SFL Corporation Sells Two Older Suezmax Tankers
SFL Corporation, backed by shipping magnate John Fredriksen, is taking decisive steps to reshape its tanker portfolio through the sale of two older suezmax tankers. The 2015-built vessels, SFL Thelon and SFL Ottawa, are currently chartered to Koch Industries and are expected to be sold for approximately $57 million each. After accounting for debts and fees, SFL anticipates a net gain of around $26 million per ship from this transaction.
Details of the Transaction
The sale reflects SFL’s strategic move to optimize its fleet, as the two vessels are among the oldest in the company’s suezmax category, which consists of seven units. Upon completion of the sale, the vessels are scheduled for delivery to their new owners in the fourth quarter and first quarter of the coming year. SFL projects a combined book gain of about $23 million from these transactions, demonstrating the value retained in its fleet. This decision follows a pattern of selective restructuring, aiming to bolster the company’s operational efficiency in a competitive market.
Alongside the sale, SFL has also agreed to mutually terminate the charters for the 2020-built suezmax vessels, SFL Albany and SFL Fraser, though these ships will remain part of SFL’s fleet. Both retained vessels feature eco-designs and are equipped with scrubbers, indicating a commitment to environmental standards. They will initially operate in the spot market, with the potential for longer-term employment as market conditions improve.
Future Investments and Market Strategy
CEO Ole Hjertaker expressed that the sale exemplifies the embedded value within SFL’s fleet, allowing the company to realize profits on ships that are just a decade old, only three years after their acquisition. He emphasized that a portion of the proceeds from this sale will be reinvested into acquiring younger, more fuel-efficient vessels. This strategy positions SFL to take advantage of the current strong charter market, where spot and period rates have significantly surpassed legacy fixed contracts.
By focusing on updating its fleet, SFL aims to enhance its competitiveness and sustainability in an evolving maritime industry. The company’s proactive approach indicates a keen awareness of market dynamics and a commitment to adapting to the changing demands of shipping logistics.
