Two days ago, Monaco-based oil shipper Scorpio Tankers (NYSE: STNG) announced plans to sell 30.7 million shares of common stock, taking advantage of a recent surge in its stock price to raise as much as $230 million in new cash. Today, the company confirmed how it intends to spend (some of) the money.
Specifically, the company says it has reached an agreement to have South Korea's SPP Shipbuilding build it four new MR product tankers, for which it will pay approximately $32.5 million each -- $130 million in total. All four vessels are to be delivered to Scorpio over the course of the third and fourth quarters of 2014.
In a press release describing the contract, Scorpio noted that it is exercising options to build two of the tankers in question, and placing new orders for the other two. Additionally, the company says it has agreed to extend the terms of "several" previously-agreed options with SPP, and negotiated fixed-price options on four more vessels, which it plans to have built and delivered in 2015.
The company further informs that today's announcement brings its total number of orders for new MR tankers, to be built by either SPP or by Hyundai Mipo Dockyard, to 16 vessels. Of these, two ships are expected to be delivered in April of this year, and the remainder are to be delivered in 2014.