New buyback program approved by Scorpio Tankers

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2014 shares buyback program

Since July 28, 2014, Scorpio Tankers Inc. (STNG) has purchased an aggregate of $67.5 million of shares in the open market at an average price of $8.64 per share during 2014. The company has $82.5 million remaining under its stock buyback program as of October 27, 2014.

Cash & near cash

During 2014, Scorpio Tankers (STNG) acquired an aggregate of 36.7 million of its common shares that are being held as treasury shares, which include the following:

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  1. 19.1 million common shares purchased in the open market at an average price of $9.06 per share
  2. 7.5 million common shares acquired in exchange for 3.4 million shares in Dorian
  3. 10.1 million common shares acquired in June 2014 in conjunction with the company’s offering of $360 million of convertible senior notes due in 2019. There are currently 164.4 million shares outstanding.

New buyback program

On July 28, 2014, the board of directors of Scorpio Tankers (STNG) approved a new stock buyback program with authorization to purchase up to $150 million of its common stock. This program replaced the stock buyback programs that were previously announced in July 2010, April 2014, and June 2014, which have been terminated. The older contacts had a lower threshold value of up to $20 million in July 2010, additional authorization of $100 million in April 2014, and up to $150 million in June 2014.

Scorpio Tankers (STNG) expects to repurchase these shares in the open market at times and prices considered appropriate by the company. But Scorpio is not obligated under the terms of the program to repurchase any shares. This gives the company an additional cash flexibility in its operations.

Among its industry peers (SEA), Navios Maritime Acquisition Corporation (NNA) also adopts a share buyback program, while Capital Product Partners L.P.(CPLP), Teekay Corporation (TK), and Tsakos Energy Navigation Ltd. (TNP) do not follow such a program.

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