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Scorpio Buying Another 6 Ships

Tuesday - 3/26/2013, 3:24pm  ET

Flush with cash from its second follow-on stock offering in as many months, Scorpio Tankers is back in the market for more tankers.

Share floatations in February and March have raised a combined $465 million in gross proceeds for Scorpio. Today, the company announced that it's deploying some of that cash to order another four LR2 tankers from Korea's Hyundai Samho Heavy Industries Co. Ltd. for approximately $50 million each, and taking out fixed-price options to build an unspecified number of additional LR2 vessels. Scorpio's also ordering two more LR2 product tankers from Daewoo Shipbuilding and Marine Engineering Co. Ltd. -- also at $50 million apiece, and also with options to buy an unspecified number of additional LR2 vessels.

In related news, Scorpio announced today that it's taken delivery of its seventh MR product tanker, the STI Emerald, and has already chartered it out to a customer for up to 120 days at the rate of $19,500 per day. Additionally, Scorpio says it has chartered-in two LR2 tankers and one Handymax tanker. Each of the three tankers is chartered for one year, with Scorpio paying $16,000 a day for the LR2's, and $12,700 a day for the Handymax.

As for its building plan, the company says it now has 33 newbuild tankers under construction for it -- 19 MRs, eight LR2s, and six HandyMaxes. All of these ships should be in its possession before the end of next year.

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This article was originally published as Scorpio Buying Another 6 Shipson Fool.com

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