase of Vessels Terminal Value $701 $771 $924
Unlevered FCF $47 $162 $60 $37 Implied LTM Multiple at Exit 18.0x 19.2x 22.2x
PV of Unlevered Cash Flows Terminal Value $701 $771 $924

Case Total PV of Projected Cash Flows 267 270 273
Low (WACC = 11.1%) $267 $46 $145 $49 $27 Baltic Stake 42 42 42
Mid (WACC = 10.1%) 270 46 146 50 28 Jinhui Stake 56 56 56
High (WACC = 9.1%) 273 46 148 51 29 Excess Cash'21
MEP / BAIT Service Contracts 40 40 40

Projected Fleet Value (End of Period) Total Value $1,106 $1,180 $1,335
Case Less: Total Debt'3* (1,447) (1,447) (1,447)
Low (Dep'n = 6.5%) $1/173 $1,102 $1,034 $971 Less: Other Claims141 (33) (33) (33)
Mid (Dep'n = 4.5%) 1,184 1,133 1,085 1,038 Residual Value to Current Equity ($374) ($301) ($145) |
High (Dep'n = 0.0%) 1,211 1,211 1,211 1,211
(1) Includes $37 million of cash projected as of June 30, 2014, $7 million due from charterers, $20 million of prepaid expenses, $20 million of accounts
payable and accrued liabilities, and $4 million of other net current operating liabilities. Additionally, includes $3 million of projected other fixed
assets.
(2) No excess cash, as projected June 30, 2014, cash balance of $37 million is less than the estimated required operating cash of $750k/vessel.
(3) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility, $74 million related to the CA Facility,
$125 million of Convertible Notes and $4 million of accrued interest. Blackstone 38
(4) Other Ciaims includes the $6 million Swap Liability, $1 million Lease Liability, and $26 million of other administrative claims.
Confidential
V. Appendix
Confidential
Valuation Methodologies Precedent Bankruptcies
Liquidation Vessel Discounted Trading Acquisition
Commentary
Analysis Appraisals Cash Flows Multiples Multiples
Overseas •
Previous DS iterations showed valuation
premised on best of 5 submitted plans
Shipholding
Group Yes No No No No •
The "Revised Equity Proposal" has been
accepted as the highest and best bid
(On-going) •
Appraisals used only for liquidation analysis
•
Debtors include 17 of TMT's 31 vessels
TMT
• Disclosure Statement confirmed in April 2014
Procurement Yes No No No No for reorganization of 3 vessels; other vessels
(On-going) have been sold or face potential sales
•
All negotiations based soiely on appraised value
Excel
•
Other methodologies were considered to
Maritime Yes Yes Yes Yes Yes support appraisal value in anticipation of a
(2013) contentious bankruptcy
•
Conducted a marketing process, but liquidity
General concerns cut it short
Maritime Yes Yes No No No •
Valuation was implied by Oaktree investment
•
Also referenced appraisals from three third
(2012)iV
party appraisal firms
• The plan exchanged secured lenders' $175mm
TBS Shipping
in debt for 90% equity in the company plus
Services Yes No No No No $151mm of new debt
(2012) •
Canceled equity interests
•
Senior lenders elected 1111(b)
Omega •
$2.5 2.6mm new investment from CEO for
Navigation Yes No No No No 100% of postreorg equity
•
Rights offering of same size offered to Junior
(2012)
Lenders / GUC at same valuation
•
RBS and Credit Agricole initially opposed the
Marco Polo
Chapter 11 filing; their objections to filing were
Seatrade No No No No No overruled by Judge Peck
(2012) •
Liquidation was ultimately completed
(1) Liquidation Analysis showed total proceeds ranging from $427 million to $899 million; vessel appraisals implied an enterprise value ranging Blackstone 40

from $1,110 million to $1,128 million; Market test / Oaktree value implied an enterprise value ranging from $936 million to $1,118 million.
Confidential
Implied Annual Fleet Depreciation
12.0%
Current:
10.0% 5.5% per annum
at
*->
« 8.0%
6.5% per annum
« 6.0%
<o 4.5% per annum
3 4.0%
C
C
<
2.0%
0.0%
Jan00 Jan02 Jan04 Jan06 Jan08 Jan10 Jan12 Jan14
Methodology Notes
•
Pulled historical time series on 10year old and 5year old vessel prices from Clarksons
• Historical data pulled for 4 main vessel classes: Capesize, Panamax, Supramax and Handysize vessels
• Differential between price of 10year old and 5year old vessel implies an annual depreciation rate
•
The 4 series were then weighted by Genco's fleet profile (9 capesize, 8 panamax, etc.) to develop an index representing the average
implied annual depreciation for Genco's fleet at different points in time
•
Annual implied depreciation generally ranges between 4.5% and 6.5% per annum
Blackstone 41
Confidential
Overview of Service Contracts
BALT Contract MEP Contract
• Baltic Trading operates a fleet of 13 drybulk vessels and • MEP is a drybulk investment platform that owns 12
expects to take delivery of 4 additional vessels by 2015 vessels
Overview • Owned by Oaktree Capital Management, Lion Cao Private
Equity Maritime, and Peter Georgiopoulos
Genco Shipping and Trading Ltd. has a management • Genco Ship Management (USA) and MEP have an agency
Contract agreement with Baltic Trading under which Genco agreement under which Genco provides MEP with
with provides Baltic Trading with commercial, technical, oversight of technical services including (i) crew
administrative and strategic services management, (ii) insurance, (iii) drydocking, (iv) ship
Genco operations, and (v) financial statement preparation
• $750 per day per ship as a technical service fee • $750 per day per ship as a technical service fee
Mgmt • 1.25% commission on Baltic Trading revenue Reimbursement of all outofpocket expenses
• 1.00% fee on any vessel purchase or disposition
Fee
• Reimbursement of all outofpocket expenses
• Initial term of 15 years and automatically renews every 5 MEP has the right to cancel its contract on 60 days notice
years unless it is terminated with a payment of a oneyear termination fee or without a
• If Baltic Trading terminates the agreement without cause fee upon a change of control
or Genco terminates the agreement with cause, Baltic
Trading must pay Genco 5 times the average annual
management fee
• Termination fee waived if change of control occurs at
Genco
• ~$1 million of annual variable expenses attributable to ~$700k of annual variable expenses attributable to
Expenses fulfillment of MEP contract along with ~$1.5 million of fulfillment of MEP contract along with ~$800k of annual
annual taxes taxes
• Calculate present value of cash flows through 2017 and Present value of cash flows through 2017 are calculated,
Valuation
apply a perpetuity valuation (based on existing cash flows at which time the contract is assumed to be terminated
Treatment continuing to be realized)
Blackstone 42
Confidential
Valuation of Baltic and MEP Contracts
(S in millions unless otherwise noted) 2014
Q3 Q4 2015 2016 2017 Perpetuity Value (10.1%) $29.9
BALT Vessels 13.0 14.7 16.0 17.0 17.0 Discount Factor11,1 0.75
Days 92 92 365 366 365 PV of Terminal Value $22.4
Service Revenue Per VesselDay $750 $750 $750 $750 $750 PV of Forecasted Cash Flows 9.4
BALT Technical Service Revenue $0.9 $1.0 $4.4 $4.7 $4.7 Value of BALT Contract $31.8
Sale & Purchase 0.6 0.6
Commission Revenue 0.2 0.3 1.3 1.0 0.8

BALT Service Revenue $1.1 $1.8 $6.3 $5.6 $5.5
Variable Costs {0.2} (0.2) (10) (10) (10)
Taxes (0.3) (0.6) (1.9) (1.5) (15)
BALT Net Cash Flow $0.6 $1.0 $3.4 $3.1 $3.0
Discount Factor 0.99 0.96 0.91 0.82 0.75
PV of Cash Flow {Disc. = 10.1%) $0.6 $1.0 $3.1 $2.5 $2.3
NPV of Forecasted Cash Flows $9.4
IS in millions unless otherwise noted) 2014

Q3 Q4 2015 2016 2017 Termination Fee in 2017 $3.3
MEP Vessels 12.0 12.0 12.0 12.0 12.0 Discount Factor'2' 0.71
Days in Period 92 92 365 366 365 PV of Terminal Value $2.3
Service Revenue Per VesselDay $750 $750 $750 $750 $750 PV of Forecasted Cash Flows 5.5
MEP Service Revenues $0.8 $0.8 $3.3 $3.3 $3.3 Value of MEP Contract $7.8
Variable Costs (0.2) (0.2) (0.7) (07) (0.7)
Taxes (0.2) (0.2) (0.8) (08) (08)
MEP Net Cash Flow $0.5 $0.5 $1.8 $1.8 $1.8
Discount Factor 0.99 0.96 0.91 0.82 0.75
PV of Cash Flow (Disc. = 10.1%) $0.5 $0.5 $1.7 $1.5 $1.4
NPV of Forecasted Cash Flows $5.5
(1) Assumes discount rate equal to Genco's WACC and cash flows are continuing in perpetuity; uses the midperiod convention. Blackstone 43

(2) Assumes discount rate equal to Genco's WACC and termination fee is paid at the end of 2017; other cash flows assume midperiod convention.
Confidential
Select Drybulk Companies Excluded from Comp Set (1 of 3)

•
Fleet of 38 drybulk vessels with no • 59% ownership in Ocean Rig
Charteredln vessels • Ocean Rig owns drillships and semi Exclude From Comp Set
• Average age of 8.2 years for drybulkers submersible rigs • Large stake in Ocean Rig
comparable to Genco • Stake worth $1.4bn, representing
DryShips •
Market cap of ~$1.4 billion
• Crude tanker ownership
nearly 50% of Dryships' TEV
• Owns 10 crude tankers
• Charter Coverage of 36% in 2014 and
21% in 2015
• Fleet includes Capesize, Panamax, and • 9 vessels Charteredln, two of which are
Supramax (on order) on bareboat charter Exclude From Comp Set
• Market cap of ~$850 million • Different cash flow profile and 10 vessels chartered in
• Company has 8 vessels on order; this is leverage from Charteredln vessels
• Focus on iceclass vessels
Golden relatively small compared to current • Meaningful Charter Coverage, with 30%
Ocean fleet of 26 owned vessels and 10 coverage in 2014 and 21% in 2015
• Younger fleet
Charteredln vessels • Average age of 5 years, younger than
Group • Large fleet and market cap
Genco's fleet
• Company owns 10 iceclass panamax • Relatively small orderbook
vessels
• Low Charter Coverage, with only 16% • After transactions with Frontline 2012

Exclude From Comp Set
Charter Coverage in 2014 and none in Ltd in 2014, the Company will be 70%
2015 owned by Frontline Ltd. • Only 5 vessels on the water
Knights
•
Conservative capitalization • Company has only five vessels on the • 70% owned by Frontline
bridge water but will have orders for 34 more 2012
Tankers vessels after the Frontline transactions • Smaller market cap
($894mm of remaining CapEx) • Straightforward pureplay
•
Company only has Capesize vessels • Low Charter Coverage
Blackstone 44
Confidential
Select Drybulk Companies Excluded from Comp Set (2 of 3)

Controls 61 vessel drybulk fleet with 39 22 vessels Charteredln under longterm
owned vessels charters and 16 purchase options Exclude From Comp Set
Only 9% fixed Charter Coverage in 2015 Owns 50.5% of Navios Maritime * Crude, product, and
Market cap of ~$950 billion Acquisition Company, owner of crude, chemical tanker exposure
Navios product and chemical tankers
• Logistics operations
Owns 63.8% of Navios South American
Maritime Logistics, owner of terminals facilities
• 22 vessels chartered in
» Large fleet and market cap
Holdings and barging operations
• Low Charter Coverage
• JP Morgan estimates that Navios'
logistics and oil / chemical
businesses represent 68% of Navios
Maritime Holdings' value*11
• Market cap of ~$1.5 billion Different business model due to MLP
structure with emphasis on steady, Exclude From Comp Set
• Diversified fleet with concentration in
Panamax and Capesize classes predictable cash flows
• MLP structure
• High Charter Coverage, with 85%
* High Charter Coverage
Navios coverage in 2014 and 52% in 2015
• Containership vessels
Maritime • Longterm charters with average
duration of 3.2 years
Partners • Staggered charter expirations to
manage market exposure
Company owns 5 containerships (6800
TEU) and has two Charteredln vessels
(1) JP Morgan Equity research report, published February 7, 2014. Blackstone 45

Confidential
Select Drybuik Companies Excluded from Comp Set (3 of 3)

• Prospective fleet will be large and • No owned vessels "on the water"
focused on drybulkers • 17 Charteredln vessels and
Exclude From Comp Set
contracts for construction of 79 • No vessels on the water
Scorpio newbuiids
• Meaningful orderbook
Bulkers • Newbuiids delivered in 2015 and 2016
• Newbuild program so large that it
changes risk profile of the company
(liquidity, construction risks, etc.)
Owned fleet of 54 drybuik vessels, with • 68.1% owned by a stateowned
vessels from all major classes enterprise in the People's Republic of Exclude From Comp Set
Most vessels currently in service China
• 68.1% stateowned
• 44 drybuik vessels on the water with • Meaningful position in multipurpose
• Exposure to containerships
10 newbuiids on order vessels and containerships
and multipurpose vessels
Sinotrans Average age of ~10 years for drybulkers • Company owns 9 containerships and
» Large fleet and market cap
4 multipurpose vessels, in addition
Shipping Market cap of ~$1.1 billion » Similarly aged fleet
to a VLCC
• Company recently purchased 49% stake
in Sinotrans Containerlines
• Fleet of 26 containerships
• 42% of proforma revenue
Blackstone 46
14-11108-shl Doc 309-2 Filed 06/20/14 Entered 06/20/14 23:14:16 Exhibit B
Pg 1 of 66 REDACTED
EXHIBIT B
COLEMAN REBUTTAL REPORT

Pg 2 of 66 REDACTED
Confidential
Genco Shipping & Trading Limited
Rebuttal Report of Timothy R. Coleman of

Blackstone Advisory Partners L.P.
June 16, 2014
Blackstone
Pg 3 of 66 REDACTED
Confidential
Disclaimer
This rebuttal report (the "Rebuttal Report") of Genco Shipping and Trading Limited ("Genco" or the "Company"), has
been prepared solely for informational purposes using certain information provided by the Company•, MSI, Marsoft, and
publicly available sources (collectively, the "Cited Sources").
Blackstone Advisory Partners ("Blackstone") makes no representation or warranty, express or implied, as to the
accuracy or completeness of the information obtained from the Cited Sources, and nothing contained herein is, or
should be relied on as a promise or representation, whether as to the past or the future. Blackstone has not
independently verified information obtained from the Cited Sources.
By accepting the Expert Report, each recipient agrees that Blackstone shall have no liability on any basis (including,
without limitation, in contract, tort, under United States or other countries' federal or state securities laws or
otherwise) for any representations, express or implied, contained in, or for any omissions from, this Expert Report or
any other written or oral communications transmitted to the recipient by or on behalf of the Counsel, the Company or
Blackstone in the course of the recipient's evaluation of the Expert Report. The information contained herein has been
prepared to assist the recipients in making their own evaluation and does not purport to be all-inclusive.
The information and data contained herein are confidential and may not be divulged to any person or entity or
reproduced, disseminated, or disclosed, in whole or in part, except as required by applicable law or regulation, as
requested by regulatory authorities, or with the consent of Blackstone.
This presentation is not intended to furnish legal, regulatory, tax, accounting, investment or other advice to any
recipient. This presentation should be reviewed by each recipient and its legal, regulatory, tax, accounting, investment
and other advisors. Recipients should not regard it as a substitute for the exercise of their own judgment.
Blackstone 1
Pg 4 of 66 REDACTED
Confidential
Summary Opinion
• I have reviewed the Rothschild Expert Valuation Report (the "Rothschild Expert Report") and the Rothschild
Rebuttal Report (the "Rothschild Rebuttal Report" and collectively with the Rothschild Expert Report, the
"Rothschild Reports")
• This report (the "Rebuttal Report") sets forth my opinions in response to the Rothschild Reports
• The Rothschild Reports contain fundamental flaws, numerous mistakes and internal inconsistencies
• These errors are summarized in the following Executive Summary
• Further detailed analysis is set forth in the sections following the Executive Summary
• After reviewing the Rothschild Reports and preparing this Rebuttal Report, I remain confident in the valuation
provided in the Blackstone Expert Report and the conclusion that there is no equity value in Genco
• I reserve the right to supplement the opinions, analyses and conclusions presented in this Rebuttal Report based
on any subsequently obtained information, including but not limited to, any objections, testimonies, reports of
other experts and new market information
• I further reserve the right to create additional exhibits, as appropriate
Timothy R. Coleman Date

Senior Managing Director
Blackstone Advisory Partners L.P. Blackstone 2
Pg 5 of 66 REDACTED
Confidential
Executive Summary
Blackstone
Pg 6 of 66 REDACTED
Confidential
Fundamental Errors in the Rothschild Reports
Issue I Blackstone Explanation I Section
• If Rothschild's valuation had any grounding in reality, then buyers would have
submitted a bid in excess of plan value in order to realize the supposed significant
upside
• Rothschild's mid and high valuations are approximately 17% and 29% above the
Company's $1,480 million of Total Debt and Other Claims(1)(2)
Valuation is Divorced
from Reality • However, not a single party has contacted Genco or Blackstone to indicate interest
O
in acquiring the Company, let alone submitted a bid
• This has been true during the highly publicized pre-petition restructuring
process and after the RSA - with its explicit fiduciary out - was made public on
April 3, 2014
(1) Rothschild Expert Report, page 25.

(2) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility, $74 million related to the CA Facility, $125 million
of Convertible Notes and $4 million of accrued interest. Other Claims includes the $6 million Swap Liability, $1 million of unsecured claims, and $26 million of
other administrative claims. Blackstone 4
Pg 7 of 66 REDACTED
Confidential
Fundamental Errors in the Rothschild Reports (cont.)
Issue J Blackstone Explanation | Section
• Rothschild dismisses the Excel Maritime ("Excel") and General Maritime

("Genmar") bankruptcies as not informative to the valuation of shipping
companies'( i )
• However, these cases contradict Rothschild's dismissive view of the NAV

methodology as both were confirmed with valuations below NAV
• While the Excel disclosure statement cites NAV, DCF, comparable company and
Misinterpretation of
precedent transaction analyses, the Excel restructuring was negotiated on the
SDNY Shipping
basis of NAV
Bankruptcies
• Excel's disclosure statement valuation was 3% below Excel's NAV
• The Genmar market test resulted in a plan valuation 5% below Genmar's NAV
• Conversely, due to the gift offered to existing equity holders in the Genco Prepack
Plan, the implied valuation is in excess of NAV

Blackstone 5
Pg 8 of 66 REDACTED
Confidential
Issue Blackstone Explanation Section
• Rothschild's assertion that NAV represents a "floor value" demonstrates its lack of
knowledge of the drybulk sector'1'
• The Q1 2014 Deiulemar liquidation proves the floor to drybulk company

valuation is a significant discount to NAV - the company sold its fleet at auction
for approximately 60% of NAV'2'
• NAV is not a static, historical cost basis or liquidation approach but instead a
forward-looking, market-based approach that is driven by the assets' expected
future earnings capacity at that time
• As such, many drybulk companies trade below NAV because investors perceive
those companies will not realize the forward-looking assumptions embedded
Misunderstanding in the asset based valuation
of NAV • Rothschild repeatedly asserts that relying on asset value disregards any value of
the franchise, management expertise and growth'3'
• However, many public drybulk companies with established franchises and

reputable management teams trade below NAV
• Moreover, approximately 92% of the analysts Rothschild cites'4' employ asset

value approaches in their valuations
• Rothschild does not dispute the academic theory that justifies the NAV approach
for drybulk companies
• Rothschild ignores that Genco management has used NAV for every transaction it
has historically analyzed

(2) Source: Tradewinds. Vessels were sold for $111million and were valued at $184 million by
Blackstone 6
(3) Rothschild Expert Report, pages 22, 23, 25, and 32.
Pg 9 of 66 REDACTED
Confidential
Issue | Blackstone Explanation | Section
Rothschild dismisses precedent transactions as uninformative because they found

only 2 drybulk company acquisitions over the last 10 years
• The lack of change of control transactions involving drybulk companies over
the last 10 years as compared to the 4,422 vessel sales since 2004(1)
demonstrates that investors are not willing to pay a premium to NAV
Earlier today, Star Bulk announced a stock-based acquisition of Oceanbulk (two
drybulk companies)'2'
• The transaction was negotiated based on "a net asset value for net asset value
basis using the average of three reputable appraisal providers"'2'
In the transactions Rothschild addressed, they calculate the asset value multiples
for the two transactions they do identify, Dryships' acquisition of OceanFreight and
Misinterpretation and Excel Maritime's acquisition of Quintana Maritime, to be .94x and 1.04x,
Biased Application of respectively'3' O
Precedent Transactions
• Both of these multiples are very close to NAV
• Further, the Excel transaction occurred during the first half of 2009 - the boom
in the most recent drybulk cycle - and was so disadvantageous that it
ultimately led to Excel's bankruptcy
When applying precedent transaction analysis in Genco's valuation, Rothschild
ascribes a 75% weighting to the Excel transaction that was completed during the
height of the drybulk market
• Had Rothschild properly applied the precedent transactions, holding all other
erroneous assumptions constant and simply weighting the Excel and Dryships
TEV / NAV comps 50-50%, their analysis would have yielded values $145
million to $206 million lower, resulting in no value to equity holders
(1) Source: Marsoft.

(2) Star Bulk Press Release, June 16, 2014. Blackstone 7
Confidential
Rothschild's most heavily weighted valuation methodologies - DCF and EBITDA

multiples - rely on CMG's "Adjusted Projections"
CMG's "Adjusted Projections" do not include any expert opinion but are instead
simply averages of non-expert equity research projections and historical results
Reliance on CMG
CMG also makes no attempt to control for the easily observed biases in the analyst
"Adjusted Projections'
projections and historical averages it relies on
• Had CMG used 5-year or 20-year average rates instead of the 10-year rates
they relied upon, their terminal-year unlevered free cash flow would have been
approximately 58% and 53% lower, respectively
Rothschild "cherry picks" quotes from industry analysts and Genco's competitors to
portray an imminent rebound that will increase values
• It is equally as easy to cherry pick negative comments from the same sources
The reality is that today's market prices for vessels reflect the consensus view of
future earnings (buyers purchase vessels based on their future expectations)
Misleading Portrayal of
the Drybulk Industry
Further, when industry participants are bullish, it is often an indicator that the
market will go down
©
• As described in the Marsoft Report, when too much capital is deployed in the
drybulk shipping sector, vessel oversupply leads to lower rates
• At the beginning of the year, many equity analysts projected a rebound in the
market; however, since that the time, the Baltic Dry lndex(1) ("BDI") has
dropped nearly 60%
(1) The Baltic Dry Index is a shipping and trade index created by the Baltic Exchange that measures changes in the cost to transport raw materials, such as
metals, grains and fossil fuels, by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, cargo type and Blackstone 8
time to delivery (speed).
Confidential
issue 1 Blackstone Explanation | Section
• Rothschild states that "Genco's historical earnings power further highlights the
conservative nature of the Company's projections"'1*
• However, Rothschild makes four fundamental flaws in arriving at this conclusion
• Rothschild compares (i) historical Genco EBITDA which includes the earnings of
Baltic Trading's vessels with (ii) projected Genco EBITDA which exc/uc/esthe
Manipulated earnings of Baltic Trading's vessels
Presentation of Genco's
• Rothschild, like CMG, erroneously assumes historical performance during
Earnings Power
boom drybulk years is indicative of future performance
• Rothschild fails to realize that the variability of Genco's EBITDA demonstrates

that drybulk companies are "price takers" to prevailing market rates
• Rothschild ignores that the projected average annual Business Plan EBITDA of
$115 million is nearly 50% higher than Genco's average 2012 and 2013 EBITDA
Rothschild claims that Blackstone has been a significant investor in the drybulk
space'2'
However, the three investments Rothschild references are not comparable as they
Misstatements about are not drybulk companies
Blackstone's
Investments
• Eletson Gas is a liquefied petroleum gas shipping company 0
• American Petroleum Tankers is a Jones Act tanker company
• BTS Tanker Partners is a portfolio of product tankers that was merged into
Hafnia Tankers
(1) Rothschild Rebuttal Report, page 6. Blackstone 9

(2) Rothschild Rebuttal Report, page 4.
Confidential
• Rothschild rejects Blackstone's thesis that older fleets have shorter remaining
useful lives and therefore lower aggregate earnings capacity(1)
• However, vessels have finite lives and, all other things equal, the value of a
younger fleet is greater than that of an older fleet
Dismiss Relevance of
Age • For instance, a fleet of 5-year old vessels will have 5 more years of earnings 0
capacity relative to a fleet of 10-year old vessels
• Rothschild attempts to rebut this undisputed concept by running a correlation
analysis of EBITDA multiples and age that does not control for the many other
variables that Rothschild concedes can impact EBITDA multiples
• Rothschild arbitrarily assigns weights to the valuation methodologies as follows: (i)

37.5% DCF, (ii) 37.5% Comparable Companies, (iii) 15% Net Asset Value and (iv)
10% Precedent Transactions'2'
• This weighting puts a significant emphasis on methodologies that require
subjective and difficult to calculate assumptions, rather than the objective NAV
approach, which does not require any subjective assumptions
• Choice of a 5-year or 20-year lookback period (as opposed to the 10-year
Weighting of Valuation lookback period used by CMG) reduces value by approximately $700 million to
Methodologies $770 million, resulting in no recovery to existing equity holders
0
• This weighting effectively eliminates the industry-standard, academically-

supported and management-employed NAV approach
• Rothschild concedes that the NAV approach yields no incremental value to
equity, even in their high case(2)
• This weighting yields an overall valuation that overemphasizes CMG's unsupported
adjustments to Genco's Business Plan
Blackstone 10
Confidential
Issue I Blackstone Explanation • Section
Comparable Companies
• Rothschild accepts Blackstone's set of comparable companies except for the two
companies with the lowest trading values
• The two comparable companies excluded - Paragon Shipping and Jinhui - are
indeed similar to Genco and the other companies Rothschild includes
• Rothschild's justifications for excluding these two comparable companies are

internally inconsistent with their own analyses and at times erroneous
Discounted Cash Flow
Valuation Application • Rothschild relies on CMG's unsupported "Adjusted Projections"
Errors • Had CMG used a 5-year or 20-year lookback period when calculating historical
average rates, Rothschild's DCF value would be reduced by approximately $700
million to $770 million, resulting in no equity to existing equity holders
• Rothschild's DCF fails a basic "sanity check" even using its own assumptions
• Rothschild's terminal value of approximately $1.8 billion, as of December 2017,

for a then 12-year old Genco fleet is approximately equal to Rothschild's
assumed cost to replicate Genco's entire fleet with brand new vessels
— This demonstrates that either (i) Rothschild's assumptions are flawed or (ii)
Rothschild believes a fleet of 12-year old vessels has the same remaining
useful life and earnings capacity as a fleet of brand new vessels
Blackstone n
Confidential
Issue | Blackstone Explanation | Section
TEV/EBITDA Multiples
• As discussed earlier, in addition to excluding the comparable companies with the

lowest valuations from Blackstone's set of comparable companies, Rothschild
ignores the impact of fleet age on a company's value
• Further, Rothschild applies its erroneously inflated TEV / EBITDA multiples to

CMG's unsubstantiated EBITDA calculations
Overvaluation of MEP / Baltic Services Contracts
• Rothschild aggressively assumes that the MEP service contract will continue in
Valuation Application
perpetuity, inflating the terminal value of the contract by over 850%
Errors (cont.)
• The contract can be cancelled (i) with no fee upon a change of control or (ii)
with an approximately $3 million fee upon 60 days notice
• MEP is controlled by Oaktree Capital Management, a private equity fund which

needs to exit its investments over a several year period to return capital to its
investors; therefore, it is unreasonable to assume Oaktree will hold this
investment or an acquiring party will pay Genco services fees in perpetuity
• Without any supporting justification, Rothschild inexplicably applies a nearly 50%

reduction to the variable costs associated with the MEP and Baltic service
contracts, as compared to Genco's management's estimate of these costs
Blackstone 12
Confidential
Issue J Blackstone Explanation | Section
Control Premium on Baltic Trading Stake
• Rothschild assigns a 30-35% control premium to Genco's ownership of Baltic

Trading
• This assumption is premised on Rothschild's erroneous belief that there are no

restrictions on Genco's ability to sell its controlling stake
Valuation Application
— The control feature in Genco's shares would be eliminated if Genco ceased
Errors (cont.)
to beneficially own those shares
• This assumption is also inapplicable within the drybulk industry
- It is unreasonable to assume an investor would place a 30-35% premium on

a company that consists solely of 14 vessels which could be purchased at
NAV
Blackstone 13
Confidential
Valuation is Divorced from Reality
Blackstone
Confidential
Q Valuation is Divorced from Reality
Rothschild's valuation is undermined by the fact that not a single party has approached Genco or Blackstone to
submit a bid.
• For over two years, Genco's restructuring has been widely publicized in the financial press, industry reports and the
Company's own public SEC reporting
• These publications have covered:
— Lenders providing amendments and waivers to Genco's Credit Facilities
— Lenders trading their debt to new holders
— The Company filing numerous 8-k's detailing the status of the pre-petition restructuring process
— The Company making public the Restructuring Support Agreement on April 3, 2014, which explicitly allowed
investors to submit proposals
— The Company filing for bankruptcy protection on April 21, 2014
Blackstone 15
Confidential
Q Valuation is Divorced from Reality (cont.)
Rothschild paints a picture, which if true, would suggest investors should be lining up to bid on Genco.
• "Equity analysts are also expectant of substantial strengthening in the sector"'1'
• "Genco's peers are anticipating a significant rebound and stabilization"'2'
• "Since 2008 over $19.4b of private capital has been invested into the marine industry by sophisticated, return-
driven investors"'3'
• Genco's "management team [has] substantial access / networks to capital markets"'4'
• "Blackstone's approach to valuation - asset based valuation - has fundamentally undervalued Genco"'5'
• "Genco has a TEV range of $1,540 million to $1,910 million, with a mid-point value of $1,725 million"'6'

Confidential
Q Valuation is Divorced from Reality (cont.)
As shown below, Rothschild's valuation implies that if an investor were to provide a bid exceeding the valuation in
the Prepack plan, the investor would immediately realize - on day 1- an appreciation in value of approximately
12% - 24%.
$ in millions $ in millions
Illustrative New Investor Bid Potential Discount Opportunity
Total Debt(1) $1,447.0 Mid High

Other Claims'1' $33.0 Rothschild Valuation $1,725.0 $1,910.0
Total Claims $1,480.0 Illustrative Total Bid 1,539.4 1,539.4
Equity Warrants 32.9 Implied Immediate Appreciation 12.1% 24.1%J
Break-Up Fee 26.5
Illustrative Total Bid $1,539.4
• This immediate appreciation does not take into account any future upside that the investor would realize if values
go up, which Rothschild characterizes as the consensus expectation
• Despite this supposed steep discount in valuation, Genco and its advisors have not received a single indication of
interest
• Furthermore, the Equity Committee has not indicated interest in sponsoring a plan that values Genco in excess of
the Prepack Plan
(1) Total debt includes $1,069 million related to the 2007 Credit Facility, $176 million related to the DB Facility, $74 million related to the CA Facility, $125 million of
Convertible Notes and $4 million of accrued interest. Other Claims includes the $6 million Swap Liability, $1million of unsecured claims, and $26 million of other Blackstone 17
Confidential
) Misinterpretation of SDNY Shipping Bankruptcies

Confidential
Q Misinterpretation of SDNY Shipping Bankruptcies
Rothschild dismisses the Excel Maritime ("Excel") and General Maritime ("Genmar") bankruptcies for not being
informative to valuing shipping companies. However, the valuations performed in those cases directly contradict
Rothschild's dismissive view of the asset value methodology.
• Rothschild discounts "recent going-concern shipping restructurings... [because there is] no consistent approach
regarding valuation methodologies"^
• Rothschild states that "only in Excel were the three traditional methodologies (plus an asset - based approach)
used. It is worth noting that Excel was subject to a bankruptcy court mediation and valuation was heavily
scrutinized"(1)
• Blackstone was actively involved in Excel and the reality was that all negotiations were based solely on
appraised value - the "traditional" methodologies were only considered to support appraised values
• Further, as shown below, Excel's plan valuation was below Excel's NAV
($ in millions)
Excel Maritime TEV / NAV Calculation'
Asset Value Notes
Vessel Value $576 Mid-Point point appraisal; page 5 of Appendix D to Excel Disclosure Statement
Excel's Stake in M/V Christine 16 Mid-Point point equity value based on appraisals; page 4 of Appendix D to Excel Disclosure Statement
Cash 51 Page 9 of Appendix E to Excel Disclosure Statement
(3)
Net Working Capital 10_ Page 9 of Appendix E to Excel Disclosure Statement
Net Asset Value $653
Memo:
Disclosure Statement Valuation $630 Page "i" of Excel Disclsoure Statement (Introduction and Disclaimer)
ITEV/NAV
H MM mmmm " H BMM MM — MH
0~9"xi
K ammm mmm wmmm •

(2) Source: Excel Maritime Disclosure Statement. Blackstone 19
(3) Calculated as Accounts Receivable plus Inventory minus Accounts Payable.
Confidential
Q Misinterpretation of SDNY Shipping Bankruptcies (cont.)
• Rothschild states that "Genmar relied on a market indication of value (value of the plan sponsor) as well as an asset
value approach (third-party)"(1)
Rothschild fails to state, however, that the accepted bid from the market test / plan sponsor was actually less than
the value implied by the NAV approach
• The Genmar disclosure statement shows that the midpoint valuation implied by ship appraisals was $1,119
million(2) while the mid-point plan valuation, implied by market test / plan sponsor, was $1,062 million(3)
General Maritime TEV / NAV Calculation

Asset Value Notes
Vessel Value $1,033 Mid-point apraisal; page 101 of Genmar Disclosure Statement
Cash 22 Page 101 of Genmar Disclosure Statement
Property, Plant Equipment 10 Page 101 of Genmar Disclosure Statement
Working Capital 55 Page 101 of Genmar Disclosure Statement
Memo:
Disclosure Statement Valuation $1,062 Mid-pont plan value; page 100 of Genmar Disclosure Statement
ITEV/NAV: ~~~~~~~~~~ J3.9_5Xj
• Contrary to Rothschild's assertion, the Excel and Genmar bankruptcies, which were both confirmed in the SDNY
bankruptcy courts, are directly relevant to valuing shipping companies
• Both cases contradict Rothschild's assertion that asset value is a "floor to value"(4) and instead demonstrate that
sophisticated investors have not valued commoditized shipping companies in excess of appraised value

(2) Source: General Maritime Disclosure Statement, page 101.
(3) Source: General Maritime Disclosure Statement, page 100.
(4) Rothschild Expert Report, page 22. Blackstone 20
Confidential
Misunderstanding of NAV
Blackstone
Confidential
Q Misunderstanding of NAV
• Rather than understanding the drybulk shipping industry, Rothschild blindly follows their experience in unrelated
industries when dismissing NAV
• Rothschild relies on select investor anecdotes without understanding the industry's history, let alone the effects
of current sentiment on future industry conditions
• To support its dismissal of NAV, Rothschild cites a textbook which regards the asset value approach as a "floor
value"'1)
— This textbook neither references to the drybulk shipping industry nor its industry structure; it is instead a
commentary on generic valuation
• The reality is that NAV is neither (i) a floor to value, (ii) a static, historical cost basis approach nor (iii) a liquidation
approach
• In the recent auction of a fleet 12 drybulk vessels owned by distressed operator Deiulemar Shipping, the
winning bid was approximately 40% below appraised asset value(2)
• "The difference in risk pricing can be seen, for example, in the pricing of shares in publicly listed shipping
companies which often trade at a discount to net asset value calculated on the basis of prevailing second hand
ship values"(3)

(2) Source: Tradewinds. Vessels were sold for $111million and were valued at $184 million by
(3) Stopford, Martin. Maritime economics. 3rd ed. London: Routledge, 2009. Page 341.
Blackstone 22
Confidential
Q Misunderstanding of NAV (cont.)
• Rothschild mistakenly asserts that "[r]elying on the asset value approach disregards any value of the franchise,
management expertise and any growth potential of the enterprise"(1)
• This assertion is contradicted by the equity analysts relied upon by CMG and Rothschild
• "[S]ome 36% of the companies under Nokta's coverage -16 of 44 - were trading below the NAV line last
week"'2)
- Omar Nokta, an analyst at Global Hunter Securities, covers 44 public shipping companies with franchise
value, management expertise and growth potential
• Further, 12 of the 13 analysts Rothschild cites(3) employ asset value approaches
— These analysts would not employ this methodology if it disregarded franchise value, management expertise
and growth potential
• In reality, the sale prices in the vessel sale and purchase market, which provides the basis for the appraisals
underlying the asset-based approach, implicitly take into account the buyer's (i) view on future rates, (ii) outlook on
growth and (iii) ability to take advantage of expertise to realize those rates and growth

(2) Holidays May Have Come Earlyfor Mainstream Shipping IPOs, Tradewinds Article, May 16, 2014.
Blackstone 23
Confidential
In attempting to rebut the NAV approach, Rothschild demonstrates its lack of shipping knowledge by claiming that
Genco's scale is a competitive advantage.'1)
• The fragmented nature of the drybulk industry refutes the existence of increasing returns to scale
• If shipping companies were able to purchase individual vessels at NAV and consistently generate excess value
above the market price, this would imply that skilled managers would achieve returns to scale and would grow
over time
• If there were returns to scale, the largest operators would grow even larger and dominate the industry
• However, as shown below, the drybulk industry does not have concentrated ownership
Top Drybulk Owners(2)

Number % of Total •
Rank Owner of Vessels Vessels |
1 COSCO Group 266 2.6% -

2 Nippon Yusen Kaisha 250 2.5%
3 China Shipping Group 180 1.8%
4 K-Line 158 1.6%
5 Mitsui O.S.K. Lines 146 1.4% Top 10 owners account
6 Sinotrans & CSC 90 0.9% for less than 15% of
7 Pacific Basin Shpg. 81 0.8% the global fleet
8 Daiichi Chuo 74 0.7%
9 Shoei Kisen K.K. 68 0.7%
10 Pan Ocean 66 0.7%
Remaining 1722 Owners 8,768 86.4% -
Total Vessels 10,147

Blackstone 24
(2) Source: Clarksons.
Confidential
As explained below, the "Competitive Strengths" cited by Rothschild are neither unique nor meaningful, and do not
create value in excess of asset value.
Alleged Competitive
Inconsistency / Error
Advantage
• "Speaking of NAV, it remains a real hurdle for mainstream shipping offerings hoping to
float in New York, says Global Hunter Securities analyst Omar Nokta. 7 agree [the IPO
market is closed], unless companies want to sell stock below NAV/ Nokta said this
New York Based week"(1>
Management Team
• Despite Rothschild listing geographic positioning as Genco's strength, CMG has
with Substantial suggested the Company relocate its headquarters(2)
Access to Investors
• As discussed earlier, the Company's "access to capital" is directly contradicted by the
absence of investors committing capital to purchase the company at even a discount
to Rothschild's valuation
• As shown on the previous page, Genco does not have one of the top 10 largest fleets
in the industry
One of the Largest, • The fragmented industry landscape proves that drybulk shipping companies do not
Most Diversified achieve returns to scale
Fleets • Furthermore, Rothschild does not explain the logic supporting any claim that a
diversified fleet is worth more than the sum of its assets (or what is inimitable about
this feature)
(1) Holidays May Have Come Early for Mainstream Shipping IPOs, Tradewinds Article, May 16, 2014.
Blackstone 25
(2) CMG Expert Report, page 4
Confidential
Alleged Competitive
Advantage
• While the list below is far from complete, it illustrates that relationships with regarded
charterers are anything but unique
Diana Shipping - Cargill, BHP Billiton, EDF Trading
Safe Bulk Carriers — Cargill, Daiichi, and Kawasaki Kisen Kaisha
Star Bulk Carriers - Cargill, Rio Tinto, EDF Man Shipping

Strong relationships Paragon - Cargill, Pacific Basin
with members of
Navios Holdings - BHP Billiton, Cargill, Glencore Grain
the shipping
industry and • Rothschild provides no proof or logic as to how Genco's relationships would actually
established dry bulk impact earnings capacity
charterers • As discussed in the Blackstone Expert Report, drybulk vessel operators are price-
takers
• Rothschild touts Genco's relationships with its technical managers, but shortly
thereafter concedes that these relationships are far from distinctive
The noted managers cover "all major ports" and provide services to over 1,000
vessels(1)
Source: company filings.

Confidential
Alleged Competitive
Advantage
• Genco derives much of its efficiencies through the outsourcing of its technical
management responsibilities to Wallem, Anglo, and V. Ships
Low-cost and highly • Rothschild admits that these managers provide services to over 1,000 other
efficient operations vessels(1)
• Rothschild's assertion directly contradicts CMG's report, which states that "there are
clearly areas for cost savings" in the Company's G&A(2)
• Chartering strategy is a risk allocation tool available to every drybulk shipping

Flexible Chartering company
Strategy Takes • "[Shipowners] can trade in the spot market and become risk managers or become
Advantage of subcontractors and ship managers, focusing on cost and management... the
Market Conditions distribution of risk between the spot and period markets is a matter of policy, and
the balance will change with circumstances."'3)

(2) CMG Expert Report, page 4.
(3) Stopford, Martin. Maritime economics. 3rd ed. London: Routledge, 2009. Page 104. Blackstone 27
Confidential
Rothschild overlooks academic research that proves a drybulk company should be valued based on asset value.
• It is widely accepted that if a company cannot generate returns in excess of its cost of capital, it should be valued
based on its asset value
"When future economic profit(1) is expected to be zero, the value of the operations will equal invested
capital(1). If a company's value of operations exceeds its invested capital, be sure to identify the sources
of competitive advantage that allows the company to maintain superior financial performance"(2)
• The evidence conclusively proves that drybulk companies have failed to sustain returns in excess of their cost of
capital
• Between 1975 and 2004, Bulk Shipping earned a 7.2% annual return on investment'3'
• Over the same period, the S&P 500 grew at 14.1% per year, LIBOR averaged 8.5% per year, and Treasury Bills
yielded 6.6% per year
• Martin Stopford conducted an independent analysis of the Drybulk Industry between 1975 and 2006 and
determined that the average return on shipping investment was 7.6%(4), more than 2% below both Rothschild and
Blackstone's estimate of Genco's cost of capital despite much higher interest rates over the surveyed period(5)
• Rothschild cites Maritime Economics in its own reliance materials yet ignores these studies'6'
(1) Note that (i) "economic profits" refers to returns in excess of the cost of capital and (ii) invested capital is synonymous with asset value.
(2) Koller, Tim, and Marc H. Goedhart. Valuation: measuring and managing the value of companies. 5th ed. Hoboken, N.J.: John Wiley & Sons,
Inc., 2010. Page 117.
(4) Stopford, Martin. Maritime economics. 3rd ed. London: Routledge, 2009. Page 326-7.
(5) Blackstone's estimate of Genco's WACC is contained on page 37 of the Blackstone Expert Report; Rothschild's estimate of Genco's WACC is
contained on page 49 of the Rothschild Expert Report.
(6) Rothschild Expert Report, page 82. Blackstone
Confidential
Review of the shipping industry's performance in the 20th Century underscores the difficulty in sustaining excess
returns, something Rothschild readily overlooks.
"We start with a brief review of the shipping industry's financial performance over the last century - it has to be said
at the outset that it makes gloomy reading. A.W. Kirkaldy's review of fifty years of British shipping, published in 1914,
observed that in 1911, 'the best year of the decade', the returns were no better than could be obtained by investing
in first-class securities... another study, by the Tramp Shipping Administrative Committee, found that, between 1930
and 1935, 214 tramp shipping companies had a return on capital of 1.45% per annum. Admittedly, the 1930s was a
bad spell, but in the 1950s, a much better decade for shipping, things were not much better. Between 1950 and 1957
the Economist shipping share index grew at only 10.3% per annum compared with 17.2% for the 'all companies'
index, and in the 1960s things got even worse. Between 1958 and 1969, the Economist shipping share index returned
only 3.2% per annum, compared with 13.5% for all companies. A detailed analysis of private and public shipping
companies by the Rochdale Committee reported a return of 3.5% per annum for the period 1958-1969 and
concluded that 'the return on capital employed over the period covered by our study was very low'.
"In the 1990s, a period of expansion in the stock market generally, the Oslo Shipping Shares Index hardly increased
and the return on capital employed by six public tanker owning companies published in 2001 showed an average
return on equity of only 6.3%. Another analysis of 12 shipping companies during the period 1988-97 concluded that
the return on capital of six bulk shipping companies was 7% per annum, whilst six liner and specialized companies
averaged 8% return on capital. It concluded that these returns were 'in most cases inadequate to recover capital at a
prudent rate and retain sufficient earnings to support asset replacement and expansion'."
Stopford, Martin. Maritime economics. 3rd ed. London: Routledge, 2009. Page 320-321.
Blackstone 29
Confidential
0 Misinterpretation and Biased Application of Precedent Transactions
On June 16, 2014, Star Bulk Carriers announced it had entered into an agreement to acquire Oceanbulk
Through the transaction, Star Bulk acquired an operating fleet of 15 drybulk carrier vessels and contracts for the
construction of 26 newbuild vessels(1)
• The transaction was negotiated between two well-capitalized, healthy Companies without the overhang of distress
"The Transaction Committee negotiated the Transaction value on a net asset value for net asset value basis using
the average of three reputable appraisal providers
Star Bulk Carriers Press Release dated June 16, 2014
• When establishing value, healthy drybulk companies do not look towards fickle cash-flow forecasts and EBITDA
projections but instead focus on net asset value
(1) Star Bulk Carriers Press Release. June 16, 2014.

Blackstone 31
Confidential
© Misinterpretation and Biased Application of Precedent Transactions (cont.)
Rothschild's precedent transactions analysis uncovers the most salient confirmation of NAV-based valuation.
• Rothschild acknowledges the "limited number of going-concern shipping company transactions" over the past ten
years'1'
• Blackstone witnessed a similar phenomena, but also contrasted this finding with the 4,422 vessel sales since
2004(2'
• The contrast clearly indicates that when operators look to build or sell drybulk fleets, they look to the market for
capital assets rather than the market for corporate control
• Rothschild claims that they considered precedent transactions to determine "what buyers would pay for a full
business, inclusive of operating platform and management"'3'
• The dearth of corporate control transactions highlights that buyers do not pay for full businesses
• Furthermore, of the two precedent transactions cited by Rothschild, one occurred at a 6% discount to NAV while
the other was closed at only a 4% premium to NAV

(2) Source: Marsoft.
Blackstone 32
Confidential
0 Misinterpretation and Biased Application of Precedent Transactions (cont.)
In analyzing precedent transactions, Rothschild focuses on the wrong multiples, resulting in an inflated valuation.
• Rothschild's precedent transactions demonstrate that even in the rare event that fleets are acquired as going-
concerns, the valuation is performed at or near asset value
• Rothschild's analysis (replicated below) shows there is no discernable range for TEV / EBITDA multiples, illustrating
that these acquisitions were not valued on an EBITDA basis, but instead on an asset value basis
• Despite the clear indications that Quintana and OceanFreight were acquired on a TEV / NAV Basis (as opposed to
TEV / EBITDA), Rothschild inexplicably chose to include a 50% weight on a single 10.5x NTM EBTIDA multiple
• This error is compounded when recognizing that Excel's 10.5x TEV / EBTIDA multiple was inflated because
Excel's EBITDA was artificially low(1)
- Excel's EBITDA was artificially low because of below-market time charters acquired from Quintana(1)
- The deflated EBITDA results in the sole, inflated TEV / EBITDA multiple that Rothschild applies a 50%
weighting
$ in millions
Rothschild's Selected Precedent Transactions'2®
Announced Enterprise Gross TEV / TEV Multiple of:
Date Acquiror Target Value Asset Val. GAV LTM EBITDA NTM EBITDA
•1 '-------"1 1
Jul-ll Dryships, Inc. OceanFreight 0.94x 7.4x
Jan-08 Excel Maritime Quintana Maritime 2,097 2,013 1.04x 12.Ox 10.5x
......
4 I
Consistent No discernable One comp and distorted by
and near GAV range charter coverage, yet chosen
by Rothschild
(1) Per Excel Maritime 2008 20-F, Excel booked a ~$885 million liability for unfavorable charters acquired. This means that because the contracts
were below market, Excel viewed the present value of the contracts to be approximately negative $885 million. Blackstone 33
(2) As per Rothschild Expert Report, page 45.
Confidential
Q Misinterpretation and Biased Application of Precedent Transactions (cont.)
• Rothschild places a 50% weight on one TEV / EBITDA ratio - the ratio from Excel's acquisition of Quintana
• Rothschild places 25% weight on each of the TEV / NAV multiples from Excel's acquisition of Quintana and Dryships'
acquisition of OceanFreight
• By placing a 50% weight on the Excel TEV / EBITDA multiple and 25% weight on the Excel TEV / NAV, Rothschild's
precedent transaction analysis places a 75% weight on Excel's acquisition, which was executed during a boom in
the drybulk market and led to Excel's excessive leverage and eventual bankruptcy
• Given that the two precedent transactions have a discernable range for TEV / NAV multiples, the analysis should
have been conducted with a 100% weight on these multiples; further, the TEV / NAV multiple range should have
included the observed transaction multiples (the Rothschild range inexplicably rounds upwards)
• As shown below, holding all of Rothschild's other erroneous assumptions constant, this one adjustment would
result in a $145 million $206 million difference, resulting in no recovery to existing equity holders
Rothschild Approach Adjusted Rothschild Approach
Multiple Assessed Value Range Multiple Assessed Value Range
Low High Low High Weighting Low High Low High Weighting
Forward Mult. 10.5x 10.5x $1,550 $1,550 J 50%l Forward Mult. 10.5x 10.5x $1,550 $1,550 l' 0%l
TEV/NAV Mult. "£-95x~~3"^* 1,162 1,284 [ 50%] TEV/NAV Mult. [a9"x"' 1,150 1,272
Sub-total $1,356 $1,417 Sub-total $1,150 $1,272
Rothschild's Baltic Value 55 55 Rothschild's Baltic Value 55 55
Rothschild's Jinhui Value 59 59 Rothschild's Jinhui Value 59 59
Rothschild's Service Contracts Value 69 69 Rothschild's Service Contracts Value 69 69
Distributable Value 1,539 1,600 Distributable Value 1,333 1,455
Total Claims (1,480) (1,480) Total Claims (1,480) (1,480)
Value for Equity $"?9 ~ *$120 Value for Equity _($147)_ ($25i I
Memo: Change vs. Rothschild $206 $145
Blackstone 34
Confidential
Reliance on CMG "Adjusted Projections"
Blackstone
Confidential
@ Reliance on CMG "Adjusted Projections"
A fundamental error in the Rothschild Reports is the reliance on CMG's Adjusted Projections
• As highlighted in the Marsoft Rebuttal Report, CMG's Adjusted Projections are overly simplistic
• Mr. Arntzen has neither previously served as an expert witness nor indicated that he has ever previously projected
drybulk rates
• Given Mr. Arntzen's lack of relevant experience projecting drybulk rates, CMG's report simply averages (i) equity
analysts' views on rates and (ii) historical results
• While Mr. Arntzen states that it "is important to review... forecasts, together with assumptions they are based on,
for major errors or bias,"(1) it is not clear that CMG has taken the time to do so
• There is neither discussion nor analysis that shows Mr. Arntzen's view on the various drivers of drybulk rates and
how they correspond to those of the analysts on whom he relies
• As shown on the following page, for his 2017 and long-term rate forecasts, Mr. Arntzen chooses a historical
period which is significantly biased upwards
— Further, it is contradictory to stress the importance of underlying assumptions and then simply assume the
past will repeat itself and use a historical average
• Finally, Mr. Arntzen ignores the persistent optimism in equity research reports, as shown in the following pages
(1) Morton Arntzen Expert Report, page 12.

Blackstone 36
Confidential
Q Reliance on CMG "Adjusted Projections" (cont.)
Using 10-year average rates to predict 2017 artificially distorts rates upwards as the period includes the Super Cycle.
• The period CMG chooses to base its 2017 rates on is a period of elevated rates relative to other historical periods
10Y Avg. (2004-2013 Excl. '07-08) 2,516 N/A

5Y Avg. (2009-2013 ) 1,811 72.0%
20Y Avg. (1994-2013 Excl. '07-08) 1,932 76.8%
• The period from 2003-2008 is called the Super Cycle due to the unprecedented uptick in the drybulk market
• The exceptional boom was a function of (i) globalization and rapid industrialization, (ii) port congestion, (iii)
increased tonne-mile demand, (iv) natural disasters, and (v) China's economic boom(1)
• As described in Maritime Economics"in 2003 the whole picture changed, revealing a very different side of the
business. The boom of 2003-8 turned out to be an oasis in a desert of indifferent returns"(2)
Baltic Dry Index Levels

Super Cycle
1
12,000
9,000
6,000
3,000
0
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Source: MSI.
Blackstone 37
(1) The Super Cycle and Beyond: An Analysis of Dry Cargo Markets (http://www.astermarine.com/knowledge.html)
Confidential
As shown below, equity analyst's views on the drybulk industry outlook have historically been bullish.
• Blackstone has analyzed the accuracy of the consensus equity analyst price targets of the 6 comparable drybulk
companies since June 2010 using data from CapitallQ
• The analysis shows that equity research analysts have consistently displayed a positive bias on the industry despite
continued underperformance
• On average, equity analysts have historically projected price targets 45% higher than the then-existing prices
Performance Since June 30, 2010

Equity Analyst Average
Premium to Share Price^
Diana Shipping 22%

Baltic Shipping 59%
Safe Bulkers 23%
Jinhui Shipping & Trading 23%
Paragon Shipping 94%
Star Bulk Carriers 50%
Average 45%
• The Following pages highlight the persistent upward bias of equity analysts
(1) Per CaplQ. See following pages for further detail.

Blackstone 38
Confidential
© Reliance on CMG "Adjusted Projections" (cont.)
Diana Shipping (Average Premium: 22%) Baltic Trading (Average Premium: 59%)
$20.0 • Consensus Price Target (CaplQ) $20.0 Consensus Price Target (CaplQ)
1 Actual Share Price Actual Share Price
$18.0
$18.0
$16.0
$16.0
$14.0
$14.0 $12.0
$12.0 $10.0
$8.0
$10.0
$6.0
$8.0
$4.0
$6.0 $2.0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Safe Bulkers (Average Premium: 23%) Jinhui Shipping & Trading (Average Premium: 23%)
• Consensus Price Target (CaplQ) Consensus Price Target (CaplQ)
$7.0
•Actual Share Price Actual Share Price
$13.0
$6.0
$11.0
$5.0
$9.0
$4.0
$7.0 $3.0
$5.0 $2.0
$3.0 $1.0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Source: CapitallQ. Blackstone 39

Confidential
Paragon Shipping (Average Premium: 94%)(1) Star Bulk Carriers (Average Premium: 50%)
• Consensus Price Target (CaplQ) Consensus Price Target (CaplQ.)
$70.0 $70.0
• Actual Share Price Actual Share Price
$60.0 $60.0
$50.0 $50.0
$40.0 $40.0
$30.0 $30.0
$20.0 $20.0
$10.0 $10.0
$- $-
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Source: CapitallQ.
(1) Periods in which analysts did not have price targets are excluded. Blackstone 40
Confidential
0 Misleading Portrayal of the Drybulk Industry
Blackstone
Confidential
Q Misleading Portrayal of the Drybulk Industry
Rothschild's overly optimistic view of the Drybulk industry biases its valuation upwards.
• As shown below, Rothschild has selectively included only bullish commentary from recent earnings reports and call
transcripts
• Similar "cherry picking" can be conducted to suggest a less positive outlook
Rothschild's "Cherry-Picked" Quote "Cherry-Picked" Counter

"It is our opinion that overall fleet growth will decelerate over the next "I think where there is a disconnect though is you got the Capesize
2 years from previous levels. We believe this could be an essential step sector which is heavily dependent on iron ore and coal versus the
towards the establishment of balance, supply and demand smaller ships the Panamaxes and Supramaxes, which I still think are in
fundamentals within the dry bulk industry." over supply situation and we are not seeing that contango in the
- Q4 2013 earnings call February 27, 2014 Panamax and Supramax one year rates."
- Q1 2014 earnings call May 12, 2014
"Diana Shipping continued to pursue the strategy designed to position "Therefore, over the next 18 to 24 months, which are going to include
the company for future opportunities and eventual upturn in the dry the periods of high deliveries, great numbers of ships joining the fleet
bulk shipping cycle." again. Unless we get an extraordinary number of scrapping tonnage
- Simeon P. Palios, Chairman and CEO, Q4 2013 earnings press coming through, which will not happen unless rates drop, as you can
DIANA SHIPPING INC.
release imagine, we're going to have soft markets."
- Anastasios C. Margaronis, President, Q1 2014 earnings call
"We believe our ongoing efforts to renew and gradually expand our "...Because of the drop of the spot markets all the buyers are skeptical.
fleet has positioned us well this early stage of the forthcoming They are trying to get a better price and they are trying to negotiate
shipping cycle." harder... we have to wait when we see a recovery of spot market..."
- Dr. Loukas Barmparis, President, Q4 2013 earnings press release - Polys Hajioannou, Chairman and CEO, Q1 2014 earnings call
"...will allow us to capture the maximum benefits from the shaping dry "The current low charter rates in the drybulk market, along with the
bulk market recovery... the supply demand balance for the dry bulk oversupply of drybulk carriers and the prevailing difficulty in
sector over the next two years looks favorable." obtaining financing for vessel purchases, have adversely affected
- Spyros Capralos, President and CEO, Q1 2014 earnings release drybulk vessel values, including the vessels in our fleet"
iStarBulk CARRIERS CORP
- 2013 20-F filed March 21, 2014
Blackstone 42
Confidential
Q Misleading Portrayal of the Drybulk Industry (cont.)
The bullishness of equity research reports is an unreliable indicator of future market direction. Equity analysts were
bullish at the start of 2014 and the BDI - an indicator of drybulk rates - is down nearly 60% year-to-date.
500
Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14
Blackstone 43
Confidential
Q Misleading Portrayal of the Drybulk Industry (cont.)
Furthermore, Rothschild improperly concludes that the significant investment in the drybulk sector must be an
indication that values are rising.
• The increase of funds flowing into drybulk can actually be a predictor of future market weakness
• Increased funds lead to increased vessel orders and the increased supply of new vessels results in continued low
rates
• The increase in orders in Q4 2013 illustrates how short term improvements in rates in the highly fragmented
drybulk industry leads to increased vessel supply, which can in turn result in subsequent rate weakness
• In Q4-2013, the BDI increased by nearly 14%(1)
• Over the course of Q4-2013, newbuild orders increased by 97%(2)
(1) Source: Clarksons.

(2) Marsfot Rebuttal Report.
Blackstone 44
Confidential
Manipulated Presentation of Genco's Earnings Power
Blackstone
Confidential
Q Manipulated Presentation of Genco's Earnings Power
Rothschild portrays a distorted vision of Genco's earnings power.
• The Rothschild Rebuttal Report compares Genco's historical EBITDA to Genco's projected EBITDA and concludes
that "Genco's historical earnings power further highlights the conservative nature of the Company's projections"*1'
• However, Rothschild's conclusion is flawed for several reasons:
• Rothschild compares (i) historical Genco EBITDA which includes the earnings of Baltic Trading's vessels with (ii)
projected Genco EBITDA which excludes the earnings of Baltic Trading's Vessels
• Rothschild fails to realize that the variability of Genco's EBITDA demonstrates that management is a "price
taker" to prevailing market rates
• Rothschild ignores that the projected average annual Business Plan EBITDA of $115 million is nearly 50% higher
than Genco's average 2012 and 2013 EBITDA
• Rothschild fails to realize that, as shown below, the period of historical results it observes includes several years
of superior drybulk rates
Rothschild's
Baltic Dry Index Levels Highlighted Period
12,000
9,000
6,000
3,000
0
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Confidential
© Misstatements about Blackstone's Investment
Blackstone
Confidential
© Misstatements about Blackstone's Investment
Rothschild claims that Blackstone has been an investor in the drybulk space and then identifies three shipping
investments that have no relevance to drybulk.(1)
Investment Dry Bulk Company Description
• American Petroleum Tankers is a Jones Act Tanker and

Chemical shipping company
American Petroleum
Tankers X • Blackstone sold this company to Kinder Morgan in 2014
• Eletson Gas is a liquefied petroleum gas shipping company
• BTS Tanker Partners is a portfolio of product tankers that

was merged into Hafnia Tankers
BTS Tanker Partners x

Confidential
Q Dismiss Relevance of Age
Blackstone
Confidential
Q Dismiss Relevance of Age
Rothschild's dismissal of the relevance of age is illogical and inconsistent with empirical evidence.
• Rothschild rejects Blackstone's thesis that, all things equal, an older fleet will have a shorter useful life and lower
aggregate earnings capacity*1'
• However, the basis for Rothschild's conclusion is premised on a faulty analysis
• In choosing its comparable companies, Rothschild highlights many relevant variables to TEV / EBITDA multiple
analysis
- Rothschild's list includes fleet composition, vessel size, enterprise value, access to capital, management
expertise, external vs. internal management, charter-in exposure, etc.(2)
• When conducting its correlation analysis to see the relationship between age and valuation multiples, however,
Rothschild does not control for the aforementioned variables, which vary from company to company
• To properly evaluate the impact of age on value, one must control for all of the other variables that can impact
value
• The analysis on the following page, which compares the value of 5-year old vessels with 10-year old vessels,
definitively demonstrates the relationship between age and value: older vessels are worth less than younger
vessels

Blackstone 50
Confidential
O Dismiss Relevance of Age (cont.)
Price of a 10-year Old Vessel as a Percentage of the Price of a 5-year Old Vessel
100.0%
95.0%
55.0%
50.0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Capesize Handymax
Blackstone 51
Confidential
© Inappropriate Weighting of Valuation Methodologies
Blackstone
Confidential
(E) Inappropriate Weighting of Valuation Methodologies
Rothschild arbitrarily weights the valuation methodologies that achieve higher values. Further, Rothschild's
valuation emphasizes the methodologies which require subjective and difficult to forecast assumptions.
• Rothschild applies a 15% weighting to its NAV analysis because they claim it is a "floor value"(1)
• As discussed at length in previous sections, this statement is not supported by the facts
• Rothschild applies only a 10% weighting to precedent transactions because of the limited number of corporate
control transactions over the past ten years'2'
• As previously noted, the infrequency of corporate control transactions, as compared to asset sales, underscores
the importance of NAV by showing investors do not pay a premium for intangible value
• Further, the Star Bulk Carriers transaction announced today was explicitly based on NAV(3)
• Rothschild then applies a 37.5% weight to its DCF analysis despite several acknowledgements of the limitations,
infrequency, and difficulty of DCF analysis as applied to the drybulk shipping industry
• Rothschild admits "DCF is used less frequently in analyst reports given the absence of long-term projections"'4'
- Rothschild's own analysis demonstrates only 5 of the 13 surveyed equity analysts conduct DCFs(4)
- This contrasts with the 12 of 13 analysts conducting asset-based valuations(4)
• Rothschild's analysis assumes "Genco performs in line with the Adjusted Projections" despite CMG's explicit
warning that "[i]t is difficult to accurately forecast freight rates in drybulk shipping"(5-6)
- CMG again notes that, "while shorter-term forecasts can be based in part on existing market data, making
accurate longer term forecasts is much more difficult."*7'

(3) Star Bulk Carriers Press Release. June 16, 2014.
(6) CMG Report, page 12.
(7) CMG Report, page 15.
Confidential
© Inappropriate Weighting of Valuation Methodologies (cont.)
• Rothschild applies a 37.5% weighting to a comparable company analysis which is tainted by Rothschild's
unjustifiable decision to eliminate Paragon Shipping and Jinhui Shipping and Trading from its set comparable
companies
• Furthermore, as described earlier, Rothschild erroneously dismisses the relationship between age and value when
performing its TEV / EBITDA analysis
• Finally, Rothschild puts a disproportionate weight on its comparable companies analysis without acknowledging
the inherent limitations of EBITDA-based approaches in the space
• Forward EBITDA-based approaches, like a DCF, require future rate forecasts which are difficult to predict
Blackstone 54
Confidential
Valuation Application Errors
Blackstone
Confidential
(D Valuation Application Errors - Unjustifiable Exclusion of Comparable Companies
Rothschild accepts Blackstone's set of comparable companies and then unjustifiably removes Jinhui and Paragon,
artificially increasing its valuation.
• Rothschild claims, "The peer set excluding Paragon and Jinhui is more indicative of where Genco will be valued
post emergence given its scale, substantial access to capital and well respected management team"*1'
• As shown on the following page, a reorganized Genco would be very similar to Jinhui
• Similarly, Rothschild's exclusion of Paragon is inconsistent with Rothschild's decision to include other comparable
companies
Blackstone 56
Confidential
o Valuation Application Errors - Unjustifiable Exclusion of Comparable Companies (cont.)
Unjustified Exclusion of Jinhui
RothschH^atJonal|l^o^xclusio^^^^™l,™l^^^^^^^^^™ Inconsistency / Error
• "Limited broker coverage (less than 3) preventing use of • Arbitrarily conclude that 2 sets of projections are inadequate
estimates"'11
• Rothschild itself uses a single TEV / EBITDA multiple in its
precedent transactions analysis
• Rothschild excludes Jinhui in TEV / NAV analysis even
though projections are not necessary
• "Limited float / liquidity (HoldCo owning over 50%)"(1) • Limited float and liquidity is similar to the Post-Reorg Genco
• Two other companies that Rothschild accepts as comparable -
Baltic Trading and Safe Bulkers - have controlling shareholders
owning more than 50%(2)
• "Reduced corporate transparency / reporting requirements • Jinhui makes information available through annual and
with NOK / HK listing"'1' quarterly reports, earnings releases, and other information, all
of which are publicly available on its website(3)
Rothschild also ignores other similarities when excluding Jinhui

• Large fleet (36 vessels) with only 1 newbuild (Genco owns 53 vessels with no newbuilds)
• No chartered-in vessels (Genco also has no chartered-in vessels)
• 7.1 year average fleet age (Genco's fleet has an average age of 9.1 years)

(2) Genco has a controlling interest in Baltic via its 65.1% voting rights. Blackstone 57
(3) http://www.iinhuiship.com/istl/istcl fin report set.html
Confidential
Valuation Application Errors - Unjustifiable Exclusion of Comparable Companies (cont.)
Unjustified Exclusion of Paragon
Rothschild Rationale for Exclusion
• "High exposure to newbuilds (7 new vessels expected FY14, or

I Inconsistency / Error
• Star Bulk and Safe Bulkers, which are both included in

over 50% of current fleet"'1* Rothschild's comps, also have high exposure to newbuilds
• 65% and 42% of fleet, respectively
• "Externalized Management Function"'1* • Baltic Trading, which is included in Rothschild's comps, also
has externalized management
• "Low market capitalization ($299 million TEV) and equity • Both Baltic Trading and Star Bulk, which are included in
trades at a discount due to low trading liquidity"'1* Rothschild's comps, have TEVs well below that of the Post-
Reorg Genco
• $520 million and $539 million, respectively'1'
• Rothschild unjustifiably states that low trading liquidity causes
Paragon to trade at a discount, without any supporting
analysis
• "Low margin due to limited scale"'2' • Paragon's 2015 EBITDA margin of 52.7% is higher than that of
Diana Shipping and only 5% lower than those of Baltic and
Star Bulk, all of which are included in Rothschild's Comps'3'
Rothschild also ignores other similarities when excluding Paragon

• Lower charter coverage (same as Genco)
• Operates diversified fleet of drybulkers (same as Genco)
• Average age of 7.5 years (Genco's fleet has an average age of 9.1 years)
(1) Per the Blackstone Expert Report.
(3) Source: CaplQ. Estimates as of 5/22/14; consistent with the Blackstone Expert Report.
Confidential
® Valuation Application Errors - DCF Deficiencies
Rothschild's DCF is tainted by the use of CMG's Adjusted Projections.
• In preparing its DCF, Rothschild adopts CMG's projections, which in turn are premised upon the simplistic
assumption that charter rates will revert to the mean in the final year of its forecast
• For this reason, Rothschild computes the final year of the projections and the terminal value of its DCF based on a
simple average of rates during the ten years from 2004-2013
• Rothschild, however, fails to acknowledge that this method of computing the reversion to the mean is upwardly
biased, and dramatically inflates the enterprise value conclusion of its DCF
• Use of any of three less biased, alternate methodologies - an average of the last five years, and average of the last
twenty years, or the median of rates since 1990 - would shrink the enterprise value Rothschild calculated $700
million to $1.25 billion (or 40%-72%)
• That the method of computing the reversion to the mean could influence Rothschild's DCF valuation conclusion so
profoundly demonstrates that CMG's projections are too unreliable to render the DCF a meaningful methodology
for assessing the enterprise value of the Debtors
Historical Reference Reduction in Enterprise Valuation Resulting Mid-Point Equity Value(1)
Average Rates: 2009 - 2013 $768 million Negative $486 million
Average Rates: 1994 - 2013 $697 million Negative $415 million

Excludes 2007 & 2008<2>
Median Rates: 1990 - 2013 $1,243 million Negative $961 million
(1) $282 midpoint equity valuation, per Rothschild Expert Report, page 25.
Blackstone 59
(2) Exclusion of 2007 and 2008 consistent with CMG's approach.
Confidential
0 Valuation Application Errors - DCF Deficiencies (cont.)
Rothschild Terminal Value Calculations Under Alternate Rate Forecasts

($ in million unless otherwise noted) Rothschild Alternate 1 Alternate 2 Alternate 3
Adjusted'2' Average Rates Adjusted'2' Median Rates Analysis holds
Rate Scenario'1' 10-year Average 2009-2013 20-year Average 1990-2013 all Rothschild
assumptions
Terminal Year Rates($/day) and mechanics
Capesize $32,845 $21,550 $24,972 $19,750 constant and
Panamax 19,302 15,205 15,103 12,100
only changes
Supramax 17,344 14,414 14,484 11,718
rates
Handymax 17,344 14,414 14,484 11,718
Handysize 12,451 10,490 9,711 7,940
Genco Terminal Year Financials

Cash EBITDA13' $213 $137 $144 $90
Drydock Expense (12) (12) (12) (12)
Purchase of Vessels (71) (71) (71) (71)
Unlevered Free Cash Flow $130 $54 $61 $7
Terminal Value Calculations

WACC 9.5% 9.5% 9.5% 9.5%
Terminal Growth Rate 2.0% 2.0% 2.0% 2.0%
Terminal Year UFCF $130 $54 $61 $7
Terminal Value $1,733 $720 $813 $93
Less: BWTS Adjustment (20) (20) (20) (20)
Adjusted Terminal Value $1,713 $700 $793 $73
Discount Factor 0.76 0.76 0.76 0.76
[ PV{Adj. Terminal Value) $1,299 $531 $602 $56^
1 Difference to Rothschild - ($768) _ ($697) ($1,243)]
(1) Alternate Scenarios 1-3 provided by Marsoft.

(2) "Adjusted" indicates the exclusion of 2007 and 2008 in calculation of historical rates, consistent with CMG's methodology. Blackstone 6o
(3) Excludes earnings from MEP and Baltic service contracts.
Confidential
(D Valuation Application Errors - DCF Deficiencies (cont.)
Rothschild's DCF is flawed due to their erroneous conclusion that age does not impact the value of drybulk
shipping companies.
• As shown below, the fleets of Rothschild's comparable companies are generally much younger than that of Genco
• In its DCF, when calculating the historical average EBITDA multiple of its comparable companies, Rothschild
analyzes a period during which the fleets of these comparable companies were even younger than they are today
• Subsequently, Rothschild applies this average EBITDA multiple (appropriate for fleets with an average age of 5.4
years) to Genco at the end 2017 (when Genco's fleet is 11.8 years old)
Average Age
2005 2006 2007 2008 2009 2010 2011 2012 2013 Current
Baltic Trading N/A N/A N/A N/A N/A 1.0 2.0 3.0 3.9 4.2
Diana Shipping 3.8 3.7 3.4 4.3 4.9 5.4 6.3 6.0 6.6 6.9
Safe Bulkers N/A N/A N/A 3.4 3.6 3.9 4.0 4.8 5.4 5.5
Star Bulk Carriers N/A N/A 8.0 9.7 10.0 10.4 10.6 10.8 9.6 9.2
Average Age 3.8 3.7 5.7 5.8 6.2 5.2 5.7 6.2 6.4 6.4
Average Age of Comp Set Over Period 5.4 years

Average Age of Genco (currently) 9.1 years
Average Age of Genco (EOY 2017) 11.8 years
Blackstone 61
Confidential
(D Valuation Application Errors - DCF Deficiencies (cont.)

Rothschild has importantly proven that DCFs are only as good as their inputs. Specifically, it is impossible to
reconcile Rothschild's terminal value with their very own assumptions.
• As of December 31, 2017, both Rothschild and Blackstone project Genco's fleet to average 11.8 years in age
• Under Rothschild's base case calculations, they project the future cash flows of the fleet and re-investment
(beyond 2017) to be worth approximately $1,764 million
• However, as an input to this calculation, Rothschild assumes Genco can purchase a comparable newbuild fleet
for approximately $1,781 million
• Rothschild's analysis yields one of two conclusions
• Conclusion 1: In 2017, Genco's 11.8 year old fleet is worth as much as a comparable newbuild fleet
- This conclusion would contradict the fact that since 1990, the value of 11.8-year old vessels has averaged
55% of the newbuild prices'1'
- This logic is akin to assuming every secondhand car, regardless of age, would be worth as much as its brand
new counterpart
• Conclusion 2: If the 11.8 year old fleet is indeed worth 55% of the newbuild price, Genco's fleet will be worth
approximately $979 million but the value of the cash flows from that fleet and re-investment will be worth
$1,781 million - a 1.80x TEV / NAV multiple
• Given the difficulty in accepting either of the aforementioned conclusions, it is clear that Rothschild's
assumptions, and therefore their DCF analysis, are flawed
• As shown on the following page, Blackstone has adjusted Rothschild's assumptions to reflect the historical
difference in value between brand new vessels and 11.8-year old vessels
• Making only this adjustment proves that equity is not entitled to a recovery
Blackstone 62
(1) Source: MSI.
Confidential
0 Valuation Application Errors - DCF Deficiencies (cont.)
Rothschild
Newbuild # of Newbuild
Price Vessels Fleet Cost
The newbuild prices listed on page 51 of the
Capesize $58 9.0 $522
Rothschild Report imply that a brand new fleet
Panamax 30 8.0 240
comparable to Genco's could be created for $1.78
Supramax(1> 28 19.3 539
billion
Handymax 28 6.0 168
Handysize 24 13.0 312
Rothschild Implied Cost of Newbuild Fleet in 2017 $1,781
Rothschild Terminal Value Under its mid-point DCF Valuation, Rothschild

Equal to Value of 11.8-year Old Fleet in 2017
assumes that a fleet with an average of 11.8 years will
EBITDA Multiple: Mid-Point $1,793
generate cashflows worth over $1.75 billion (as of the
Perpetuity Growth: Mid-Point 1,734
Rothschild Value of 11.8yr old fleet in 2017 $1,764
end of 2017)
Value of 11.8-year Old Fleet Implied by Rothschild Newbuild Prices

Rothschild Implied Newbuild Fleet Value $1,781 However; 12 year old vessels have on average traded
Historical Value of 11.8yr old vessel as % of Newbuild(1) 55% at 55% of the value of comparable newbuild vessels.
Implied value of 11.8yr old fleet in 2017 $980 Rothschild analysis implies that newbuild vessels will
remain significantly mispriced in perpetuity, artificially
Rothschild value of 11.8yr old fleet in 2017 $1,764
creating $560 million of unsubstantiated value in its
Newbuild implied value of 11.8yr old fleet in 2017 980
Difference in Value in 2017 $784 base case (and even more in the high case)
PV of Difference (WACC = 10.1%) 560
(1) Historical average between 1990 and 2013 of MSI data on Capesize, Panamax, and Handymax vessels. Blackstone 63
Confidential
© Valuation Application Errors - Overvaluation of MEP / Baltic Service Contracts
• Rothschild has estimated that Genco's variable cost of providing services under the MEP and Baltic Trading service
contracts is $900k per year*1'
• Rothschild unjustifiably indicates that these estimates are based on discussions with management'1*
• However, Genco's management has explicitly indicated in the Business Plan that they estimate the variable costs of
servicing the MEP and Baltic Trading contracts to be approximately $1.7 million per year
• Furthermore, the Debtors have provided Rothschild with internal tax accounting schedules that show annual
variable salary costs in excess of $2.5 million per year
• Despite these facts, Rothschild has independently adjusted management's projections to manufacture lower costs
and higher value under the MEP and Baltic service contracts
Blackstone 64
(1) Rothschild Exper Report, page 57.
Confidential
(J) Valuation Application Errors - Baltic Control Premium
Rothschild's application of a 30-35% control premium to Genco's ownership of Baltic Trading is inconsistent with the
terms of Genco's controlling shares and the reality of the drybulk market.
• Rothschild incorrectly assumes that there are no restrictions on Genco's ability to sell its controlling stake
• However, it is publicly disclosed that the control feature in Genco's shares would be eliminated if Genco ceased
to beneficially own those shares
• Furthermore, Rothschild's assertion that it is appropriate to apply a control premium when valuing Genco's stake in
Baltic is consistent with Rothschild's failure to grasp that drybulk shipping companies should be valued on an NAV
basis
• Again, Rothschild applies its general valuation toolkit without regard to the industry in which Genco operates
• As discussed earlier, operators have proven unwilling to pay for corporate control; they instead look to the
market for capital assets
• By Rothschild's logic, if two partners were to acquire 14 vessels at NAV with a 95% - 5% split, upon
consummation of the transaction, the controlling owner would have a stake worth ~126% of the vessel's value(1)
• Finally, Rothschild's calculation of control premium exhibits selection bias
• In its control premium analysis, Rothschild excludes real estate and financial institution transactions'^, two
industries which, like drybulk shipping, are often valued based on asset value
• Further, Rothschild also excludes negative premiums which artificially increases the average premium(2)
(1) Calculated as 95% ownership x Rothschild's 1.324% mid-point control premium on page 58 of the Rothschild Expert Report.
Blackstone 65
(2) Rothschild Expert Report, page, 76.

309 - Genco - Colemen Declaration

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14-11108-shl Doc 309 Filed 06/20/14 Entered 06/20/14 23:14:16 Main Document

UNITED STATES BANKRUPTCY COURT

Debtors. : Jointly Administered

DECLARATION OF TIMOTHY R. COLEMAN IN SUPPORT OF CONFIRMATION

I, Timothy R. Coleman, hereby declare as follows under penalty of perjury pursuant to 28

1. I am over 21 years of age. I am a senior managing director and head of the

Restructuring & Reorganization Group of Blackstone Advisory Partners L.P. ("Blackstone"), a

2. I submit this declaration (the "Declaration") in support of confirmation of the

[Docket No. 284].1

4. Except as otherwise indicated, I have personal knowledge of the matters set

BACKGROUND AND QUALIFICATIONS3

5. Since joining Blackstone in 1992, I have worked on a broad range of

transactions. In particular, I have been involved in numerous restructurings, including, without

6. I hold a Bachelor of Arts degree from the University of California at Santa

occasions, including instances involving valuation.

7. Blackstone is a leading global provider of financial advisory services and

B. Experience in the Shipping Industry

8. Blackstone and its professionals also have significant experience in the

including how it differs from other industries.

9. More specifically, Blackstone has advised clients in several major

Shipping Services (advising bondholder committee in an out-of-court restructuring); Cecon

involving debt and equity capital financings.

10. Blackstone's engagement by the Debtors is more fully described in the

Blackstone relied upon several external sources of information:

Clarksons: Clarksons, including Clarksons Shipping Intelligence

Maritime Strategies International ("MSI"): MSI offers independent

Marsoft; Marsoft is a leading maritime industry consultant that provides

S&P Capital IO ("CapIQ"): CapIQ, a business unit of McGraw Hill

product and industrial production.

on cargo carrying capacity:

a. Handvsize Vessels: Handysize vessels carry less than 40,000 deadweight

B. Drybulk Shipping Economics

than 20% of the global dry bulk fleet.

differentiate competitors. International regulations, such as those enforced by the International

Consequently, a company's ability to predict long term revenues is severely constrained.

competitors in short order.

9 See id. (listing vessels by shipyard).

margins over the long haul.14

21. Drybulk shipping is fundamentally different. It is an example of an industry

23. In addition, the earnings of a drybulk shipping operation cannot be reliably

more difficult to credibly predict.

occurred near NAV.

equity value in the Debtors.19

that provided by the Prepack Plan.

valuation assessments (comparable transactions, comparable companies TEV/NAV, comparable

Chart: Summary of Valuation Approaches - Total Value of Debtors

Based on four Independent

Precedent Analysis of six precedent

Analysis of trading prices of

Analysis of trading prices of

WACC ranging from 9.1-11.1% and

$1,000 $1,150 $1,300 $1,450 $1,600

B. Net Asset Value Approach

29. Blackstone employed an NAV approach as its principal methodology to value

30. More specifically, it is difficult to build enterprise value independent of asset

reliable for the purpose of valuation.

earning capacity of the vessels will be. Blackstone further consulted

These sources are regularly relied

higher. The above is illustrated by the following chart:

Chart: Asset-Based Valuation

lAppraised Value of Fleet $1,211 $1,198 $1,182 $1,227 $1,262 $1,211 1

Net Working Capital'3' 40 40 40 40 40 40

$ in millions unless otherwise noted.

C. Other Methodologies Confirm the Debtors' Insolvency