Genco Shipping & Trading Ltd will cut its debt by more than $1 billion by giving control of the company to its lenders in a deal that requires the dry bulk shipping company to file for bankruptcy. Lenders backing a $1.06 billion credit facility would convert their debt into about 81.1 percent of company’s stock, according to a regulatory filing from Thursday. Investors who hold $125 million of Genco convertible debt would receive 8.4 percent of the company. The remaining equity would be allocated to those investors funding a $100 million rights offering, while management would also get a 1.8 percent stake in the company. Existing Genco stock would be canceled and shareholders would receive warrants for 6 percent of the reorganized company’s stock. Genco stock jumped 28 percent to $1.96 per share on the New York Stock Exchange in late trading on Friday. The agreement requires Genco to file for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Manhattan. A bankruptcy would allow the company to force a small number of hold-out creditors to accept the plan. Firms that specialize in distressed investing - Centerbridge Partners, Apollo Management and Solus Alternative Asset Management - would rank as the largest shareholders after the company reorganizes. The company joins a growing list of shipping companies that have been struggling as charter rates have been depressed by a glut of large new vessels. A U.S. energy boom has also hit some companies as oil shipments to the United States have dropped. Peter Georgiopoulos, Genco’s chairman and one of its largest stockholders, was a founder of General Maritime Corp, a shipping company that succumbed to Chapter 11 bankruptcy in 2011. The company emerged a year later under the control of Oaktree Capital Management, a distressed investment firm. Genco has hired Kramer Levin Naftalis & Frankel to lead the restructuring talks and Blackstone Advisory Partners as a financial adviser.