DryShips Scrambles to Renegotiate Loans amid USD 2.8 Bn Loss

Greece-based owner of drybulk carriers and offshore support vessels DryShips Inc. reported a full-year net loss of USD 2.8 billion for 2015, plunging from previously reported USD 48.2 million loss.

For the fourth quarter the company posted USD 527.6 million loss, also considerably larger from USD 24.1 million recorded in the corresponding period from 2014.

The loss includes vessel impairment charges and non-cash losses of USD 119.1 million and non-cash write down of the company’s investment in Ocean Rig of USD 310.5 million.

DryShips said that given the prolonged market downturn in the drybulk segment and the continued depressed outlook on freight rates, it is discussing restructuring of its debt facilities with lenders.

Specifically, three of these bank facilities have matured and the company has not made the final balloon installment. For the remaining bank facilities, DryShips decided to suspend principal repayments to preserve cash liquidity.

As of 31 December, DryShips accrued USD 236.9 million in total debt.

This year doesn’t seem to bring many signs of hope, as the year-start saw Dry Ships’ contract for the oil spill recovery vessel Vega Juniz ended. Namely, the company received a notice of termination from Petroleo Brasileiro S.A. (Petrobras) effective March 9, 2016.

“The contract of the Vega Juniz was expiring on April 25, 2017 and this termination represents a loss in contracted EBITDA of approximately USD 2.8 million for the balance of 2016,” the company said.

This is the second termination from Petrobras, which in February ended the contract for the platform supply vessel Vega Crusader effective as of March 6, 2016. The contract of the Vega Crusader was expiring on January 8, 2017, incurring a loss in contracted EBITDA of approximately USD 2.2 million for the balance of 2016.

DryShips is due to carry out reverse stock split and its common stock will begin trading on a split adjusted basis on the Nasdaq Capital Market on March 11, 2016.

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