Geneva, 24 September, 2019
Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers”), today announced that it has acquired subsidiaries of Trafigura Maritime Logistics Pte. Ltd. (“TML”), a wholly-owned subsidiary of Trafigura Group Pte Ltd (“Trafigura”), which have leasehold interests in 15 Medium Range (MR) product tankers and four LR2 product tankers (the “Vessels”).
Scorpio Tankers will assume the present value of the finance lease arrangement of approximately USD668 million and issue approximately 4.7 million shares at USD29.00 per share to Trafigura for an aggregate market value of approximately USD135 million. These shares will be subject to a customary lock-up through the end of 2019.
Scorpio Tankers also announced today private placements with Trafigura for USD35 million and Scorpio Services Holding Ltd., a related party, for USD15 million for an aggregate total of USD50 million or 1,724,137 shares at USD29.00 per share. Following the closing of both transactions which is expected before 27 September 2019, Trafigura will own approximately 10 percent of the ordinary shares of Scorpio Tankers.
The new-build super-eco vessels constructed by Hyundai Vinashin and New Times shipyards, are all fitted with exhaust gas cleaning systems operating with a potential significant competitive cost advantage in the changing oil and freight markets.
Rasmus Bach Nielsen, Global Head of Wet Freight at Trafigura commented:
“Trafigura enjoys a close working relationship with Scorpio Tankers, a company that we consider to be very well run. Today’s decision completes a strategic decision to crystalize financial benefits now and to move long term leasing obligations into leading shipping equities, a place where we see significantly more value and upside potential in the period ahead.
We are delighted that through these agreements Trafigura has become a significant shareholder in Scorpio Tankers. In our view, minimal supply growth and an expected demand spike through oil market disruption and bunkering inefficiencies, are making product tanker market fundamentals look healthier than we’ve seen for many years.”
Emanuele A Lauro, Chief Executive Officer of Scorpio Tankers Inc. commented:
“This transaction represents a close alignment between Scorpio and Trafigura, a strategic customer and now a valued shareholder. We share common beliefs in quality assets, quality service, and most importantly, the favorable fundamentals currently unfolding in the product tanker market. This fleet of 19 ultra-modern product tankers is a singular opportunity in an otherwise diminished global order book. The average age of our fleet will be reducing (from 4.1 to 3.7 years) and our fuel efficiency increasing. At the same time, IMO 2020 and other demand drivers are set to increase ton-mile demand significantly over the coming months.
In addition to Trafigura being a longstanding customer, their investment in Scorpio Tankers represents a new stage in our partnership which we believe will serve all our shareholders and stakeholders well.” Clarksons Platou Securities AS acted as sole financial advisor to Trafigura. For further details of the agreements including the list of vessels and finance lease arrangements, please refer to Scorpio Tankers’ website – www.scorpiotankers.com
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns or finance leases 109 product tankers (38 LR2 tankers, 12 LR1 tankers, 45 MR tankers and 14 Handymax tankers) with an average age of 4.1 years and bareboat charters-in 10 product tankers (three MR tankers and seven Handymax tankers). The figures do not include the acquisition described above. Visit www.scorpiotankers.com
Founded in 1993, Trafigura is one of the largest physical commodities trading groups in the world. Trafigura sources, stores, transports and delivers a range of raw materials (including oil and refined products and metals and minerals) to clients around the world. The trading business is supported by industrial and financial assets, including 49.3 percent owned global oil products storage and distribution company Puma Energy; global terminals, warehousing and logistics operator Impala Terminals; Trafigura's Mining Group; and Galena Asset Management. The Company is owned by around 700 of its 4,300 employees who work in 66 offices in 38 countries around the world. Trafigura has achieved substantial growth over recent years, growing revenue from USD12 billion in 2003 to USD180.7 billion in 2018. The Group has been connecting its customers to the global economy for more than two decades, growing prosperity by advancing trade. Visit: www.trafigura.com
Trafigura Beheer B.V. press release