SFL Corporation, which is associated with an individual named John Fredriksen, has agreed to sell seven tankers to the commodity giant Trafigura. This deal is expected to generate approximately $275 million in net revenue and record a book profit of $175 million.
Details of the Tanker Shipment
This package includes four LR2 product tankers built in 2014 and 2015 and three suezmax tankers built in 2019, all of which are currently leased to Trafigura. The current leases will expire with the change of ownership of the vessels in the fourth quarter of 2026 and the first quarter of next year.
Read more: Exmer Confirms Sale of First Suezmax Tanker
Tankers Included in the Deal
SFL's fleet identifies the LR2 tankers as SFL Puma, SFL Panther, SFL Tiger, and SFL Lion, while the suezmax group includes Marlin Sicily, Marlin Santorini, and Marlin Shikoku. The individual sale prices of these tankers have not been disclosed, but SFL is expected to receive about $275 million from this sale.
SFL's management, Ole Hjertaker, stated that the company has received strong cash flow from these vessels over the past five years and has also retained a significant share of the asset value increase. SFL purchased the four LR2 tankers from Frontline-related companies for $160 million in late 2021 and attached minimum five-year leases to Trafigura, adding approximately $160 million to its contracts.
The suezmax tankers were separately acquired in 2021, and SFL described them as a counter-cyclical investment. These three vessels were also leased for a minimum of five years and added $140 million to SFL's fixed contracts.
SFL's Future After the Sale
Following this deal, SFL will remain exposed to the tanker market. Its fleet includes three LR2 tankers built in 2024 that are leased to Vitol, as well as LR2 tankers built in 2017 and suezmaxes built in 2020 that are traded in the short-term market.
The company has also begun further investments in other transportation sectors. Just two days before the announcement of the sale to Trafigura, SFL ordered two large ammonia carriers for $216 million, expected to be delivered in the second quarter of 2028, and has long-term contracts with a reputable European oil company.
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