DryShips Opts for Second VLGC Newbuild

DryShips Inc., owner of ocean going cargo vessels, said it has exercised its second option under a previously announced option agreement to acquire up to four very large gas carriers (VLGCs) currently under construction at Hyundai Heavy Industries Co., Ltd. (HHI) for a purchase price of $83.5 million.

George Economou, DryShips Chairman and Chief Executive Officer, said, “This second investment in the gas carrier segment marks our confidence to the expected positive long-term fundamentals of the gas market and allows us to deploy the company’s available liquidity immediately.”

Approximately 25 percent of the purchase price will be paid on closing, expected within March 2017, with the balance payable in installments until the vessel’s delivery from HHI.

The VLGC will be employed on a fixed rate time charter with five years firm duration to an oil major. The charterer has options to extend the firm employment period by up to three years.

“We are very pleased to have declared our second option to purchase a high specification VLGC with long term employment to an oil major at above market rates,” Economou said.

DryShips said it expects the total gross backlog associated with this time charter to be $54 million, or $92.7 million including the optional periods, and expects to take delivery of the vessel in September 2017.

The transaction was approved by the independent directors of the company based on third party broker valuations.