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Tuesday, 11 November 2014 19:48

Scorpio clear to sell LPG stake

Scorpio Tankers has cleared the way to sell off its shares in Dorian LPG should it wish to cash in its chips in the VLGC owner.


New York-listed Scorpio tells investors it has registered for sale its remaining Dorian shares after the end of its lock-in period.

Scorpio holds 9.4m shares in the New York-quoted LPG specialist, giving it a 16.3\% slice of the company.

The update comes as Scorpio announced a higher dividend and a double resale purchase today and only a short time after Scorpio president Robert Bubgee left the Dorian board.

"Sets stage for sale"

Jonathan Chappell of Evercore says the filing related to the Dorian shares is “housekeeping” but believes a move should be expected shortly.

“Although this filing does not indicate an imminent sale, it does set the stage for STNG to be flexible with the shares when it is ready to sell,” he said.

Based on the last trade in Dorian shares at $15.49 each Scorpio’s holding would fetch $145m on the open market.

Chappell said in a research note the shares were not an long-term holding for Scorpio.

“We would expect STNG to monetize its stake in the next few months and return the cash to shareholders promptly,” he added.

"A buyer not a seller?"

Scorpio took a holding in Dorian before it upgraded its over the counter listing in Oslo via its New York initial public offering after selling its VLGC newbuildings to the John Hadjipateras controlled company.

It later trimmed its interest via a stock swap deal with hedge fund Kensico.

On Scorpio’s third quarter conference call Bugbee suggested Scorpio was not looking for a speedy sale of its remaining stake.

“If you were looking at a technical basis, we’re a much better buyer of that stock than we are a seller of that stock at the moment,” Bugbee said at the time.


Despite the comments on the call, others still expect a sale to happen, with his board departure a logical prelude.

Today he declined to discuss any of Scorpio’s dealings with Dorian.

Attempts to reach Dorian representatives for colour on the matter were unsuccessful at the time of writing today.


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