DryShips ( DRYS) led a selloff in the shipping sector Monday after the company announced it had received a notice of going concern from its auditors.
DryShips shares were recently falling 17.4% to $4.84 after the Athens, Greece-based shipping firm said its auditors had sent it a notice of going concern related to the company's efforts to reclassify $1.8 billion in debt as current. The company also said that continued low charter rates would harm financials and the ability to comply with covenants in its loan agreements. Should lenders not agree to waive or modify covenants, the company said continued, lenders could accelerate the payments of some debt, and the company could lose vessels. The rest of the shipping sector also was suffering at midday Monday: Excel Maritime ( EXM) was 15.3% to $4.50. Genco Shipping ( GNK) was down 10.7% to $12.39. Diana Shipping ( DSX) was down 13.1% to $12.47. Eagle Bulk ( EGLE) was down 12.7% to $4.12. Horizon Lines ( HRZ) was down 4.9% to $3.09. Star Bulk ( SBLK) was down 11.3% to $2.18. Teekay Corp. ( TK) was down 8.6% to $14.12. Tidewater ( TDW) was down 4.6% to $36.98. Kirby ( KEX) was down 5.2% to $25.94. Frontline ( FRO) was losing 9.9% to $17.41. Seacor Holdings ( CKH) was down 3.3% to $58.40. Atwood Oceanics ( ATW) was down 6.7% to $16.35.