http://seekingalpha.com/article/4033700-dryships-part-deux
Summary
DryShips' CEO switches from being the largest shareholder to being the largest creditor.
An obscure company has agreed to underwrite up to $300 million in new shares.
Legacy shareholders have effectively been wiped out.
Over the course of the past five weeks, we have witnessed DryShips (NASDAQ RYS) going from a company where George Economou was its largest shareholder to one where he is the largest, and soon to be sole, creditor.
Mr. Economou may now wear the hat of an alternative lender, but he remains the chief executive of DryShips, while related entities affiliated with him continue providing management services, albeit at a slightly reduced per diem fee.
Given previous shareholders (including Mr. Economou) have effectively been wiped out by the issuance of 32.7 million new shares through Kalani Investment Holdings, an unaffiliated and obscure British Virgin Islands investment vehicle, one has to wonder if the sequel will have a better fate than the original.
Of course, the bigger question will be if it will materially be of consequence to anybody whose name is not George Economou. Public shareholders, after all, have seen their shares lose 98% in value in 2016 alone, from reverse-split adjusted $255 on December 31, 2015, to $4 on Tuesday December 27, 2016.
To summarize the recent events, Kalani closed on a $100 million private placement in DryShips shares on November 22, 2016, and on December 23, 2016, it agreed to place an additional $200 million over the next two years. The timing and size of such purchases will be at the sole discretion of DryShips.
Very little has been officially disclosed about Kalani except that it is considered an "underwriter" according to US federal securities laws, and that it may from time to time resell all or part of its shares through public or private transactions.
The agreement for the second $200 million placement is, in effect, a stand-by "equity line". Kalani, or whoever the ultimate buyer might be, will acquire the new shares at a substantial discount to then prevailing market prices.
Immediately following the $100 million placement, DryShips had 33.8 million shares outstanding, of which 32.7 million, or 96.7% of total shares outstanding, were issued to Kalani, mostly through conversion of preferred shares and warrants.
The absence of a beneficial ownership filing by Kalani, triggered when a shareholder surpasses a 5% ownership threshold, indicates that these shares have subsequently been sold to third-party investors. It goes without saying that the equity dilution will continue unabated as DryShips starts exercising its $200 million "put option".
Mr. Economou, on the other hand, has been busy buying out any remaining creditors. By December 14, 2016, he had consolidated $154.5 million of debt outstanding. As of the same date, only $16.5 million of debt remained in the hands of third-party commercial lenders.
The entrepreneurial shipowner has since swiftly refinanced the debt under his control with a new $200 million revolving credit facility. What stands out in the new facility is a 30% kickback to Mr. Economou for any realized asset value increases.
He certainly sounded jubilant when he commented in a press release that "we are now in a position to commence the process of re-building the company's fleet and earnings capacity and pursuing investments in various shipping segments as they arise. We are already evaluating a number of opportunities that we hope will materialize in the very near future". DryShips today owns a fleet of 13 Panamax dry bulk carriers and 6 offshore supply vessels.
Anthony Kandylidis, president and chief financial officer of DryShips and nephew of the celebrity shipowner, sounded equally exuberant a few days ago when he vowed to "make DryShips great again".
The two executives certainly have their work cut out for them. |
发表于 2016-12-16 11:16
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发表于 2016-12-16 15:50
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