Scorpio Tankers Inc. yesterday announced that it will recognize a net gain from sales and write downs of approximately $14.0 million due to the gain on the previously announced VLGC transaction and the write down of some of the older vessels in the fleet as the Company has designated these vessels as “Held for sale”.
The Company also announced that it has closed on the previously announced acquisition of four MR product tankers currently under construction in South Korea.
The purchase price of the four MR product tankers, in aggregate, was approximately $154.4 million. In connection with the sale, the Company issued 3,523,271 common shares (or approximately 26% of the purchase price) and $4.4 million in cash in exchange for the four vessels. The remaining purchase price will be paid to the shipyard from cash-on-hand and bank debt. One vessel is expected to be delivered in the third quarter of 2014, and the remaining three are expected to be delivered in the first quarter of 2015. These vessels are similar to the Company’s newbuildings that are also under construction at the same shipyard.
Emanuele Lauro, Chairman and CEO of Scorpio Tankers, commented: “The reclassification of some of our older vessels further emphasizes our commitment to our modern fuel efficient fleet.”
Mr. Lauro concluded, “While the fourth quarter of 2013 started out weak in all tanker sectors, we have started to see improving rates in the product tanker market in the last few weeks. Unfortunately, the majority of the benefits from the improving market will not be realized until January 2014.”