Thank you, operator. Thank you all for joining us today.

Welcome to the Scorpio Bulkers fourth quarter of 2020 earnings conference call. On the call with me are; Emanuele Lauro, Chairman and Chief Executive Officer; Robert Bugbee, our President; Cameron Mackey, Chief Operating Officer; James Doyle, Senior Financial Analyst; and David Morant, Managing Director.

This morning, we issued our fourth quarter of 2020 earnings press release, which is available on our website. The information discussed on this call is based on information as of today, Tuesday, February 2, 2021 and may contain forward-looking statements that involve risk and uncertainty.

Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in the earnings press release that we issued today, as well as Scorpio Bulkers' SEC filings, which are available at www.scorpiobulkers.com and www.sec.gov.

Call participants are advised that the audio of this conference call is being broadcast live on the Internet and is also being recorded for playback purposes. An archive of the webcast will be made available on the Investor Relations page of our website for approximately 14 days.

To support today’s call, we have posted a presentation on our website. If you have any specific financial modeling questions, you can contact me later and we can discuss these offline.

Now, I'd like to introduce you to Emanuele Lauro.

Thank you, Hugh. Good morning or afternoon to everybody.

Thank you for being with us today. I continue to be pleased with the commitment and the energy of the organization despite the challenging times the world is facing due to this pandemic.

We have made as a company significant progress in exiting dry bulk. We have found the constructive sale and purchase market, which has allowed us to dispose of most of our fleet since we started our sale process about 120 days ago.

Deliveries are accelerating in February and March, as you can see from the slides we have provided today. The balance sheet is becoming more and more simple to read, with cash being the biggest assets on the balance sheet and equities, which are allowing us some flexibility in timing our full dry cargo exposure exit.

Allow me a small clarification to our 101 million cash balance as reported today. This figure excludes $64 million of net proceeds from the sale of four vessels where the debt has already been repaid or partially repaid, but the sale proceeds have not been received.

We are nearing the end of the sales process. As mentioned, we expect to be able to announce further sales shortly.

And the end of February remains a realistic target as the time in which all of the vessels will be either sold or committed for sale. In terms of the focus on wind energy, as I have stated before, the justification for our pivot has only become stronger as time passes, even accelerating during this period of significant economic uncertainty really.

As a group, we have done an incredible amount of work on the wind side on all fronts. On the organizational front, we've been identifying and sourcing key personnel.

On the technical front, we've been fine tuning the specification of the vessel, exploring different geographical restrictions and specific requirements to optimize the design, which will lead to an improved performance. And finally, on the commercial front, we've been actively participating in tender processes.

We have learned a lot. We continue to learn a lot, and combining these with the readily available expertise, we feel we can play a significant role in this industry going forward.

Tomorrow we will be holding an Extraordinary General Meeting where the shareholders of the company will vote for the name change and the ticker change. We will resurface next week under our new name Eneti Inc.

and our new ticker, NETI. I'd like to thank the shareholders who have voted so far, which represent a strong majority of the outstanding shares and encourage whoever has not voted yet to do so, if they find the time before tomorrow's EGM.

With this, I will turn the call to Robert. Thank you.

Thank you very much, Emanuele. So, by the time we speak to you next, dry bulk will be in the rear view mirror.

Name would have changed, our ticker symbol would have changed, and hopefully our new operation will be underway. Our move into wind is carefully considered, and as we move to the execution phase, we are moving with purpose, but also with patience.

We have not lost any of our optionality by moving with patience. Rather, we have gained tremendously from it.

We have gained knowledge, we have gained time to build operations, and gain and see experience and try things that we, you know, in not live, but in theory on what can work and what can't work. And we've most importantly, watched the market continue to develop in a more favorable fashion.

We've seen significant government changes, government support, significant projects moving forward and certainly that space is continuing to improve. We've done this in a relatively low risk format.

We've had the benefit through our relationships of not losing anything related to, you know, delaying the formalization of a new building contract. We haven't had to commit to it, whilst we've been doing the sales.

If we go back to November, early, before the election, things were uncertain; things became more uncertain after the U.S. election.

And now however, two or three things have happened to our long-term favor. We're almost through the transition.

We can't be caught halfway in a position having laid our capital for the new project without fully divesting from the second. We've seen the government changes.

And we've seen the vaccinations are ultimately going to bring back economic stability and growth to the industry. For this call, however, we'd like to, you know, really, we're not really in a position to answer much on our wind plans.

We'd like to keep that answering to the modeling anything you want to relate it to, you know what we're seeing in the remaining dry cargo etcetera there. And shortly, we would like to be able to answer any of your wind installation questions after the company's renaming in the near future.

So thank you very much. And with that, we'd like to open up for questions.

Sure. Hey, guys.

Good morning. Good afternoon.

Robert, I'll try to heed your comment regarding keeping it more towards dry bulk, at least. Clearly the past few months has been very busy for you guys.

And if I count correctly, you've sold 37 ships since your announcement back in August of the transition. I just wanted to make sure I heard you correctly and [Emanuele] on the call, earlier did you say that you expect to conclude all agreements to sell the remaining fleets by the end of this month?

And so that's the first question. The second one, just to follow up is, you know, maybe could you give us a flavor or discuss how the reception has been in the sale and purchase market since you first started selling ships in September and how it is today?

Thank you.

Omar, thanks for the question. On the first question, you are correct.

Your understanding is right. We expect to have sold or committed for sale the remaining 12 vessels by the end of this month.

This is as I commented before, a realistic expectation, and we expect you to get that done in the next 26, 27 days. And as far as the general comment on the S&P market, I think that in a way, the fact that the dry cargo market has been constructive, and we are in the first quarter seasonal – usually seasonally weak dry cargo market and instead, you know, the industry was surprised on how strong this – and constructed this Q1 has been, has helped us in actually executing our sales in what we defined as a constructive market, right.

So, it was quiet, not – I wouldn't say easy, but it was possible to actually dispose of so many vessels in what has been [arising] markets and you've seen that the prices at which we've been selling ships have reason accordingly throughout. On top of that, we've announced a couple of transactions with existing players, where we have taken their stocking as consideration.

And we're actually pleased with that. We're happy with the positions we have, which we think will allow us a little bit of flexibility on when exactly we want to push the exit button, and you know [but that’s really], if I've answered question number two, Omar.

Yeah, no you did. Thank you.

Maybe just a follow-up on that last point, on the equity you've taken, is there a restriction period on the ownership of the shares? And have you thought of, is there a way to maybe hedge the position?

Is that something you desire or you feel comfortable just owning the equity outright?

I think that, you know, we feel, kind of, that's a – we consider that Star Bulk is, it's always trying to work out who is the leader, the number one, but it certainly doesn't have – is the top of top of the tree as far as the dry bulk public company is concerned, and in terms of size, market cap, you know, quality earnings to, you know, any given market cost. I mean, there's so many reasons why, you know, we're very happy to take their stock.

We also believe that and we said from the beginning, you know, right from the beginning, where this isn't a, you know, we weren't getting out of dry bulk, because we felt that dry bulk was going to crash and fall apart. We felt that it was going to improve and improve into an economic rally, post-COVID or the expectation of post-COVID.

You know, that is fortunately being panning out all the time, as you've seen, we've been selling into a steadily rising sale and purchase curve that's improved our – not only the ability for us to sell the assets. It's also improved our ability to, you know, get a greater net asset value or cash, cash shell as it were to move forward in the transition to wind.

And, you know, the dynamics that are, you know, that we're seeing in the market, that there's no reason to think that that's not going to prove a, you know, a very good, very good investment. So, there's certainly no need for us to or no desire for us to go ahead right now.

And, you know, hedge that investment. The private group itself is also as a shareholder, a number one shareholder or other shareholders we know in the group, pro the position.

Company clearly doesn't need the cash at the moment. The plans that, you know, if we were to take down the new building, again, the company's balance sheet is more than strong enough where it doesn't have to sell the stock straight away.

So, you know, we can take our time, and, you know, I would say be a constructive seller over time, which means we feel that the stock is moving in an upward trend, but clearly, you know, it is not a long, a very long-term investment, but it certainly [doesn't got to be] dealt within, you know there's nothing that we clearly have over a year in which to deal with it.

Thanks, Robert. I appreciate that.

And maybe just one final one, and then I'll pass it on. And not sure if you're able to answer this or if you prefer to wait until – under the Eneti umbrella next week, but any sense of timing on the official contract signing?

I think that, I think we said what we want to say on the wind subject at the moment and we’ll wait until it’s under the Eneti umbrella. I think this is very much about, you know, bookending at the moment.

This is about, let's say, you know, we're about to turn the final page in the chapter of Scorpio Bulkers. And we want to spend the time in this call dealing with that.

And that's what the company is focused on right this second. And as soon as that name change comes, which is going to come right on top of, as Emanuele says, you know, let's say the conclusion of selling out of the dry bulk sector, then as I said, we’re looking forward to discussing the wind installation market.

Very good. Thanks, Robert.

That's pretty clear. Good luck with the transition here, these next several weeks and into the next several years.

Thanks.

Thank you.

Yeah, hi. This is Frank Galante on for Ben.

Thanks for taking our questions. Kind of a smaller question, but around the dividend, I guess what's the thought on continuing to pay a dividend?

In a world where you're going to have no earning assets for two plus years? Is that anticipated to stay around or what's the thought around that?

I think that's a great question. You know, there aren't much thoughts about that at the moment, the dividend itself is very minimal.

The, you know, the cash or ability to pay the dividend is super high. So, that's why we haven't, let's say seen a rush at the moment to view that.

I think that that's something that will be taken up in let's say the new venture, and, you know, we'll leave that to Eneti later.

Okay. That makes sense.

And then…

But there are no – on an official basis, the board has not discussed at all the stopping or cutting of the dividend.

Okay. That makes a lot of sense.

And then it seems like not much happened on the share repurchase program, but it did continue into 2021. I guess, again, sort of, [indiscernible] as far as it goes?

Sure. No, no, I think that, look, the stock still is, you know very undervalued to its net asset value.

And as I think all of you, we're not going to discuss it in detail, but I think the part of what these results give and the explanations that we're giving, we will make it very clear for any of you to, you know, you may have different results at the end, but you're all going to come out with calculations that are going to show a number much higher than where the stock is trading now, in terms of cash that you would expect the company to have, once it's delivered and sold as vessels. The company, of course, was, you know, aware of that and was buying as much stock as it could.

And very simply, once the end of the second week of the year came, we were not allowed to – we were, let’s say went into a closed window, and the company has been in that closed window since. That closed window will reopen again, you know, tomorrow morning.

And that's really all we'd like to say on that.

Okay. That makes sense.

That's all I have. Thanks very much.

Thank you.

Thank you.

Hi gentlemen, how's it going?

Good. Thank you, Randy and congratulations.

Congratulations to your family.

Thank you so much. If you hear some crying, it's not me.

Anyway, on Slide 8, thanks again. Slide 8, the SBLK vessel values, those only amount to the 102 million of debt, as the footnote says there, what’s the total value of those vessels trying to get a sense for what kind of discount was taken for that block sale?

And what price you're, kind of taking SBLK shares at?

I think it's probably [better that way], – sorry if I may [indiscernible], as quickly and if you can do it is, you know, for us, it's where they are at the moment, right, It’s because the deal itself may have been struck at different times. But Hugh, carry on.

I think Robert’s actually captured it. You know, it's a very straightforward transaction in the sense that Star Bulk are going to be taking over the existing debt lease obligations of the ships, which amounts to around $102 million.

And in return, we are obviously receiving 3 million Star Bulk shares. And, you know, if you do the math, you can see what, you know, we're receiving or the value of the transaction basis, the current Star Bulk stock price, and obviously, you make your own interpretation of what that can be monetized for or whatever that is worth.

Okay. I guess…

I think it is fair to say that you wouldn't do that structure unless we felt that, you know, over the time, through delivery, and through sale that the stocks would, the stock itself would continue to trade to trade well and higher.

Sure. You know – and I've done the math, and it's around [$134 million] using current SBLK share price.

So, you know, in our view, the vessels are worth probably [145], right. So that $10 million, $11 million variance is either due to some kind of discount when doing an end block sale or a expected appreciation of SBLK shares and what their true [indiscernible].

I would, Randy, Emanuele in here. I would actually relook at your valuations of the vessels actually.

Okay.

I don't know where you find the 145, but if you will invest in value or anything else, or if you take our, just take the Scorpio sales prices, we know we have created enough benchmarking ourselves, right. So, if you look at that, and you divide the seven vessels by the 134 or 135, you said it today, you see that?

You know, your well – your constructive – those are constructive valuations, I really don't know where you get your 145. But we can, you know, discuss offline, if you wish to go into more details, but the 145 seems extremely [high to me].

But you're also, you know, you're partly there. It lies somewhere in between other things.

You know, Emanuele is talking specifically on the ships themselves. But if you're looking at the share part, I think you're looking at a deal construction that was, you know, that was based much more on a, you know, somewhere between NAV and the ships, etcetera.

I don't think you'd have to sell. There wouldn't be a block discount in a market for selling vessels.

I mean, that would be the opposite, because the market is moving strongly. And as you've seen, vessel values are going up and up.

But I think that it wouldn't surprise me at all. And my expectation, let's say is that Star Bulk is trading under NAV 2.

So, if you're coming out with a total valuation, and then you're just putting those vessels into the rest of your model, then you are then going to come back and say, well, those vessels in my model will have a value higher than 134. And that would be the case because the whole of Star Bulk itself is trading under NAV in our calculations.

And Emanuele is right related to you know, individual modeling at the particular time that the contract was actually struck.

Got it. Yeah, that’s fair.

And we also view SBLK as undervalued here trading below NAV. So, that's fair.

I think that's probably the beauty of the deal between the two companies. I mean, it's a, you know, so they didn't mark around.

I mean, they wanted to grow and take to the opportunity to great assets, and were able to use that currency. We felt that the assets were good.

And we wanted a situation at the time of the deal where we were able to continue to participate in the rising values at a time. And whilst at the same time, have certainty over these least vessels in terms of disposal.

So, I think it's a great win, win for both.

Perfect. Okay.

And then just making sure I heard you, right.

Anytime you can have Hamish Norton working for you. It's just wonderful feeling to – [indiscernible] and beat him up.

That is true. And just making sure I heard you right on the timing, right.

So, there won't be any WTIV construction contract until you completely unwind your dry bulk vessels is that what you said?

No, we just don't want to comment on that until we've – as we've said, shortly, we hope to be able to – shortly we want to be able to discuss wind etcetera, but that will happen once the company has become Eneti with its new ticker symbol.

Got it. I thought I’d ask that.

And I guess lastly, since we're focusing on dry bulk on this call, what are your quarter-to-date rates for those remaining vessels that you are owning? Are you operating those to maximize cash flow?

Are you operating those four best positioning for upcoming sales?

It's a combination of everything, because what you're trying to do is maximize your cash upon exit.

Sure. And it’s a combination of getting that cash in the door now versus getting closer to selling it?

Sure.

Yeah. And you have to have a blend of that.

Good deal. Well that’s if from me.

Thanks again.

[Indiscernible] So, we're far more interested in exactly that and how much cash will we have to invest in the new business? Assuring that cash that, you know that we make time our friends, which is what we've been able to do with the markets developing?

It's a long-term business, multi-year business that we've really gained a moment I think from, you know, from not having to, you know we've learned so much in terms that – we wouldn't have otherwise learned, if we'd you know, rushed [indiscernible] into it.

Sure. Well, that's it from me.

Thanks again and good luck with [EGM].

Thanks.

Thank you. You did set a timeline for when you expected the sale of the final 12 vessels, would you anticipate them all to be cash or would you consider a stock offer like you did with Star Bulk and Eagle?

I'm not sure we can comment on that at this stage because negotiations are ongoing Liam, but, you know, you've seen what we've done. So far the majority have been sold for cash with – we were happy to take a smaller portion of stock from Eagle and the larger portion of stock given the liquidity the size from Star Bulk, you know, we cannot comment further because negotiations are ongoing.

Okay. So, I mean, but you would consider taking stock and then the final transaction of the final 12 vessel sales?

You know, as I said, we cannot comment. I cannot even say whether who actually is we are negotiating with is a public company or not.

So, you know, we are – please take the no comment at this stage. Because, you know, as I said negotiations are ongoing.

That's fine. Thank you very much.

Sure.

I would just refer back quickly what I can to a question earlier with regard to us buying stock, and you know, it's not, I mean, I think we bought nearly 10% of the company back in the last quarter during the window that we were allowed to buy. So, that I think was a good – anyway, next question.

Thank you.