Boston, MA 10/15/2014 (wallstreetpr) – DryShips, Inc. (NASDAQ:DRYS) has been facing an acute shortage of funds as about $700 million of debt has become a due within another two months. The company tried for bond sale which didn’t work. So, now DryShips is looking for a bank loan to close the same. In addition to the loan, the company would also utilize $350 million of finance from ABN Amro Group NV and Nordea Bank AB has also provided a credit line of $100 million. Besides this, the company will use cash in hand and a funding commitment from the CEO George Economou.
Company Faces Tough Time
The bond offering for a convertible note is due on December 01, 2014 post the cost of the funding for the speculative-grade borrowers climbed to the highest peak in a year and prospective buyers demanded for 12% of interest. DryShips also has a tanker and other offshore drilling units. Earlier, DryShips, Inc. (NASDAQ:DRYS) has also negotiated with creditors to get a waive on about $6 billion of debt or at least it gets restructured after it ran badly out of the governing rules of the loan agreement.
The shares of the company are underperforming due to this news besides oil prices going down and analysts believe that company waited for too long to get the refinance done. DryShips, Inc. (NASDAQ:DRYS) cancelled a $700 million secured notes offering on a demand by potential investors. As per the Bank of America Merrill Lynch Index data, the average yield on the speculative grade bond increased to 6.54%.
Subsidiary Comes For Rescue
DryShips, Inc. deals in marine transportation services for petroleum and drybulk cargoes will now seek loan on the basis of securing assets of its own subsidiary, Ocean Rig UDW Inc. As per the U.S. Securities and Exchange filing dated August 6, 2014, the ABN AMRO will have a maturity for one year. It should be noted that DryShips, Inc. (NASDAQ:DRYS) is in losses for the last three years due to continuous market contraction.
