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Monday, May 18, 2009

DryShips secures loan covenant waivers

Tony Gray - Friday 15 May 2009


DRYSHIPS has secured loan covenant waivers on a $654m facility covering 23 dry bulk vessels, the company disclosed. 
The agreement with Germany’s HSH Nordbank, as agent for the facility, represents a major step forward for DryShips as it strengthens its balance sheet in readiness to take advantage of acquisition opportunities. 
“This agreement is a testament of the support of the syndicate led by HSH Nordbank to DryShips”, chief executive George Economou said. 
The vessels covered by the facility represent more than half of DryShips’ fleet of 43 bulk carriers aggregating 3.4m dwt. 
Nasdaq-listed DryShips has taken several measures to improve its financial positions, including cancelling 17 vessels. 
The company has also been raising fresh equity through “at the market” 
Ten days ago, DryShips unveiled a second at-the-market share offering with Merrill Lynch in little more than three months, which could bring the fresh equity raised by the company this year to about $950m. 
The agreement with HSH Nordbank is not the first loan covenant agreement the company has pinned down. 
Earlier this year, it reached a deal to restructure two loans with Piraeus Bank, one of its leading lenders, on facilities which originally totalled $220m but had been paid down to $164.9m. 
DryShips also clinched a final agreement from a banking consortium on temporarily waiving covenants on its $800m facility for Primelead, the subsidiary used to acquire Norway’s Ocean Rig last year.