DryShips Exercises First Option To Acquire A VLGC With A 5 Year Time Charter Attached To An Oil Major

By Finance

DryShips Inc. (NASDAQ:DRYS), an international owner of drybulk carriers and offshore support vessels, announced yesterday that it has exercised its first option under the previously announced option agreement to acquire one Very Large Gas Carrier (VLGC) currently under construction at Hyundai Heavy Industries (HHI) for a purchase price of $83.5 million.

DryShips Exercises First Option To Acquire A VLGC With A 5 Year Time Charter Attached To An Oil Major

Part of the purchase price (abt. 25%) will be paid on closing, expected within January, with the balance payable in installments until the vessel’s delivery from HHI. The VLGC will be employed on a fixed rate time charter with five years firm duration to an oil major. The charterer has options to extend the firm employment period by up to three years. The Company expects the total gross backlog associated with this time charter to be $54.0 million, or $92.7 million including the optional periods, and expects to take delivery of the vessel in June 2017. The transaction was approved by the independent directors of the Company based on third party broker valuations.

George Economou, Chairman and Chief Executive Officer commented: “We are very pleased to have declared our first option to purchase a high specification VLGC with long term employment to an oil major at above market rates. This acquisition allows us to deploy the Company’s available liquidity immediately and will be highly accretive to earnings and cash flow. This marks the first acquisition of the Company since the restructuring of its balance sheet and our first investment in the gas carrier segment which we believe has very positive long-term fundamentals.”

Source: DryShips