Dryships Launches Mandatory Offer for Ocean Rig
DryShips Inc. has purchased 33,254,576 shares of Ocean Rig ASA, an Oslo Stock Exchange listed offshore drilling services company, at a price of NOK 45 per share. Following these transactions DryShips Inc. owns 49.9% of the shares and votes in Ocean Rig ASA. As advised on December 17, 2007 Mr. George Economou, Chairman and CEO of DryShips Inc., has separately acquired approximately 4.4% of the share capital of Ocean Rig ASA. The total ownership percentage has been calculated based on an issued share capital in Ocean Rig ASA of 170,374,980 shares, as contained in Ocean Rig's last Certificate of Registration.
As a consequence of yesterday's acquisition DryShips Inc. will commence a mandatory tender offer for the remaining outstanding shares in Ocean Rig ASA within the four weeks deadline set by Oslo Stock Exchange rules. Accordingly, a draft offer document will be filed with the Oslo Stock Exchange for its review and approval. The offer period will be four weeks with an expected commencement date in early May and its terms will otherwise be prescribed by the requirements of the Norwegian Securities Trading Act.
DryShips Inc. will use a combination of cash on hand and debt financing which is already in place to acquire the remaining outstanding shares of Ocean Rig ASA. Mr. George Economou, Chairman and CEO of DryShips Inc., commented: "I am very excited by the opportunity of increasing our ownership significantly and the prospect of acquiring Ocean Rig. We believe that Ocean Rig is uniquely positioned to take advantage of the extremely attractive fundamentals of the ultra deep water drilling (UDW) market, especially given the recent developments with the latest impressive oil finds in Brazil as well as other offshore areas around the world.
Ocean Rig's asset and contract portfolio will serve to supplement and diversify DryShips' assets and sources of cash flow. Moreover, Ocean Rig's operational expertise will provide us with the necessary platform to compete in the UDW drilling sector. As previously advised, we expected the Eirik Raude to be employed at a record breaking day rate and the contract concluded with Tullow Oil at the rate of USD 637,000 per day exceeded even our expectations. The Leiv Eiriksson, Ocean Rig's other UDW asset, is one of the very few rigs available worldwide with dynamic positioning (DP) capability in 2009. As such, we also expect this asset to enter into a new employment contract at a significantly higher day rate.
While our belief in the positive fundamentals of the dry bulk sector remains unchanged, we believe our strategic investment in the UDW sector will contribute to shareholder value as the extremely bullish fundamentals of the sector continue to unfold. Going forward we plan to expand our asset portfolio with further acquisitions and explore other strategic alternatives including the possibility of spinning off this business unit to our shareholders."
Manages 14 Offshore Rigs
- Avenue Capital Urges Ocean Rig To Hire Advisers (Oct 17)
- Rig Contractor Ocean RIG Files For Bankruptcy Protection In US (Mar 28)
- Ocean Rig Acquires an Ultra Deepwater Drillship for $65M (Apr 27)
Company: Dryships Inc. more info
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