Scorpio in stock swap

Scorpio Tankers has bought back a chunk of its own stock using some of its stake in Dorian LPG as currency.
Emanuele Lauro, chief executive of Scorpio Tankers.

Emanuele Lauro, chief executive of Scorpio Tankers.

New York-listed Scorpio will record a gain of $11m on the deal, it told investors today.

In a statement the owner explained it purchased 7.50 million  of its own shares, which have a street value of $66.5m today, using 3.42 million Dorian shares.

Scorpio does not name the other investor in the privately negotiated deal.

According to the shipowner’s annual report issue in April, Wellington Management was its largest shareholder with a 7.1% stake followed by Galahad Securities, York Capital and Kensico Capital Management, which was one of the largest investors in Dorian ahead of its promotion to the New York Stock Exchange.

TradeWinds reported in May Scorpio had received clearance to reduce its Dorian holding after the IPO.

We have previously reported that its management and Dorian had disagreed on strategic matters including a takeover approach for the VLGC owner from Avance Gas.

Scorpio is left with 9.4m Dorian shares after today’s deal.

The swapped stock is not the only batch of Scorpio paper the tanker giant has secured.

It tells investors it has also repurchased 2.76 million shares at an average of $8.89 apiece as part of a $100m share buyback programme. It now has $75.3m remaining on the scheme, the statement said.

Scorpio president Robert Bugbee has repeatedly stressed he feels the company is being undervalued by investors.

He has backed up the words with actions, building his own stake in the company.