NYSE-listed Scorpio Tankers is deploying cash raised in a recent share offering to purchase four LR2 product tanker newbuilding resales for USD60 million each.
The newbuildings are being constructed at Sundong Shipbuilding and Marine Engineering and Daehan Shipbuilding. They are due for delivery between June and August. The sellers were two unrelated third parties, the company confirmed.
On 30 April Emanuele Lauro-led Scorpio Tankers priced a public offering of 15 million shares, which will raise gross proceeds of USD139.5 million, or USD160.4 million if the underwriter option is fully exercised.
Evercore ISI analyst Jon Chappell estimated that the company will use net proceeds from the offering to cover half the aggregate USD240 million cost of the four LR2s and use remaining capacity under its credit facilities to cover the remainder of the purchase price.
“We had expected Scorpio Tankers to use the proceeds from the recent equity offering to acquire five to six LR2 newbuildings,” Chappell said. By purchasing four, the company “retains the financial wherewithal to pick up similar tonnage promptly if it becomes available without issuing any more equity, which would likely be accretive to forecasts at current rate assumptions”, Chappell said.
Following the recent delivery of three newbuildings and purchase of four newbuilding resales, Scorpio Tankers owns 70 product tankers, charters in 21, and has 12 remaining for delivery.