Americas News
Scorpio Bulkers Faces a Tough 2015
U.S-based ship operator Scorpio Bulkers Inc. is facing a difficult 2015 following an 80 percent plunge in share price over the last year along with a lowered forecast issued by Deutsche Bank, ShippingWatch reports.
"Scorpio Bulkers in our view has been the stock-of-choice for U.S. investors to invest in the dry bulk sector," said Amit Mehrotra, a shipping analyst for Deutsche Bank.
"This has led to significant underperformance as hope of a rate recovery gives way to the realities of the market."
Dry bulk markets have so far suffered from overcapacity and an over-dependence on imports to China and India, according to Mehrotra, who added that Scorpio's current unfunded acquisition program had also made things difficult for the company.
Scorpio announced earlier this week that it would be selling off four Capesize newbuilds in an attempt to shed around $120 million of financing need, though the sales will come with a loss of about $41 million, according to the company.
"If we are wrong and rates significantly and sustainably improve, then Scorpio Bulkers has the most upside given its spot exposure," Mehrotra said.
Scorpio's bulker business, a sister company of Scorpio Tankers, launched its $151 million initial public offering in December last year.
