DryShips Bags Financing for Four VLGCs

Greek shipowner DryShips has won “firm commitment” for a senior secured credit facility of up to USD 150 million with Dutch ABN AMRO bank and the Export–Import Bank of Korea (KEXIM), the company said.

The loan is intended to be used to partly finance the delivery of the shipowner’s four Very Large Gas Carriers (VLGCs). However, the facility remains subject to definitive documentation.

As stipulated in the agreement, the loan facility will have a tenor of 6 years, will bear an interest rate of LIBOR plus margin and will have an amortization profile of approximately 12 years.

The four VLGCs currently under construction at South Korean shipbuilder Hyundai Heavy Industries (HHI) are scheduled for delivery in June, September, October and December of 2017. Once delivered, DryShips plans to employ them on long term charters to unnamed oil companies and oil traders, with a total gross backlog of approximately USD 390 million, including optional periods.

“We have come a long way since a year ago, when we were in discussions with commercial lenders about the restructuring of our debt. We are pleased that we have put all this behind us and grateful for the support of ABN AMRO and KEXIM in arranging our first bank financing since 2014,” George Economou, Chairman and Chief Executive Officer, said.

” Following the closing of the ABN/KEXIM loan, DryShips will still have the majority of its fleet (32 vessels) unencumbered. In dollar terms, assuming a modest 50% leverage of the market value of these assets, this would imply the ability to raise approximately USD 250 million (or USD 19.13 per share) of additional debt capital. We will now concentrate our efforts on arranging financing for these vessels. This will allow us to focus on further accretive vessel acquisitions without the need to raise further equity.”