George Economou’s DryShips has entered into a “zero cost” option agreement with TMS Cardiff Gas, also controlled by Economou, for the purchase of up to four VLGCs.
The LPG carriers are currently under construction at Hyundai Heavy Industries in Korea, and DryShips says that each are set to be employed on long term charters to major oil companies and traders.
DryShips have three months to exercise the four separate options to purchase each of the vessels at $83.5 million each. The deal has been approved by the independent directors of the company based on broker valuations.
It intends to finance any acquisition of the vessels by using cash on hand, its undrawn liquidity under the Sifnos revolver closed this week and proceeds from its previously announced issuer managed equity transaction with Kalani Investments.
“We are very pleased to have concluded a deal that allows us great flexibility in immediately deploying our available liquidity. We believe in the long-term prospects of the gas carrier market. Having the option to acquire a fleet of four sister ships of very high specifications, ready for delivery in the near term and chartered to major industry players, provides us with a unique opportunity to enter this new segment in a solid footing that can be a stepping stone for further expansion . If the Company elects to exercise any of its options, each acquisition will be highly accretive to the Company’s earnings and will provide visible and stable cash flow at above market rates,” Economou said.
The vessels would be managed by TMS Cardiff Gas.