Scorpio Bulkers moves ahead with offshore wind plans

In: Vessels
Scorpio Bulkers Inc. announced that following the recent sales of vessels by the Company, its Board of Directors has authorised the Company, to sell its remaining dry bulk vessels and exit the dry bulk sector during 2021. Scorpio Bulkers Inc., a provider of marine transportation of dry bulk commodities announced earlier this year that it intends to exit the dry bulk sector and is investing in wind turbine installation vessels.

As a result the decision to sell its remaining dry bulk vessels, the Company expects to record a write-down ranging from $475.0 million to $500.0 million on vessels sold and classified as held for sale.  This estimated write-down includes non-cash charges of $425.0 million to $440.0 million to reflect the current fair market value of the fleet and $50.0 million to $60.0 million of estimated cash charges, which include $34.0 million to $36.0 million for the termination of various vessel-related agreements, as well as other selling costs. The Company will also write-off approximately $10.0 million of deferred financing costs as outstanding debt is repaid.

Pursuant to the Master Agreement previously filed with the SEC governing the commercial and technical management of its vessels, the Company has submitted a notice of termination to its managers, effectively ending its relationship with Scorpio Commercial Management s.a.m. and Scorpio Ship Management s.a.m.

The Company has recently sold eight vessels and has contracted to sell sixteen additional vessels, all of which are expected to close in the first half of 2021. Scorpio Bulkers Inc. intends to sell its 25 remaining wholly-owned or finance leased drybulk vessels (including 7 Kamsarmax vessels and 18 Ultramax vessels) during 2021.

The Company has signed a letter of intent to enter into a shipbuilding contract with Daewoo Shipbuilding and Marine Engineering Inc. to build a wind turbine installation vessel to be delivered in 2023, with options to build three further similar vessels. 

The initial vessel will be built by Daewoo Shipbuilding and Marine Engineering Inc. for delivery that is scheduled in 2023. The WTIV is an NG-16000X design GustoMSC and includes a 1,500 ton Leg Encircling Crane (LEC) from Huisman Equipment B.V.. The total project cost is expected to be approximately $265-$290 million, subject to final design modifications.

To reflect its transition, the Board of Directors has also resolved to seek shareholders’ approval to change the name of the Company. The proposed new name of the Company will be announced on or before January 8, 2021.

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