Scorpio Tankers gets $157.5 million financing, repays loans

By Marisa Wong

Morgantown, W.Va., Feb. 14 – Scorpio Tankers Inc. closed some financing arrangements in the fourth quarter of 2018, according to a Thursday press release.

The company had agreed in July 2018 to sell and lease back six MR (medium-range) product tankers and one LR2 (large range) product tanker to an international financial institution.

Scorpio borrowed $157.5 million under the arrangement, which closed in October.

In September, the company repaid the outstanding debt for two vessels, including $14.2 million on its HSH credit facility and $13.6 million on its K-Sure credit facility, in advance of the closing of the sale and leaseback transactions.

At closing, remaining proceeds of the new financing were used in part to repay the outstanding $59.2 million on the company’s 2016 credit facility and $25.8 million on its DVB 2017 credit facility.

Each sale and leaseback agreement is for a fixed term of seven years, and the company has options to purchase the vessels beginning at the end of the third year.

The leases bear interest at Libor plus 300 basis points and will be repaid in equal quarterly principal installments of $500,000 per MR and $600,000 for the LR2.

Each agreement also has a purchase obligation at the end of the seventh year.

Monaco-based Scorpio is an oil tanker business.

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