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08:32 DRYS DryShips faces fresh debt blow - FT (6.63)
FT reports the co is likely to retain the liability for a $650 mln debt accumulated to build an offshore oil-drilling business it now wants to spin off, the company has admitted. The co is also in breach of the conditions on nearly half its $3 bln borrowings and has no guarantee that it will be able to reach agreement with its creditor banks about changing the conditions, it has declared in filings with the SEC. Martin Sommerseth Jaer, an analyst at Arctic Securities, said that the SEC filings underlined the "extreme leverage" in DryShips. "One thing is, of course, the dry bulk side of it," he said. "But most of the liabilities have been within the rig side." The SEC filing outlines Dry Ships' desire to spin off to its shareholders Primelead Shareholders, a subsidiary that owns offshore drilling interests including Ocean Rig, an Oslo-listed company taken over in April last year. If the spin-off were to go ahead, the company would ask its banks to release it from guaranteeing Primelead's remaining debt, it says. But without the lenders' agreement, Dry Ships will retain the liability for the $650 mln outstanding debt without gaining from Primelead's future income. Two banks have also informed DryShips it has breached the conditions of $752 mln of its debt, the filings say.