Containership owner Global Ship Lease continues to grow richer from its follow-on shares issue last week led by investment bank B Riley FBR.
The underwriter has now agreed to exercise its 15% over-allotment option, adding a further $6m to a cash pile than now sits at a gross figure of $55.2m.
Net proceeds to GSL after underwriting discounts, but before offering expenses, will be $51.7m.
This comes after the original $40m sale of common shares was upsized to $48m based on oversubscribed investor demand.
B Riley FBR’s decision to exercise the so-called “greenshoe” option was possible because the stock has traded up for the $7.25 deal price through the entire process.
GSL shares were at $7.74 this afternoon on the New York Stock Exchange, up about 1% on the day.
It is possible for underwriters to exercise the over-allotment only when shares trade up for the sale price in an equity issuance — something fairly rare in shipping deals over the past decade.
Through its underwriting discount, B Riley FBR was able to buy shares in the offering at $6.78 each.
The GSL deal was bolstered when B Riley FBR agreed to take $15m over the original deal for its own account, attracted by the investment opportunity, GSL chief executive Ian Webber told TradeWinds today.
The company operates a fleet of mid-sized and smaller containerships.
Global Ship Lease owns 40 vessels and has contracted to purchase a further ship, ranging from 2,207 teu to 11,040 teu. Nine are fuel efficient wide beam units. The fleet has total capacity of 224,162 teu and an average age, weighted by teu capacity, of 11.9 years at June 30.
