Seanergy Maritime Holdings has bought almost half of its outstanding Class E warrants in an effort to tidy up the balance sheet and prevent share dilution, the capesize bulker owner announced on Wednesday.
The New York-listed bulker owner said it purchased 47% of the warrants, each of which can be exchanged for a common share. Seanergy bought 4.03m warrants at $0.20 each.
“We’re actually buying the warrants at the discount to their exercise price, and that we think is a highly accretive measure in several ways,” chief executive Stamatis Tsantanis said on Wednesday during a talk hosted by Capital Link.
“That helps to clean up the balance sheet a lot and eliminate potential dilution when hopefully the stock price is going to get better.”
The tender offer is tied to the private warrants issued in conjunction with the public equity raising in August 2020. That was Seanergy’s last ever structured public equity offering with warrants, Tsantanis said.
Seanergy’s shares, which trade on the Nasdaq stock exchange under the ticker symbol SHIP, gained 3.4% to reach $0.57 by midday on Wednesday.
The final results of the tender offer will be announced once they are confirmed.
Tsantanis told TradeWinds that buying the warrants will benefit Seanergy’s share price because the stock was trading for a while at the warrant’s strike price of $0.53.
“The Class E warrants … were considered as an overhang to our capital structure, creating a potential ceiling to our share price,” he said.
“Removing a significant portion of this dilutive instrument from our capital structure was important for us.”
Seanergy, which has a market capitalisation of $104m backed by 182m shares, achieved $0.04 earnings per share for the third quarter, beating analyst estimates by $0.02 in late November, despite posting a lower profit in a weaker market.
The Greek owner of 17 capesizes reported net income of $7.1m for the third quarter, down from a profit of $20.1m a year earlier, but was still gave an unchanged shareholder payout of $0.025 per share.
