DryShips is selling its Ocean Rig shares at the same time as George Economou has stepped up to buy three bulkers from the company.
Nasdaq-listed DryShips has secured $49.9m for its stock in the drilling company with the proceeds used to pay down debt on a loan previously provided by Economou.
As part of the agreement new loan covenants have been introduced and any default on the debt will be waived should other lenders also be willing to do so.
Ziad Nakhleh, chief financial officer at DryShips, said: "We are pleased to have reached a preliminary agreement with one of our lenders to waive any events of default and we hope that the rest of the lenders follow suit, recognizing the pro-active approach of the company to reduce its debt burden and cash flow burn."
Simultaneously, Economou has agreed to buy three bulkers and their related debt from DryShips.
The latest vessels to join Economou’s private stable are the 206,200-dwt Fakarava (built 2012) and the 2013-built Rangiroa and Negonego.
Their sale takes DryShips out of the capesize market and leaves it with just panamax bulkers and platform supply vessels to its name.
DryShips will cut its debt by over $100m to $213.7m following the deals.
An SEC filing from yesterday shows that Economou holds 17.6% of DryShips.
Overhang eliminated
The sale does not mean an end to Economou’s involvement with Ocean Rig, which he bought into in 2007.
He holds seven million shares in the company, of which he is chairman, via Sphinx Investment and other vehicles.
DryShips was its largest shareholder with a 40% stake. Those shares have been purchased by an unrestricted subsidiary.
Professor John Liveris, chairman of the independent audit committee at Ocean Rig, said: “We are pleased to have eliminated the overhang of the Ocean Rig shares that DryShips owned once and for all, in a transaction that is priced at fair value and is to the benefit of all the shareholders of Ocean Rig.”
Adage Capital Partners is its largest outside shareholder with 6.1%, according to its last annual report.
