EMEA News
DryShips Posts Single Worst Annual Performance by a Public Shipping Company: Report
Athens-based dry bulk carrier DryShips Inc. Tuesday announced a major loss for the fourth quarter of the year and said that the company would no longer going to pay principal on $236.9 million of bank debt.
The loss was characterized by at least one media outlet as "one of the worst full-year performances ever by a public shipping company."
The dry bulker and offshore services provider reported a net loss of $527.6 million for the fourth quarter of 2015 versus a net loss of US 24.2 million in Q4 of last year.
Included in the latest period were $119.1 million in non-cash losses and vessel impairments and a $310.5 million non-cash write-down of the company's 40 percent stake in Ocean Rig UDW according to a press release.
The company also announced that, given the prolonged market downturn in the drybulk segment and the continued depressed outlook on freight rates, the company is presently engaged in discussions with its lenders for the restructuring of its debt facilities.
The press release went on to note that three of the company's bank facilities have matured and that company has not made the final balloon instalment.
For the remaining bank facilities, the company has "elected to suspend principal repayments to preserve cash liquidity."
IHS noted the suspension of payments on the principal places DryShips "squarely in the 'hard default' category with bank lenders," as opposed to breaches of covenant that are considered "soft defaults."
Al Yudes, partner at Watson, Farley & Williams, told IHS recently that a hard default was effectively saying, "we either have to restructure this thing or it's going to blow up in all of our faces."
In theory, lenders could now call their loans and foreclose on DryShips' entire fleet at any time.
In September of 2015 Ship & Bunker reported that DryShips was making moves to sell its entire fleet, with 17 of its 39 ships set to be sold to the company's CEO George Economou.
