June 6 (Reuters) – Dry bulk shipper DryShips Inc raised “substantial doubt” about its ability to stay in business after it defaulted on three bank facilities, hit by a prolonged downturn in commodity prices and low charter rates.
The company’s shares fell as much as 26 percent to $1.75 in extended trading on Monday.
DryShips, which had total liabilities of $280 million as of March 31, said in a regulatory filing that it was in breach of financial covenants and has elected to suspend principal repayments and interest payments for the remaining bank facilities. (http://1.usa.gov/1tcW16D)
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Shippers which transport commodities such as coal, iron ore and grain have been hurt by tepid demand, especially in China, and a surplus of vessels for hire.
The Baltic Exchange’s main Baltic Dry index has dropped 22 percent to $610 since the beginning of 2015. It fell as low as $290 this year.
The company had reported a near 98 pct fall in revenue for the quarter ended March 31 as time charter equivalent, the average daily revenue performance of a vessel on a per voyage basis fell more than 99 percent.
Up to Monday’s close, DryShips’ stock had fallen about 88 percent this year.
