Athens: Scorpio Tankers has sold its remaining 5.8% stake in NYSE-listed Dorian LPG through the sale of its 3,392,083 common shares to Sino Energy Holdings for a price of $16.16 per share or around $58.82m in total.
The shares are expected to be delivered to Sino Energy on or around July 29.
The purchase price shows progress on the $15.34 per share paid by BW Group, which purchased 6m shares in Dorian LPG from Scorpio on Monday this week. The shares were acquired through BW’s subsidiary BW Euroholdings, which now holds a 10.2% stake in Dorian.
Together, Scorpio’s two share sales transactions this week have generated total proceeds of $146.9m.
“The [Dorian] shares were payment to STNG [Scorpio Tankers] for the profitable sale of its VLGC newbuildings to LPG last year, but we never viewed the ‘investment’ as strategic. Rather, the stake had become a forgotten piece of STNG’s capital structure given concerns about the liquidity of the equity,” Jonathan Chappell, chief fundamental research analyst at Evercore ISI, said of the sale in a note today.
“Now, following the sale of the shares, STNG has unlocked another large slug of liquidity that strengthens its balance sheet (further), can enable it to more swiftly ramp-up its dividend payments (along with the strong cash flow generated from its fleet), improves its negotiating position with banks as it seeks to refinance current facilities at more favorable terms, and, perhaps more importantly, should remove a perceived overhang regarding future equity issuances,” he continued.
At the time of writing, Dorian’s stock is trading at $16.25 per share.