Performance Shipping closes financing for LR2 newbuilds

Greece’s Performance Shipping has secured financing for its third newbuilding in China through another sale and leaseback deal.

The Nasdaq-listed tanker owner and operator of seven ships on the water and four on order is selling its LNG-ready scrubber-fitted LR2/aframax product and crude oil carrier to an unnamed counterparty and chartering it back for eight years on a bareboat basis.

The bareboat financing amount totals about $45m, or about 70% of the vessel’s shipbuilding price, and kicks in upon its delivery from CSSC-affiliated Shanghai Waigaoqiao Shipbuilding.

Aliki Paliou-led Performance will buy back the vessel for $25m, including the last 96th monthly installment, when the eight-year bareboat deal expires, but also has options for early repurchase after two years under the charter.

The deal is the final sale and leaseback the company struck for the 114,000 dwt trio ordered in late December 2023 for delivery in August and September 2025, and January 2026. The aggregate bareboat financing amounts to $134.6m and covers nearly all of the $138.4m remaining installments due to the shipyard, the company said.

All tankers have been fixed to Clearlake Shipping, a subsidiary of commodity trading giant Gunvor, at $31,000 per day, while daily all in cashflow breakeven rate, including lease payments, is estimated at about $25,000 per vessel.