Economou backs DryShips issue

George Economou has stumped up $80m to help DryShips raise the funds which will cure its convertible bond headache.

The tycoon has purchased 57,142,857 shares at $1.40 each as the bulker and tanker owner pushed through a shares issue today.

Economou’s move appears to have strengthened his holding in the company and is seen as crucial in insuring the success of the issue.

His contribution is part of a $350m fundraising effort from the Nasdaq-listed company.

In all, DryShips is selling of 250,000,000 shares at the same $1.40 each in an issue that comes hot on the heels of an abandoned bond offering.

Ziad Nakhleh, chief financial officer of DryShips, said: “This is a momentous occasion. The convertible is completely taken out by this.”

The $350m to come from the shares issue, will be added to a $200m facility with ABM AMRO, a $110m contribution from a Nordea ship finance loan and up to $120m from Ocean Rig to more than cover the $700m convertible.

RS Platou Markets and Pareto Securities led the issue, with ABN AMRO Securities and DVB Capital Markets serving as co-managers.

Shares in DryShips traded down after the announcement, falling 26\% to $1.48 per share – giving investors in the equity issue a profit of almost a dime per share right now.

Economou and his management team have repeatedly stated their confidence in meeting the convertible deadline.

Just a couple of weeks ago he told TradeWinds: “We have various options. I don’t want to discuss them. But we have to look at various options to bridge this gap.”

source:tradewindsnews.com