DryShips Inc., an international owner of dry bulk carriers and offshore support vessels, has sold three of its vessels, the Fakarava, Rangiroa and Negonego, along with the associated bank debt, to entities controlled by the company’s Chairman and CEO, George Economou.
The vessels were sold at fair market value as supported by independent third party broker valuations, and the transaction was approved by the disinterested members of the company’s Board of Directors.
As a result of this transaction, the company’s total bank debt has been reduced by US$102.1 million, and currently stands at US$213.7 million.
The company has also agreed to sell all of its shares in Ocean Rig UDW Inc. to an unrestricted subsidiary of Ocean Rig for total cash consideration of approximately US$49.9 million. The sale proceeds will be used to partly reduce the outstanding amount under the Revolving Credit Facility (Revolver) provided to DryShips by a company controlled by Economou and for general corporate purposes.
In addition, DryShips has reached an agreement under the Revolver whereby the lender has agreed to (i) release its lien over the Ocean Rig shares and (ii) waive any events of default, subject to a similar agreement being reached with the rest of the lenders to Dryships, in exchange for certain LTV covenants being introduced under the Revolver. This transaction was approved by the disinterested members of the company’s Board of Directors on the basis of a fairness opinion and is subject to standard closing conditions. After this transaction, the company will no longer hold any equity interest in Ocean Rig.
Ziad Nakhleh, Chief Financial Officer of the company, commented: “We are pleased to have reached a preliminary agreement with one of our lenders to waive any events of default and we hope that the rest of the lenders follow suit, recognising the pro-active approach of the company to reduce its debt burden and cash flow burn.”
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/handling/06042016/dryships-reduces-debt-through-vessel-sales-533/