Scorpio Tankers has revealed a series of leased vessel purchases to cut financial expenses.
In a securities filing, the Emanuele Lauro-led shipowner said 22 chartered-in vessels will be reacquired from financiers.
The first of these is the 110,000-dwt LR2 STI Supreme (built 2016) from KKR-owned sale-and-leaseback specialist Ocean Yield for $27.8m.
It has also exercised purchase options on the 50,000-dwt MR product tanker STI Maximus (built 2020), and two more LR2s — the 110,000-dwt STI Lily and STI Lotus (both built 2019).
These are owned by China’s Bank of Communications Financial Leasing (BCFL) through a $670m lease financing.
The buybacks are expected to take place in the fourth quarter.
The outstanding lease liability is expected to be $85.5m on the date of purchase.
In addition, Scorpio has given notice that it will be buying the 50,000-dwt MRs STI Galata and STI La Boca (both built 2017), financed by China’s Taiping & Sinopec Financial Leasing. A total of $38.1m remains under this 2020 financing deal.
Then three more LR2 product tankers — the 110,000-dwt STI Stability, STI Solace (both built 2016) and STI Solidarity (built 2015) — are being repurchased from BCLF, with $58.4m left on the lease.
Five other LR2s are being bought from CSSC Lease Financing, with $110.4m to pay, and two more MR product tankers are being reacquired from CMB Financial Leasing in China. The outstanding amount is $36.5m.
SPDB Financial Leasing — another Chinese leaseback company — is selling four MRs, and the final two ships are MRs owned by BCFL.
Fearnley Securities said these deals may explain the slower pace of share buybacks in recent weeks.
The shipowner said in the filing that it had bought 1.64m of its own shares since 1 July. Removing deals announced in August, this leaves a net 668,000 shares acquired since then.
Fearnley Securities is tipping repurchases to increase again as freight rates improve in the winter market.
Scorpio also said it had tapped DekaBank Deutsche Girozentrale for a credit facility of up to $94m.
The owner has drawn down $43.8m backed by two MR2s as collateral and expects to access the rest in the last three months.
The loan matures over five years at the secured overnight financing rate plus 1.7%.
Covenants that form part of the loan require Scorpio to keep a minimum liquidity of $25m, or $500,000 per owned vessel, plus $250,000 for each unit chartered in.
