Euronav has entered into a sale and leaseback agreement with Taiping and Sinopec Financial leasing for three VLCCs
Nautica, Nectar and Noble, all built at Dalian Shipyard, were sold for a net en bloc price of US$126M. The vessels were delivered to the new owners on 30 December 2019.
Euronav has leased back the three vessels under a 54-month bareboat contract at an average rate of US$20,681 per day per vessel. The vessels will be redelivered to their new owners at the end of the contract. Euronav has purchase options exercisable after the first year.
The transaction produced a capital gain of about US$23M and will be booked as an operating lease under IFRS. The transaction is expected to generate US$66.6M in cash after the company settles the debts associated with the vessels.
Euronav chief executive Hugo De Stoop said the price the VLCCs fetched would help the company recycle the cash into younger tonnage adding “At the same time we maintain our exposure to a freight market that is currently characterised by robust market fundamentals and which is, we believe, in the early stages of a sustained cycle of elevated cash flows.”