Scorpio Tankers is buying another chartered-in LR2 vessel to reduce financial costs.
The New York-listed product tanker specialist said it has served notice to exercise its option to acquire the 110,000-dwt STI Sanctity (built 2016) from Norwegian sale-and-leaseback company Ocean Yield.
The vessel was brought into the Scorpio fleet as part of the takeover of Navig8 Product Tankers in 2017.
The STI Sanctity is currently on a bareboat charter to Scorpio for more than 11 years.
The lease bears interest at Libor plus 5.4% and the purchase will cut $27.8m from Scorpio’s debt schedule.
The tanker will be delivered in the first quarter of 2023.
VesselsValue assesses the ship as worth $59m, but it cost only $48m to order in 2013.
Ocean Yield bought it as a resale for $49.5m in 2015.
Fearnley Securities described the transaction as “accretive” for Scorpio.
The investment bank expects the company to refinance the ship at “significantly improved” terms.
Busy buying
The deal follows a number of tanker purchases by Scorpio in recent weeks.
Earlier in September, it took advantage of eight purchase options to boost its owned fleet against a backdrop of strong forward bookings.
Analysts believe the Monaco-based product carrier owner is heading for a record profit in the third quarter as a result.
Scorpio said it was buying back two LR2s, four MRs and two handymaxes as part of sale-and-leaseback contracts.
The buybacks will reduce debt by $133m, it said, while cutting break-even costs by $665 per day.
No price was given, but the ships are worth a combined $312m, according to VesselsValue.
In August, six Scorpio MRs were bought back for $95m, reducing debt by the same amount and cutting the break-even by $555 per day.
Scorpio Tankers also said it has bought back 137,459 of its shares in the open market at an average price of $43.27 each in recent days.
This involved an outlay of $5.95m.
The company has $169.1m remaining under its securities repurchase programme.
A further 1.66m shares were repurchased in the summer.
