Scorpio Switches Dry Bulk Newbuildings Order to Tankers

Scorpio Switches Dry Bulk Newbuildings to Tankers

Scorpio Bulkers Inc. has reached agreements with shipyards in South Korea and Romania to modify six newbuilding contracts for Capesize bulk carriers into newbuilding contracts for LR2 product tankers, as well as to sell four of these LR2 newbuilding contracts to Scorpio Tankers Inc., with options for Scorpio Tankers to purchase the remaining two.

The sale price for each of the four LR2 newbuilding contracts is USD 51.0 million. The two option contracts, which expire on May 31, 2015, may be exercised by Scorpio Tankers Inc. for a fixed purchase price of USD 52.5 million for each contract.

The company expects to record an aggregate loss on disposal of approximately USD 41 million on the four modified newbuilding contracts. The company also expects to record an aggregate loss of approximately USD 14 million on the potential disposal of the two option modified newbuilding contracts.

A sale of all six modified newbuilding contracts will result in an estimated reduction of future cash obligations of approximately USD 120 million.

Emanuele Lauro, the company’s Chairman and CEO, said:  “We have taken these actions to strengthen our liquidity position. We will continue to be proactive in further strengthening our balance sheet.”

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