DRYSHIPS founder and chief executive George Economou will lift his stake in the Nasdaq-listed company to almost 70% after backstopping a $100m rights issue that other stockholders steered clear of.
The offering, which expired after market closing in New York on Tuesday, raised less than $1m from outside investors, triggering an investment of $99.2m from Sierra Investments, one of Mr Economou’s private vehicles.
Mr Economou and affiliates had agreed not to exercise any rights to shares in the rights offering, other than through the backstop commitment.
DryShips has said that proceeds may be used for vessel acquisitions or repaying amounts under its credit facility with Sierra.
Following the offering, the amount outstanding under the unsecured Sierra facility is calculated to be about $73.8m and this is expected to be refinanced with a new secured loan from Sierra, the company said.
Sierra’s new investment in DryShips brings the total number of common shares controlled by Mr Economou to almost 104.3m, or 69.5% of the company.
The Greek shipowner has turned around the company in bewildering fashion over the past 12 months, expanding and diversifying the fleet to 22 bulkers, four tankers and four very large gas carriers.
Last month, DryShips took delivery of its second VLGC, which has already begun a five-year time charter with Shell that includes an optional three-year charter extension period.
The DryShips share price had mostly traded below the $2.75 per share offering price until a last-minute rally saw the stock close on Monday at $2.76 per share, one cent above the offering price.
In early trading on Wednesday, investors seemed to take the news well as the stock surged several points to well over $3 per share.