SFL adds to fleet

SFL corp (SFL) announced the acquisition of 3 LR2 vessels for $230M


On paper, it seems like a good deal. In reality, it seems to be primarily a financing deal. SFL has done these type of deals in the past e.g. the deal with Hunter Tankers to finance 3 VLCCs, the VLCC for Landsbridge, etc. The annual revenue ($13.33M) is good (in a different time-frame, even “great”) for a long-term rate, but is on the much lower side when compared to the current LR2 spot rate.


The difference between an Aframax and an LR2 is … the latter is a “coated” vessel i.e. the holding tanks are lined with a different material. As FRO mgmt have mentioned on a couple of their earnings calls, the coating becomes less effective after 15 years. I am guessing the vessels then either trade dirty products or just trade crude oil.