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Scorpio Tankers charters-in two, builds war chest

Scorpio Tankers charters-in two, builds war chest
Scorpio Tankers has announced its intention to charter in two handymax product tankers, as well as securing a large loan to finance newbuilds.

The charters, each at $12,500 per day, include a 37,412dwt for one year, with an option for an additional year at $13,250 per day, and a 37,455dwt for 18 months, with an option for an additional year at $13,500 per day. Both vessels are expected to be delivered in mid-October 2013.

Meanwhile, the company has secured a loan facility of up to $429.6m through Letters Of Intent (LOIs). These include $129m from an unnamed “leading financial institution” and up to $300.6 million from in the Export-Import Bank of Korea (KEXIM), with the former maturing in 2020 and the latter in 2026. Scorpio intends to use the loans to finance up to 60% of the purchase price of newbuilds.

Scorpio also raised another $209.6m after the underwriters in its 20,000,000-share IPO exercised their over-allotment option, purchasing 3,000,000 additional common shares at $9.50 per share. The $209.6m figure factors in deducting underwriters’ discounts and offering expenses from the follow-on offering and the exercise of the over-allotment option. Following the move, Scorpio has a total of 187,656,424 shares of common stock issued and outstanding.