Performance Shipping Secures Funding for Third Newbuild Tanker

Greece-based Performance Shipping has finalized financing for its third newbuild vessel in China through another sale and leaseback agreement.

The Nasdaq-listed tanker company, which operates a fleet of seven ships with four more on order, has arranged to sell its LNG-ready, scrubber-fitted LR2/aframax product and crude oil carrier to an undisclosed buyer. The vessel will then be leased back under an eight-year bareboat charter.

The financing deal amounts to approximately $45 million, covering about 70% of the vessel’s shipbuilding cost. The funding will take effect upon the ship’s delivery from Shanghai Waigaoqiao Shipbuilding, a subsidiary of CSSC.

Led by Aliki Paliou, Performance Shipping has the option to repurchase the vessel for $25 million at the end of the eight-year charter, which includes the final 96th monthly payment. Additionally, the company retains early buyback options starting two years into the lease.

This agreement marks the company’s final sale and leaseback transaction for the trio of 114,000 dwt tankers ordered in late December 2023. The ships are scheduled for delivery in August and September 2025, as well as January 2026. In total, the bareboat financing for all three vessels amounts to $134.6 million, covering nearly all of the $138.4 million in remaining payments owed to the shipyard.

All three tankers have been secured on charter with Clearlake Shipping, a subsidiary of global commodity trading firm Gunvor, at a daily rate of $31,000. The estimated daily cash flow breakeven rate, including lease payments, is around $25,000 per vessel.