DryShips cancels vessel purchase to reduce capex

DryShips Inc , a Greek dry bulk carrier whose bankers have said it is in breach of some debt covenants, said it cancelled the purchase of a ship in a bid to reduce its capital expenditure to save cash.

The cancellation will further reduce its 2009 capital expenditure by $46.9 million, and also paves the way for discontinuing an arbitration it had with the seller, DryShips said.

DryShips had earlier agreed to buy the 2005-built Panamax carrier M/V Maple Valley for $61 million from an unrelated third party.

The company said it had agreed to terminate the purchase agreement by paying $8 million as a fee to the seller. The seller will also retain $6.1 million paid as a deposit by DryShips.

The company also said it has entered into a time charter for the M/V Alameda at a gross rate of $21,000 per day for a period of about two years expected to commence during late February or early March 2009.

Shares of DryShips were trading at $8.32 after the bell. They closed down 30 percent at $8.56 Thursday on Nasdaq, a day after the company said it was in breach of certain financial covenants and planned to sell shares worth $500 million.

Source: http://uk.reuters.com