Please ensure Javascript is enabled for purposes of website accessibility

Scorpio's Fleet Grows Again

By Rich Smith - Apr 4, 2013 at 8:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Monaco oil shipper wants six new ships built, charters three more.

Scorpio Tankers' (NYSE: STNG) hunger for new ships just cannot be assuaged.

Barely a week after placing an order for six new tankers late last month, the company's back in the market for more tankers -- again. On Thursday, the Monaco-based oil shipper announced it is taking over the contracts for construction of four MR-class tankers that are currently being built by Hyundai Mipo Dockyard Co. Ltd. (HMD) for a third party. Scorpio will sign novation contracts with said customer, essentially "stepping into its shoes," and becoming the contracting customer. Each of the STI Amber-class vessels will cost it $36.5 million when delivered -- sometime between June and September 2013.

Scorpio's also hiring two more shipbuilding contracts with HMD of its own, exercising options to buy two Handymax ice class-1A vessels. These will cost Scorpio $31.5 million apiece, inclusive of the cost of taking out fixed-price options on even more ships.

Finally, Scorpio has chartered-in three existing vessels for its fleet, a Handymax and two LR2 product tankers, for which it will pay day rates of between $12,600 and $16,250.

At present, Scorpio has a total of 39 tankers under contract to be built -- 23 MRs, eight LR2s, and eight Handymaxes. Scorpio expects to have five of these ships in hand by September 2013, with the rest arriving before the end of 2014. When all's said and done, the company expects to pay $1.3 billion for these ships now under contract.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.