DryShips, which owns dry bulk carriers and offshore support vessels, announced that it sold three of its vessels along with the associated bank debt to entities controlled by the company’s Chairman and CEO George Economou.
The vessels, Fakarava, Rangiroa and Negonego, were sold at fair market value as supported by independent third party broker valuations, according to a statement.
The transaction, approved by DryShips’ board of directors, allowed the company to reduce its total bank debt by $102.1 million, currently standing at $213.7 million.
In addition, DryShips has agreed to sell all of its shares in Ocean Rig UDW to an unrestricted subsidiary of Ocean Rig for about $49.9 million in cash.
The sale proceeds will be used to partly reduce the outstanding amount under the revolving credit facility provided to DryShips by a company controlled by Chairman and CEO Mr. Economou and for general corporate purposes.
Moreover, DryShips has inked an agreement under the revolving credit facility whereby the lender has agreed to release its lien over the Ocean Rig shares and 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 revolving credit facility.
After the transaction, which is subject to standard closing conditions, DryShips will no longer hold any equity interest in Ocean Rig.
“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, recognizing the pro-active approach of the company to reduce its debt burden and cash flow burn,” DryShips CFO Ziad Nakhleh stated.