Scorpio Tankers Orders 16 New Vessels from Korea

Scorpio Tankers Inc. announced today that it has reached agreements with five shipyards in Korea to construct 16 newbuilding vessels consisting of eight LR2, four MR, and four Handymax ice class-1A product tankers.

Scorpio Tankers Orders 16 New Vessels from Korea

In addition, the Company announced that syndication of the Company’s previously announced $267 million Credit Facility has been heavily over-subscribed resulting in an increase of the overall commitments received from new and existing financial institutions to $525 million.

Emanuele Lauro, chief executive officer and chairman of the board, commented, “These 16 orders for fuel efficient vessels, and, as significantly, the over-subscription of our 2013 credit facility, have solidified our unique position in front of an improving cycle in product tankers. We are pleased that our shareholders and lenders alike are showing their support of our strategy.

“Furthermore, we are observing attenuated capacity at quality shipyards, meaning that prices have moved up 8-12% and expected deliveries for new orders are moving beyond 2015. Under these circumstances, we have no plans for further newbuilding contracts.”

Newbuilding Vessels

LR2 Newbuildings

The Company reached agreements to construct eight, 114,000 dwt, LR2 product tankers for approximately $52.0 million each, consisting of four at Samsung Heavy Industries Co., Ltd. (“SHI”), two at Hyundai Samho Heavy Industries Co., Ltd. (“HSHI”), and two at Daewoo Shipbuilding and Marine Engineering Co., Ltd. (“DSME”). These vessels are scheduled to be delivered in the first and second quarters of 2015.

MR Newbuildings

The Company reached an agreement with SPP Shipbuilding Co., Ltd. of South Korea (“SPP”) to construct four 52,000 dwt MR product tankers for approximately $32.5 million each. These vessels are scheduled to be delivered in the first and second quarters of 2015.

Handymax Ice Class-1A Newbuildings

The Company reached an agreement with Hyundai Mipo Dockyard Co., Ltd. of South Korea (“HMD”) to construct four Handymax ice class-1A (37,000 dwt) product tankers for approximately $31.6 million each. These vessels are scheduled to be delivered in the third quarter of 2014.

Newbuilding Program Summary

The Company currently has a total of 54 newbuilding product tanker agreements, which include 26 MR, 16 LR2 and 12 Handymax ice class-1A vessels, at HMD, SPP, HSHI, DSME and SHI. Four of the newbuildings are expected to be delivered to the Company by September 2013, 38 within 2014 and the remaining 12 in the first half of 2015.

The estimated future payment dates and amounts for these vessels are as follows:

Q2 2013                                               $ 197.3 million

Q3 2013                                               $  176.7 million

Q4 2013                                               $  167.3 million

Q1 2014                                               $  100.4 million

Q2 2014                                               $  320.3 million

Q3 2014 3                                           $    77.0 million

Q4 2014                                              $  288.7 million

Q1 2015                                               $   207.5 million

Q2 2015                                               $  144.0 million

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Total                                                $ 1,979.2 million

2013 Credit Facility Commitment Letter Update

All of the existing lenders in the 2013 Credit Facility have increased their commitments and additional financial institutions have agreed to participate, resulting in an upsizing of the Facility and an increase of overall commitments to $525 million from $267 million. The terms of the loan remain unchanged and the closing of the loan remains subject to usual and customary conditions precedent, including negotiation and execution of final documentation.

Time Charter-In Update

The Company agreed to time charter-in an MR product tanker, (49,999 dwt, 2010 built) for one year at approximately $14,150 per day. This vessel was delivered to the Company on May 20, 2013.

The Company also agreed to extend the time charters on two Handymax vessels that are currently time chartered-in, each for ten months at $12,800 per day beginning in June and July 2013, respectively. We have options to extend each charter for an additional year at $13,650 per day.

Source: Scorpio Tankers - worldmaritimenews.