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Scorpio Tankers cuts $141.4m in debt with ship buybacks

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Scorpio Tankers will buy back eight ships sold under sale and leaseback deals as part of its ongoing debt cutting drive.

Five MR product tankers, STI Duchessa, STI San Antonio, STI Mayfair, STI St. Charles, and STI Yorkville and LR2 tanker STI Alexis were sold to “an international finance institution” in July 2018 and bareboat chartered back for a period of seven years.

Scorpio Tankers has opted to take up the purchase options it held for each of the vessels at the end of the third year. “The leases bear interest at LIBOR plus a margin of 3.00% per annum,” said the company, which expects to cut debt by $85.8m with the acquisitions.

The company announced it was also exercising purchase options for a pair of bareboat chartered-in tankers it acquired in the 2017 merger with Navig8 product tankers. STI Steadfast and STI Supreme’s leases bear interest at LIBOR plus a margin of 5.40% per annum and are expected to cut debt by $55.6m when the purchases are completed in 2023.

Scorpio Tankers also announced it had given notice to repay a credit facility for LR2 product tanker STI Madison. The $21m term loan facility was signed in early 2021 and was expected to mature in December 2022. The company said the facility had $17.5m of outstanding debt was expected to be repaid in full in October 2022.