Scorpio to Raise $131 Million for Possible ECO Ship Orders

by Ship & Bunker News Team
Thursday December 6, 2012

Scorpio Tankers Inc. [NYSE:STNG] (Scorpio) says it is trying to raise $131.8 million with an offering of 21.6 million shares of its common stock at a price of $6.10 per share, which in turn has lead to speculation that it plans to invest in more fuel efficient tankers.

In its press release, Scorpio says it plans to use the proceeds to partially repay outstanding debt as well as for "general corporate purposes, including vessel acquisitions and working capital."

That was the same message it gave in April when it issued 4 million shares priced at $6.75 each in a $27 million deal that turned out to be the foundation for its fleet expansion.

Lloyd's List's Rajesh Joshi notes the company "is not exactly strapped for cash" either, so suggests it plans to use the new funds to add to the energy-efficient vessels it has already purchased from Hyundai Mipo Dockyard.

The company has received five vessels in the past year, and five more are due for delivery by the end of 2014.

In its third-quarter results, the company said that despite a widening net loss, the fuel-efficient newbuildings use 28 to 30 percent less fuel than comparable older ships and were putting it in a "desirable position."

Some analysts have warned  that the addition of new eco-ships is only adding to the problems of oversupply in the tanker market, and a market recovery is contingent on "substantial scrapping of vessels."

Ship & Bunker News Team
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