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Overview

Taiping & Sinopec Financial Leasing enters into a sale-and-leaseback agreement worth $126 million USD with Euronav for three VLCC oil tanker vessels

Commitments (Constant USD, 2023)$130,786,424
Commitment Year•2019Country of Activity•BelgiumDirect Recipient Country of Incorporation•BelgiumSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Dec 30, 2019
Start (actual)
Dec 30, 2019
End (actual)
Dec 30, 2019

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

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This sale-and-leaseback agreement supported the acquisition of three Very Large Crude Carrier (VLCC) oil tanker vessels by Euronav NV, which is headquartered at De Gerlachekaai 20, 2000 Antwerpen, Belgium. More detailed locational can be found at: https://www.openstreetmap.org/way/439706128

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned companies

  • Taiping & Sinopec Financial Leasing Co., Ltd.

Receiving agencies

Private Sector

  • Euronav NV

Loan desecription

Taiping & Sinopec Financial Leasing enters into a sale-and-leaseback agreement worth $126 million USD with Euronav for three VLCC oil tanker vessels

Interest type•Unknown

Narrative

Full Description

Project narrative

On or prior to December 30, 2019, Taiping & Sinopec Financial Leasing Co., Ltd. — a Chinese financial services and leasing company jointly owned by state-owned China Petrochemical Corporation (Sinopec) and majority state-owned Taiping Life Insurance Co., Ltd. — entered into a sale-and-leaseback agreement worth $126 million USD with Euronav NV — an Antwerp, Belgium-based and incorporated international shipping company specializing in the transportation and storage of crude oil listed on the New York Stock Exchange (NYSE) and Euronext Brussels — for three Very Large Crude Carrier (VLCC) oil tanker vessels. The three VLCCs were 'Nautica', 'Nectar', and 'Noble', all with deadweight tonnage (DWT) of 307,284. The vessels were sold for a net en-bloc purchase price of $126 million USD and then delivered to Taiping & Sinopec on December 30, 2019, and were then leased back to Euronav under a 54-month bareboat contract (operating lease) at an average rate of $20,681 USD per day per vessel; the vessels would redelivered to Taiping & Sinopec at the conclusion of the contract, though Euronav had purchase options exercisable on the vessels after the first year. The proceeds of the agreement generated a capital gain of $23.0 million USD for Euronav and were used in part, to repay existing debt, after which there was $66.0 million USD in free cash available for it. Prior to July 2023, Euronav purchased back 'Nautica'; then, in July 2023, Euronav sold 'Nautica'; the vessel was delivered to its new owner on July 17, 2023. In 2023, Euronav exercised the purchase option for the VLCC 'Nectar', and repurchased it from Taiping & Sinopec Financial Leasing; the vessel was delivered to Euronav on September 27, 2009. Euronav also purchased 'Noble' prior to March 2024; in March 2024, Euronav sold the 'Nectar' and 'Noble'.

Staff comments

1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 2. The precise commitment date is unknown, as the transaction was announced on January 2, 2020, but as the vessels were delivered on December 30, 2019, it evidently was committed prior to or on that date. Therefore, for the time being, AidData has coded December 30, 2019 as the commitment_date field and marked the commitment_date_estimated? field as True.