The tanker shipowner Frontline provided today more details on the potential deal with Euronav to acquire a modern fleet of 24 VLCC tankers from the Euronav fleet for $2.35 billion, and to sell shares to CMB.
The ships in question are young, with an average age of 5.3 years, and from the 24 VLCC tankers the 22 are Korean built and nine are scrubber fitted.
With this transaction the shipowner will increase the total fleet size from 65 to 89 vessels, making Frontline the “largest pure play tanker owner in the public domain measured by dwt.”
John Fredriksen, the director of Frontline said on Monday that this “transaction will solidify Frontline’s position as the leading publicly listed tanker company, and significantly expand our exposure towards modern efficient VLCCs at an opportune time in the cycle.”
Frontline has said on Thursday that Frontline and Famatown will agree to sell all their shares (representing 26.12% of Euronav’s issued shares) in Euronav to CMB for $18.43 per share, to be followed by a public mandatory takeover at the same price.
Following the acquisition of Euronav shares from Frontline and Famatown, CMB will own 49.05% of Euronav’s issued shares (representing 53% of the voting rights in Euronav).
Furthermore, Euronav’s pending arbitration action filed in January 2023 against Frontline and affiliates, following Frontline’s withdrawal from their combination agreement would be terminated conditional to the share sale.
The company claims that Frontline will fully finance the acquisition through the sale of Frontline’s shares in Euronav to CMB and an attractive long term debt package.
Frontline stated in a release today: “This transaction fortifies Frontline’s position as one of the leading tanker companies in the public domain and is expected to be highly accretive on earnings and free cash flow per share.”
Lars H. Barstad, chief executive of Frontline Management AS, commented: “This transaction reflects our platform’s ability to act decisively on large scale fleet transactions with the support of our largest shareholder and key relationship banks.”
The sale of the Euronav shares and the acquisition are inter-conditional, and such inter-conditionality has to be approved by the Euronav shareholders meeting through a 50% +1 vote majority. The acquisition is further conditional upon customary anti-trust approvals and expected to close in the fourth quarter of 2023.
Euronav revealed today that “CMB intends to maintain Euronav’s listing on Euronext Brussels and the New York Stock Exchange, and has no intention to launch a squeeze-out bid following the closing of the offer.”
Lieve Logghe, Euronav CFO and interim CEO, stated: “After many months of uncertainty, the transaction announced today leverages the value that Euronav and its people have created through many years of hard work. It represents a balanced outcome for shareholders, who now have the choice between realising that value in cash or following Euronav in a new strategic direction under a new controlling shareholder.”
