Scorpio Bulkers entered into a financing transaction of one of its Ultramax vessels with an unaffiliated third party.
As part of the transaction, the company will sell a 2015 Japanese built Ultramax dry bulk vessel, SBI Echo, for a consideration of $19.0 million and then lease it back from the buyer through a five-year bareboat charter agreement at a rate of $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 + 1.97% per annum.
The transaction also provides the company with 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 Scorpio Bulkers’ liquidity by approximately $7.9 million after repayment of the vessel’s existing loan.
Scorpio Bulkers is a provider of marine transportation of dry bulk commodities. It has an operating fleet of 57 vessels consisting of 56 wholly-owned or finance leased drybulk vessels (including 19 Kamsarmax vessels and 37 Ultramax vessels) and one time chartered-in Ultramax vessel.
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