Scorpio Bulkers: Farewell to dry bulk & welcome to offshore wind

Monaco-based ship owner and operator Scorpio Bulkers plans to sell its remaining dry bulk vessels, exit the dry bulk sector and change name during 2021 as part of its transition to a sustainable future.

As a result of this decision, the company expects to record a write-down ranging from $475 million to $500 million on vessels sold and classified as held for sale.

This estimated write-down includes non-cash charges of $425 million to $440 million to reflect the current fair market value of the fleet and $50 million to $60 million of estimated cash charges, which include $34 million to $36 million for the termination of various vessel-related agreements, as well as other selling costs, according to Scorpio.

The company will also write-off approximately $10 million of deferred financing costs as outstanding debt is repaid.

What is more, the company has submitted a notice of termination to its managers, ending its relationship with Scorpio Commercial Management s.a.m. and Scorpio Ship Management s.a.m.

Scorpio’s board of directors has also decided to seek shareholders’ approval to change the name of the company. The proposed new name will be announced on or before 8 January 2021.

Focus on offshore wind

In August this year, the dry bulk operator revealed a decision to invest in a wind turbine installation vessel, making a move into a brand new sector. 

Scorpio Bulkers signed a letter of intent with South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME) for the construction of this vessel which is slated for delivery in 2023. The contract includes options for three more similar vessels.

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Since September 2020, the company has been selling its dry bulk vessels to implement steps within the envisioned transition.

It recently sold eight vessels and has contracted to sell sixteen additional vessels, all of which are expected to close in the first half of 2021. Scorpio Bulkers intends to sell the 25 remaining wholly-owned or finance leased drybulk vessels, including 7 Kamsarmax vessels and 18 Ultramax vessels, during 2021.