It looks as though New York-listed wind player Eneti will need to be content with the $175m in proceeds it raised last month through a follow-on shares offering.
The Scorpio Group-backed company stood to gain up to a further $26.3m if underwriters of the deal bought over-allotment shares, but time has essentially run out on that possibility as the share price struggles below the $9 deal price.
Underwriters had 30 days from the 12 November pricing to exercise the option, but that would have required Eneti's stock to trade above the deal price for a period of time.
In practice, the stock closed above that level only twice, at $9.01 on 23 November and $9.14 the following day.
Eneti management declined to comment on the underwriter proceeds on Friday, but once again company president Robert Bugbee has done some talking with his personal account.
Bugbee purchased 90,000 common shares at a price of $7.45 in a transaction announced after the close of trading Thursday in New York. This set him back about $690,000.
It is the fourth time Bugbee has stepped up to support the stock since the deal closed. He also spent about $2m of his own funds buying into the equity raise.
Eneti then announced a fifth purchase by Bugbee after the close of trading on Friday. The president bought 60,000 common shares at an average price of $7.26.
None of that has been enough, however, to lift the stock, which closed $7.12, down more than 3% on Friday's session.
Investor base turnover
"With the equity raise, the shares have been hammered in the midst of an investor base turnover,' said Stifel analyst Ben Nolan in a client note.
"While third-quarter results weren't anything to write home about, we expect that as selling pressure abates, the share should start to reflect a more optimistic future than what is currently priced in."
Stifel has set a $14 price target on the company, which Nolan said "is all about future expectations" tied to its expanding fleet of wind turbine installation vessels (WTIVs).
The fleet currently stands at five but will be supplemented in 2004 and 2005 by a pair of newbuildings from Daewoo Shipbuilding & Marine Engineering in South Korea, and a Jones Act-compliant WTIV that is currently under late-stage negotiations at Keppel AmFELS in Brownsville, Texas.
The $175m in IPO proceeds put Eneti at the doorstep of full funding for the newbulding programme, management has said.
Eneti's progress toward fully funding the programme was laid out in a note this week from Turner Holm, head of research for Clarksons Platou Securities.
"Eneti has $896m in remaining growth capital expenses on its three newbuildings. With an estimated cash position of $192m, the company has $704m of unfunded growth capex," Holm wrote.
"However, based on previous guidance, we believe Eneti should be able to secure $559m in debt on its three newbuilds, leaving a remaining financing post of $144m."
This can be partially met by an estimated $112m in operating cash flow, Holm estimates, leaving only a $32m gap.
Eneti owns Scorpio Tankers shares currently worth some $29m.
