DryShips cancels $400 mln purchase of four vessels
Due to the battered dry bulk freight market, greek bulk carrier DryShips Inc (DRYS.O: Quote, Profile, Research, Stock Buzz) said it cancelled its proposed $400 million acquisition of four Panamax type vessels in order to preserve cash.
The deals were signed in July with entities beneficially owned by DryShips Chief Executive George Economou.
As part of the deal, the selling companies will retain the deposits totaling $55 million for the four vessels, the company said.
Shares of the company were trading up 21 percent at $11.40 in morning trade on the Nasdaq.
The company also inked a revised deal with those selling entities, which gives it an exclusive option to buy the same four Panamax ships for $160 million.
This exclusive purchase option will end on Dec. 31, 2009, the company said.
Due to cancellation of the deal and purchase of exclusive options, DryShips paid an extra $26.25 million per vessel to each of these selling entities.
In addition, DryShips said the previously announced $55.5 million sale of its Panamax vessel, M/V Lacerta, will not close due to the buyer's decision not to go ahead with the deal. The company did not identify the buyer.
The company intends to pursue legal remedies against the buyer, it said.
In November, DryShips' rival Genco Shipping & Trading Ltd (GNK.N: Quote, Profile, Research, Stock Buzz) agreed to cancel a deal to buy six dry bulk vessels, and took a charge of $54 million in fourth quarter.
The deals were signed in July with entities beneficially owned by DryShips Chief Executive George Economou.
As part of the deal, the selling companies will retain the deposits totaling $55 million for the four vessels, the company said.
Shares of the company were trading up 21 percent at $11.40 in morning trade on the Nasdaq.
The company also inked a revised deal with those selling entities, which gives it an exclusive option to buy the same four Panamax ships for $160 million.
This exclusive purchase option will end on Dec. 31, 2009, the company said.
Due to cancellation of the deal and purchase of exclusive options, DryShips paid an extra $26.25 million per vessel to each of these selling entities.
In addition, DryShips said the previously announced $55.5 million sale of its Panamax vessel, M/V Lacerta, will not close due to the buyer's decision not to go ahead with the deal. The company did not identify the buyer.
The company intends to pursue legal remedies against the buyer, it said.
In November, DryShips' rival Genco Shipping & Trading Ltd (GNK.N: Quote, Profile, Research, Stock Buzz) agreed to cancel a deal to buy six dry bulk vessels, and took a charge of $54 million in fourth quarter.