DryShips’ Future in Doubt in Prolonged Downturn

File photo (c) Shutterstock/Lukasz Z
DryShips Inc. owns a fleet of 24 drybulk carriers and 6 offshore support vessels, as well as has 40% stake in international drilling contractor Ocean Rig UDW. Photo: Shutterstock/Lukasz Z

ReutersJune 6 (Reuters) – Dry bulk shipper DryShips Inc raised “substantial doubt” about its ability to stay in business after it defaulted on three bank facilities, hit by a prolonged downturn in commodity prices and low charter rates.

The company’s shares fell as much as 26 percent to $1.75 in extended trading on Monday.

DryShips, which had total liabilities of $280 million as of March 31, said in a regulatory filing that it was in breach of financial covenants and has elected to suspend principal repayments and interest payments for the remaining bank facilities. (http://1.usa.gov/1tcW16D)

Shippers which transport commodities such as coal, iron ore and grain have been hurt by tepid demand, especially in China, and a surplus of vessels for hire.

The Baltic Exchange’s main Baltic Dry index has dropped 22 percent to $610 since the beginning of 2015. It fell as low as $290 this year.

The company had reported a near 98 pct fall in revenue for the quarter ended March 31 as time charter equivalent, the average daily revenue performance of a vessel on a per voyage basis fell more than 99 percent.

Up to Monday’s close, DryShips’ stock had fallen about 88 percent this year. (Reporting by Arathy S Nair in Bengaluru; Editing by Don Sebastian)