Athens: NYSE-listed Scorpio Tankers is to spend up to $250m buying back its securities, but says it won’t buy two LR2 product tanker newbuildings from sister company Scorpio Bulkers.
The company says it intends to purchase its bonds and common stock in both the open market and in privately negotiated transactions. At the time of writing, Scorpio Tankers’ stock is trading at $9.22 per share; a total of 181,005,026 shares are outstanding.
The securities to be purchased also comprise convertible senior notes due 2019, issued in June 2014; unsecured senior notes due 2020, issued in May 2014; and unsecured senior notes due 2017, issued in October 2014.
The outstanding notes due in 2019, 2020 and 2017 have a total principal amounts of $350m, $53.75m and $51.75m respectively.
The buyback programme was approved on May 27 by the Monaco-based company’s board of directors. It supersedes a previous stock buyback programme announced in July 2014.
Meanwhile, Scorpio Tankers has this month taken delivery of a new MR product tanker, STI Notting Hill (52,000 dwt), from South Korea’s Hyundai Mipo shipyard. The vessel has begun an up to 120-day timecharter for approximately $18,000 per day for an unnamed charterer.
Scorpio Bulkers’ two LR2s that had previously been candidates for sale to Scorpio Tankers are currently under construction. Deliveries are expected in the fourth quarter of 2016 and first quarter of 2017.
In February, Scorpio Bulkers announced it would change its contracts for three new capesize vessels to three LR1 product tankers instead. The three 74,500-dwt LR1 tankers were reported sold in March to Japan’s Nisshin Shipping for a price of around $44m per vessel. The tankers are due for delivery in 2017.