Scorpio today laid down $120m for four tankers at Hyundai Mipo and president Robert Bugbee says the owner has no intention of letting up on its expansion efforts.
Asked if today’s swoop would mark the end of the owner’s spending for now, he said: “No. We would expect to make further orders. We have just raised a lot of capital to do that.
“We are increasing confident about the positive dynamics in the products tanker sector and increasingly confident about the superior returns eco vessels provide.
“And we are increasingly confident with increased environmental regulations and awareness our customers will want these vessels.”
Bugbee refuses to comment on exactly how many new tankers the owner has on its wish list or when further deals will be placed.
Observers note the owner collected around $225m from its last trip to the capital markets, which allied with 60% debt financing would give Scorpio $570m at its finger tips.
With today’s order costing $120m the owner has invested in the region of $250m since the RS Platou-led fundraiser, meaning only around 40% of that capital has been set to work so far, analysts note.
Bugbee says the $30m Scorpio is spending on the four 37,000-dwt tankers at Mipo is only $1m more than the group paid for similar ships at the same yard back in 2002.
“Prices are virtually the same as 12 years ago and these are better specification vessels,” he said.
Scorpio now has 20 firm eco newbuildings on its books with 14 more options pencilled in.
The company has been a chief cheerleader for the benefits of eco vessels, along with John Fredriksen’s Frontline 2012.
However, Bugbee dismisses any suggestion that the two companies will be going head to head.
Frontline 2012 has 14 chemical and products tankers in its own orderbook, but the Scorpio president insists the two companies are pursuing complementary strategies rather than vying for supremacy.
“I see no competition with Frontline ’12,” Bugbee said.
“I see us as complementary as Frontline ’12 is taking a broad view of eco designs in the recovery of commodity shipping of which products are one area.”
