John Fredriksen’s Ship Finance International (SFL) has been confirmed as the buyer of three VLCC newbuildings owned by Arne Fredly’s Hunter Group under a sale and leaseback deal announced by Hunter at the end of August.
The three vessels Hunter Atla, Hunter Saga and Hunter Laga are currently ready for delivery at South Korean yard DSME. The net purchase price is $60m each, and the scrubber-fitted vessels will commence five-year bareboat charters to Hunter Group with purchase options.
“The agreed purchase price is significantly below current broker estimates for VLCC resales, effectively providing SFL with a very attractive risk profile and the transaction will add more than $100m to SFL’s fixed-rate charter backlog,” SFL said in a release.
SFL will initially fund the acquisition from its cash position, but expects to finance a significant portion of the purchase price in the commercial bank market. The company said it has already received a term sheet on bank financing at very attractive terms which will significantly enhance the return on invested equity.
“In an environment where traditional bank financing for maritime companies is becoming increasingly scarce, this transaction highlights SFL’s unique position as a specialty financing company. With a versatile toolbox, including time charters, bareboat charters and senior financing structures, we are able to provide our customers with competitive tailor made solutions, whilst at the same time creating shareholder value on the back of our strong balance sheet and our unique access to attractively priced capital,” said Ole Hjertaker, CEO of SFL Management.
Hunter Group ordered a total of eight VLCCs at DSME last year. In June, the company sold one of the VLCCs to South Korean company SK Shipping for $98m.