Performance Shipping Inc. Secures Sale and Leaseback Agreement for Third Newbuild LR2 Aframax Tanker

Core Viewpoint - Performance Shipping Inc. has successfully secured financing for three newbuild LR2 Aframax tankers through a sale and leaseback agreement, which is expected to enhance the company's operational capacity and financial stability [1][2][3]. Financing Details - The total bareboat financing amount is US$45 million, with the vessel being sold and chartered back for an eight-year period at a fixed daily rate of US$6,850 plus a variable rate based on SOFR plus 2.05% per annum [2]. - A balloon payment of approximately US$25 million is due with the last installment, and the company has options to repurchase the vessel at predetermined rates after the second anniversary of the charter [2]. Newbuilding Vessels - The three newbuilding LR2 Aframax tankers, each with a deadweight tonnage of approximately 114,000 dwt, are expected to be delivered between August 2025 and January 2026 [1]. - The aggregate bareboat financing of US$134.6 million covers about 70% of the total shipbuilding contract cost of US$192.9 million, addressing nearly all remaining installments due to the shipyard [3]. Charter Agreements - The newbuild tankers have been chartered to Clearlake Shipping Pte Ltd. for five years at a rate of US$31,000 per day, with options for extension and profit sharing [3]. - The estimated daily cash flow breakeven rate, including lease payments, is about US$25,000 per tanker, which is significantly lower than the secured charter rate [3]. Fleet Renewal Strategy - The company aims to gradually renew its fleet, reducing the average age from 14 years to 10 years upon the delivery of the newbuild tankers [3].