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DryShips Inc. Reports Net Loss of $12.7 Million for Second Quarter

DryShips Inc., a diversified owner and operator of ocean going cargo vessels, and through the acquisition of Heidmar Inc. (“Heidmar”), a global tanker pool operator, announced its unaudited financial and operating results for the quarter ended June 30, 2019.

Second Quarter 2019 Financial Highlights

For the second quarter of 2019, the Company reported net loss of $12.7 million, or $0.15 basic and diluted losses per share.
Included in the second quarter of 2019 results are the following:
Vessel dry-docking costs of $5.7 million, or $0.07 per share
Vessel impairments of $1.5 million, or $0.02 per share
Excluding the above, the Company’s net results would have amounted to a net loss of $5.5 million, or $0.06 per share.

The Company reported Adjusted EBITDA of $6.4 million for the second quarter of 2019. ([1])
Other Developments

Future Proofing of the Company’s fleet – Update
Further to the Company’s plan to future proof its fleet, as of September 17, 2019, we have completed the dry-docking, installation of ballast water treatment systems (“BWTS”) and scrubbers on 7 vessels, incurring approximately $26.1 million of total costs and 300 off-hire days. For the balance of 2019 and the full year 2020, we expect to continue to execute our plan to upgrade additional vessels and we expect to incur approximately 843 off-hire days for a total estimated cost of $65.8 million.

In connection with the installation of scrubbers on our vessels we have entered into agreements, directly or indirectly, with internationally recognized financial institutions and/or export credit agencies to borrow up to $36.4 million to partly finance such installations. The loans have not yet been drawn and they are guaranteed by entities that may be deemed to be affiliated with our Chairman and CEO, Mr. George Economou.

Pending Merger with SPII
As previously announced, on August 18, 2019 the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, SPII Holdings Inc. (“SPII”), a company that may be deemed to be beneficially owned by the Company’s Chairman and Chief Executive Officer, Mr. George Economou, and Sileo Acquisitions Inc., (“Merger Sub”) a wholly owned subsidiary of SPII. Pursuant to the Merger Agreement Merger Sub will be merged with and into the Company, with the Company continuing as the surviving corporation after the merger and a wholly owned subsidiary of SPII (the “Merger”). Pursuant to the Merger Agreement, at the effective time of the Merger, each share of the Company Common Stock that is issued and outstanding immediately prior to the effective time (other than shares of Company Common Stock held by SPII or any subsidiary of either SPII or the Company) will be automatically converted into the right to receive the merger consideration of $5.25 per share in cash, without interest and less any required withholding taxes. The Company has called a special meeting of its shareholders (the “Special Meeting”) to be held on October 9, 2019, at 4 p.m., local time, at 80 Kifissias Avenue, GR 151 25, Marousi, Athens, Greece. At the Special Meeting, shareholders will be asked to consider and vote on a proposal to authorize and approve the Merger Agreement. Only shareholders of record as of the close of business on August 30, 2019, which has been fixed as the record date for the Special Meeting, will be entitled to vote at the Special Meeting. The merger is also subject to the satisfaction or waiver of other customary closing conditions but not to any financing condition. The merger is expected to close in the fourth quarter of 2019. Refer to the Transaction Statement on Schedule 13E-3 and the proxy statement, dated September 9, 2019, attached thereto, as filed by the Company with the U.S. Securities and Exchange Commission on September 9, 2019 for additional information on the Merger.

Full Report [PDF]

Source: DryShips Inc.

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