Scorpio Tankers has no debt due 2017; liquidity, flexibility increase

By Devika Patel

Knoxville, Tenn., Feb. 13 – Scorpio Tankers Inc. has no debt due in the coming year and has increased its liquidity and transparency in the last quarter.

The company’s executives say that the company isn’t under pressure while it waits for the industry to recover and can handle its financing requirements through the end of the year.

“The first thing the company has done in the last two, three months is increase its liquidity and increase its work on its transparency going forward with the balance sheet,” president and director Robert Bugbee said on the company’s fourth quarter earnings conference call on Monday.

“We don’t have any more debt due for 2017 and we are working on the sale lease-backs which are pretty efficient borrowing to increase the front-up liquidity

“That gives us tremendous amount of flexibility from the balance sheet side.

“It doesn’t really put us under any pressure as to when the recovery will come.

“We are also pleased with completing our bank financing requirements for 2017 and we remain grateful for our lenders’ support on this,” chairman, director, and chief executive officer Emanuele A. Lauro said on the call.

Loans

On Dec. 13, the Monaco-based oil tanker business announced an upsizing and extension of its BNP Paribas credit facility.

The company received an additional $27.6 million commitment from BNP Paribas.

The $27.6 million increase of the bilateral financing will bear interest at Libor plus 230 basis points and mature in December 2021.

Funds were used to refinance existing debt on two medium-range product tankers built in 2013 at the lesser of $13.8 million and 48% of the fair market value of each respective vessel.

In addition, the maturity date of the existing BNP Paribas facility was extended to December 2021.

On Jan. 19, Scorpio Tankers said it received a commitment for an up to $172 million loan facility from Macquarie Bank Ltd., London Branch, DekaBank Deutsche Girozentrale, Export-Import Bank of Korea and Garanti-Instituttet for Eksportkreditt.

The facility consists of multiple tranches, which mature between six and 12 years from their drawdown dates.

It will be used to finance up to 60% of the market value of eight medium-range product tankers, which are under construction at Hyundai Mipo Dockyard Co., Ltd. and are scheduled for delivery in 2017 and 2018. The facility bears interest at Libor plus a blended margin of 202 basis points.

Terms and conditions, including financial covenants, are similar to those of the company’s existing credit facilities.

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