Belgian tanker giant Euronav has entered into a sale and leaseback agreement for three VLCC vessels with Taiping & Sinopec Financial Leasing. The three VLCCs – all 2008-built in Dalian – are the Nautica, Nectar and Noble. The vessels were sold for a net en bloc purchase price of $126m.
The transaction produced a capital gain of about $23m and will be booked as an operating lease under IFRS. After repayment of the existing debt, the transaction has generated$66.6m free cash.
Euronav has leased back the three vessels under a 54-months bareboat contract1 at an average rate of $20,681 per day per vessel. At the end of the bareboat contract, the vessels will be redelivered to their new owners. Euronav has purchase options exercisable after the first year.
Euronav CEO Hugo De Stoop said: “Euronav is pleased and honoured to have executed this transaction with a leading Chinese counterparty. Consistent with our approach on fleet renewal, we are securing an excellent price for these vessels whilst retaining the capability to recycle this cash into younger tonnage. At the same time we maintain our exposure to a freight market that is currently characterised by robust market fundamentals and which is, we believe, in the early stages of a sustained cycle of elevated cashflows.”