A slump in Eagle Bulk Shipping's share price amid a convertible notes issue has been met by an upgrade from analysts at Cleaves Securities.
Eagle is issuing the new paper with a $70m injection from its two major shareholders to fund the purchase of six ultramaxes worth $122m.
As TradeWinds reported yesterday, four of the ships in Eagle’s sights are being sold from the fleet of Nautical Bulk Holdings.
Joakim Hannisdahl of Cleaves said the 15% drop in the Eagle stock since the convertible was announced shows a “lukewarm reception” from investors.
However, he added any dilution from the new notes would be “perfectly offset” by higher operational and financial leverage.
Hannisdahl has raised Eagle to buy just a couple of months after downgrading the company.
The shipowner will become the first to purchase scrubber-fitted bulkers with the Nautical quartet and will also fit the technology on two other ships being bought simultaneously.
Cleaves forecasts Eagle to be heading for a loss of $11m in 2019, before swinging to a profit of $20m in 2020.
Further out it projects a profit of $41m for Eagle in 2021 and $74m in 2022.
Shipbroking sources say Eagle will pay $21m each for four vessels in the Nautical Bulk fleet, which were placed on the market this summer by one of its three core investors — Solus Alternative Asset Management.
The price reflects both a debut S&P view for ships changing hands with scrubbers fitted and a rising market on the back of a rebound in freight rates this summer, TradeWinds is told.
