Euronav Concludes Sale, Leaseback Deal for VLCC Trio

Belgium’s tanker shipping company Euronav NV has entered into a sale and leaseback agreement for three very large crude carriers (VLCCs) with China-based Taiping & Sinopec Financial Leasing.

The ships in question are Nautica, Nectar and Noble. Built at Dalian shipyard in China in 2008, each of the tankers has a deadweight of 307,284 tons.

As informed, the vessel trio was sold for a net en-bloc purchase price of USD 126 million and delivered to the new owners on December 30, 2019.

Euronav has leased back the three vessels under a 54-month bareboat contract at an average rate of USD 20,681 per day per vessel. At the end of the bareboat contract, the VLCCs will be redelivered to their new owners. Euronav enjoys purchase options exercisable after the first year.

Commenting on the transaction, Hugo De Stoop, Euronav CEO, said: “Consistent with our approach on fleet renewal, we are securing an excellent price for these vessels whilst retaining the capability to recycle this cash into younger tonnage.” 

“At the same time we maintain our exposure to a freight market that is currently characterized by robust market fundamentals and which is, we believe, in the early stages of a sustained cycle of elevated cashflows.”

According to Euronav, the transaction produced a capital gain of about USD 23 million and will be booked as an operating lease under IFRS. After repayment of the existing debt, the transaction generated USD 66.6 million free cash.

Euronav’s owned and operated fleet currently comprises two ULCCs, 42 VLCCs, 27 Suezmaxes (of which two owned in 50%-50% joint venture) and two FSO vessels (both owned in 50%-50% joint venture).