SFL Corporation Ltd. (NYSE: SFL) (“SFL” or the “Company”) today announced that it has agreed to sell its seven handysize dry bulk vessels to an Asian based buyer for an aggregate price of approximately $100 million.
Delivery of the vessels is expected to take place before year end, and net cash proceeds are estimated to be more than $50 million after repayment of associated debt. The Company expects to record aggregate book gains of more than $40 million from the sale of the vessels.
The vessels have cargo capacity between 32-34,000 dwt and have been employed in the spot market the last 5 years, after redelivery from their initial charters. With limited long term chartering opportunities for small dry bulk vessels, the intention has been to trade the vessels in the spot market until the markets improved. The sale will not have an impact on our charter backlog, and the net proceeds are expected to be reinvested in new assets.
Ole B. Hjertaker, CEO of SFL Management AS, said in a comment: “Our primary business strategy is to own and charter out vessels long term to strong counterparties, and we have added more than $850 million to our charter backlog in 2021. The seven small bulkers were redelivered from the initial charters when the market was soft, and instead of divesting the vessels at the time we have waited for improved market conditions. Asset values in the segment are up 75% this year, and we believe this is a good time for a strategic sale of these vessels”.
September 14, 2021
The Board of Directors
SFL Corporation Ltd.
Investor and Analyst Contacts:
Aksel Olesen, Chief Financial Officer, SFL Management AS
+47 23 11 40 36
André Reppen, Chief Treasurer & Senior Vice President, SFL Management AS
+47 23 11 40 55
Ole B. Hjertaker, Chief Executive Officer, SFL Management AS
+47 23 11 40 11
SFL has a unique track record in the maritime industry and has paid dividends every quarter since its initial listing on the New York Stock Exchange in 2004. The Company’s fleet of vessels is split between container vessels, bulkers, tankers and offshore drilling rigs. SFL’s long term distribution capacity is supported by a portfolio of long term charters and significant growth in the asset base over time. More information can be found on the Company’s website: www.sflcorp.com
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including SFL management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although SFL believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, SFL cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward looking statements include the strength of world economies, fluctuations in currencies and interest rates, general market conditions in the seaborne transportation industry, which is cyclical and volatile, including fluctuations in charter hire rates and vessel values, changes in demand in the markets in which the Company operates, including shifts in consumer demand from oil towards other energy sources or changes to trade patterns for refined oil products, changes in market demand in countries which import commodities and finished goods and changes in the amount and location of the production of those commodities and finished goods, technological innovation in the sectors in which we operate and quality and efficiency requirements from customers, increased inspection procedures and more restrictive import and export controls, changes in the Company’s operating expenses, including bunker prices, dry-docking and insurance costs, performance of the Company’s charterers and other counterparties with whom the Company deals, the impact of any restructuring of the counterparties with whom the Company deals, including the bankruptcy proceedings relating to Seadrill and certain of its subsidiaries and timely delivery of vessels under construction within the contracted price, governmental laws and regulations, including environmental regulations, that add to our costs or the costs of our customers, potential liability from pending or future litigation, potential disruption of shipping routes due to accidents, political instability, terrorist attacks, piracy or international hostilities, the length and severity of the ongoing coronavirus outbreak and governmental responses thereto and the impact on the demand for commercial seaborne transportation and the condition of the financial markets, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission. SFL disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.