More details of the agreement the Saverys family has reached with John Fredriksen over the future of Euronav have been published.
After a two-year battle for control of the Antwerp tanker giant, Famatown Finance, Fredriksen’s finance vehicle, along with Frontline, his tanker firm, announced a deal with the Saverys-controlled Compagnie Maritime Belge (CMB) last week whereby 24 Euronav VLCCs will be handed over to Frontline for $2.35bn in return for Fredriksen backing away from his take over ambitions with the Saverys’ buying him out.
The ships in question are young, with an average age of 5.3 years, and they will make Frontline the largest publicly traded tanker owner in the world, with its fleet capacity leaping by 58% to 19.7m dwt.
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.”
Fredriksen, 79, commented: “I firmly believe in building best in class companies through consolidation.” He added that the extra VLCC tonnage was coming at an “opportune time in the cycle”.
Lars Barstad, the CEO of Frontline, said: “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.”
Following completion of the share purchase expected in Q4 2023, CMB will launch a mandatory public takeover bid on the remaining shares in Euronav. However, CMB revealed today it intends to maintain Euronav’s listing on Euronext Brussels and the New York Stock Exchange.
Once it has taken full control of Euronav, CMB outlined today what it intends to do with the famous European tanker brand.
CMB wants to diversify the fleet of Euronav into different shipping segments to decrease the dependence on the transportation of crude oil. This does not mean exiting the tanker business altogether, CMB stressed, but a gradual decrease of the share of revenues coming from pure crude oil transportation by adding different future-proof shipping asset types to the Euronav portfolio, potentially from the CMB and CMB.TECH fleet.
Future-proof in CMB’s view means efficient low-carbon emitting ships and/or ships powered by hydrogen or ammonia.
CMB also said today in a release it wants Euronav to play a leading role in the decarbonisation of the shipping industry and be the “reference shipowner” when it comes to green ships.
Lieve Logghe, Euronav CFO and interim CEO, stated today: “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.”
UK consultants Drewry described the transaction, which still needs regulator and shareholder approval, as a “win-win situation” for all key stakeholders, ending the strategic and structural deadlock at Euronav while giving Frontline 24 on-the-water VLCCs at a time when Drewry expects the crude tanker market to enjoy a phase of healthy day rates amid favourable supply-demand dynamics.
