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.