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DryShips vessel contract terminated; restructuring discussions ongoing
By Caroline Salls
Pittsburgh, Feb. 16 – DryShips Inc. said Petroleo Brasileiro SA (Petrobras) has given notice of termination on the contract for the platform supply vessel Vega Crusader, effective as of March 6.
According to a news release, the contract of the Vega Crusader was scheduled to expire on Jan. 8, 2017. DryShips said this termination represents a loss in contracted EBITDA of $2.2 million for the balance of 2016.
Given the prolonged market downturn in the drybulk segment and the continued depressed outlook on freight rates, the company said it is in discussions with its lenders for the restructuring of its debt facilities. While those discussions are ongoing, DryShips said it may elect to suspend principal repayments to preserve cash liquidity.
The company said founding shareholder George Economou has expressed his continued support to DryShips throughout these discussions, subject to the continued support of all the lenders.
However, the company said the sale of the Fakarava, Rangiroa and Negonego to entities controlled by chairman and chief executive officer Economou has failed, but the company has reached a settlement agreement with the charterer of these vessels for an upfront lump sum payment and the conversion of the daily rates to index-linked time charters.
Economou has expressed his desire to proceed with the sale of the vessels, subject to the transfer of the existing loan at the current fair market value of the vessels, and DryShips is in discussions with the respective lenders to achieve this, the release said.
DryShips is an Athens-based owner of drybulk carriers and tankers.
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