Scorpio Tankers has exercised purchase options on eight ships as it looks to shed more of its debt
The company said it is exercising purchase options on an LR2 product tanker (STI Alexis) and five MR product tankers (STI Duchessa, STI San Antonio, STI Mayfair, STI St. Charles, and STI Yorkville). These vessels were refinanced in a sale and lease back deal in Q4 2018.
Scorpio Tankers said it expects to cull debt by US$86M and the purchases are expected to occur in Q4 this year. The leases bear interest at LIBOR plus a margin of 3.0% per annum.
In addition, Scorpio has given notice to exercise its purchase options on STI Steadfast and STI Supreme, two LR2 product tankers acquired in 2017 as part of the acquisition of Navig8 Product Tankers. The leases bear interest at LIBOR plus a margin of 5.4% per annum. The purchases, which are expected to occur in 2023, are expected to result in a debt reduction of around US$56M for the company.
And this month, Scorpio also intends to repay a bilateral credit facility, which finances LR2 tanker STI Madison and has an outstanding debt of US$17M.
Scorpio Tabkers currently owns, finance leases or bareboat charters-in 113 product tankers (39 LR2 tankers, 60 MR tankers and 14 Handymax tankers) with an average age of 6.8 years.
Earlier this year, the company agreed to sell 17 vessels including two LR2s, 12 LR1s (to Hafnia Tankers), and three MRs. Seven of these sales closed within Q1 2022 bringing in US$92M in fresh liquidity.
