DryShips agrees covenant waiver

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George Economou’s (pictured) global bulk shipping and offshore contract drilling oil services company DryShips has reached preliminary agreement with Nordea Bank Finland to obtain a covenant waiver in connection with the $800 million Primelead facility, which was used to partially finance the acquisition of Ocean Rig ASA. As of today, the outstanding loan amount under the facility is $650 m.

In accordance with the main terms of the waiver DryShips will pay a restructuring fee of 0.15% on the outstanding loan amount under the facility plus an amount equal to 1% per annum on the loan outstanding for the period from January 9, 2009 until the effective date of the waiver agreement. Also $75.0 m of principal repayment due February 2009 will be postponed until May 2009. The margin on the facility will increase by 1% to 3.125% per annum and regular principal payments will resume as of August 2009.

In addition, among other things, lender consent will be required for the acquisition of DrillShip Hulls 1837 and 1838, for new cash capital expenditures or commitments and for new acquisitions for cash until the loan has been repaid to below $375 m. The waiver agreement Effective Date will not exceed August 12, 2009, at which time the company expects to be in compliance with the restructured loan covenants.

The agreement is preliminary and is subject to formal approvals by the Company and the syndicate banks (Nordea Bank Finland Plc, DnB NOR Bank ASA and HSH Nordbank AG).