Narrative
Full Description
Project narrative
On February 28, 2022, ICBC Financial Leasing Co., Ltd. ("ICBCFL") entered into a $414 million USD sale and leaseback agreement with Hafnia Limited ("Hafnia") to finance the acquisition of 12 LRI product tanker ships from Scorpio Tankers Inc. The first vessel was expected to be delivered in March 2022. Upon delivery of each of the vessels, Hafnia was expected to lease the boats from ICBCL as bareboat charters for a period of 10 years. Hafnia was also expected to have monthly purchase options for each of the 12 vessels, with a purchase obligation for each ship upon expiry of the agreement. The vessels to be acquired using the proceeds from the facility include the “Hafnia Excel”, “Hafnia Excelsior”, “Hafnia Expedite”, “Hafnia Exceed”, “Hafnia Experience”, “Hafnia Executive”, “Hafnia Excellence”, “Hafnia Express”, “Hafnia Pride”, “Hafnia Providence”, “Hafnia Precision” and “Hafnia Prestige”.
Staff comments
1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 2. A bareboat charter is when the owner of the vessel (in this case, ICBCFL) leases (or "charters") the vessel to a lessee ("charterer") without any crew or supplies. The charterer assumes full responsibility for the operation of the vessel. 3. ICBC Financial Leasing Co., Ltd. (ICBCFL) is a Chinese financial leasing company that is a subsidiary of Industrial and Commercial Bank of China Limited (ICBC). 4. Hafnia Limited is a shipping company and investment holding company that owns and operates chemical and product tankers. They transport oil, oil products, and chemicals for a variety of companies, including oil companies, chemical companies, trading companies, and utility companies. Hafnia Limited is incorporated in Bermuda but with its operational headquarters in Singapore and has over 5,000 employees. See https://s201.q4cdn.com/891122012/files/doc_presentation/2022/4-May-2022-Hafnia-Limited-Company-Presentation-2.pdf