New York-listed International Seaways has confirmed a $375m refinancing of six modern VLCCs through a sale-and-leaseback arrangement with Norwegian financier Ocean Yield that was first reported by TradeWinds on Monday.
While the arrangement on the six large tankers acquired in 2018 from Belgian owner Euronav has raised questions about whether Seaways is making a liquidity grab amid a protracted sour tanker market, Seaways management accentuated other positives in a statement on Tuesday.
"Reflecting our enhanced capabilities following our recent transformational merger, we are pleased to enter into this opportunistic and favourable refinancing ahead of the anticipated tanker market recovery, which is beginning to emerge," said chief executive Lois Zabrocky.
"Seaways' strong liquidity, leadership in both the crude and product tanker markets, and disciplined capital allocation approach position us well to create enduring shareholder value."
Nonetheless, Seaways makes clear in Tuesday's statement that the refinancing will allow about $150m in incremental liquidity once the existing $228m Sinosure facility on the VLCC sextet is replaced.
As TradeWinds reported on Monday, Ocean Yield disclosed in a statement earlier this month that it was paying about $380m to acquire unidentified vessels from an unnamed seller, with purchase obligations to the seller at the end of 10-year bareboat charters.
Tanker market sources tied that transaction to Seaways, which had no initial comment on the report.
Seaways acquired the six VLCCs from Euronav for $434m after the Belgian owner had taken ownership as a result of its 2018 takeover of New York-listed Gener8 Maritime. The deal was seen as transformative for Seaways' efforts to renew and expand an ageing fleet.
In Tuesday’s statement, chief financial officer Jeffrey Pribor said: “This attractive transaction enables us to further diversify our capital structure with long-term financing with terms that harmonise well with those in our other corporate loans, while unlocking additional liquidity.”
The tankers sold to OceanYield are the 301,000-dwt Seaways Hendricks, Seaways Liberty, Seaways Diamond Head, Seaways Triton and Seaways Cape Henry (all built 2016), and the 301,000-dwt Seaways Tybee (built 2015).
VesselsValue says the VLCCs are worth about $387.5m en bloc.
Pribor thanked financiers Sinosure, Export-Import Bank of China, Bank of China and Citibank, who originally extended the project construction loans assumed in 2018.
Seaways closed another important acquisition in July with completion of the $2.2bn all-shares takeover of Diamond S Shipping. It has previously sold 12 tankers for net proceeds of $75m since closing the Diamond deal.