Scorpio Tankers Gets New $429.6M Loan for More Newbuildings

The company reached charter agreements for two handymax vessels

Scorpio Tankers Inc. [NYSE:STNG] (Scorpio Tankers) is borrowing $429.6 million to help finance more newbuildings, the company announced in a press release Wednesday.

Earlier this year the company ended a 6 month newbuild order spree that saw it put 54 new vessels on order.

For its latest fundraising efforts, Scorpio Tankers said it has received a commitment letter from "a leading financial institution" of $129 million and a letter of intent from the Export-Import Bank of Korea (KEXIM) of up to $300.6 million for the loan facility being arranged by the financial institution.

"The KEXIM Credit Facility would be used to finance up to 60% of the purchase price of newbuildings upon delivery," the company said.

"The Commercial Tranche matures in 2020 and the KEXIM Tranche matures in 2026 assuming the Commercial Tranche is refinanced through that date."

Scorpio Tankers also announced that underwriters in a public offering announced earlier this month have exercised their over-allotment option to buy additional shares, giving the company total net proceeds of $209.6 million.

Additionally, the company said it has agreed to time charter-in two of its Handymax product tankers, one of them for one year at about $12,500 per day with an extension option for $13,250 per day for an additional year, and the other for eighteen months at about $12,500 per day, also with a potential one-year extension at $13,250 per day.

Both vessels are expected to be delivered before the middle of October 2013.

Scorpio announced its public offering earlier this month, saying it needed capital to buy new liquefied petroleum gas (LPG) and product tankers.