TaxiCaT - The F1 filing didn't provide any details on when the spinoff would occur or how many shares would be distributed and the ratio. The spinoff will represent 49% of the DGAS value though with DRYS retaining 51% ownership. Because of DRYS ownership value, I expect they will continue to combine DGAS in DRYS financials going forward.
Here is another thought: DRYS is buying back what may amount to nearly half of the float. GE's stake in DRYS will increase to at least 80%.That means the new DGAS will have about 10% ownership by everyone other than GE.Let's say DGAS is issued with 40 million total common. DRYS will retain 20.4 million. Of the remaining 19.6 million, GE will control 15.6+ million leaving roughly 4 million shares for everyone else.
Based on the filing, the book value for DGAS seems to be around $4.30 per share if 40 million shares are issued. The unit lost money last year, but I believe that was primarily due to the financing activities for the new ships and timing of when they were employed under the charters. That should change dramatically this year with all 4 ships producing revenue.
The next thing to look at is the ratio that will be used. How many DGAS shares will be distributed for each DRYS. Again, if 40 million shares are issued my guess is 1 DGAS for every 5 DRYS. so the net result would be to shift about $0.86/DRYS share to DGAS ($4.30/5).
DRYS market valuation would be $2.58/share based on the close of $3.44 yesterday ($3.44 - $0.86). 32 remaing ships with hardly any debt on the books? This seems to be a ridiculous valuation to me.
