Nearly two months after its spin-off from parent company StealthGas, the Vafias family’s Nasdaq-listed Imperial Petroleum unveiled plans to widen its circle of shareholders through a share sale.
In an F-1 registration statement filed with the US Securities and Exchange Commission (SEC) late on Thursday, the company said it would sell 5m units consisting of one common share and a Class A Warrant.
The proposed sale, which is to take place “as soon as practicable" after the registration statement becomes effective, will see Imperial’s number of shares double to about 10m units.
Maxim Group LLC, which will serve as underwriter, will have the option to purchase additional common shares or Class A warrants. The latter are securities that confer the right to buy a common share at a fixed price but without any rights to vote or receive dividends.
Imperial provisionally estimated in the filing that it would raise between $8.9m and $10.3m from the share sale, depending on the degree to which underwriters will exercise their purchase option.
Planning to grow
The intended share sale would help Imperial to widen its pool of investors. The company’s current ownership is concentrated to a relatively high degree, with chief executive officer Harry Vafias controlling nearly 22% of the stock and a further 54% owned by Glendon Capital, MSDC, TowerView, Russell Investments, Redwood Capital and Renaissance Technologies.
Another object is to help fund future growth.
“We intend to use the net proceeds of this offering for capital expenditures, including acquisitions of additional vessels which we have not yet identified, and for other general corporate purposes,” Imperial said in the filing.
The company didn't rule out eventually investing even outside the crude and product tanker sectors it is currently active in.
Imperial Petroleum began trading on 6 December after being spun off US-listed LPG player StealthGas.
The Vafias family, which is the biggest single shareholder in both firms, said the separation would help them “increase [their] business focus … alleviate market confusion and attract new investors”.
Another likely reason for the move was that poor markets affecting the four tankers spun off into Imperial Petroleum had been weighing on StealthGas’s financial results.
Based on unaudited, pro-forma results carved out from StealthGas, Imperial Petroleum booked a net loss of $2.16m between January and September of 2021, up from a net loss of $0.55m in the same period of 2020.
Imperial, however, is optimistic that it can benefit from a post-pandemic tanker recovery this year.
“Attractive market opportunities” beckon for tankers in 2022, the company said in the filing, citing independent research that sees demand for product tanker tonnage increase by 6% this year and by 8% for crude tankers.
Imperial currently intends to retain any future earnings to grow the business. However, it didn’t rule out paying dividends, depending on the future performance and financial condition.
The fleet
Imperial Petroleum’s fleet consists of the 115,000-dwt crude tanker Stealth Berana (built 2010) and three MR product tankers — the 47,000-dwt Clean Thrasher and Magic Wand (both built 2008) and the 46,000-dwt Falcon Maryam (built 2009).
The Magic Wand is on a time charter of $12,250 per day that expires in April but is extendable at for another year at $14,500 per day.
The Clean Thrasher is on a time charter that expires next month and earns the vessel $12,000 per day. The deal can be extended for two consecutive 45-day periods at $13,250 and $14,500 per day, respectively.
The Falcon Maryam is on a bareboat charter until September for $7,800 per day.
The Stealth Berana is currently earning $13,950 per day in a time charter that expires this month but has multiple extension options for between two and six months for proceeds ranging between $17,550 and $20,000 per day.
The Stealth Berana is equipped with a scrubber while Imperial's three product tankers are not. Imperial plans to install ballast water treatment systems in its MRs between the third quarter of 2022 and the first quarter of 2023.
Private Vafias company Stealth Maritime provides management services to Imperial under arrangements similar to the ones it has with StealthGas.
