26SEP2019 - NEWS - Trafigura bets on shipping stocks in Scorpio share deal

Scorpio Tankers has agreed to acquire Trafigura subsidiaries that have leasehold interests in 19 ships in an all-share transaction worth $803 million, the companies said on Tuesday.

The deal is the latest move by commodities trader Trafigura to convert its investments in ship leases and ships that transport its commodities into shares of shipping companies.

The strategy is in expectation of an upturn in the tanker market in the coming months and an accompanying increase in the value of the equity stakes.

Under the agreement, Scorpio Tankers will take over the roughly $668 million principal balance on the leases and cover monthly costs for the 19 oil products tankers – four of which are still under construction – held in subsidiaries of Trafigura’s wholly owned Trafigura Maritime Logistics.

Scorpio Tankers will separately issue about 4.7 million shares at $29 a share to Trafigura for an aggregate market value of about $135 million.