Oslo-listed MPC Container Ships (MPCC) has prevented any dilution of investor shareholdings by reacquiring a series of convertible warrants.

The feeder vessel player said it had agreed a deal to buy back and cancel 1.87m warrants that gave its second biggest shareholder — MPC Capital — the right to buy shares at $1.89 each.

The deal is costing MPCC $2.2m — a 3% discount to the intrinsic value of the securities based on the 10-day average price of MPCC stock.

The share was trading at NOK 29.30 ($3.28) in Oslo on Monday morning.

The shareholding of MPC Capital remains unchanged at 15%.

“The repurchase price is expected to be overcompensated in less than 1.5 years by avoiding dilution of existing shareholders,” the shipowner said.

There are no longer any outstanding warrants relating to MPCC shares.

Fearnley Securities has a “buy” rating on the company, with a target share price of NOK 37.

The investment bank said the warrants are “well in the money”, based on the subscription price compared to the trading level.

Fearnleys also said the deal is accretive to shareholders at the 10-day discount.

MPCC carried out a similar exercise in September 2021, with 3.7m warrants bought back for $3.5m.

Backlog set to surge

In the week ending 21 January, the owner announced seven new long-term vessel charters and a profitable sale of one feeder unit.

“The repurchase adds to last week’s string of positive news for MPCC ... setting the stage for imminent capital distributions,” Fearnleys said.

The company has 82% of fleet days covered for 2022, 57% for 2023 and 30% for 2024.

“We expect this to increase rapidly with 19 charters expiring this year,” the investment bank said.

Its analysts believe MPCC could add about $600m of backlog to the current $900m.