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Scorpio Bulkers offers more equity, could raise up to $63m

NYSE-listed Scorpio Bulkers is to sell 21m shares in an underwritten public offering, in which shares worth around $15m will be sold to certain company directors and Scorpio Services Holding, which is controlled by Scorpio’s founding family, the Lolli-Ghettis.

UPDATE: The offering was priced today at $3.00 per share, which could raise up to $63m in total.

Scorpio Services Holding and certain directors of Scorpio Bulkers have agreed to purchase an aggregate of 5,030,000 common shares at the public offering price. The offering is expected to close on March 22.

The offering will increase Scorpio Bulkers’ number of outstanding shares by 73% to 49.7m in total. It is the company’s third equity offering since its IPO in 2013.

“The offering may be successful to the extent it attracts new investors looking to invest at the bottom of the dry bulk cycle, but it will likely be a tough sell as management is effectively asking for cash to burn with no visibility on when rates can reach breakeven levels,” Deutsche Bank said in a note on Wednesday.

“To be fair, management has done everything it possibly can to right-size the ship (i.e. significant asset sales), but the current market is too unforgiving with respect to both operating-related cash burn (as SALT takes delivery of its newbuildings) and declines in asset values (which leads to LTV breaches and triggers margin calls,” the bank continued.

Clarksons Platou Securities is acting as the offering’s sole bookrunner and joint lead manager. Pareto Securities is joint lead manager and BTIG is acting as co-manager.

Scorpio Services currently owns a 10.01% stake in Scorpio Bulkers. The company technically and commercially manages the Scorpio fleet through its subsidiaries and began buying shares in Scorpio Bulkers in late July 2015.

Its majority shareholder Annalisa Lolli-Ghetti is one of the three daughters of Dr Glauco Lolli-Ghetti, who founded Scorpio Ship Management in the 1950s. She is also the aunt of Emanuele Lauro, Scorpio Bulkers’ co-founder, chairman and CEO.

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Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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