UPDATE 1-DryShips cancels vessel buy, further cuts capex
* Cancels deal to buy capesize newbuilding * To pay penalty of $42.8 mln
* Says move further cuts '09 capex by $71.2 mln
June 3 (Reuters) - Greek shipping company DryShips Inc (DRYS.O) said it agreed to cancel the acquisition of a capesize vessel, a move that would further reduce its 2009 capital expenditures by $71.2 million.
On May 21, the company said it cancelled $2 billion of capex so far in 2009.
An abrupt end to the recent boom for bulk shippers has left many laden with debt for ships they bought at the top of the market. DryShips has cancelled a slew of newbuilding contracts to reduce capital spending and save cash.
The company had earlier said it would buy the capesize newbuilding, currently under construction in South Korea, for a contract price of $114 million.
DryShips will pay a cancellation penalty of $42.8 million, including the initial deposit of 20 percent, the company said in a statement.
The company, which has been battling a debt overload, received a going concern notice from its auditors in March, as it reclassified $1.8 billion of long-term debt as current. [ID:nBNG31471]
DryShips has so far raised about $1 billion of equity in two at-the-market stock offerings since January, which saw its share count shoot up from 43 million to about 258 million. [ID:nBNG428976]
Shares of the company closed at $7.42 Wednesday on Nasdaq. They are off about 92 percent from their June 2008 high. (Reporting by Adveith Nair in Bangalore; Editing by Vinu Pilakkott)
