Monarch exits Scorpio Bulkers with last jab

US investment firm, and combative shareholder, says 'highly dilutive' equity raise behind decision to ditch stake.

Scorpio Bulkers snapshot

Scorpio Bulkers was created in a 2013 initial public offering (IPO) by the Scorpio group, which is controlled by the Lolli-Ghetti family.


Monarch Alternative Capital has sold its entire stake in Scorpio Bulkers, blaming the New York-listed shipowner's latest fund-raising drive.

The asset manager told the US Securities & Exchange Commission (SEC) that it now owns 0% of the bulker owner. It had reported holding 10.4% just two days earlier.

Monarch said the move was partly motivated by a "general lack of confidence" in management at the bulker owner.

And the firm said it made the move in light of Scorpio's announcement yesterday that it had priced what Monarch said was "a highly dilutive public offering" at a significant discount to the company's stock price a day earlier.

Management at Emanuele Lauro and Robert Bugbee-led Scorpio declined to comment.

Michael Weinstock-led Monarch, which is best known as an investor in distressed debt, said it sold its nearly 3 million shares at $3.01 apiece, which implies it received $9.02m.

As TradeWinds has reported, Scorpio issued 21 million shares at $3 each, well below the $3.68 price of the shares at the market's close a day earlier.

Founding family buys in

Some company board members and Scorpio Services Holding, which is controlled by the founding Lolli-Ghetti family, snapped up $15m worth of the shares.

This was not the first time that Monarch has been critical of Scorpio's use of new equity to raise cash, which was cited as a sore spot in a months-long standoff last year. The fight was resolved in December, apparently temporarily, with the addition of a Monarch-nominated board member.



Scorpio Bulkers shoots for $63m from issue

Lolli-Ghetti family to contribute $15m as stock sale prices at $3 per share.

17 Mar 2016