DryShips Seeks Drilling Rig IPO as Early as September
DryShips Inc., a Greek owner of deep-water drilling rigs and drybulk ships, is seeking an initial public offering of its rig segment as early as September, Chief Operating Officer Pankaj Khanna said. The drilling IPO may triple DryShips" shares to about $18 from the current price of below $6, Khanna said in an interview in New York, adding that the company has no plan to sell itself. Speculation that DryShips may be acquired by A. P. Moller-Maersk A/S sent shares up the most in almost four months on March 8.
?At this point, we are working to IPO the company and to find charterers for the drilling rigs,? said Khanna. ?We have no thoughts on other strategic options.?
DryShips expects to find charterers in six months for two of the four new rigs that are scheduled to be delivered in 2011, Khanna said. The company has two existing rigs that are chartered by Petroleo Brasileiro SA and Tullow Oil Plc.
?As a minimum, to go out to do the IPO, we need to have two of the four rigs fixed,? said Khanna, who rang the opening bell at the Nasdaq exchange today to celebrate DryShips" five- year anniversary as a public company. ?And assuming everything falls into place, September is the earliest time we can have the IPO.?
The company is planning to list 20 percent of the shares of the drilling segment and hold the remaining 80 percent. The IPO is expected to add between $8 and $12 a share to DryShips" current share prices, according to Khanna"s estimate.
DryShips, based in Athens, rose 13 cents, or 2.4 percent, to $5.80 as of 11:19 a.m. New York time in Nasdaq composite trading. Shares are little-changed this year.
The current price doesn"t reflecting the value of the drilling rigs because the company has yet to secure charters, Khanna said. Once the charters are secured, shares should rise because the rig segment will bring in earnings before interest, tax and amortization of as much as $640 million, he said.
?The risk is that we don"t have charters for the four drill ships, and we don"t have financing for two of the drill ships,? said Khanna. ?That"s why we are trading around $6.?
DryShips diversified into the oil drilling business through the 2008 purchase of Ocean Rig ASA. Revenue from the two drilling rigs accounted for 40 percent of DryShips" fourth- quarter revenue of $217.9 million.