Scorpio Tankers Takes Back Another Six Ships

Credits: Katherine McCormack/Unsplash

Scorpio Tankers has exercised options to buy back six MR product tankers from China’s CMB Financial Leasing, says an article published on Splash.

Leaseback agreement

The 2014-built STI Battery, STI Milwaukee and the 2015-built STI Tribeca, STI Bronx, STI Manhattan and STI Seneca were part of a sale and leaseback deal the New York-listed company agreed in 2018.

Scorpio Tankers had an option to repurchase the ships at the start of the fourth year of the sale-and-leaseback agreement.

Leases bear interest

The company, which has a fleet of 113 product tankers, said the leases bear interest at LIBOR plus 3.20% per annum, and that buying the vessels back will result in a debt reduction of $99m.

The deal should close in December.

Debt reduction actions

The Emanuele Lauro-led owner has taken several debt reduction actions since the summer on the back of the fundamentally sound product tanker market.

The deal follows an option taken to repurchase three LR2s and five MRs, a move that slashed debt by around $141m.

Aggregate to finance

In addition, Scorpio Tankers said it had entered into a time charter out agreement this month for an LR2 with an oil major for three years at an average rate of $37,500 per day.

The company has also received commitments for two separate loans of up to $166.5m in aggregate to finance two handymax product tankers, three LR2s and four MR product tankers.

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Source: Splash