Scorpio Tankers agreed to sell and leaseback three MR product tankers and two LR2 product tankers to AVIC International Leasing. Upon completion, the company’s liquidity is expected to increase by $42 million in aggregate after the repayment of outstanding debt.
These lease financing arrangements are part of the company’s new financing initiatives that were announced on April 25, 2018.
As part of the agreements, the company will bareboat charter-in the vessels for a period of eight years. In addition, the company has purchase options beginning at the end of the second year of each agreement. There is also a purchase obligation for each vessel upon the expiration of each agreement.
These lease financing arrangements are subject to customary conditions precedent and the execution of definitive documentation.
Scorpio Tankers is a provider of marine transportation of petroleum products worldwide. The company currently owns or finance leases 109 product tankers (38 LR2 tankers, 12 LR1 tankers, 45 MR tankers and 14 Handymax tankers) with an average age of 2.8 years and time or bareboat charters-in 17 product tankers (two LR2 tankers, eight MR tankers and seven Handymax tankers).
With the first implementation of ASC 842 fast approaching and lessees recognizing that the off-balance sheet operating lease will be a thing of the past, the leasing industry is now starting to see inquiries regarding whether financing structures can be... read more
Monitor 100 2018
Implementation of ASC 842 Leases will begin for larger companies in the fiscal years starting after December 15, 2018 and in fiscal years starting after December 15, 2019 for other companies. The impact of this accounting standard is operating leases... read more