Scorpio Bulkers Refinances Ultramax Vessel
Monaco-based Scorpio Bulkers announced that the Company has entered into a financing transaction in respect of one of the Company’s Ultramax vessels with an unaffiliated third party in Japan.
As part of the transaction, the Company will sell a 2015 Japanese built Ultramax dry bulk vessel, SBI Tango, for a consideration of $19.0 million and then lease it back from the buyer through a five-year bareboat charter agreement at a rate of $5,400 per day.
If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at current swap rates would be LIBOR + 1.73%.
The transaction also provides the Company with options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement.
This transaction, which shall be treated as a financial lease for accounting purposes, increases the Company’s liquidity by approximately $10.3 million after repayment of the vessel’s existing loan.
Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities. It has an operating fleet of 56 vessels consisting of 55 wholly-owned or finance leased drybulk vessels (including 18 Kamsarmax vessels and 37 Ultramax vessels), and one time chartered-in Ultramax vessel.
In addition, one Kamsarmax vessel which is being constructed at Jiangsu New Yangzijiang Shipbuilding Co Ltd in China is expected to be delivered to the Company in the third quarter of 2018. Upon final delivery of the last vessel, the Company’s owned and finance leased fleet is expected to have a total carrying capacity of approximately 3.9 million dwt and all of the Company’s owned vessels will have carrying capacities of greater than 60,000 dwt.
