Costamare Inc (NYSE:CMRE) Boosts Equity Fundraiser and the Market Reacts

Costamare Inc (NYSE:CMRE) Boosts Equity Fundraiser and the Market Reacts

Costamare Inc (NYSE:CMRE) has embarked on an equity fundraiser that will see the company sell at least 12 million new shares to the public. That’s more than the 11 million shares the company earlier said it was aiming to sell. Costamare is selling each share at $6.

Expected proceeds

Costamare has given underwriters in the offering a window of opportunity to purchase an additional 1.8 million shares on top of the primary 12 million shares on offer to cover overallotment. In case only the primary 12 million shares are sold, Costamare expects the transaction to generate $72 million in gross proceeds. But the amount could swell to $82.8 million if the underwriters exercise their right to purchase additional shares.

Majority shareholders injecting $10 million

Costamare further said its majority shareholder, the family of Konstantakopoulos, is participating in the equity fundraiser. The Konstantakopoulos family has agreed to purchase additional shares worth about $10 million. Participating in the equity offering is expected to enable Konstantakopoulos to preserve its majority ownership in Costamare.

What’s the cash for?

Costamare intends to channel the net proceeds from the offering mainly to capital expenditures that it hinted could include acquiring new vessels. Any balance would be used for working capital and repaying the company’s debts. Costamare finished 3Q16 with total debt of $1.49 billion.

The equity offering is expected to close on December 5 or around that date.

Mixed 3Q16 results

Costamare posted mixed results for 3Q16. While EPS of $0.20 missed the consensus estimate of $0.36, revenue of $115.43 million beat the consensus of $114.2 million. But both topline and bottom line results dipped from a year-ago period.

Costamare’s expanded equity fundraiser rattled the stock in the last session, pushing shares down 14% to $5.76, below the offering price. The stock is down more than 44% YTD and down more than 53% over the last one year.