After successfully raising US$ 500 mio by selling shares over several months at market levels, DryShips is now planning to sell up to US$ 475 mio shares in its second ATM equity offering of 2009. As long as investors continue to purchase the shares at ever higher values above NAV, the more accretive it is for previous shareholders as it aids net asset value.
DRYS management is reserving the widest range of options for the use of the proceeds: to opportunistically acquire additional dry-bulk vessels in the current market environment, and for working capital, existing capital expenditures, repayment of indebtedness, general corporate purposes and, as needed, to continue to enhance our liquidity and to assist in complying with our loan covenants.
The company remains overleveraged. Whilst there has been some improvement in dry cargo rates, the Panamax-size units, which are the core of the fleet, are probably the hardest hit sector in this market. Some forecasters feel that supply-side pressure is likely to cap the Baltic Dry Index in the next two years. In addition, DRYS has taken a sizeable impairment charge on its oil rig acquisition and has more drill rigs on order.
Continued investor enthusiasm to purchase additional shares of this company may prove that positive expectations can be a self-fulfilling means of recovery for this company. The expectations are largely based on steel producers hiking output ahead of the Chinese government's stimulus measures, and fixing iron ore from abroad to meet their anticipated needs.
DRYS management is reserving the widest range of options for the use of the proceeds: to opportunistically acquire additional dry-bulk vessels in the current market environment, and for working capital, existing capital expenditures, repayment of indebtedness, general corporate purposes and, as needed, to continue to enhance our liquidity and to assist in complying with our loan covenants.
The company remains overleveraged. Whilst there has been some improvement in dry cargo rates, the Panamax-size units, which are the core of the fleet, are probably the hardest hit sector in this market. Some forecasters feel that supply-side pressure is likely to cap the Baltic Dry Index in the next two years. In addition, DRYS has taken a sizeable impairment charge on its oil rig acquisition and has more drill rigs on order.
Continued investor enthusiasm to purchase additional shares of this company may prove that positive expectations can be a self-fulfilling means of recovery for this company. The expectations are largely based on steel producers hiking output ahead of the Chinese government's stimulus measures, and fixing iron ore from abroad to meet their anticipated needs.
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