Emanuele A. Lauro led Scorpio Bulkers Inc. (NYSE: SALT) said today that following its recent string of vessel sales, its board of directors has authorized the company, as part of its transition to a sustainable future, to sell its remaining dry bulk vessels and exit the dry bulk sector during 2021.
“As a result of this decision” said today’s announcement, “”the company expects to record a write-down ranging from $475 million to $500 million on vessels sold and classified as held for sale. This estimated write-down includes non-cash charges of $425 million to $440 million to reflect the current fair market value of the fleet and $50 million to $60 million of estimated cash charges, which include $34 million to $36 million for the termination of various vessel-related agreements, as well as other selling costs. The company will also write-off approximately $10 million of deferred financing costs as outstanding debt is repaid.”
The company says it has submitted a notice of termination to its managers, effectively ending its relationship with Scorpio Commercial Management S.A.M. and Scorpio Ship Management S.A.M.
To reflect its transition, the board of directors has also resolved to seek shareholders’ approval to change the name of the company.
The proposed new name will be announced on or before January 8.
Scorpio Bulkers announced its intention to exit the dry bulk sector during 2021 and is investing in the next generation of wind turbine installation vessels. The company has recently sold eight vessels and has contracted to sell sixteen additional vessels, all of which are expected to close in the first half of 2021. It say it intends to sell its 25 remaining wholly-owned or finance leased dry bulk vessels (including seven Kamsarmax vessels and 18 Ultramax vessels) during 2021. The company has signed a letter of intent to enter into a shipbuilding contract with Daewoo Shipbuilding and Marine Engineering Inc. to build a wind turbine installation vessel to be delivered in 2023, with options to build three further similar vessels.