First, the company’s annual report may include a going concern uncertainty disclosure. This should not come as a surprise to anyone since Genco has been classifying its debt outstanding (at the parent level) as current since March 31st, 2013.
Second, the company provided preliminary estimates for last year’s results on a consolidated basis. Despite an estimated operating loss of $67 million and a total loss of $157 million for the year, the company was able to generate approximately $4 million profit from operations during the fourth quarter of 2013.
This is the first time Genco is generating a quarterly operating profit in two years. Unfortunately it may come as too little too late for its shareholders.
Given its fast deteriorating cash balance, it is very likely that Genco will seek court protection from its lenders as early as this week.
But not all may be lost for shareholders. As I analyzed in my recent Seeking Alpha Pro article, while the company’s capital restructuring is inevitable, improving freight markets and asset values may still leave existing shareholders with a piece of the company’s new equity.