DryShips Inc. (the “Company”) was founded in 2004 by its current Chief Executive Officer, Mr. George Economou, and was the first dry bulk company to go public in the United States. The Company completed its initial public offering on the Nasdaq Stock Market in January 2005.
During the shipping super cycle, which lasted from approximately 2005 to 2008, the Company’s fleet experienced tremendous growth, expanding to 38 vessels and entering the Ultra-Deep Water drilling segment with the acquisition of Ocean Rig ASA. Ocean Rig ASA was later acquired by Ocean Rig UDW Inc. (“Ocean Rig”) which has been a publicly listed company since October of 2011.
Following the financial crisis, in the period from 2009 to 2014, the Company slowed the rapid growth of its shipping fleet and focused on the growth of Ocean Rig, which expanded from two drilling units to nine drilling units during the period, becoming one of the largest ultra-deepwater drilling contractors worldwide. In addition, the Company diversified its shipping assets by entering the tanker sector and at its peak the Company’s shipping fleet was comprised of 56 vessels. In 2014, the Company raised $350 million in an oversubscribed equity offering of its common shares in which Mr. Economou participated with an investment in the amount of $80 million.
From 2015 to 2016, a period marked by a severe downturn in the drybulk and offshore markets, the Company was supported by Mr. Economou, who through affiliated entities purchased over 30 vessels from the Company, helping it to raise capital and reduce debt. In the fall of 2016, entities affiliated with Mr. Economou bought out the remaining Company’s lenders and extended a new loan to the Company.
Over the past two years, Mr. Economou has further assisted the Company through the difficult market conditions by:
- purchasing 10 tankers from the Company at an aggregate purchase price of $536 million, effectively reducing the associated loans outstanding by $260.5 million;
- purchasing 20 drybulk carriers for a total consideration of $335 million, effectively reducing the associated loans outstanding by $304.3 million; and
- purchasing the Company’s remaining bank debt (approximately $160 million), thereby reducing or eliminating the Company’s obligations under various loan covenants.
At the end of 2016, the Company’s fleet was comprised of 13 bulk carriers with an average age of 13.4 years and six offshore support vessels.
Since the fourth quarter of 2016:
- the Company has tapped the equity capital markets and raised approximately $700 million of fresh capital.
- On February 27, 2017, the Company announced its new dividend policy under which it expects to pay a fixed quarterly dividend of $2.5 million.
- On June 22, 2017, the Company entered into a Senior Secured Credit Facility of up to $150 million with ABN AMRO and KEXIM to partly finance the delivery of its four Very Large Gas Carriers (“VLGCs”). This marked the Company’s first commercial bank loan since 2014.
- Since the beginning of 2017, taking advantage of the historically low asset values, the Company acquired 17 modern ocean-going vessels, ranging from drybulk, tankers and gas carriers, including four VLGC newbuildings with long-term charters with major oil and gas companies and traders.
- By the end of 2017 and after having taken delivery of the previously announced acquisitions, the Company’s fleet will total 36 vessels with an average age of approximately 6.7 years.
- On August 29, 2017, the Company announced the closing of a private placement (the “Private Placement”) of 36,363,636 newly issued common shares (total worth of $100 million or $2.75 per share) to entities affiliated with Mr. Economou.
- On October 2, 2017, the Company completed a rights offering (the “Rights Offering”) of 36,363,636 of common shares to its existing shareholders with a subscription price of $2.75 per share for total consideration of $100 million. The rights offering was backstopped in full (with no backstop fee) by an entity affiliated with Mr. Economou.
- Following the completion of the Private Placement and the Rights Offering, Mr. Economou beneficially owns approximately 69.5% of the Company’s common shares.