Times Square stunner

George Economou’s DryShips has reactivated a $200m fundraising programme that was tossed on ice less than four weeks ago.
Festivities in Times Square, the home of Nasdaq and the annual New Year’s Eve ball drop, were already underway when DRYS released the announcement.

Festivities in Times Square, the home of Nasdaq and the annual New Year’s Eve ball drop, were already underway when DRYS released the announcement.

Just hours before the ball drop in Times Square the Nasdaq-listed bulker and tanker owner unveiled plans to resume the periodic sale of shares by way of a previously announced at-the-market (ATM) offering.

In a statement released an hour before the end of the US business day Tuesday the Athens-based operator noted it has already pocketed around $24.1m in proceeds from the sale of nearly 7 million shares to date.

The total implies its agent, an affiliate of Manhattan-based investment bank Evercore Partners, offloaded stock for approximately $3.50 a piece on average, which is well below the $4.70 premium seen at today’s close.

Shares of DryShips, which have experienced 52-week low of $1.53 and high of $5.00 over the same period of time, plummeted 6.17% to $4.41 in afterhours trading as investors digested a development that likely reignited fears about dilution.

While the rationale behind today’s decision isn’t clear the move likely caught many off guard since the company shelved the fundraiser earlier this month even though it warned shareholders that it reserved the right to reactivate the ATM or pull the plug altogether at anytime.

DryShips first announced plans to enlist a sales agent to offload common shares on its behalf back in October under a broader crusade to cure debilitating financial maladies and stabilise its overall health.

“Dry-bulk shipping rates and ship values have increased recently and we believe this trend will continue particularly in the larger asset classes,” Economou, the company’s chief executive, told investors at the time.

“Given the improved market backdrop, we believe this is an opportune time to flexibly access the equity capital markets to reduce some or all of our funding needs through 2014 that we currently estimate at $150m.”

More recently the Greek shipping magnate said DryShips would likely need to raise $130m in new equity, which was well below the estimate issued in the first and second quarters of 2013.  Following today's announcement, however, some industry observers believe the bar may have been raised.

DryShips
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