DryShips cancels purchase of 4 carriers

DryShips cancels purchase of 4 carriers from companies controlled by its own CEO
ATHENS (AP) -- DryShips Inc. said Wednesday it had canceled the purchase of four dry bulk carriers from companies controlled by its own CEO, saying it failed to get bank financing for the $400 million deal.

DryShips said Chairman and Chief Executive George Economou's companies would keep $55 million in deposits.

And DryShips said it paid the companies controlled by Economou an additional $105 million for cancellation of the sale and an exclusive option to buy the ships in a block deal for $160 million. The option expires Dec. 31.
Without financing, the original $400 million purchase would have been a major outflow of cash, and DryShips said the audit committee of its board decided it would be unwise given the significant deterioration in the dry bulk shipping market since the deal was announced.

The Greek company had announced in July that it would buy four Panamax carriers that were new or under construction in China.

DryShips also announced the collapse of the previously announced sale of a 1994 Panamax carrier for $55.5 million, saying the buyer decided not to complete the purchase under agreed terms. DryShips said it plans to pursue legal remedies.
DryShips operates 38 drybulk carriers.

The company's U.S.-traded shares rose $1.68, or 17.8 percent, to $11.13 in morning trading.

Source: http://biz.yahoo.com/ap/081210/dryships_cancels_carriers.html?.v=1