Scorpio’s boost from VLCC sales

May 02 2014

For the three months ended March 31, 2014, Scorpio Tankers reported net income of $53.3 mill, compared to a net income of $6.6 mill in 1Q13.

However, the company's adjusted net income was $1.9 mill, which excluded a gain of $51.4 mill, resulting from the previously announced sale of seven newbuilding VLCCs and an unrealised gain on derivative financial instruments of $47,000.

In March 2014, Scorpio Tankers converted its newbuilding credit facility with Credit Agricole Corp and Investment Bank and Skandinaviska Enskilda Banken from a term loan to a reducing revolving credit facility.

This gives the company the ability to draw down and repay the available commitments under the facility when needed. All other terms and definitions remain unchanged.

The amount available under this facility is $82.3 mill and is fully drawn as of the end of April. The amount available will reduce by $1.5 mill each quarter until the maturity date in June 2019.

Scorpio Tankers later announced that it had taken delivery of the MR, ‘STI Meraux’ from SPP Shipbuilding of South Korea.

After delivery, this vessel began a one year timecharter at a rate consistent with the current market level, which included a profit sharing mechanism whereby earnings in excess of the base time charter rate will be split between the company and charterer.

On 28th April, 2014, the board authorised a share buyback programme of $100 mill of its common stock. The company also said that it expected to repurchase these shares in the open market, at times and prices that are considered to be appropriate, but is not obligated under the terms of the programme to repurchase any shares.

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