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New financing agreement to see Scorpio Bulkers sell an Ultramax dry bulk vessel

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Dry Bulk,

Scorpio Bulkers Inc. has entered into a financing transaction in respect of one of the company’s Ultramax dry bulk vessels with an unaffiliated third party in Japan.

As part of the transaction, the company will sell its 2015 Japanese built Ultramax dry bulk vessel, SBI Tango, for a consideration of US$19 million and then lease it back from the buyer through a five-year bareboat charter agreement at a rate of US$5400 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%.

According to the company, the transaction also provides Scorpio Bulkers 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 shall be treated as a financial lease for accounting purposes, increases the company’s liquidity by approximately US$10.3 million after repayment of the vessel’s existing loan. 

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