Sale of two small tankers is a positive move. Net of debt secured by the small tankers, the sale of the small tankers should boost liquidity by $2.8 million and increase 2022 EBITDA slightly to $9.0 million based on TCE rates of $13.4k/day.Asset sale lowers pro forma debt. After refinancing Malou debt of $7.3 million and adding new Lamda debt of $21.7 million, total debt approximated $84 million, including related party notes of $6.0 million. Pro forma for the sale of the small tankers, total debt should drop into the $78 million range, with preferred stock of ~$11 million and cash of $5 million. Sale complements recent MR acquisition and increases focus on MR tanker market. The acquisition of the 2017-built Lamda MR tanker expanded the MR fleet to five and improved the fleet profile. Following the small tankers sale, the fleet will total five modern MR tankers.Major shareholder interest recently moved back above 50%. In the Lamda transaction that closed in 4Q2021, equity of $3.0 million was issued to Eddie Valentis at an average price of ~$0.725/share. As a result, his ownership interest increased to 22.83 million shares, or 53% of outstanding shares, up from 18.69 million shares, or ~49%, in 3Q2021. Including 1.1 million shares issued in the conversion of a $1.0 million note in 2Q2021, a total of 5.2 million shares have been issued to Mr. Valentis at an average price of $0.765/share over the past three quarters.Maintain Market Perform rating due to uncertain near term outlook. We have a positive view on intermediate fundamentals for the refined product tanker market, based on a limited order book, low inventories and budding demand recovery, and believe that the recent moves to improve the asset base are positive, but the near-term outlook still appears uncertain. While the stock fell back from the early 2021 highs and was down 42% last year, including drops of 14% in 2Q2021, 12% in 3Q2021 and 37% in 4Q2021, we continue to wait for stronger signs that the refined product tanker market has turned upward. Read More >>