Scorpio Bulkers raises cash through sale and lease-back

Monaco-based Scorpio Bulkers announced on Tuesday, April 17, that the company has entered into a financing transaction in respect of one of the company’s Ultramax vessels with an unaffiliated third party in Japan.

As part of the transaction, the company will sell a 2015 Japanese built Ultramax dry bulk vessel, SBI Tango, for a consideration of $19 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 + 1.73 percent.

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 will be treated as a financial lease for accounting purposes, increases the company’s liquidity by approximately $10.3 million after repayment of the vessel’s existing loan.

Scorpio Bulkers is a provider of marine transportation of dry bulk commodities and has an operating fleet of 56 vessels consisting of 55 wholly-owned or finance leased drybulk vessels, including 18 Kamsarmax vessels and 37 Ultramax vessels, and one time chartered-in Ultramax vessel.