US-listed Scorpio Tankers is repurchasing another five tankers from financial leases to cut debt levels even further.
The Emanuele Lauro-led company said it has given notice to exercise purchase options on two 2020-built ships, the 47,500-dwt STI Mighty and STI Maestro, and three dating from 2019, the 50,000-dwt STI Modest and 47,500-dwt STI Maverick and STI Millennia.
The leases bear interest at Libor plus 3.5%.
The deals will go through in July, resulting in a debt reduction of $119.4m, Scorpio added.
Fearnley Securities said this would also reduce its quarterly interest cost by about $2.6m.
The Monaco and New York-based shipowner has been on a campaign to reduce borrowings, wiping $1.2bn off the balance sheet through lease buyouts and debt repayments over the course of 2022. This has taken debt to below $2bn from a starting point of $3.2bn.
In March, it announced a further debt reduction of $150m as it bought out six product tankers from leases.
Scorpio will have exercised 40 purchase options since the third quarter of last year, but still had 56 tankers under lease financing before the latest move.
Earlier in May, the owner said it was on the verge of sealing up to $1bn in bank lending that would enable it to accelerate buyouts of the expensive leases.
More shares repurchased
The shipping company also said it has bought back another 2m of its common shares in the open market at an average price of $47.03 each.
This means an outlay of $94m.
Scorpio has just restocked a $250m shares buyback programme after having splashed out nearly $87m under a previous authorisation.
“We do not intend to grow the company, rather we intend to harvest,” chief executive Lauro said on an earnings call.
