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Equity Overdone?
Regularly, we hear that the markets are open for well-known serial issuers of equity and debt securities. This week one regular issuer, Seaspan, quickly and successfully accessed the preferred market, issuing more of its Series C preferred. There were also two filings for equity follow-ons from a recent transplant from London and one of the original public companies. It will be interesting to gauge investor appetite in the case of the latter given the overall weak market conditions.
TOPS Share Sale
Last week, Top Ships Inc. (“TOPS”) entered into a shelf registration to sell up to $500 million of common shares, preferred shares and warrants, including the sale of 70,462,300 common shares by selling shareholders. Contemporaneously, the company also entered into a Standby Equity Distribution Agreement (“SEDA”) with YA Global Master SPV LTD (“YA Global”), an investment vehicle managed by Yorkville Advisors LLC, who previously utilized a similar structure with OceanFreight. Under the latter agreement, which is sometimes referred to as an equity line of credit arrangement, TOPS has the option, for a three year period from the effective date of a registration statement, to sell its common shares to YA Global for a total of up to $200 million, at the company’s sole discretion. YA Global intends to sell up to an estimated amount of 70,462,300 of these shares.
Faster Than a Speeding Bullet, More Powerful Than a Locomotive, and Able to Leap Tall Buildings in a Single Bound”
No, we are not talking about Superman, but if that was your guess you were close. In fact, we are referring to John Fredriksen, who may be, in financial circles, more powerful than Superman. On Wednesday, Frontline announced the acquisition of five suezmax tankers and the intention to partially finance them with a private placement of new shares. The private placement was successfully completed today in less than 24 hours.
The five double hull suezmax tankers were purchased en bloc at a purchase price of $240 million from Top Ships Inc. The vessels were built in the period from 1992 to 1996 and will be delivered between June and August 2008.
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