SFL to buy product tanker quartet from Frontline in a $160M deal

Bermuda-based ship owner and charterer SFL Corporation has agreed to acquire four Aframax LR2 product tankers for an aggregate purchase price of $160 million.

As informed, the sellers of the tankers are affiliates of compatriot shipping company Frontline Limited and the purchase price is in line with valuations by independent shipbrokers. Hemen Holdings Ltd., which owns approximately 20% of the company’s issued and outstanding shares, is also a major shareholder in Frontline.

The vessels are built in 2014 and 2015 and have eco-design features including exhaust gas cleaning systems. The company expects to take delivery of the vessels between December 2021 and February 2022.

Furthermore, the units are planned to be deployed on long-term time charters to a subsidiary of Trafigura, a Switzerland-based commodity trading company.

The charter period of the vessels will be for minimum five years with extension options thereafter, adding approximately $160 million to SFL’s fixed-rate backlog, according to the firm.

The charterer will also have the option to develop a sale of the vessels during the charter period, subject to a profit share mechanism with SFL.

“We are very pleased to further expand our presence in the tanker market and the transaction demonstrates our ability to develop opportunities and achieve sustained growth through repeat transactions with our customers. We have this year added more than $1 billion to our charter backlog and will continue to explore new opportunities going forward,” Ole B. Hjertaker, CEO of SFL Management AS, said.

In September this year, the company revealed that it will sell its seven handysize dry bulk vessels to an unnamed Asian buyer for approximately $100 million.

As part of its fleet renewal program, SFL also acquired two 14,000 TEU containerships and sold 18 vintage feeder ships to a subsidiary of the Swiss shipping major Mediterranean Shipping Company (MSC) in August this year.