Thursday, April 1, 2010

Another Speculative Shipping Venture Starts Slowly

Scorpio Tankers Fail to Reach IPO
Shipping News Feature

USA – The floating of Scorpio Tankers Inc this week went pretty much the same way as the two previous March launches of shipping companies seeking funds for development. After Baltic Trading, a dry bulk carrier company, and Crude Carriers Corp, another oil tanker group, just about managed to achieve bottom estimates for their initial public offerings, Scorpio shares went for an opening price of $12.75 against the IPO pricing of $13. As $14 - $16 was the price range anticipated by the company and its agents no doubt this was a disappointment, although probably not entirely unexpected.

All three of the new ventures are currently trading below their initial offer prices and reflects the uncertainty of the market as regards the immediate future of the industry and how each branch of maritime carriage will trade in the coming months and years. Scorpio’s avowed intent was to settle outstanding debts, borrow new money, allegedly $150 million from three major banks, and invest in more tankers to boost its current fleet of three crude oil carriers.

Although the company says it has aspirations to invest in some new builds it seems likely that they in fact wish to take immediate advantage of the depressed market in second hand tonnage. The current fleet are in the five to nine year old range and Scorpio say they wish to buy vessels in a range of sizes “up to 200,000 tonnes” generally less than five years old. Scorpio Group, who offered the stock, are believed to have retained a 30% interest in the new company.