35m new shares to be sold, at $2.85. No indication that the funds will be used to increase revenue....ie fleet expansion. Management striking while share price is "high", it appears.
This stock needed more of a float, but this is a terrible deal for current shareholders. Just when the stock had no where to go but way up they diluted the hell out of it for a measly $100M. But it's a great deal for the insiders at Navios.
Your "Insiders" you're complaining about just paid 2.85 and you could have bought it at 2.89 today, so what's the gripe? For that matter you could have had it at $2.05 on 12/28: that's not even 2 months ago. PLENTY of time to have pulled the trigger. No, not at 2.05 but well below 2.85. So tell me, did YOU buy when you had the chance at under 2.85?
No indication, oh, please! Every time AF raises cash it means fleet expansion. And AF + NM are in for half of the new raise. Good enough for AF here good enough for me. I put an order in before the open at 2.80 in case it came down, but so far it hasn't. In fact it's up. The raise was at 2.85 and NNa was recently trading down near 2.10 so cash coming in here is a mark of support. My bet is NNA will be making MAJOR aquisitions. Just a matter of getting the cash in hand so the buy can be executed with a larger cash component to flash around. Cash is king, great credit is royalty too.
Didn't the announcement include mention of a reduction in outstanding debt as one of the probable / possible uses of the funds?
Dunno about bank debt, but the 8.675% 2017 bonds are currently selling for 96 and change (callable at 104 starting this November). Assuming AF has access to credit lines when she needs them, she could get a quick improvement in EPS by retiring some of the existing expensive debt and then floating new, cheaper loans when necessary to fund a fleet expansion.
Personally, I'm pretty happy with the coupon on the 2017s, so I hope the bonds aren't called away any time soon. 8-)
I did sell 1/2 my NNA shares earlier this week. Would be happy to buy them back if the pps craters below the new share issue price.
Its somewhat disappointing to see NNA do a deal here. I always expected to be diluted, though, since this is a growth vehicle and it is meant to provide both debt and equity capital for fleet expansion. My suspicion is that there are deals to be done at attractive prices and terms, but NNA's balance sheet was leveraged as much as the banks would accept and still sell distressed assets to the company/finance newbuilds. If you look at the last couple of deals NNA inked, one included the use of convertible preferred and the other involved no up-front equity to be paid. That suggests to me that NNA was out of cash equity to do new deals. I suspect that we will now see NNA in a position to do more deals going forward. I certainly hope so. If we are lucky, it will also result in a more liquid stock and not just the plaything of NM and Larry.
I said a few weeks back that the $ was at NM, due to the insurance settlement, but that the action is at NNA and NSALI. Sure enough, NM directs capital at these two pieces in a big way. I am not super duper thrilled with a secondary at sub $3 but there are mitigating factors - the high NM and mgmt participation, the near certainty that this will be put into growth projects almost immediately. I would have preferred they did a convert note like SFL just did, but that was mostly a refi deal, this equity is indicative that they will be buying ships soon and bankers are demanding more equity on the books. AF is not sitting still. The people who should be #$%$ are those that bought into the last secondary at $5.50, but I guess they simply made a bad market call, no sense in holding back the company to assuage them...
you may be correct about "intent" of AF, but contrast with what STNG said 2 3 weeks ago with their placement:
"MONACO--(Marketwire - Jan 30, 2013) - Scorpio Tankers Inc. ( NYSE : STNG ) (the "Company" or "Scorpio Tankers") announced today that it has priced the offering of 30,672,000 shares of its common stock, par value $0.01 per share, at a price of $7.50 per share. The offering is expected to close on February 4, 2013. RS Platou Markets, Inc. is acting as sole manager in the offering. Clarkson Capital Markets, DNB Markets, Inc. and Evercore Group L.L.C. are acting as placement agents. The net proceeds of the offering are expected to be used for vessel acquisitions, working capital and other general corporate purposes."