Specifically, DryShips CEO George Economou is shifting 17 vessels, comprised of 13 Capesize and 4 Panamax bulk carriers, worth an aggregate price of about USD377 million, to his private company The remaining 20 Panamaxes and 2 Supramaxes will be classified as ‘held for sale’. (This includes their existing employment agreements and the assumption of USD236.7 million of debt as of September 10, 2015, associated with some of the vessels.) The company previously sold its 10 tankers to Economou for USD536 million. As a result, total impairments in the first 3 quarters of 2015 will be at least USD2.3 billion. Once these are sold, there would be no remaining fleet and only their 40.4% stake in Ocean Rig UDW, the offshore driller.
ORIG is a relative newcomer to offshore, providing oilfield services for offshore oil and gas exploration, development and production drilling, and is based in Nicosia, Cyprus Until recently, they were a subsidiary of DryShips, Inc. On July 30, ORIG announced that it had exchanged the remaining outstanding balance of USD80 million borrowed by Dryships for 17,777,778 shares of ORIG owned by DRYS, or USD4.50 a share.
With Mr. Economou as the owner of 120 Million shares of DrySHips, is certainly is not in his interest to run this ship aground.He has also talked of forming a fund to focus on offshore drilling, which means this must be where he truly believes the money is. He also owns lots of ORIG stock, as well. Also, please note that Ocean Rig has deferred delivery of a third drillship. More specifically, Samsung Heavy Industries (SHI) said in a Korea Exchange filing that an “Oceania-based customer” had asked to delay delivery of a drillship from December 2015 to June 2017. IHS Maritime’s Sea-web data show the vessel, which was ordered in September 2013, is likely to be Ocean Rig Santorini, originally contracted for KRW610.3 billion (USD515.3 million).
All in all, these are major moves, as can go without saying. Mr. Economou is no dummy. He seems to feel strongly that this a buyers market for oil related business opportunities, and that ORIG is his best foot in the door since he already has a strong partnership there. He and his board must also be thinking of the shareholders, (including themselves) in my opinion. It will be interesting to watch a things unfold, for sure.