DRYS Cancels

Yesterday, DryShips announced that it had entered into an agreement to cancel Hull 2089, a Capesize vessel under construction in South Korea. The vessel was contracted for $114 million. Under the terms of the agreements, DryShips will pay a total cancellation penalty of $42.8 million inclusive of its previously paid 20% deposit. The company will end up paying an incremental $20 million and benefits from a reduction of $71.2 million in 2009 capex.

In these days of looking simply at cutting costs, the deal seemed to provide a reasonable trade-off. However, Natasha Boyden of Cantor Fitzgerald looked at

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