Ardmore Shipping sells some tankers, leasebacks others

Ireland-based tanker owner and operator Ardmore Shipping has sold two vessels and refinanced seven more, after losses widened in Q4 2018.

The Bermuda-headquartered company, whose principal operating offices are in Cork, Ireland, agreed to sell 2004-built, Marshall Islands-flagged, 28,114 gt Ardmore Seamaster (IMO 9271951), entered with West of England Club, for $9.7m. It expects to make a loss on the sale of about $6.5m.

Three months ago Ardmore agreed terms for the sale of 2002-built, 28,852 gt oil products tanker Ardmore Seatrader (IMO 9240847, now the Sanmar Santoor), entered with Steamship Mutual. The sale price for the vessel was $8.3m and the vessel delivered to the buyer on January 9, 2019. Ardmore recognized a loss of $6.4 million on the sale in the fourth quarter of 2018.

The company has options to repurchase the vessels at various stages prior to maturity and the other terms and conditions of the financings are generally in line with Ardmore’s existing debt facilities.

Ardmore Shipping reported a net loss of $8.8m in Q4 2018, compared with a loss of $3.8m a year earlier.

The company currently has 27 vessels in operation. It has completed refinancing for seven vessels through sale and leaseback arrangements, with net proceeds totalling $32.7m after debt repayment. The contracts run from seven to 12 years.

CEO Anthony Gurnee said that he anticipated  a significant demand boost for product tankers from mid-2019, ahead of the implementation of MARPOL 2020 “We expect this additional layer of product tanker demand, which some analysts expect to be 5% or more, to last up to two years until the market reaches a new equilibrium”, he said.

Ardmore Dauntless and Ardmore Defender were refinanced in a sale and leaseback transaction with Ocean Yield ASA having a lease term of 12 years.

Ardmore Explorer and Ardmore Encounter were refinanced in a sale and leaseback transaction with an unnamed “top-tier” Chinese financier, with a lease term of seven years.

Ardmore Seavanguard and Ardmore Exporter were refinanced in a sale and leaseback transaction with another “top-tier” Chinese financier, also with a lease term of seven years.

Ardmore Engineer was refinanced in a sale and leaseback transaction with a “high-quality” Japanese financier with a lease term of 11 years.

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