Economou Takes Over Larger Part of DryShips’ Debt
Greece-based owner of dry bulk carriers and offshore support vessels DryShips revealed that its chairman and CEO George Economou has taken over the majority of the company’s debt.
Namely, a company controlled by Economou has become the lender of record under DryShips’ USD 85.1 million syndicated loan previously arranged by Germany’s HSH Nordbank.
Following this transaction, entities affiliated by Economou control “the vast majority” of DryShips’ debt outstanding with total aggregate principal amount outstanding of USD 154.5 million.
The company further said that the remaining debt of USD 16.5 million is associated with third party commercial lenders with which DryShips has either reached or is in discussions to reach an amicable settlement.
“With more than 90% of our debt now in the hands of our founder, it is safe to conclude that the company is no longer in any danger from its lenders exercising any of their rights under the company’s existing defaults under their respective loan agreements,” Anthony Kandylidis, executive vice president and interim CFO, said.
He added that DryShips is already in discussions with Economou to amend the company’s debt and regain compliance.
Last month, DryShips decided to sell its preferred shares for gross proceeds of USD 20 million to British Virgin Islands-registered Kalani Investments Limited. DryShips also said it may further receive up to USD 80 million if all of the preferred warrants are exercised, for total proceeds of USD 100 million.
The company said that the net proceeds from the sale would be used for general corporate purposes and/or to repay indebtedness under one or more of existing credit facilities and/or to repay indebtedness incurred under the Revolving Facility with Sifnos Shareholders Inc.