NYSE-listed Scorpio Bulkers has announced agreements to convert three Capesize newbuilding contracts into LR1 product tanker newbuilding contracts.

Two of the Capesizes had been scheduled for delivery from South Korea in the first quarter of 2016, followed by one in the second quarter of the same year. Under the conversion deal, two LR1s will be delivered in the second quarter of 2017 and one in the third quarter of 2017.

Scorpio Bulkers will book a US$22m loss related to the agreement.

Sister company Scorpio Tankers "will not purchase the LR1 vessels", said Scorpio Bulkers Feb. 4.

The LR1 newbuildings will be re-classified as 'held for sale'. If they are sold to third parties at current market pricing, Scorpio Bulkers' future cash obligations will be cut by US$60m.

As the dry bulk market continues to flirt with historic lows, Scorpio Bulkers has worked to shed some of its orderbook.

In December, the company sold a Kamsarmax newbuilding contract and agreed to convert six of its Capesize newbuilding contracts into six LR2 product tanker newbuilding contracts, four of which were taken by Scorpio Tankers.

But the Scorpio Group's switching of bulker contracts into tanker contracts appears to be at an end. On Feb. 4, the group stated it "has no plans for any further contract conversions".