DryShips Buys First VLGC

Greek owner of drybulk carriers DryShips Inc. has exercised its first option to acquire one very large gas carrier (VLGC) currently under construction at South Korean shipyard Hyundai Heavy Industries (HHI) for a purchase price of USD 83.5 million.

The VLGC, scheduled to join the company’s fleet in June 2017, will be employed on a fixed rate time charter with five years firm duration to an undisclosed oil major. The charterer has options to extend the firm employment period by up to three years.

DryShips said that the total gross backlog associated with this time charter should be USD 54 million, or USD 92.7 million including the optional periods.

Part of the purchase price of about 25% will be paid on closing, expected within January, with the balance payable in installments until the vessel’s delivery from HHI.

“We are very pleased to have declared our first option to purchase a high specification VLGC with long term employment to an oil major at above market rates. This acquisition allows us to deploy the company’s available liquidity immediately and will be highly accretive to earnings and cash flow,” George Economou, Chairman and Chief Executive Officer, said.

“This marks the first acquisition of the company since the restructuring of its balance sheet and our first investment in the gas carrier segment which we believe has very positive long-term fundamentals,” Economou added.

The purchase is a part of a “zero cost” option agreement which DryShips signed earlier in January to purchase up to four high specifications VLGCs capable of carrying liquefied petroleum gas (LPG).

The remaining three vessels are scheduled for delivery in September, October and December of 2017, respectively.

If DryShips exercises all four of its options, the total purchase price of the VLGC fleet will be USD 334 million.

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