Euronav Completes Merger with Gener8 Maritime

By MarEx 2018-06-13 00:48:23

Tanker shipping companies Euronav and Gener8 Maritime have concluded their merger. 

The merger creates an independent large crude tanker operator which includes:

•      76 operating crude tankers, consisting of 43 VLCCs, 27 Suezmaxes, two ULCC, two Panamax tankers and two FSOs under joint venture - representing over 19,4 million DWT in aggregate;
•      Balance sheet assets of over $4 billion;
•      Estimated pro-forma market capitalization of approximately $2.0 billion based on Euronav's closing price of $9.10 per share on June 11, 2018;
•      Marked-to-market leverage of less than 50 percent;
•      A liquidity position estimated at more than $800 million, including cash on hand and undrawn amounts available under existing credit facilities;
•      Tangible economies of scale via pooling arrangements, procurement opportunities, reduced overhead and enhanced access to capital;
•      Increase of the scale of the Tankers International Pool (a spot market-oriented tanker pool) to 65 VLCCs allowing it to continue to provide the lowest commercial fees as a percentage of revenue in the sector.

Paddy Rodgers, CEO of Euronav, said: "Today marks an important milestone in the continued development of Euronav. Completing this transaction provides the crude tanker market with a global player of substantial size. Increasingly our customers and clients are demanding flexibility and scale solutions to their transportation requirements. The enlarged operation will allow Euronav to meet these specifications.” 

Members of Euronav board of directors and executive management will continue to serve in such positions. Steven Smith, a former Gener8 director, was nominated and elected to serve as an independent director of Euronav at its General Meeting of Shareholders held on May 9, 2018. Effective as of closing, Smith will join Euronav's board of directors to serve for a three year term as an independent director.

Tanker companies have faced tough conditions over the last year, partly as a result of a glut of tankers available for hire and as a result have been looking for ways to build scale and cut costs. Last year, Frontline failed in its takeover attempt of rival DHT Holdings.