Scorpio Tankers Inc (STNG) 2013 Q3 法說會逐字稿

Hello and welcome to the Scorpio Tankers Incorporated third-quarter 2013 conference call. As a reminder, today's call is being recorded.

I would now like to turn the call over to Brian Lee, Chief Financial Officer. Please go ahead.

Thank you for joining us today. On the call with me are Emanuele Lauro, Chairman and Chief Executive Officer; Robert Bugbee, President; Cameron Mackey, Chief Operating Officer.

The information discussed in this call is based on information as of today, October 28, 2013, and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties you should review the forward-looking statement disclosures in our earnings press release that we issued today as well as Scorpio Tankers' SEC filings, which are available at ScorpioTankers.com.

Call participants are advised that the audio of this conference call is being broadcast live on the Web and is also being recorded for playback purposes. An archive of the webcast will be made available on the Investor Relations page of our website for approximately 14 days.

Now I would like to introduce Emanuele Lauro.

Thank you, Brian. Thanks, everybody, for being here today. You all know by now the format of these calls. We value the question-and-answer part, so after a brief statement which I will make and followed by a brief statement by Mr. Bugbee, we are going to go open the floor for questions.

Today, it is an important day for Scorpio Tankers, not only of course we are releasing our third-quarter results, but more importantly today we have announced the agreement to invest in Dorian LPG. It is a happy transaction that we are announcing today. We are happy to announce it and to help and support Dorian LPG in its consolidation effort.

We look forward to work together with Dorian in the future, making sure that this venture will be a success. We are very happy to have teamed up with Mr. Hadjipateras and his management team in the company that he founded. We are delighted to have found a partner like Mr. Fabrikant in this venture.

Their track record, know-how, and experience speaks for itself. But we are extremely pleased to start today what we believe will be a successful venture.

We are convinced that this was the best asset and capital allocation for the shareholders of Scorpio Tankers, and we look forward to having the chance to prove our convictions going forward. With this, I give the word to Robert if he has anything to add, and then looking forward to your questions.

Thank you very much, Emanuele. Thank you, everybody, again for attending. First of all, we're going to try and keep this call to within 45 minutes or so. There'a a lot of people on the call. I know everybody's time is valuable.

I would just like to add that -- a couple of things. First, the actual quarter itself, the way we look at this, is that we had to pay the price in this quarter for the charters in at the LR2s. We fully expected these vessels would be a tough sledding in this third quarter, but they are very nicely set up for the fourth quarter, first, and second. I think, though, that we can see from the results on the MRs, which are more or less the same as the year up to date on the second quarter, that our ability to handle the MR fleet as well as what we have stated before about the ability of these newbuildings is really coming through in those numbers.

When we look forward to what we have done here in the LPGs, I would really like to echo Emanuele's words. I mean, Dorian, in terms of operations there is no better.

They are first class when it comes to their relationships with their customers. We have spent a long time with those customers going through different operatings, etc.

And now with a combination of their own family experience, capital at a work, combined with the strong support from not just their institutional shareholders, but now two industrial partners that have, not just in Scorpio, a lot of complementary experience and contacts in customers, but also in SEACOR, really the preeminent logistics US capital market company, we really want to do the best we can to help John Hadjipateras and his team in literally taking that leadership position. We ourselves in Scorpio as a management believe that size matters, believe in strong leadership positions in any market that you are in, and we believe that that is absolutely the best structure for our shareholders to have great value.

Now, that means -- what this deal means for us is that one could actually argue right now but Scorpio's balance sheet, now that we have just -- we have got the new loan, the KSURE loan, and we no longer have the capital commitments on the debt side of the LPG, one could argue that we are overequitized for the first time in our life. And this, I believe, the deal could become the pivot where the Company changes from its investing phase.

We have really appreciated the trust that you have all given us as shareholders in funding the growth of Scorpio Tankers and getting us the best fleet that is out there in the product market. And this could be the pivot where really we change from that heavy investing phase to the beginning of the harvesting phase.

We will remain disciplined. We really -- you're not going to see us go out and order a whole bunch of product tankers in 2016, etc. We will obviously continue to look for fundamentally strong, strategic, and accretive acquisitions like we have seen with our latest deal with Livanos, Valero, and JPMorgan, which we are extremely happy with that partnership.

And otherwise, where we sit right now we are looking forward to winter. Every sign we have is that we are going to have a stronger winter than last year. The adjacent markets like palm oils, vegetable oils are starting off very nicely as we approach winter.

And certainly we know that we are entering that period where there really isn't that much on the gross deliveries because of the lack of investment that the industry has gone. Later in the year I think we will come closer and closer to that [two fifteen] hammer with the regulations that are coming.

With those few comments we would like to open it up now to questions.

(Operator Instructions) Jon Chappell, Evercore Partners.

Thank you. Good afternoon, guys. My first question, Emanuele and Robert, has to do with the Dorian relationship. Obviously you guys are quite incentivized for this venture to do well.

So I am just wondering; what is the Scorpio management commitment going to be to Dorian? Are you going to have somebody on the board? Are you going to be involved in strategy discussions, capital structure discussions? Or are you going to be a silent but very supportive minority shareholder?

Well, first of all, we are really confident in the management of Dorian and John Hadjipateras and his team to run their company. There is no point in us investing in another company to this level and then we do all the work. Otherwise, it would have been better for us just to set up a company ourselves.

We are expecting Dorian and have no reason not to think that they are going to continue their excellent work on a day-to-day basis. We also believe that we -- in teamwork, and we believe that we will be there to provide not just financial support; but we will turn over should that management wish any information and expertise or contact lists or help that we may have in view of commercial side. And with regard to strategic, we will obviously really enjoy sitting down with the brains that there are at that table, with everybody sharing the goal to create the greatest possible return possible and the best VLGC company out there.

It has a fantastic start. It is going to have a balance sheet. It has clearly got the best fleet that is out there.

And it has got a very pro -- one of our tractions with -- even though Dorian itself is new to the public markets, you can quite clearly see a very professional setup on that board, their existing board members, and their positions going forward. At this particular point, apart from the press announcement we have made, we would like to extend the courtesy of the exact answer to your question to Dorian to explain that to the market first.

Okay; that makes sense. My other question, Robert, you mentioned a very important point about the pivot part of the Company right now. With the capital commitments now much more tempered, without the VLGCs, with all the financing that you have, with the operating cash flow that you are expected to start generating, and the order books basically filled to the point where you don't want to order probably MRs anymore, are there really other opportunities out there like what you have done with Livanos and Valero, as far as cash for -- or I'm sorry, shares for ships?

Or do you really start ramping the dividend once you turn to a pretty significant free cash flow positive basis, assuming that should be early next year?

Well, we'll answer the first, the opportunities, first. There are a pretty limited product tanker order books. It is doesn't matter what size they are, whether they are from LR2s all the way down to the Handys, that are available to delivery within our timeline of mid 2015. So the answer is yes, there are opportunities to do that.

But the answer is also that just by definition of the actual consolidation of those new ECO ships that there exists at the moment -- I mean, bear in mind the number that the Shells have, the Vitols have, and our customers have -- we are likely to see those opportunities come from some form of strategic relationship where both the customer and ourselves thinks is beneficial, rather like the last deal that we did. But there are some of those -- there are some that I think could come to fruition. But correct, they are limited.

So that is why I feel that this could be -- it doesn't mean we're -- it is very hard to tell over the next six months whether it'll be buying a few more ships that are coming to the water within that 2015 period, or whether we won't be. But either way I do see this as the pivotal point between that full investment period and then the return to capital from shareholders.

Now we have been very clear in the past that clearly the way that we are already indicating, we are already guiding the horses to what we are doing. We doubled our dividend this quarter. This is the third quarter, I think, in a row that we have increased the dividend.

And a basic use of abacus or just using your own fingers would tell you that, if we have the ability to return capital in the form of dividends fairly aggressively, if we chose that route, that obviously one of the alternatives to Dorian -- I mean, we are going to be there and help its development, and we are going to be a very good shareholder, a very good partner, and take it through its IPO process. But clearly the top two, 1A and 1B of alternatives is going to be distribution of the ownership that we have in the form of a dividend to our shareholders, in a tax efficient form ultimately, which is a dividend, or sale of the stock.

So -- but as we have also clearly publicly stated, that we would have no problem that if we feel that on a valuation basis the market -- just the same as at OMI -- isn't giving you the valuation that we internally believe going forward, not analyst reports or anything, we will have no problem and starting to buy back the stock, either.

So in this sense it depends upon how we are valued as to what route we take in terms of that harvesting and distribution.

All right. Well, that's incredibly helpful. For the sake of brevity I will turn it over. Thanks, Robert.

Gregory Lewis, Credit Suisse.

Yes, thank you and good afternoon. Robert, could you provide a little bit about the genesis of what brought Scorpio in partnership with Dorian? Was this something that Scorpio was actively looking at? Was there potentially other -- there is a handful -- there is a couple other LPG players out there that -- in other words, had you looked at anyone else? Or is this -- it was just specifically Dorian?

Yes, we get the question. As you know, as any of us including yourselves know, who are married, that wonderful question of -- how did the two of you meet and get together? You may get a slightly different answer from the girl and the boy.

But we made it very clear that we felt that our alternatives were to either partner in a consolidating form with one of the potential players; to go it our own; partner with one of the existing cargo operators. But we made it very clear that we weren't there to divest our investment because we are very, very constructive on that VLGC market. That we were willing and open to both dancing with somebody as well as ultimately marry.

And I think that we are a little bit -- we have talked to all. All operators. We have talked to -- over the last three months or so we have had more extensive talks with some than others. We have talked to all of the major customers. We have run multiple calculations on doing it ourselves.

But rather than say what the others didn't have, we were convinced that Dorian, because of what we had said before, their operational fundamental strength, their setup with regard to the partners and their investors, their desire to mirror us in the newbuilding ECO design and build a -- and they are very client focused. This is a company that is built around performing for the customers, seeing the customer as a customer and providing a service.

So they were the guys who had the -- one of the first people to move in terms of getting the ECO design vessels. They basically beat us by a month in doing that. We are building at the same shipyards.

So first of all you had a very strong synergy in terms of how to service customers, how to develop a fleet, what was the best yards to go to, and not be penny wise and pound foolish in that process. Then there were tremendous synergies related to where you would -- your views to corporate governance.

We are putting a lot of our shareholders and our capital in this company. And when you look at the present board of Dorian, it is beyond the reasonable doubt that they are not going to -- they are going to manage that company appropriately in a modern way and have experience of building industries themselves.

So, all in all, they -- the boy always has to -- we made it clear. The boy always has to ask the girl to dance. But when this boy asked us to dance, and they did it in a very nice way, they didn't make a big public fiasco about it, they did it in a very mature, nice way. And we sat down, and this is where we have resulted.

Okay, great. Then just one quick follow-up.

Even with that, we did a full analysis. As we see, we engaged Perella Weinberg as advisors. They did a very, very objective view, and of all our alternatives, etc., etc.

Okay, great. Then just real quick, just turning to the market real quickly, it looks like the LR1 and MR markets are a little bit weak here as we head in towards the winter. Is there anything we should be thinking about in terms of what could get these rates moving higher in the near-term? It is just a function of --

Sure. You should change your mindset rather than thinking these rates are weak entering into winter, you should sit there and go -- actually they are pretty strong on a historical basis and a balanced basis in terms of the market; and we are now very close to winter. It is -- as you see the general balance of this product market, any time there is any demand put into one of these markets they tend to rip up pretty fast.

So we have had a fairly warm start to the winter in the northern hemisphere. We haven't had any hurricanes. So it is perfectly -- we have had extensive refinery turnaround as a result of how hard they were going over the summer.

So for us, we are really saying this glass is half-full. We don't know whether that market will start ripping next week or it will start ripping a week before Thanksgiving or two weeks before Thanksgiving, but it is coming. And I think the question then will be to ask how high does it go.

Okay, great. Then just, so like in other words, I guess over the week, or like I guess at the end of last week there was the refinery fire in Illinois. Is this something that --?

Not really. That is just noise. In terms of refinery news last week, it was -- what we were looking at was the continued pressure the European refiners have to remain competitive; and the continued confidence we have in, for example, Saudi refineries coming up online; and the latest data of palm oil and vegetable exports.

Those are the things. I agree there may be some minor effect. But that in terms of the fundamental thesis here is just noise.

Okay, perfect. Thank you for the time.

Doug Mavrinac, Jefferies.

Thank you, operator. Good afternoon, guys. Just had a follow-up to your last point, Robert. Because that is actually the way we were looking at things, is that the MR market has held in pretty good given that we have 2.5 million barrels a day of refining capacity down globally.

So as a follow-up to that or within that theme, what do you expect to happen to raise this across all the asset classes when you have -- if you're entering that period right now with relatively decent rates and if you have 2 to 2.5 million barrels a day of refining capacity coming back? How will that affect the broader market? How will that affect the EU-to-US market?

There is a great question. But again, with respect, the statement is 2.5 million barrels refined. If we go into this next couple of months, yes, you have got tremendous demand increase on the product side, but you have still got demand increases on the palms, the vegetable oils. You are going to have supply dislocation because you are going into northern hemisphere winter.

So I really -- it may be a flippant comment but it is what we feel. Which is, the question is going to become how high is it going to get in January, February, March.

Right, right, right; got you.

In other words, we are very confident it is going to be higher than last year in that first quarter. It is just -- what happens? Is this the year that you get the breakout? Or do you have to wait until next year?

Got you. Very helpful. Then following up to another point that you made earlier, when you talked about the order book for product tankers being small regardless of asset class, can you talk about why you have to look at the overall product tanker market to figure out how much new capacity is being added? Rather than just focusing on what the headlines seem to be focused on, as that is just the MR asset class. Can you talk about substitutability and all that sort of stuff?

Sure, well the first thing is let's look at the MR market, where you've got superficially a double-digit number of vessels on order. But if you look at it historically, you've still got growth supply coming in for the next two and a half, three years, coming in at 4%, 4.5% per annum, which is really low compared to the trailing 15, 20 years.

It is only people think that it is a high MR book because they are seeing all these headlines of people ordering them. But the headlines themselves, if you are looking at the map, you have still got a lot of constraint next year in the order book, and the following year. And we have got a lot of capacity that is already being taken out in other vessel classes in 2016.

When we look at the substitutability, there is almost nothing. There is a tiny percentage of Handy product tankers on order. That is the size below MR.

There really is almost nothing in the LR1s, which is the size above it. And the LR2 market is extremely contained.

The reason why there is substitutability is it is fungible. If you drive MR rates up to a certain point, you would then make LRs competitive. If you don't have any LR fleet ships, you are going to either drive it up into the LR2 rate or drive it into the MR rate.

The importance also of looking at the MRs, when you have the LR1s above that have almost nothing on order, and the Handys below that have nothing on order, is that the Handy market is the most environmentally and operationally challenging market in the world. It is the one that is doing that heavy grunt work in the North Sea and Hamburg ranges, Canada in the winter, and at the same time has the most environmentally sensitive charterers such as the Totals and the BPs of the world when it comes to vetting and the [215] position.

So, those are the reason you have to put all of this ordering, not the headlines and the gross numbers, you have to put it in the context of the entire fleet plus the context of the historical supply in more favorable markets over the last 15, 20 years. And finally put it in context that it is quite clear the demand curve is already accelerating higher than the supply curve.

Perfect. Very, very, very helpful. Then just final question before I turn it over, it pertains to asset values. Right now we are seeing the brokers quoting resale MRs, newbuilds at $38 million and new orders that $34.5 million.

Is that about right? Or are they still a bit behind the curve there?

Well, I think they are a bit behind on the new orders. They are doubly behind on the new orders because the new orders aren't just [hired], they are also further out in the time period. You are having to put down a lot of money, especially when the yards now aren't necessarily all the time giving favorable payment terms. You're putting on a lot of money for a later delivery.

I think $38 million is paid, paid for a 2013 delivery vessel. That is done. I mean, that was done this week.

Because of the consolidating nature of that market that we have said, we have explained it wouldn't surprise me at all if -- well, I mean it wouldn't be a fair bet to take with you all. The next ship will trade higher than that. It's is as simple as that.

We are really -- that is how we are seeing it. You're not going to see us at [4.01] today go out and do a stock offering on STNG. This is not a book talking; this is the factual position of what the market is.

And I think that the analyst community will have to keep on their toes with regard to these valuations across all sectors, because the newbuilding market is accelerating in pricing quicker them, let's say, the data sample that you guys will have to look at. And in markets that you turn to positive cash flow in, you then get that double multiplier.

So this is the point in the cycle where the quality names -- it doesn't matter here whether we are looking in Norden in the dry cargo market, or Golar LNG, or any of these top names. This is where the top names start to actually dislocate from the NAV calculation, because the NAV calculation becomes out of date very quickly.

Yes, yes, yes. Very helpful. Thank you for the time, guys.

Ben Nolan, Stifel.

All right, great. Robert, I just had one quick question for you. It relates to the time charter strategy. You guys, it seems as though, have been a little bit less active in the past several months with respect to time chartering, while at the same time it appears as though many of the big oil traders and oil majors have really stepped up their activity level.

Is it simply a matter of replacing chartered-in and tonnage with fully owned tonnage? Or could you maybe talk through how you are thinking (multiple speakers)?

Yes, it's (multiple speakers) question. Look, first of all, time chartered tonnage is amazingly expensive on its cash breakevens compared to the newbuildings that we are getting delivered. So, we are faced with time-chartering vessels that are, A, more expensive on a cash breakeven basis; and, B, they are going to earn less on a headline basis because they are the non-ECO, fuel-efficient, and new tank-coating vessels.

So first, on a straight business basis, we have erred towards using all capital or risk on a balance sheet to increase our positions to the market. Secondly, that market is pretty tight now.

You are correct that you are seeing across-the-board oil majors and traders increasing their length on time charters. And therefore, it is scarce. It is a competitive world.

We are out there now looking to take in time charters. We are not averse to it at this point, especially as we have basically fulfilled our newbuilding program. It is just a competitive place to get ships.

And then finally, we have a charter book that has a lot of optionality in it, in terms of extending things. And the other thing is it is all about another test here as well. Value at risk is that for us we are very sensitive to risk/reward parameters. And as you march up the market and you march up your charter book you by definition are increasing your VaR whilst lowering your future reward.

So we are going to manage that time charter book on an opportunistic basis while being -- by keeping disciplined to it, knowing that next year we are going to have an avalanche of deliveries that have much lower cash breakeven points and P&L points than anything we could time-charter in any market right now.

Right. No, that makes sense. Okay, well, I will do my part to keep it to 45 minutes and let somebody else take over.

Omar Nokta, Global Hunter Securities.

Hi, thank you. Just a follow-up, Robert, on your commentary regarding the distributing potential of the stake in Dorian. You guys are going to be taking an active role in helping build up the company. Just to get a sense of timing, it sounds like Dorian is going to like to do an IPO in 2014.

Would you envision or do you envision currently distributing the stake to existing shareholders? If you were to do that, would that happen say right after or sometime around the IPO? Or would it be when it is operationally up and running with your taking delivery of those VLGCs in 2015 or 2016?

Well, I think you are going to do -- what you're going to be is a strong, loyal, and constructive partner to take them through properly the IPO process. Okay? That doesn't -- take that through properly means that you don't present a company on its night of its IPO with that you are going the day after -- going to dividend out all your shares to your shareholders. That is not really being a proper partner.

So you are going to take them through the IPO, make sure the stock is trading properly. And that, then, becomes a viable option.

We are formally going to keep all of our options open, but it will be based on what brutally at that point, once we feel that we have fulfilled our side of the bargain, which is to be a solid partner and take it through that process, it is going to be simply what creates the best value and return for our shareholders. And at the moment, one could foresee that from a shareholder point of view they would like to choose themselves whether they want to keep a -- be invested in a VLGC company and a product tanker company.

That is one thing. Given the shareholders choice.

And obviously, it would have benefits in terms of a dividend structure. But I would say that there it's a strong -- we will obviously formally retain all our options. And we can't say much more related to the timeline, rather than we want to give Dorian, because it is Dorian who we have invested in and have the confidence in, the ability over the next days, weeks, to elaborate more their timeline.

No, that's very good. Thanks, Robert. Just another bigger-picture question. You talked about the pivot and the harvesting and seeing limited opportunities in products.

What about potentially just getting into crude? I know fundamentally it has been abysmal recently. Is that something that you are seeing any sort of semblance of an opportunity there? if so, would you look to invest in that within Scorpio Tankers?

I think you -- look, you never say never, but Scorpio Tankers is quite clearly in its (technical difficulty) is any way limited in the size ranges of crude that we are -- I guess the crude oil is more adjacent to the product market than dry cargo. But when faced with the fact that we thought that the dry cargo had bottomed we chose to set up a completely separate entity to invest in dry cargo.

You are already hearing from the language related to the VLGCs and Dorian that we fundamentally believe that you have to have a pretty good reason to not actually allow investors choice, and that single type companies in sectors are very firstly efficient, they are more easy to understand, more easy to manage, etc.

We have -- look, we are quite constructive on the crude oil space itself. But I think that our shareholders have entrusted us with their capital, and there is really nothing wrong in getting to a point that -- that is one of the benefits of the first-mover advantage -- of getting to that harvesting and return of capital either through buybacks or dividends as quickly as you can. That is not a problem. I don't think we can be accused of not growing a Company.

No, absolutely not. Well, thanks, Robert.

Herman Hildan, RS Platou Markets.

Good afternoon, guys. Quick question, on growing Dorian, is it likely you're going to do that organically through selling the options that you have to the company? And if so, at what price? And also, I guess (multiple speakers)

Oh, wait, wait, wait.

In terms of growing Dorian?

Yes, I get that. But we have made it very clear that we are transferring our interest in the VLGC market to an investment in Dorian. Full stop.

Including the options?

Our entire position, our entire interest in Dorian -- in VLGCs will be transferred to Dorian. There may be some technicalities related to options, timing, declarations, or whatever as you mechanically do this transfer. But all of our interests are going to be transferred to Dorian.

We will not -- obviously it's irrational for us to keep in a competitive position to Dorian, and we will support that company wholeheartedly in that process. This is not a step-by-step transaction. This is our entire interest in one go.

Also, can you just give a quick comment? [AdvancedGas] at our seminar said very clearly that he wanted to merge with Scorpio. Is that out of the picture now, or is it still a possibility that Dorian and Scorpio could merge with AdvancedGas?

We are very happy for AdvancedGas to give us a lot of stock, but we don't have much in return to give them. (laughter)

Okay, thank you.

I mean that would be a question for what Dorian wants to do in the future, now. It's not -- of course, Advanced were obviously a valid alternative. But as I said I wanted to stress the positives of why we chose Dorian rather than discuss the relative merits or not of any other choice we may have had.

Okay. I agree with you. Also in terms of -- where do you think the value on the resale is today? You briefly discussed earlier that newbuild prices are coming up and resale prices are coming up. What kind of level (technical difficulty) to do a transaction (multiple speakers) ?

No idea, but I know that stock is likely to go above still, because my comments related to net asset values and lack of capabilities. But -- that will (technical difficulty).

Okay. Thank you very much.

Eirik Haavaldsen, Pareto Securities.

Hi, my questions have actually been asked, but just to clarify them. You are transferring all your VLGC and LPG assets into Dorian. Do you still count on -- just from my basic calculations, you will be the largest shareholder in Dorian. Do you still believe you are the largest shareholder in Dorian a year from now?

Who knows? Because that is largely dependent upon when Dorian left, what capital they required during that process, and after they left them and as I've said, how quickly we feel comfortable that we have fulfilled being a good partner and stabilized the company. We then decide what to do with the shares.

All right, so you are not ruling out that you will participate in a potential IPO offering of Dorian in, say, early next year?

I think we are not going to discuss exact positions, other than we will state quite clearly we intend to support Dorian as a good partner in our fullest efforts both financially, commercially, in friendship, and in partnership.

All right, thank you.

I think we have time for one last question.

Fotis Giannakoulis, Morgan Stanley.

Yes, hi, Robert, and congratulations for the successful wedding with Dorian. I want to ask, you have been involved in three different sectors, the LPG, the product tankers, and the drybulk market as a team. Which of these three sectors do you see that there is more upside next year?

And related to the Dorian question, the Dorian transaction, there was a service fee, a 1% commission fee that was paid to the Scorpio Tankers. Is this fee going to be reimbursed, or is this going to be paid also for the sale of the fleet to Dorian? There was some discussion, some Tradewinds article that you might be considering changing this structure.

Okay, I am going to allow -- not allow -- he's the Chairman. But the second question I think that Emanuele is the right person to answer.

And the first question is, look, we are very excited about all three markets right now, whether it is the VLGC, the products, or the dry. And trying to work out which one is going on a month-to-month basis to be ahead or not is -- you just have three first class sprinters, and the gun has gone off for all three, and they are running down the track, and all three are going to be medalists. But we are not sure in such a short time period which one is going to win the gold.

Emanuele, would you like to answer the second part with regard to the fees and everything?

Sure, Hi, Fotis. First of all, I think that more than the Tradewinds article there was your piece on Scorpio Tankers that raised the concerns on the relationship between private and public. We actually welcome any scrutiny because we are constructive people and we take that as a constructive comment or concern.

Of course, our shareholders have done all their diligence on us. And all the transactions, to answer specifically your question, all the transactions which are taking place between Scorpio Tankers and its managers are disclosed in the related party transactions and our filings. So I suggest you actually have a look at there on what is going to be paid or not paid.

No, I am not asking about that. I didn't raise any concern if I had to clarify.

I understand the direct question. There is the cost of this transaction in total, okay, so that is the safest way to do it. That includes both the purchase, and the sale, and the underwriting position. But there is a cost -- so the cost of purchase, any -- so fundamentally there would have been the right for a purchase commission, a sale commission, and an underwriting commission. Okay? Not underwriting, an advisors' position.

The total cost, so here you can see that it is not even 1% of the purchase position, is going to be no more than $7 million. Okay? That is on the entire purchase fees and including advisor fees.

So you can see that there is a compromise that has been made. But in terms of the actual specific details, that will come in a proper filing document.

Okay. Thank you very much.

And that is substantially less, obviously, then 11 -- that is obviously much less than a theoretical much, much larger number that it could have been.

Thank you.

I think -- thank you ever so much, everybody, for your time. Thank you again as shareholders for the trust.

And we know nothing is guaranteed but we are very confident of the Company's position going forward. And we hopefully are showing you today that we are really focused on your return for that trust you have given us. Thank you.

That does conclude today's call. Thank you all for your participation.