Scorpio Tankers plans $150m IPO.
SCORPIO Tankers, controlled by Italy"s Lolli-Ghetti shipping dynasty and with US tanker icon and former OMI executive Robert Bugbee as president, has joined the initial public offering queue in New York.
Scorpio filed on Wednesday for a proposed $150m IPO for a tanker company that also will have a presence in the product tanker market.
Emmanuele Lauro, principal of the Scorpio group, is chairman and chief executive of the proposed listed vehicle.
Scorpio Tankers will use proceeds of the proposed IPO to add to its existing fleet of three panamax tankers. The prospectus states an intention of acquiring ?up to four new handysize tankers, two new panamax tankers, or one new aframax tanker?.
The putative IPO, unveiled against an unappetising outlook for tankers and product tankers in particular, has not been priced. Morgan Stanley and Dahlman Rose are the managers. It was unclear whether any imminent road show is in the offing.
Details of principal shareholders after the IPO, as well as the listed company"s debt, were left blank in the prospectus.
Mr Bugbee is the second American shipping personality after Peter Georgiopoulos to go public with a proposed shipping IPO since last October.
Peter Shaerf, chairman of New York Maritime and managing director of AMA Capital Partners, told Lloyd"s List: ?I am not surprised that Robert Bugbee is leading the charge in another New York IPO. The announcement shows that he understands the value of New York"s public capital markets.?
Nevertheless, the nature and timing of Scorpio"s prospectus left some ship finance experts baffled, especially given Scorpio"s involvement in product tankers. One ship finance source told Lloyd"s List that there ?is no appetite whatsoever? for product tankers in today"s capital market environment.
?Product tankers are perhaps the most underperforming segment in today"s New York listed space,? he said.
Examples are Omega Navigation Enterprises and Capital Product Partners, both product tanker specialists. Other players, such as Overseas Shipholding Group, operate product tankers as part of a larger tanker fleet, and would be the proposed Scorpio Tankers" trade rivals as well.
Scorpio Tankers will begin life as a listed company with a fleet of three panamax tankers, acquired from the Scorpio group: Venice, Noemi, and Senatore. Noemi and Senatore are on long-term charters that expire in January 2012 and October 2010, respectively. Venice is entered into a pool.
Scorpio"s prospectus, while highlighting the existing trio"s average age of 6.5 years, said any potential additions would be modern secondhand vessels that met is specifications, or newbuildings. The size range targeted is 35,000 dwt to 200,000 dwt. The chartering strategy would be a ?variety of time charters and spot charters?.
?We believe our strong balance sheet, financing capacity and future access to capital will allow us to make opportunistic vessel acquisitions at attractive prices,? Scorpio said, without providing details.
Despite the buzz caused by Scorpio"s filing, one independent market source cautioned against expecting an immediate miracle.
The source said: ?Baltic Trading [Mr Georgiopoulos" spot-market specialist dry bulk player, which last October became the first IPO aspirant since the 2008-2009 recession] has still not hit the road, despite indications that it would do so before the end of 2009, and then before the end of January 2010.
?The IPO market in New York is still not ripe. I am sure Scorpio has a valid reason to go public with its prospectus right now. But Baltic Trading has been waiting for four months. It would be interesting to see when Scorpio"s IPO is actually consummated.?
Mr Bugbee joined the privately held Scorpio group a year ago as president, after Teekay and Torm took over OMI in 2007. Other than marking Mr Bugbee"s formal return to shipping, the recruitment was seen as a precursor to Scorpio"s expansion in the New York Big Boys" league.
OMI had carved a niche as a diversified tanker player, with its product tankers largely under contract coverage while crude vessels played the spot market. Early indications are that Scorpio would follow the same basic model.