Scorpio Spends New-Share Money on 4 (More) Tankers
Last week, Monaco-based oil shipper Scorpio Tankers announced plans to sell 30.7 million shares of common stock, taking advantage of a recent surge in its stock price to raise as much as $230 million in new cash. A few days ago, Scorpio revealed that it intends to spend about $130 million of that cash on four new MR product tankers, to be built for it by South Korea's SPP Shipbuilding. Today, the company unveiled Phase 2 in its grand plan to take over the world of international oil tanking.
Specifically, Scorpio announced it is exercising options to have Hyundai Mipo Dockyard Co., Ltd., build it four "Handymax ice class-1A" tankers for approximately $30 million apiece -- $120 million in all. Delivery of the vessels is scheduled for Q4 2014 and, as part of the deal, Scorpio has taken out options for four more Handymax vessels to be firmed up at a later date.
This brings the company's list of soon-to-be-delivered ships up to 20 tankers, plus 14 fixed-price options on an additional 14 tankers.
The total purchase price of all the vessels announced this week now exceeds the amount of cash Scorpio expects to raise from its share issuance.
The article Scorpio Spends New-Share Money on 4 (More) Tankers originally appeared on Fool.com.Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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