Scorpio Tankers Inc. Announces Agreement for a $223.6 Million Prepayment under its 2023 $1.0 Billion Credit Facility
Scorpio Tankers (NYSE: STNG) announced the approval for a $223.6 million prepayment under its 2023 $1.0 Billion Credit Facility. This prepayment will be applied to the term loan's eight quarterly principal installments from Q3 2024 to Q2 2026. The prepayment is expected to reduce the company’s cash break-even rates by approximately $3,500 per day in the first year following the prepayment. The revolving portion of the credit facility remains at $288.2 million. After this prepayment, the future principal repayments on Scorpio Tankers' outstanding debt are structured over various quarters until 2026, amounting to a total of $1.401 billion.
- Approval for $223.6 million prepayment under 2023 $1.0 Billion Credit Facility.
- Prepayment reduces cash break-even rates by approximately $3,500 per day for the first year.
- Revolving portion of credit facility remains intact at $288.2 million.
- Structured debt repayment plan over various quarters until 2026, ensuring predictable financial planning.
- Significant debt repayment obligations totaling $1.401 billion up to 2026.
- Various principal payments and maturities due in 2024 and 2025, increasing financial commitments short term.
- Potential cash flow constraints owing to large repayments in the near term.
Insights
Scorpio Tankers' prepayment of $223.6 million on its $1.0 billion credit facility signals a strong financial position. Reducing debt ahead of schedule will directly lower interest expenses, improving overall cash flow. The decrease in daily cash break-even rates by approximately $3,500 is a tangible benefit, translating to higher profitability margins even if revenue remains constant.
This move also reflects prudent financial management and a commitment to debt reduction, which can enhance investor confidence. By maintaining the availability of $288.2 million under the revolving credit portion, Scorpio retains financial flexibility for potential opportunities or unexpected expenditures.
For retail investors, this prepayment suggests the company is in a robust liquidity position, decreasing financial risk and potentially leading to higher returns through improved operational efficiency.
The impact on Scorpio Tankers' cash break-even rates by approximately $3,500 per day is substantial for an industry dependent on spot rates, which can be volatile. Lowering break-even costs provides Scorpio with a competitive edge, allowing it to generate profits even in a softer market.
Understanding the debt repayment schedule and its implications for cash flow is crucial. By strategically reducing debt, Scorpio Tankers can optimize capital allocation, potentially reinvesting in fleet upgrades or expansion, which can drive future revenue growth.
This proactive approach to debt management may also positively influence Scorpio's credit rating, leading to more favorable terms in future financings.
MONACO, May 20, 2024 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE:STNG) ("Scorpio Tankers," or the "Company") announced today that it has received approval from majority lenders under its 2023
This repayment will not impact the availability under the revolving portion of this credit facility, which is currently
After giving effect to this repayment, the expected future principal repayments on the Company’s outstanding indebtedness as of March 31, 2024, which includes principal amounts due under the Company's secured credit facilities, lease financing arrangements and Senior Notes Due 2025, are as follows:
| Unsecured Maturities | 2024 and 2025 maturities, including announced debt and lease repayments | Recurring 2024, 2025 and thereafter maturities | Total, including announced repayments (1) | |||||||||
| Q2 2024 (2) | $ | - | $ | 341.7 | $ | 57.1 | $ | 398.8 | ||||
| Q3 2024 | - | - | 18.5 | 18.5 | ||||||||
| Q4 2024 | - | - | 24.0 | 24.0 | ||||||||
| Q1 2025 | - | - | 18.5 | 18.5 | ||||||||
| Q2 2025 | 70.6 | - | 18.0 | 88.6 | ||||||||
| Q3 2025 | - | - | 14.6 | 14.6 | ||||||||
| Q4 2025 (3) | - | 55.4 | 14.7 | 70.1 | ||||||||
| 2026 and thereafter | - | - | 768.1 | 768.1 | ||||||||
| $ | 70.6 | $ | 397.1 | $ | 933.5 | $ | 1,401.2 | |||||
(1) Amounts represent the principal payments due on the Company’s outstanding indebtedness as of March 31, 2024.
(2) Includes the unscheduled payment activity that has recently occurred or is expected to occur. This includes (i) one vessel under the 2021 CMBFL Lease Financing, which was repurchased in April 2024 for
(3) Includes the scheduled maturity payment of
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 108 product tankers (39 LR2 tankers, 55 MR tankers and 14 Handymax tankers) with an average age of 8.3 years. The Company has entered into an agreement to sell one of its MR tankers, which is expected to close in the second or third 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 epidemics 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 between Israel and Hamas, 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 did Scorpio Tankers announce in May 2024?
How will the prepayment affect Scorpio Tankers' cash break-even rates?
Does the prepayment affect the revolving portion of the credit facility?
When will the $223.6 million prepayment be applied?
What are the total future principal repayments on Scorpio Tankers' debt?
