Genco Shipping & Trading has put a price on a public offering of common stock.

The John Wobensmith-led company announced Friday that it has agreed to sell 6.1 million shares of common stock at a public offering price of $16.50 per share.

Total gross proceeds from the offering, set to close 19 June, will be approximately $100.7m, the US-based comnpany said.

Genco said it intends to use the net proceeds from the offering for future vessel acquisitions.

Its fleet currently has 13 capesizes, six panamaxes, four ultramaxes, 21 supramaxes, a handymax and 15 handysize vessels with a total capacity of about 4.7 million dwt.

In connection with the offering, Genco granted the underwriters a 30-day option to purchase up to an additional 915,000 shares of common stock.

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Jefferies LLC, Fearnley Securities AS and Fearnley Securities are acting as joint book-running managers for the offering.

ABN AMRO Securities (USA) LLC, Skandinaviska Enskilda Banken AB (publ), Credit Agricole Securities (USA) Inc., Seaport Global Securities LLC and Noble Capital Markets Inc. are acting as co-managers.

The common stock was offered pursuant to a shelf registration statement previously filed with the US Securities and Exchange Commission.

The offering was made only by means of a prospectus supplement and an accompanying prospectus.

Offering is a 'bit of a head scratcher'

Deutsche Bank analyst Amit Mehrotra questions the move.

"While we note acquisitions of dry bulk assets is clearly the right strategic direction at this still-low point in the cycle, the use of equity financing is a bit of a head scratcher given the already under-leveraged nature of GNK's balance sheet," he wrote in a note to clients.

His firm estimates 30% loan-to-value ratio on a net basis.

"Our understanding is that the company will add leverage as assets are acquired ... though amount of equity proceeds was not disclosed," he said.

"Nonetheless, it does appear that GNK's net LTV is likely to be the lowest in the industry pro forma for the transaction, which has its pros and cons."

Deutsche Bank maintains a buy rating.