Scorpio Bulkers Swaps Capesize Newbuilds for Product Tankers

13 months after putting an order for twenty Capesize bulk carriers, Scorpio Bulkers is modifying their order and as an alternative swapping out three of their Capes for 3 LR1 product tankers.

Considering the massive hit the Baltic Dry Index has taken over the previous 12 months, and the quantity of current tonnage available in the market, this transfer is no surprise.

Scorpio says two of those new LR1s will delivered from an undisclosed South Korean yard inside the second quarter of 2017 and one inside the third quarter of 2017.

As a results of this order change, Scorpio will incur a lack of roughly $22 million referring to writing down the contracts to their estimated honest market worth.

Due to the very fact Scorpio Bulkers is a dry bulk transport firm, these LR1 newbuilds will now be listed on the corporate’s steadiness sheet as belongings held on the market and if the newbuild contracts are bought for his or her present market worth, Scorpio Bulkers says the estimated future money obligations will likely be diminished by roughly $60 million.

Scorpio Tankers has stated they won’t buy the LR1s and Scorpio Bulkers notes there aren’t any plans for any additional contract conversions.