Gross
Built/ rate Redelivery Redelivery
Name Delivery DWT Employment per day Earliest Latest
---- -------- --- ---------- ------- -------- ------
MV Ventura 2006 174,315 TC 50,000* Apr.-14 Jun-14
MV Pompano 2006 174,219 TC 50,000* Mar.-14 May-14
MV Fernandina 2006 174,315 TC 50,000* Apr.-14 Jun-14
MV Morgiana 1988 186,001 TC 67,500** Oct.-12 Dec-12
Newbuilding H1106 Nov-09 177,926 TC 56,000 Oct.-14 Dec-14
Newbuilding H1119 Sep-10 177,926 N/A N/A N/A N/A
Newbuilding H1154 May-09 177,926 N/A N/A N/A N/A
Newbuilding H1155 Jun-09 177,926 N/A N/A N/A N/A
Newbuilding H1129 Jun-09 177,926 N/A N/A N/A N/A
* Index linked until June 30, 2009, thereafter the vessel will be
chartered-out at a gross daily rate of $50,000.
** Staggered at a gross daily rate of $122,500, $95,000, $55,000 $35,000
and $30,000 for years one through five respectively.
DryShips will pay to the Sellers $689.6 million in exchange for the shares
of the SPCs. Such consideration will be in the form of 19,431,840 newly
issued shares of DryShips Inc. common stock. The Company will also assume
$216.3 million of existing debt and $262.0 million in remaining shipyard
installments related to these vessels which will be financed by debt
facilities that are already in place except for $16 million which will be
funded by DryShips. The implied aggregate value of the fleet is estimated
at $1,168 million. Following the issuance of the new shares to the sellers,
the total number of DryShips shares outstanding will be 62,984,840.
Pending the actual transfer of shares of the SPCs, the sellers will
transfer all economic benefits and obligations arising from the ownership
of the vessels to the Company.
George Economou, Chairman and CEO of DryShips Inc., commented:
"This transaction will enable DryShips to further grow its fleet and expand
its market share at a time when our competitors are not only constrained by
the difficult credit environment but do not have the ability to find
quality assets on such a scale from the second hand sale and purchase
market. These vessels are high specification sister vessels and following
this transaction our Company's fleet will be among the most modern in the
industry, thus further enhancing the quality and longevity of our future
earnings. In addition, the acquired fleet has a prompt delivery schedule
and five of the nine vessels come with time charter employment attached
ranging between five and six years.
When we saw the market mature in 2008 we shifted our chartering strategy to
long term period coverage as a result of which 61% of the vessels in the
water are employed on fixed rate contracts with an average remaining term
of 5 years.
The fact that the consideration of this transaction is in the form of newly
issued DryShips shares as opposed to cash is a testament of management's
belief in the intrinsic value of the Company and its future prospects. We
remain confident in the long term fundamentals of the drybulk sector and we
believe that this transaction will strongly reinforce our position as a
leader and consolidator of the industry."
Offshore Drilling (UDW) Segment
Primelead Shareholders Inc, a 100% wholly owned subsidiary of DryShips Inc,
has entered into an agreement to take over the equity interests of a
holding company which owns two advanced capability drillships for use in
ultra deep water drilling (UDW) locations which are controlled by clients
of Cardiff Marine, Inc., including Mr. Economou, Chairman and CEO of
DryShips Inc. The drillships are to be constructed by Samsung Heavy
Industries Co., Ltd. (SHI) and are expected to be delivered from the
shipyard in the fourth quarter of 2010 and the first quarter of 2011. The
drillships are sister vessels to the two drillships ordered by DryShips
earlier in the year at SHI which are expected to be delivered in the third
quarter of 2011.
The consideration payable to the Sellers for these two UDW drillships will
be in the form of newly issued shares of Primelead Shareholders Inc., which
following this transaction will own six UDW units including 2 harsh
environment (HE) semisubmersible rigs presently operational. The number of
shares received by the sellers will be equal to twenty-five percent (25%)
of all the then issued and outstanding shares of Primelead Shareholders
Inc.
George Economou, Chairman and CEO of DryShips Inc., stated that:
"We are entering the offshore drilling segment with the same strategic
vision we viewed the drybulk market back in 2005 when DryShips went public.
We believe we are entering an industry that has very solid prospects for
the next three to five years and we aim to take advantage of this. Our goal
is to create a company that will be a competitive player in the UDW and HE
sectors.
We continue to execute on our previously stated business plan to spin off
Primelead Shareholders Inc. (to be renamed) to its shareholders in the form
of a share dividend. Our plans remain intact and on schedule. We expect to
file the necessary documents with the SEC within the next few weeks and to
complete the spin off either during the 4th quarter of 2008 or the 1st
quarter of 2009 subject to SEC review.
Post spin off, the newly created business entity will be the only pure play
UDW/HE public company in the U.S with one of the most modern UDW fleets in
the world that ranks number four internationally in number of UDW units.
With the experienced management team of Oceanrig ASA acquired earlier this
year and their proven operational track record of obtaining contracts with
most oil majors, DryShips shareholders are in a unique position to capture
the full advantage of the strong need for offshore oil exploration and
production to meet the insatiable demand for energy."
Conference Call and Webcast: Today, Monday, October 6, 2008, at 9:00 a.m.
EDT
DryShips' management team will host a conference call today, Monday,
October 6, 2008, at 9:00 a.m. Eastern Daylight Saving Time to discuss these
acquisitions.
Conference Call details
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329
(from the UK) or +(44) 1452 542 301 (from outside the US). Please quote
"DryShips."
A replay of the conference call will be available until October 13, 2008.
The United States replay number is 1(866) 247 4222; the international
replay number is 0(800) 953-1533; from the UK or (+44) 1452-550 000 and
access code required for the replay is: 2133051#
Slides and audio webcast
There will also be a simultaneous live webcast over the Internet, through
the DryShips Inc. website (www.dryships.com). Participants to the live
webcast should register on the website approximately 10 minutes prior to
the start of the webcast.
The presentation material to be used for the conference call and webcast
will be available on the company's website in the Investor Relations
section under "Presentations."
About DryShips Inc.
DryShips Inc., based in Greece, is an owner and operator of drybulk
carriers that operate worldwide. As of the day of this release, DryShips
owns a fleet of 54 drybulk carriers comprising 7 Capesize, 30 Panamax, 2
Supramax, and 15 newbuilding drybulk vessels with a combined deadweight
tonnage of about 4.7 million tons.
DryShips is also the owner of 6 UDW drilling units including 4 UDW
drillships to be built at Samsung Heavy Industries (SHI), scheduled for
delivery between the fourth quarter of 2010 and the third quarter 2011.
DryShips Inc.'s common stock is listed on NASDAQ Global Market where it
trades under the symbol "DRYS."
Visit our website at www.dryships.com
Forward-Looking Statements
Matters discussed in this release may constitute forward-looking
statements. Forward looking statements reflect our current views with
respect to future events and financial performance and may include
statements concerning plans, objectives, goals, strategies, future events
or performance, and underlying assumptions and other statements, which are
other than statements of historical facts.
The forward-looking statements in this release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management's examination of historical
operating trends, data contained in our records and other data available
from third parties. Although DryShips Inc. believes that these assumptions
were reasonable when made, because these assumptions are inherently subject
to significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond our control, DryShips Inc. cannot
assure you that it will achieve or accomplish these expectations, beliefs
or projections.
Important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include
the strength of world economies and currencies, general market conditions,
including changes in charterhire rates and vessel values, changes in demand
that may affect attitudes of time charterers to scheduled and unscheduled
drydocking, changes in DryShips Inc.'s operating expenses, including bunker
prices, dry-docking and insurance costs, or actions taken by regulatory
authorities, potential liability from pending or future litigation,
domestic and international political conditions, potential disruption of
shipping routes due to accidents and political events or acts by
terrorists. Risks and uncertainties are further described in reports filed
by DryShips Inc. with the US Securities and Exchange Commission.
Contact Information: Contact: Investor Relations/Media Nicolas Bornozis Capital Link, Inc., New York Tel. 212 661 7566 E-mail: dryships@capitallink.com