Going Concern?

On Monday, DryShips filed its annual report for last year, which included unqualified audit opinions from Deloitte, Hadjipavlou, Sofianos and Cambanis on the company and Ernst & Young (Norway) on its subsidiary, Ocean Rig. However both opinions assume a “going concern,” despite breaches in financial covenants, questions about its ability to meet its financial needs and negative working capital.

Unlike TBS, mentioned earlier, the company did not obtain its waivers prior to the issuance of the financial statements. The inability to obtain resolution is likely attributable to the multiplicity of lenders as well as the different prospects for the shipping and offshore businesses. Footnote 11 to the financial statements lists 13 current credit facilities. Dryships is the obligor on 12 of which 2 relate to Ocean Rig (share purchase

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