Scorpio Tankers Inc. announced yesterday that it has commenced a public offering of 5,500,000 shares of its common stock. The proceeds of the offering are expected to be used, after assessing any working capital and other general corporate expense needs, to pursue vessel acquisitions consistent with the Company’s acquisition strategy.
In addition, the Company has announced that it is currently in advanced negotiations with an established shipyard in South Korea for the construction of five 52,000 deadweight ton ‘MR’ product tankers. The contract price for each vessel is expected to be between $36.5 and $37.5 million, depending on various enhancements to the vessel’s specification. The Company believes that these prices are approximately 30% below what it would have paid for similar vessels built at the same shipyard when tanker vessel prices were at historical highs in 2008. If negotiations are consummated, the Company expects to take delivery of the five vessels during the second half of 2012. In addition, the Company expects to be granted an option from the same shipyard to order a further three vessels of the same specification and price for delivery between the second and third quarter of 2013. There is no assurance that the Company will be successful in completing any of these acquisitions.
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Source: ScorpioTankers, May 13, 2011.