New York-listed wind player Eneti has priced an issue of 19.44m new shares, but at a 36% discount to its prevailing share price prior to the deal being announced.
With word circulating in New York finance circles on Thursday night that investors had gained the upper hand in the share sale, Eneti confirmed the terms in an announcement, saying it had raised about $175m at $9 per share.
Eneti had closed at $14.21 per share on the last trading session before the stock issuance was announced on Monday.
"It appears that the pricing is heading below the $10 mark as the hedge funds smelled blood in the water on this one," said one finance man shortly before Eneti made the pricing official.
Still, the result is expected to allow the Scorpio Group-backed owner to build its first US Jones Act-compliant wind turbine installation vessel (WTIV) at the Keppel AmFELS shipyard in Brownsville, Texas for $500m and declare an option on a WTIV at South Korea's Daewoo Shipbuilding & Marine Engineering.
Price talk below the $10 mark was consistent with how the shares traded on Thursday in New York. After an initial push above the $11 mark in morning action, the stock slid throughout the day, falling sharply in the last hour of trading to close at $10.20 — a drop of more than 5% from the previous close.
Eneti fell further to $9.99 in after-hours trading.
Bugbee buys in
The company has granted underwriters a 30-day option to sell a further 2.9m shares that could push gross proceeds to $201.2m.
Scorpio Holdings, the private arm of the Scorpio Group and a related party, wound up taking about 3.67m shares, roughly 20% of the offering.
In addition, Eneti president Robert Bugbee is buying in for 222,222 shares, while an unidentified company director is taking 11,111.
DSME is already building a $330m WTIV for Eneti for delivery in 2024.
Eneti indicated in the offering prospectus that the optional unit will cost slightly less than $330m and will deliver in the second quarter of 2025.
"We intend to exercise this option using a portion of the net proceeds of this offering," it said.
The Jones Act unit would be only the second Jones Act-compliant WTIV after Dominion Energy's $450m Charybdis, which is under construction at Keppel AmFELS.
Eneti may wind up owning between 25% and 49% of the Jones Act unit.
The former Scorpio Bulkers sold off its entire dry fleet in order to pivot towards the offshore wind sector with WITVs that carry components and install giant turbines.
Citigroup, DNB Markets, BTIG and Nomura acted as joint bookrunners in the offering. Clarksons Platou Securities, Fearnley Securities and Kepler Cheuvreux were co-managers.
