Scorpio strikes again

Scorpio Tankers has taken a giant stride towards financing its huge newbuilding orderbook after its second successful visit to Wall Street in two months.

New York-listed Scorpio has collected $230m from investors in an initiative headed by RS Platou Markets. 

It is printing 30,672,000 shares worth $7.50 each a week after chalking up a couple of new eco MR tankers at Hyundai Mipo.

In a statement Scorpio says the fresh cash will be used for vessel acquisitions, without offering further guidance.

Scorpio, which has been a chief cheerleader from eco newbuildings, has raised the funds only days after a profit warning which was dismissed without fear by analysts.

Its order last week meant around 80% of the capital raised in its $132m share sale in December had been set to work.

It presently has 12 newbuildings on its balance sheet alongside options for another 12.

Plenty of options

Scorpio now has the punch to take out the options and add even more eco ships if this latest capital injection is allied with debt financing.

"We believe Scorpio's large scale equity raise is a signal that the company is likely to exercise some of those options relatively soon and add to its already significant orderbook of 12 MR product tankers to be delivered over the next 24 months," said Doug Mavrinac of Jefferies.

He added: "With recent capital raises and newbuilding program announcements, Scorpio is evolving into one of the preeminent refined products tanker companies in the world and one of the most significant publicly traded shipping companies in the US with 100% spot exposure to one of the most attractive shipping sectors."

Jon Chappell of Evercore Partners said: "After this most recent raise, we now forecast that STNG can meet its capital commitments without the addition of another credit facility, which would compress its net debt-to-capital ratio to only 11% after it takes delivery of all 13 newbuilds.

"We would be naïve to think that STNG will not add new credit lines to enhance its financing firepower, though, especially as we expect banks to be even more willing to lend to a counterparty that has shown a strong track record of complementing debt with equity.

"All told, we expect STNG to begin exercising some of its 12 existing options as a firm use for the recent proceeds and we believe a likely forthcoming new credit facility could not only enable it to exercise all 12 options, but also to place new orders for longer-dated delivery (2015)."

RS Platou Markets acted as sole manager in the offering, with Clarkson Capital Markets, DNB Markets and Evercore Group the placement agents.

It is the first time Platou has led a US capital markets offering alone, having won plaudits from Scorpio for its role in the December issue.