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SFL, part of John Fredriksen’s business empire, is selling four LR2 product tankers and three Suezmax tankers to Trafigura. After profit sharing and debt repayment, the company expects net proceeds of around $275 million.
The seven vessels are already operating under time charters for the commodity trader. The existing charter contracts will terminate upon their handover to Trafigura, which is scheduled for the fourth quarter of 2026 and the first quarter of 2027.
The LR2 tankers were built in 2014 and 2015, whilst the three Suezmax tankers were built in 2019. SFL acquired the vessels in 2021 and 2022. The charter agreements include a profit-sharing clause in the event of a profitable sale.
The purchase prices of the individual vessels remain confidential. After deducting the profit-sharing payment and repaying the associated debt, SFL expects total net proceeds of around $275 million. The company estimates the expected book profit from the transaction at approximately $175 million.
“We have generated strong cash flows from the vessels over the past five years and, in addition, retained a significant share of the capital appreciation, which we are now realising,” explains Ole B. Hjertaker, CEO of SFL Management. The proceeds are to be reinvested in new, value-enhancing projects to strengthen the company’s long-term dividend-paying capacity.
Expansion in the gas tanker segment
The sale follows closely on the heels of the announced entry into a new segment: as HANSA reported yesterday, SFL – part of John Fredriksen’s business group – has ordered two Very Large Ammonia Carriers (VLACs), each with a cargo capacity of 93,000 m³. The newbuilds are due to be delivered from the second quarter of 2028. Total construction costs are estimated at around $216 million.
SFL has already concluded long-term time charter contracts for the gas tankers, which are equipped with dual-fuel propulsion, with an as-yet-unnamed European oil company. This increases the company’s fixed-rate charter backlog by at least $162 million. SFL has not announced any specific plans to use the proceeds from the recently agreed tanker sale to finance this newbuild project.
