DryShips shares sink on loan defaults

Shares of Greek shipping company DryShips plummeted more than 40% early Tuesday on concerns that cargo firm would go out of business.

Athens-based DryShips had "substantial doubt about the Company's ability to continue as a going concern," it said in a filing with the Securities and Exchange Commission.

The company noted that it had defaulted on three loan payments, which amount to $213.7 million through March 2017.  The payments due of $213,667 exceed DryShips' current capital of $146,340. DryShips had $280 million in total liabilities as of March 31, 2016, according to the filing.

Shares in DryShips (DRYS) closed down 45% to $1.29 Tuesday.

The shipper's vessels deliver cargo such as coal, iron ore and grain globally. Last month, DryShips reported first-quarter net income of $55.4 million, after a loss in the quarter a year ago.

"Given the prolonged market downturn in the drybulk segment and the continued depressed outlook on freight rates and vessels' market values, cash expected to be generated from operations or proceeds from the sale of vessels, assuming that current market charter hire rates would prevail in the twelve-month period ending March 31, 2017, will not be sufficient to cover the Company's working capital deficit," the company said in the filing. "These conditions and events raise substantial doubt about the Company's ability to continue as a going concern, for a reasonable period of time."

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