Seanergy Maritime Common Stock (NASDAQ: SHIP) released some big news yesterday with regard to termination of an equity offering program. This was incredibly positive news. Today, we’ll talk about the news, why it was so positive, and what we’ll be watching for with regard to SHIP ahead.
SHIP Terminates Equity Offering Program
As mentioned above, Seanergy Maritime announced yesterday that it has terminated an equity offering program. The program was known as the “At-The-Market” equity offering program, under which the company had up to $20 million up for grabs. Under an Equity Distribution Agreement with Maxim Group LLC, SHIP not only terminated the ATM Offering program, but also sold 2,782,136 common shares, bringing in approximately $2.9 million in gross proceeds. In a statement, Stamatis Tsantanis, Chairman and CEO at SHIP, had the following to offer:
“Since August 2016, we have raised approximately $28.3 million of gross proceeds from public equity offerings, including the ATM Offering. We have utilized these funds in the most constructive way as they enable the Company to pursue highly accretive transactions. In particular, we have used the proceeds of the offerings to partly fund the acquisitions of the M/V Lordship, the M/V Knightship and the M/V Partnership, as well as to finance the prepayments under the early termination of a credit facility. The combined accretion in value we have created for our shareholders from these transactions is more than $27.9 million, which is derived from the market value appreciation of the acquisitions and the expected gain due to the early termination and refinancing of one of our facilities. We will continue to pursue accretive transactions with the aim of further creating value for our shareholders.”
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
Why This Is Positive News
Ultimately, the termination of the ATM Offering program is relatively good news. The reason for this is that the company is starting to show tremendous balance sheet strength. As a result, it is now able to start looking to traditional forms of financing. Not to mention, only about 12% of the ATM Offering was actually used. So, it was ultimately canceled for a reason.
Another positive that we’ve noticed that we’d like to point out here is that SHIP stock has been trading over $1 per share for the past two consecutive days. This is overwhelmingly positive news, as maintaining a price over $1 per share removes the dark clouds associated with the potential delisting of the stock from the NASDAQ. At the end of the day, Seanergy seems to be putting itself in a prime position to run!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on SHIP. In particular, we’re interested in following price action on the stock in the coming days and weeks, considering that the overhang of a potential delisting is now fading and that the company’s balance sheet seems to be strengthening. We’re also interested in following potential future acquisitions, as SHIP has a knack for acquiring vessels at steep discounts. We’ll continue to follow the story closely and bring the news to you as it breaks.
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!