Genco Shipping & Trading plans a common stock offering as it looks to finance an $141m deal for four modern bulkers.
The diversified bulker owner announced late Thursday it "commenced a public offering of common stock" with the proceeds from sales pegged for "future vessel acquisitions."
In the follow-on prospectus, Genco said it entered an agreement for the "en-bloc" purchase of four dry bulk vessels for approximately $141m using cash in hand.
The deal includes two 2015-built capesizes and a 2014-built ultramax from "First-tier" Chinese shipyards and 2016-built ultramax from a first-tier Japanese shipyard.
Genco said the two capesizes came from among three offered by the seller.
The seller and names were not immediately available. But VesselsValue shows Zodiac Maritime and Golden Ocean each having at least three capesizes built at Shanghai Waigaoqiao in 2015.
Genco said it may look to lever the purchases through debt financing and "to finance or refinance a portion of potential future vessel acquisitions."
The size of the equity offering, which is being managed by Jefferies and Fearnley Securities, was not announced
The news sent Genco's stock price down just under 5% in after hours trading.
The offering comes as Genco's shares have been buoyed by resurgent demand for dry bulk shipping.
Genco's shares have risen some 37% this year, compared to Star Bulk Carriers' 22% and Golden Ocean's 10% gain.
Chief executive John Wobensmith has been a vocal advocate of bringing the fragmented industry together, saying last year at an investor forum "the industry needs consolidation."
The offering comes after other steps Genco has taken to boost its firepower. The company signaled plans to sell 15 vessels which, along with its $200m cash position, presents "a significant war chest" said Deutsche Bank analyst Amit Mehrotra in an earlier note.
Peers, though, have been quicker off the mark in that regard with Star Bulk Carriers paying $331m for the 15-strong fleet of Songa Bulk earlier this year.
