John Fredriksen’s SFL Corp, a New York-listed owner of 71 ships, announced on Wednesday that it has bought four more tankers for $222.5m.
It did not identify the ships, other than to say they are suezmaxes built in 2015 and 2020 and are equipped with modern eco-design features and exhaust gas cleaning systems.
The deal includes six-year time charters with a subsidiary of Koch Industries that add about $250m to SFL’s fixed-rate backlog, it added.
That description matches the four tankers currently in the fleet of Turkey’s Ciner Shipping Industry & Trading — the 158,100-dwt Zeynep and Ayse C (both built 2020), 159,500-dwt Istanbul and Atina (both built 2015).
The deal adds to a flurry of tanker transactions lately, on the back of increasing earnings in the sector.
It also provides further evidence that the frenzy in the sale-and-purchase market that initially gripped smaller tankers, from handysizes to MRs to aframaxes, is extending to bigger sizes, such as suezmaxes and occasionally even VLCCs.
Scrubber-fitted vessels enjoy a particular premium, given that a widening gap between the prices for low-sulphur and high-sulphur bunkers has made scrubber operations more profitable.
According to SFL, Koch can terminate the quartet’s charters after three years against a fee. The charterer also has an option to “develop a sale of one or more of the vessels from year four of the charter period, including a profit-share arrangement with SFL”.
The ships will be delivered to SFL between August and October.
“We are pleased to further expand our presence in the tanker market at what we believe is an attractive point in the cycle with historic low orderbook in the segment,” SFL chief executive Ole Hjertaker said.
Clarksons said the newbuilding-to-active-fleet ratio for suezmaxes stands at a mere 2.9% — the lowest level since at least 1996, according to the broker’s data bank. Hjertaker had already said in May that low orderbooks make tankers interesting.
“The transaction demonstrates our standing in the market as a high-quality provider of transportation services for industry-leading customers, and we continue building our fleet and charter backlog with accretive acquisitions,” he said.
The purchase of the four Ciner tankers comes after the sale by SFL in May of a pair of 18-year-old VLCCs and a 19-year-old feeder container ship.
The addition of the Ciner quartet brings SFL’s tanker fleet to nine suezmaxes, six product tankers and one VLCC.
The sale-and-leaseback specialist also owns container ships, car carriers, bulkers and offshore drilling rigs.
SFL separately announced on Wednesday net income of $57.4m in the second quarter, up from $47m in the first three months.
It paid its 74th consecutive dividend, increasing the payout to $0.23 per share — its fourth consecutive increase over the past 12 months, Hjertaker said.
Ciner officials were not immediately available for comment.
The sale of the four suezmaxes, however, marks the company’s exit from tankers.
The Istanbul firm has given ample signals of its intention to focus on, and develop, its considerable bulker fleet.
Earlier in August, it was revealed that it had ordered four handysize newbuildings, adding to seven kamsarmaxes and ultramaxes it already has on order.
Ciner, which has 22 bulkers and four container ships on the water, is adding tonnage it plans to employ in its internal soda ash trading operations.
Ciner Shipping is part of one of Turkey’s biggest industrial groups.
