Scorpio Tankers is continuing its huge vessel buyback drive in improving markets.
The US-listed product tanker giant said it was repaying debt or lease financing tied to 13 ships over the next four months.
These include three 2013-built leased MR vessels costing $29.1m in total, and four more 2012-built MRs being reacquired for $29m.
Three handymaxes dating from 2014 are currently financed as part of a Prudential credit facility. Repayments of this debt will take place in January at a total cost of $33.7m.
Then there are three 2015-built MRs financed as part of a 2021 Taiping & Sinopec Financial Leasing leaseback deal.
The ships will be bought back in March for $45.6m.
Scorpio revealed in October that it was repurchasing 22 vessels from financiers.
Chief executive Emanuele Lauro said the product tanker market remains strong.
“MR rates have led the way and we are seeing an improvement in LR2 rates as winter demand increases and Middle East refinery maintenance concludes,” he added.
“Our balance sheet continues to improve and the commitments to repay the debt or lease financing obligations on 13 vessels reflect our commitment to lowering leverage and borrowing costs.”
Debt coming down
Net debt will drop to $1.23bn, from $1.4bn at the end of the third quarter.
Fearnley Securities believes this number is quickly getting close to the scrap value of the fleet and could mean increased dividends in 2024.
There is currently $288.2m available under the revolving portion of the $1bn credit facility arranged earlier this year.
Scorpio operates 111 ships.
The company also gave updated forward bookings data for the final three months of 2023.
Pool and spot MRs have coverage at $32,500 per day for 87% of days, while LR2s stand at $38,000 on 92% coverage.
The handymaxes have achieved $30,000 from 84% of days booked.
Fearnley said these numbers were as strong as expected and should boost first-quarter results as some voyages are already stretching into that period.
Scorpio logged an adjusted Ebitda of $200m in the third quarter.
