SFL – Sale of Suezmax Tankers and Termination of Charters

Core Insights - SFL Corporation Ltd. has agreed to sell two 2015-built Suezmax tankers to a subsidiary of Koch Industries for approximately $57 million each, with net proceeds estimated at $26 million per vessel after debt repayment and termination fees [1][2] - The transaction is expected to yield an aggregate book gain of approximately $23 million, which will be allocated between the two vessels [2] - The company will also terminate charters for two 2020-built Suezmax tankers with Koch, incurring a termination fee as per a pre-agreed profit-sharing arrangement [3] - The retained vessels are eco-designed and equipped with scrubbers, initially employed in the spot market, with potential for longer-term employment [3] - The CEO highlighted the transaction as a demonstration of the fleet's embedded value, allowing for significant profit realization from older vessels while benefiting from solid cash flows [4] - A portion of the proceeds from the sale will be reinvested in younger, more fuel-efficient vessels to capitalize on the current strong charter market [4] Company Overview - SFL Corporation has a diverse fleet including tankers, bulkers, container vessels, car carriers, and offshore drilling rigs, and has paid dividends quarterly since its NYSE listing in 2004 [5] - The company's long-term distribution capacity is supported by a portfolio of long-term charters and significant growth in its asset base over time [5]