DryShips refinances via $200 million revolver from founder’s company

By Wendy Van Sickle

Columbus, Ohio, Dec. 15 – DryShips Inc. reached an agreement with Sifnos Shareholders Inc., an entity controlled by the company’s founder and chairman George Economou, to refinance most of its outstanding debt under a new $200 million three-year senior secured revolving facility, according to a press release.

Sifnos will extend the loan, which secured by all of DryShips’ present and future assets except the bulk carrier Raraka, which will continue to be financed by its existing commercial lender.

The revolver will carry interest of Libor plus 550 basis points, is non-amortizing, has no financial covenants and will be arranged at a cost of 2%, according to the release.

Sifnos will have the ability to participate in realized asset value increases of the collateral base in a fixed percentage of 30%.

The transaction was approved by the independent members of DryShips’ board, and a fairness opinion was obtained in connection with the transaction, the company reported.

Following repayment of $33.5 million under the previous Sifnos facility and the write-off of about $1.6 million of overdue interest under a previous syndicated loan arranged by HSH Nordbank, DryShips said it expects year-end total debt between $135 million and $140 million with total cash between $40 million and $50 million and about $79 million of availability under the new revolver.

“Following the closing of our successful equity offering and putting the new revolver in place, we will have total available liquidity of between $119 million and $129 million that will not only give us comfort to fund operations but also gives us the opportunity to evaluate the possible acquisition of assets at distressed values,” DryShips’ newly appointed president and chief executive officer Anthony Kandylidis said in the release.

“We believe that given where we are in the cycle in both the tanker and drybulk markets, we are faced with a unique entry point to acquire vessels in these sectors at historic low prices.”

DryShips is an Athens-based owner of drybulk carriers and tankers.

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