Scorpio Tankers Announces Vessel Sale Agreement

Rhea-AI Summary

Scorpio Tankers Inc. (NYSE:STNG) has announced an agreement to sell its 2019-built LR2 product tanker, STI Lily. The vessel sale is set at a price of $73.5 million and is expected to be finalized within the fourth quarter of 2024. This strategic move by the Monaco-based company represents a significant transaction in the tanker market, potentially impacting the company's fleet composition and financial position.

Positive

• Sale price of $73.5 million for a single vessel, potentially generating significant revenue
• Divestment of a relatively new asset (2019-built tanker) likely at a favorable market price

Negative

• Reduction in fleet size, which may impact overall capacity and revenue potential

Insights

Financial Analyst

The sale of the STI Lily, a relatively new LR2 product tanker, for $73.5 million is a significant transaction for Scorpio Tankers. This move could be seen as strategic asset management, potentially capitalizing on strong vessel valuations in the current market. The sale price appears robust for a 5-year-old vessel, which might indicate a seller's market for product tankers.

The transaction's impact on Scorpio's financials will be notable. It's likely to result in a substantial gain on sale, given the vessel's age and the typically high depreciation rates in the shipping industry. This could boost the company's Q4 2024 earnings. Moreover, the sale will improve Scorpio's liquidity position, providing additional financial flexibility for debt reduction, fleet renewal, or shareholder returns.

However, investors should consider the potential impact on future revenue streams and fleet capacity. The sale reduces Scorpio's LR2 fleet size, which could affect its market position in this segment. The company's decision to divest a modern vessel might also signal its view on future market conditions or a shift in fleet strategy.

MONACO, Oct. 01, 2024 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE:STNG) (“Scorpio Tankers,” or the “Company”) announced today that it has entered into an agreement to sell its 2019 built LR2 product tanker, STI Lily. The sale price is $73.5 million and the sale is expected to close within the fourth quarter of 2024.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns or lease finances 102 product tankers (39 LR2 tankers, 49 MR tankers and 14 Handymax tankers) with an average age of 8.5 years. The Company has entered into agreements to sell three of its vessels (one LR2 and two MRs), all of which are expected to close in the fourth quarter of 2024. Additional information about the Company is available at the Company’s website www.scorpiotankers.com, which is not a part of this press release.

Forward-Looking Statements

Matters discussed in this press release may constitute forward‐looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward‐looking statements in order to encourage companies to provide prospective information about their business. Forward‐looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “project,” “likely,” “may,” “will,” “would,” “could” and similar expressions identify forward‐looking statements.

The forward‐looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although management believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. The Company undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.

In addition to these important factors, other important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward‐looking statements include unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies in response to epidemic and other public health concerns including any effect on demand for petroleum products and the transportation thereof, expansion and growth of the Company’s operations, risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all, the failure of counterparties to fully perform their contracts with the Company, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, including the impact of the conflict in Ukraine and the developments in the Middle East, including the armed conflict in Israel and Gaza, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off‐hires, and other factors. Please see the Company’s filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties.

Contact Information

Scorpio Tankers Inc.
James Doyle – Head of Corporate Development & Investor Relations
Tel: +1 646-432-1678
Email: investor.relations@scorpiotankers.com

FAQ

What is the sale price of the STI Lily tanker announced by Scorpio Tankers (STNG)?

Scorpio Tankers (STNG) has announced the sale of the STI Lily tanker for $73.5 million.

When is the sale of Scorpio Tankers' (STNG) STI Lily expected to close?

The sale of Scorpio Tankers' (STNG) STI Lily is expected to close within the fourth quarter of 2024.

What type of vessel is Scorpio Tankers (STNG) selling in this agreement?

Scorpio Tankers (STNG) is selling a 2019-built LR2 product tanker named STI Lily.