Scorpio Bulkers Raises $305 Million in NYSE Debut

Earlier this week I had the opportunity to write on the coming IPO of Scorpio Bulkers Inc. (SALT).  As expected, Scorpio priced its IPO after the closing of business on Wednesday. The company was able to sell 31.3 million shares, more than double the originally offered size of 15.5 million, underlying strong demand from investors. The offering price of $9.75 per share remained the same as had been originally indicated.

Scorpio was able to raise $305 million in gross proceeds or approximately $282 million after deduction of underwriting fees and other expenses.   The net haul of $282 million, cash on hand of $595 million, and a proposed $330 million credit facility, will go a long way towards funding the remaining capital expenditures of $1.364 billion for the company’s 52 new-building vessel program.

As is customary in public offerings, the underwriters have been granted a 30-day overallotment option to purchase an additional 4.695 million shares (or 15% of the number of shares sold).  It would be very interesting to see how the stock will trade over the coming weeks, because this will determine the fate of the overallotment option and the ultimate success of the IPO.

Scorpio’s shares commenced trading on the New York Stock Exchange today under the symbol SALT, and closed down 2.56% at $9.50 per share, amid heavy trading of almost 10 million shares.

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