Scorpio Bulkers Inc announced that it has entered into a financing transaction in respect of one of the Company’s Kamsarmax vessels with unaffiliated third parties in Japan.
The cost of the financing is equivalent to an expected fixed interest rate of 4.24% for 10 years. If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent margin at current swap rates would be LIBOR + 2.07%.
As part of the transaction, the Company will sell a 2015 Japanese built Kamsarmax dry bulk vessel, SBI Rumba, for a consideration of approximately $19.6 million and then lease it back from the buyers through a 9.5 year bareboat charter agreement, with the Company’s option to extend for a further six months.
The agreement also provides the Company with options to repurchase the vessel beginning on the fifth anniversary of the sale and until the end of the bareboat charter agreement.
This transaction, which shall be treated as a financial lease for accounting purposes, increases the Company’s liquidity by approximately $6.0 million, net of commissions and after repayment of the vessel’s existing loan.
Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities. Scorpio Bulkers Inc., after the completion of the recent acquisition of six Ultramax vessels, will own 52 vessels, consisting of 18 Kamsarmax vessels and 34 Ultramax vessels.
The Company also time charters-in one Ultramax vessel. The owned fleet will have a total carrying capacity of approximately 3.6 million deadweight tonnes upon the completion of the acquisition of the six Ultramax vessels.