New York-listed Safe Bulkers is looking to sell shares into the market over time in a process that could raise up to $23.5m in fresh liquidity in a sector still trying to get to the other side of the Covid-19 pandemic.
Safe Bulkers has contracted with DNB Markets to sell stock under a so-called "at the market" (ATM) programme that allows companies to act in piecemeal fashion at times when pricing and other conditions appear favourable.
Safe Bulkers shares dipped more than 5% to $1.16 in heavier-than-normal trading on the New York Stock Exchange on Monday morning.
If Safe Bulkers sells the maximum number of shares, proceeds would be equal to about 20% of the current market capitalisation of $118m.
When Polys Hajioannou-led Safe Bulkers reported quarterly earnings last week, the company disclosed current liquidity of about $111m.
The owner has refinanced loans to reduce principal payments over 2020 and 2021 to about $100m. Management said on its earnings call that there are no loan maturities prior to 2023.
"The most important thing, I think is to keep a strong cash position in the balance sheet because there's a lot of uncertainty as yet. We are optimistic about the market and [stimulus packages], but there's no guarantees," said Safe Bulkers president Loukas Barmparis on the call.
"We have already [a] second phase from this coronavirus disease, but we don't know what — how it would be developed in the winter months, if there are more lockdowns or partial lockdowns or other things. So we intend to keep a strong cash position. And if possible, use part of it to deleverage and prepay earlier some installments of the loans."
Safe Bulkers said in Monday's filing that it will use proceeds for general corporate purposes, including possible debt repayment or vessel acquisitions.
Safe Bulkers operates a fleet of 42 vessels. Its shares have traded at a high of $2.24 and a low of $0.74 in the past 52 weeks.
