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Scorpio Tankers in five-ship sale and leaseback deal with China’s AVIC

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Scorpio Tankers is strengthening its balance with a sale and leaseback deal for five vessels with China’s AVIC International Leasing.

The company said in a press release that it would sell and lease back three MR product tankers (STI Ville, STI Fontvieille and STI Brooklyn) and two LR2 product tankers (STI Rose and STI Rambla).

The exercise is expected to boost Scorpio Tankers’ liquidity by $42m in aggregate after the repayment of outstanding debt. The company added that these lease financing arrangements are part of its 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, it also has purchase options beginning at the end of the second year of each agreement as well as a purchase obligation for each vessel upon the expiration of each agreement.

Chinese leasing companies have been aggressively moving into the shipping market in recent years.

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