IPO Report: Ardmore Shipping (ASC)

Francis Gaskins |

Summary

Ardmore Shipping ($ASC) provides oil tanker shipping services to major companies.  ASC has never made any money and is engaged in a substantial expansion of its current 8 ships, to 24 ships by 2016.  Based in Cork, Ireland, Ardmore Shipping (ASC) scheduled a $160 million IPO with a market capitalization of $288 million at a price point mid-range of $16, for Thursday, August 1. 2013.

SIx other IPOs were scheduled for the week of July 29. The full IPO calendar can be found at IPOpremium.

F-1A filed July 22, 2013

The Manager & Joint Managers are  Morgan Stanley; Jefferies; Clarkson Capital
THe Co-Managers are Fearnley Securities; Evercore; ABN AMRO (USA); DVB Capital


Valuation

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Q1 ’13

Cap (mm)

Sls

Erngs

BkVlue

TanBV

in IPO

Ardmore Shipping (ASC)

$288

9.9

-180.0

1.1

1.1

56%


Glossary:

ASC has never made money, and is wholly dependent on the world wide shipping market.  There is no demonstrated track record of success.

Recommendation

Avoid the ASC IPO.

Business

ASC is incorporated in the Republic of the Marshall Islands.  ASC ships petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies.

Fleet

The fleet consists of 12 vessels including eight in operation and four on order with deliveries expected to begin in January 2014.  In addition, ASC has letters of intent for six vessels with deliveries expected to begin in November 2014 and options for an additional two vessels.  ASC is currently in discussions for two newbuildings with deliveries expected to begin in November 2015 and intends to acquire two more secondhand vessels.

Management

ASC’s wholly-owned subsidiary Ardmore Shipping Limited carries out management functions. ASL currently has a staff of 11 employees based in Cork, Ireland.

Use of Proceeds

ASC expects to net $147 million from its IPO.  Proceeds are allocated to fleet expansion.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ASC Ardmore Shipping Corporation 7.25 0.30 4.32 153,582
BLMMF Blackmores Ltd. (Australia) n/a n/a n/a 0

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