Antwerp-based tanker owner and operator Euronav NV has entered into a five-year sale and leaseback agreement for four very large crude carriers (VLCCs) with investment vehicles advised by Wafra Capital Partners Inc., a private equity partnership.
The vessels included in the deal are the 2006-built Nautilus, and 2007-built Navarin, Neptun and Nucleus. Featuring 307,284 dwt each, the VLCCs joined their new owners on December 22, 2016.
Euronav has leased back the four vessels, which were built by China’s Dalian Shipbuilding Industry (DSIC), under a five-year bareboat contract at an average rate of USD 22,000 per day per vessel.
At the expiry of each contract the VLCCs will be redelivered to their new owners.
Euronav said that the transaction, which assumes a net en-bloc purchase price of USD 186 million, produced a capital gain of about USD 37 million and should be booked as an operating lease under IFRS.
“This transaction has the advantage of increasing our liquidity position for 2017 whilst maintaining our exposure to a market that, we believe, will be interesting over the next five years,” Hugo De Stoop, CFO of Euronav, said.
After repayment of the existing debt, the transaction generated in excess of USD 100 million free cash.