Nordic American Tanker Ltd (NYSE:NAT): Common Shares At A Public Offering Price Of $8.62 Per Share

by Liza Smith | Wednesday, Apr 9, 2014 | 917 views

Boston, MA, 04/09/2014 (usastockreports) – Nordic American Tanker Ltd (NYSE:NAT) announced underwritten public offering for 10.0 million common shares few days back. But with the rising demand of its offering the company has decided to change the offering to 12.0 million common shares. The company has decided the price of the common share offering.  It has decided the offer price of $8.62 per share.  The news of upsizing the public offering is not taken well by investors and has resulted in a sell off.

Offer to the Underwriters

Nordic American Tanker Ltd (NYSE:NAT) has given the nod to the underwriters to buy an additional 1.8 million common shares. They have a period of 30 days for the same purpose. It was not welcomed by the investors and, therefore, the stock sold off on Tuesday.

The use of net proceeds

The public offering is expected to close on April 11, 2014, as per the customary closing conditions. As per the normal expectation the proceeds will be used to improve the business structure. The company intends to buy two to four vessels in the coming time. The number of vehicles will depend on the other factors like the age of the vessels, the corporate objectives and others.

The present performance

The company is facing a tough time to improve its profit margin from last some time. The gross profit margin is not at the expected marks. It is currently quite low showing the slow growth in the company. The silver lining here is that the company managed to improve on its gross profit margin from the same period last year. But still the company is a laggard and is underperforming as compared to the industry average. The earnings growth has not been up to the mark.

In the last one year there has been no change in the stock’s price of Nordic American Tanker Ltd (NYSE:NAT), and it is worth noticing as the markets have done well during this period.

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