DryShips (DRYS) Annual Report Contains "Going Concern" Statement
DryShips Inc. (NASDAQ: DRYS) filed its Annual Report on Form 20-F for the year ended 2008. The audit opinions include an explanatory "going concern" paragraph which, in the case of the Company, states:
"The accompanying consolidated financial statements for the year ended December 31, 2008, have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company's inability to comply with financial covenants under its current loan agreements as of December 31, 2008, difficulties in meeting its financing needs, its negative working capital position, and other matters discussed in Note 3 raise substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty."
George Economou, Chairman and Chief Executive of DryShips, commented: "As discussed during our latest conference call, the going concern explanatory paragraph is the result of the previously announced reclassification of $1.8 billion of long-term debt as current. With the proactive approach already taken to reduce $2 billion in capital expenditures, the confidence of our three main lenders with whom we are in close ongoing discussions, secured revenues of over $2.4 billion in the next three years from drybulk time charters and offshore drilling contracts and the recent equity infusion of $380 million through the ATM Equity Offering(SM) share issuance program, we have repositioned DryShips for the long-term and remain ahead of the curve."
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