DryShips in VTL boost

DryShips has seen its fleetwide value-to-loan (VTL) ratio surge to 171% from 105% in December 2012, the company’s finance chief said.

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The ratio is a key financial measure used in shipping loans, which typically require that the value of financed vessels does not fall within 125% to 140% of their debt levels.

And while New York-listed DryShips portrayed the VTL rise as a sign of improved loan compliance by the company, chief financial officer Ziad Nakhleh said Wall Street’s focus on shipowners’ covenant breaches is “overdone”.

“Banks are primarily concerned with non-repayment of principal and interest. Quarter after quarter, we have shown that lenders are supportive of DryShips as they understand that we only have a few remaining technical breaches,” he told analysts during the company’s second quarter earnings briefing.

He said Athens-based DryShips secured additional covenant waivers during the second quarter.

As TradeWinds reported yesterday, DryShips shrank its second-quarter loss to $5.6m, from $18.2m a year earlier.

Earnings before interest, taxes, depreciation and amortisation soared to $221m from $112m in the second quarter of 2013.

The company’s loss per share amounted to $0.01, which was lower than the average $0.05 prediction by analysts.

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