Bloomberg News

DryShips Sells Panamax Vessels for Double Published Value

February 24, 2012

DryShips Inc. (DRYS), the most frequently traded shipping stock in the U.S., sold two dry-bulk vessels for $80.5 million, almost double their published value.

The Panamax ships Avoca and Padre, both built in 2004, are worth $21.6 million and $19.9 million respectively, according to VesselsValue.com, an online valuation service owned by London- based shipbroker Seasure Shipping Ltd.

The higher selling prices partly reflect long-term charters that the vessels have in place, Ziad Nakhleh, DryShips chief financial officer, said by phone from Athens. The company reported the sales yesterday.

“It was a sale between a willing buyer and a willing seller,” Nakhleh said, declining to name the purchaser, or the company that currently charters the ships. “The steel value is just one aspect of the equation.”

The Avoca was chartered to Cosco Qingdao, a subsidary of China Cosco Holdings Ltd., according to a DryShips Securities & Exchange Commission filing in April. Dryships ended a dispute with the Chinese company over unpaid hire for three vessels in August, the company said at the time.

The Avoca has a long-term hire agreement at a rate of $45,000 a day in place until Dec. 2013, and the Padre is chartered until Dec. 2012 at $46,500 daily, according to a DryShips filing in July. Those rates are almost seven times the current hire cost for Panamax vessels, according to the Baltic Exchange. Average rents are $6,705 daily, data from the London- based exchange show.

“You can say we were lucky,” George Economou, DryShips president, said about the sale price in a conference call yesterday.


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