Monaco-based shipping company Scorpio Bulkers has entered into a financing deal related to its Ultramax vessel SBI Tango.
As part of the transaction, agreed with an unaffiliated third party in Japan, the company will sell the 2015-built Ultramax dry bulk ship for a consideration of USD 19 million and then lease it back from the buyer through a five-year bareboat charter agreement at a rate of USD 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 company informed.
Under the agreement, Scorpio Bulkers has 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 some USD 10.3 million after repayment of the vessel’s existing loan.
Scorpio Bulkers 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.