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BDI up again today: 1582 +16. It hasn't been this high since January 2014.
I-Man - I think the BDi will inch up a bit through November, DRYS will take delivery of the VLGC shortly, and 3Q earnings report out perhaps by mid-November all will push DRYS pps higher. Maybe $4.50 - $5.00? None of this will be even close to the catalyst that drove the pps last November. However, 3Q and 4Q earnings with any revised estimates being reported could easily move the pps into the teens and beyond. There haven't been any updates regarding revenues from the new ships in the fleet and nothing at all for Heidmar. I think there will be a few surprises ahead.
DRYS should be announcing delivery of the next VLGC either this week or next. That may be the catalyst to move the pps along.
BDI higher again today: 1523 +38.
The macro level of seaborne trade is growing a really good pace. Will Q3 be the first positive revenue quarter for DRYS?
"Aggregate world seaborne trade is projected to grow by 3.9% in full year 2017. This follows on from growth last year of 2.8%, which itself was a major bounce back from the sluggish growth of 2.1% registered in 2015, which had triggered many to think twice about the general long-term health of seaborne trade. If this year does achieve the 3.9% mark, it would constitute the fastest year of seaborne trade growth for 5 years, since the 4.3% growth in 2012, a real bounce back to form.
As well as representing a healthy bounce back, the rate of expansion this year holds up well in historical terms. The average since the downturn in 2009 (when seaborne trade shrank by 4.0%) has been 4.2%. Excluding the year of 2010, which was a huge bounce back in its own right (9.3% growth) the figure would be a more modest 3.4%. The average in the 2002-08 boom was not too much higher at 4.5%"
http://www.hellenicshippingnews.com/bouncing-back-fastest-trade-growth-in-half-a-decade/
Read the filings much? No RS coming any time soon.
BDI still advancing: 1485 +27
Sedona - 3 million tons of wood waste will be converted to diesel, biochar, activated carbon, and CO2 captured. The amount of material available for the project literally on site is sufficient to feed the process for the next 40 years. This will be the start for several similar projects in Canada. The project owners have roughly 20 million tons of additional feed stocks located in other areas.
Sedona - There may be someone associated with the Lake Chad project looking to do something with the KDS. I can't say I know anything about it though. The bird-in-hand so to speak is the Quebec project. It will be a fundamental change for FASC once/if that project comes to fruition.
Charlie - Any contract I have ever been involved with requires vendor proposals. So I don't see anything negative in that. From all accounts and that includes one of the project owners that I have spoken with directly, there is no way the project can get started without the equipment from FASC. We will see of course, but hopefully word will be coming out shortly.
Sam - I don't know anything about Lake Chad. However, the Quebec project is the linchpin for other projects. That area might be a better focus for the board...
So here is the latest...
Brian was at a meeting in Quebec province with the project principals. They met for 5 days last week. He has submitted FASC's proposal for the KDS's, presses, and conveyors that will be used by the project. At this point it is just a waiting game for checks and contracts to be written. It is unclear on the timeline though. My take on it is that if the project moves forward, checks will necessarily need to cut within a few weeks.
The financial backers of the Quebec project is the same group that will be financing projects in 2 US states. A lot is riding on the Quebec project getting started.
The 10k run was sparked by a huge run in China's commodities imports. I am not expecting that to happen again. However, I do believe that with world growth, now guessed at 3.4% for 2017 and 3.6% for 2018 by the IMF, the BDI should get well into the 2000 - 2400 range. That is a sizable growth from here and spot rates will certainly help DRYS.
The BDI generally rises this time of year (seasonality), but does seem to be advancing back to more normal rates.
That was a weird MM thing. They posted 18 shares trading at $3.40 and then withdrew it to reflect $3.30. The games that get played.
BDI continues to advance: 1433 + 15
Charlie - Unclear at this point, but hope to hear something today. The last word I got was the meeting held last week went well. The message was brief and it just wasn't clear what the status of the project was. More when I know it.
The short answer is yes. Shipping is in a recovery and growth period.
"The pickup in global growth anticipated in the April World Economic Outlook remains on track, with global output projected to grow by 3.5 percent in 2017 and 3.6 percent in 2018."
http://www.imf.org/en/Publications/WEO/Issues/2017/07/07/world-economic-outlook-update-july-2017
Capesize and Panamax fleets are growing at slightly over 1% at the same time demand for shipping is increasing. Demand is catching up with the supply of ships and other factors will begin to kick in that will slow the supply side of the equation. Ship age isn't a factor today. However, low sulfur fuels and ballast water treatment systems are. These regulations will begin to have an effect and ships will either be scrapped or sidelined for upgrades. Either way supply becomes constrained and rates will move up.
Holding NMM.
BDI up +7 to 1418. The last time it was this high was almost 3 years ago this month. The BDI chart has been stair stepping upward since its low in March last year.
Spot rates are higher and DRYS is expecting delivery of its 3rd VLGC this month. 3Q and going forward revenues should be positive for DRYS.
Today is Thanksgiving in Canada
BDI up 1411 +6
BDI up strong again today: 1405 +23 Both the Cape and Panamax spot rates are well into the range where shippers make positive returns.
EH - perhaps. An irrational person might want to destroy their value. On the other hand, they might actually want to start moving the pps higher into a period where they sell. In GE's case and just guessing, let's say DRYS gets back to at least book value. That would add $700 - $800 million to GE's value. I doubt he is planning any short sales in the near future.
EH - If you are referring to the shares GE already owns, I would agree. However, the shares from the backstop are locked up for 6 months:
"All of our shares of Common Stock issued to the Backstop Investor pursuant to the Purchase Agreement will be restricted shares and will bear a restrictive legend. The Purchase Agreement provides that shares of Common Stock issued to the Backstop Investor will be subject to a six (6) month lock-up commencing on the closing of the Rights Offering."
https://www.sec.gov/Archives/edgar/data/1308858/000091957417006563/d7452405a_424b-2.htm
page S8
EH - You might want to read the filing. Sifnos shares are locked up for the next 6 months.
DryShips Inc. Announces Results Of Rights Offering
ATHENS, GREECE--(Marketwired - Oct 4, 2017) - DryShips Inc. (NASDAQ: DRYS) ("DryShips" or the "Company"), a diversified owner of ocean going cargo vessels, today announced the final results of its previously announced rights offering of shares of the Company's common stock, par value $0.01 per share ("Common Stock"), which expired at 5:00 p.m., New York City time, on October 2, 2017. The offering was fully financed and the Company raised $100.0 million of gross proceeds, including a $99.2 million investment by Sierra Investments Inc. ("Sierra"), an entity affiliated with the Company's Chairman and Chief Executive Officer, Mr. George Economou, pursuant to a backstop commitment by Sierra.
Rights holders subscribed for an aggregate of 305,760 shares of Common Stock and the Company raised approximately $0.8 million of gross proceeds therefrom, while 36,057,876 shares of Common Stock will be issued to Sierra. Shares of Common Stock will be delivered to subscribers in the rights offering and Sierra on or about October 4, 2017.
The cash proceeds from the rights offering are expected to be used for general corporate purposes and/or vessel acquisitions and/or to repay amounts outstanding under the Company's unsecured credit facility, as amended, with Sierra (the "Sierra Credit Facility"). Following the closing of the rights offering, the amount outstanding under the Sierra Credit Facility will be approximately $73.8 million and the facility is expected to be refinanced with a new secured loan facility with Sierra.
Additionally, following the closing of the rights offering, the total number of shares of Common Stock outstanding will be 104,274,708 and entities that may be deemed to be affiliated with the Company's Chairman and Chief Executive Officer, Mr. George Economou, will beneficially own approximately 69.5% of the issued and outstanding Common Stock.
The rights offering was made pursuant to a registration statement on Form F-3 that was filed with the U.S. Securities and Exchange Commission and became effective on May 7, 2015. For questions about the rights offering, you may contact Advantage Proxy Inc., the information agent for the rights offering, toll-free at 877-870-8565 or if you are a bank of broker, 206-870-8565.
About DryShips Inc.
The Company is a diversified owner of ocean going cargo vessels that operate worldwide. The Company owns a fleet of (i) 13 Panamax drybulk vessels; (ii) four Newcastlemax drybulk vessels; (iii) five Kamsarmax drybulk vessels; (iv) one Very Large Crude Carrier; (v) two Aframax tankers; (vi) one Suezmax tanker; (vii) four Very Large Gas Carriers, two of which are expected to be delivered in October and December of 2017; and (viii) six offshore support vessels, comprising two platform supply and four oil spill recovery vessels.
DryShips' common stock is listed on the NASDAQ Capital Market where it trades under the symbol "DRYS."
Visit the Company's website at www.dryships.com
Forward-Looking Statement
Matters discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with such safe harbor legislation.
Forward-looking statements reflect the Company's current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include the factors related to the strength of world economies and currencies, general market conditions, including changes in charter rates, utilization of vessels and vessel values, failure of a seller or shipyard to deliver one or more vessels, failure of a buyer to accept delivery of a vessel, the Company's inability to procure acquisition financing, default by one or more charterers of the Company's ships, changes in demand for drybulk or LPG commodities, changes in demand that may affect attitudes of time charterers, scheduled and unscheduled drydockings, changes in the Company's voyage and operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations, changes in the Company's relationships with the lenders under its debt agreements, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, international hostilities and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by DryShips Inc. with the SEC, including the Company's most recently filed Annual Report on Form 20-F. The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made.
Investor Relations / Media:
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. 212-661-7566
E-mail: dryships@capitallink.com
(MORE TO FOLLOW) Dow Jones Newswires
October 04, 2017 08:45 ET (12:45 GMT)
6k out. All rights subscribed to. Total 104 million OS
EH - What are you basing that on?
Warrants are registered and available to any new buyer. The rights offering was made to shareholders as of a specific date and are not transferable.
slmlrd - don't believe I have every seen anything that specific. Just guessing, probably after delivery of a ship they get their fee for managing the purchase of the ship then it shifts to fees for managing the operations .
I suppose that is a problem here. Facts often get confused. :)
Wonder if the 3rd VLGC will be delivered early too? Q4 revenues will be helped by all 3 ships.
D52 - Issuing Warrants? Do you have a link?
Here is another domino falling that will continue moving spot rates higher http://www.hellenicshippingnews.com/dry-bulk-market-chinese-government-to-cancel-domestic-iron-ore-mining-rights-as-it-focuses-on-higher-quality-iron-ore-imports/
WF - "These shares have no voting rights." Huh? Do your Due.
Spartan - GE certainly doesn't care about shareholders beyond getting their money to advance his agenda. Fiduciary responsibility doesn't mean anything to him. With that said, his current agenda may be in alignment with shareholders for a change. With such a large ownership stake it doesn't seem likely he would want to destroy his value in DRYS. He has stated this "phase" of DRYS rebuilding is over - ie hyper dilution and equity sell off. His next phase is apparently to use commercial debt to further build DRYS fleet. Consider that a normal shipping company would have a debt to equity ratio between .50 or .60. DRYS currently has ~.25 -.30 debt/equity so there should be room to add more debt and maintain a strong balance sheet. Moreover, getting GE/Sifnos involvement cut down is probably a good thing.
The biggest risk for DRYS and its shareholders is still GE.
"Shareholders" did approve all of the RS's. Of course, GE set that up to be just him via the 100k votes he gave himself through the preferred shares. He diluted himself along the way and the preferred shares were eventually worthless for voting purposes and he gave a small number of them back to DRYS.
Don't see this happening again since GE will own over 70% of the shares by Monday.
You should consider reading the filings. It is stated clearly what will take place if Sifnos backstops the offering.
Sam - I think relisting is definitely in the cards. My guess is it will require some number of contracts in hand before Brian would want to move forward. With that said though, he has indicated he wants the company relisted. I am taking him at his word on this.
If Sifnos (GE company) backstops the entire offering, they will be swapping $100 million in DRYS debt they hold for 36+ million shares @$2.75 per share.
DRYS will have more shares, but less debt.