Saturday, February 14, 2009
DryShips Left hanging Dry
It looks like Samsun Logix left DryShips high and mostly dry. DryShips revealed late Wednesday in a filing with the Securities and Exchange Commission that Samsun Logix stiffed it out of a $1.5 million deposit on the purchase of a freighter when the South Korean shipping company filed for the equivalent of bankruptcy court protection. “As a result, Samsun is in breach of this agreement,” DryShips said in the filing. “Samsun has not stated whether it intends to fulfill its agreement to purchase the M/V Toro, and the company intends to explore its legal options with respect to Samsun’s breach.”
DryShips shares sank 5.05, or 29 cents, to $5.00, on Thursday.
On Feb. 6, DryShips announced it agreed to sell the 1995-built M/V Toro for $36.0 million, a 43.0% discount to the $63.4 million price agreed upon with Samsun in July. Samsun agreed to pay a $6.3 million deposit immediately and then a $1.5 million deposit.
At the time the news looked like a good deal since DryShips had announced in January in a SEC filing with that Samsun had backed out of the deal completely. Now the news that Samsun Logix is filing for bankruptcy protection -- and that it failed to make the $1.5 million deposit -- calls into question whether the sale of the Toro will go through at all.
The Samsun fiasco is the last thing that DryShips needs. The company spent the last two weeks negotiating amendments to some of its loans in order to regain compliance after breaching some loan covenants. Prior to striking a deal with its lenders, DryShips warned that even if it was able to change its debt terms, it might not be able to pay dividends, obtain more debt or make capital investments.
Meanwhile, DryShips is desperately trying to preserve cash as freight rates have plummeted more than 90.0% from their summer highs and financing has dried up. DryShips said it plans to sell new stock to preserve its liquidity. It's off to a good start: Last week, the company agreed to sell up to $500.0 million of shares at any time, adding that it canceled the purchase of a ship to save $46.9 million in 2009.
A bit of hope: The Baltic Dry Index, which measures bulk shipping rates on 40 routes across the world, rose for 17 straight days before falling 66 points on Thursday, to 1,989, down from 2,055 on Wednesday.
Source: Forbes
0 comments:
Post a Comment