DryShips axes ships purchase to save cash

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Richard Meade - Wednesday 10 December 2008

 

ATHENS-based DryShips has cancelled its proposed $400m acquisition of four panamaxes from companies beneficially owned by DryShips chief executive George Economou in order to preserve cash. 
The company blamed a “significant deterioration in the dry bulk market”. 
“The aggregate purchase price of $400m would have represented a significant cash outflow from the Company’s cash reserves given that the Company had not obtained bank financing for the acquisition,” said a company statement. 
As part of the deal originally signed in July, the selling companies will retain the deposits totaling $55m for the four vessels, the company said. 
The company also inked a revised deal with those selling entities, which gives it an exclusive option to buy the same four panamax ships for $160m. 
Due to cancellation of the deal and purchase of exclusive options, DryShips paid an extra $26.3m per vessel. 
In addition, DryShips said the previously announced $55.5m sale of its panamax vessel, Lacerta, will not close due to the buyer’s decision not to go ahead with the deal. The company did not identify the buyer. 
The company intends to pursue legal remedies against the buyer, it said. 
Shares of the company were trading up 21% at $11.4 in morning trade on the Nasdaq.