- The Washington Times - Monday, March 30, 2009

NEW YORK (AP) - Shares of DryShips Inc. fell Monday after the Greek shipping company said its auditors expressed concern about its ability to stay in business as the drybulk carrier market continues a slump that began in October.

Shares of DryShips fell 92 cents, or 15.7 percent, to $4.94 in afternoon trading. They have ranged from $2.72 to $116.43 in the past year.

DryShips disclosed the auditor’s findings in a press release and a filing with the Securities and Exchange Commission.

The company reclassified $1.8 billion in borrowing as current debt because of breaches of its loan terms. The company is negotiating with lenders to avoid foreclosure on its ships. DryShips said it would be very difficult to refinance its debt.

Chairman and Chief Executive George Economou said the company had moved to cut spending by $2 billion, expected $2.4 billion in charter revenues over the next three years and raised $380 million from a recent stock offering, putting it “ahead of the curve.”

Last week, the company reported that it lost $1.02 billion in the fourth quarter due to a write-down of its acquisition of Ocean Rig ASA and other items. It posted a full-year loss of $361.3 million.

The company said it has agreed to a covenant waiver and changes relating to an $800 million credit facility with Nordea Bank, and has a preliminary agreement for waivers on $166 million in loans from Piraeus Bank.

The company said it is also in breach of covenants related to $673.4 million in borrowing from HSH Nordbank, and with other loan agreements.

The company announced in January that it was in violation of some of its debt terms and planned to sell shares.

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