Saverys Pursue “Green Vision” with Deal for Euronav to Acquire CMB.TECH
Moving forward with their vision of a “green future” for shipping, weeks after taking control of Euronav, the Saverys family has engineered the long-planned merger of the tanker company and their cleantech maritime group CMB.TECH. It was a vision they first mapped out during the fight for control of Euronav more than a year ago and which they previewed when they outlined their vision for the future of the company after agreeing to buy out John Fredriksen’s position in Euronav.
After the close of the stock markets on Friday, December 22, CMB and Euronav revealed the two companies had entered into a share purchase agreement for Euronav to acquire CMB.TECH. The tanker giant will use the cash proceeds from the sale of a portion of its VLCC tanker fleet to Frontline to acquire the tech newcomer. The purchase price is $1.15 billion all in cash.
Describing the strategy in a press release the companies said, “CMB and Euronav believe that the addition of CMB.TECH to Euronav’s business will enable a flywheel strategy – positioning the group to tap into each step of the energy transition towards low carbon shipping, with a clear vision on value creation for its shareholders.”
CMB.TECH has emerged rapidly as a player in the future of “cleantech” with a strategy that builds, owns, operates, and designs large marine and industrial applications that run on dual-fuel diesel-hydrogen and diesel-ammonia engines and monofuel hydrogen engines. CMB.TECH is moving quickly to develop hydrogen and ammonia fuel with a strategy to launch a fleet of 106 low-carbon vessels. CMB highlights that 46 of the vessels are under construction, including recent orders in sectors ranging from offshore service vessels to bulkers. CMB.TECH launched the first hydrogen-fueled offshore crew transfer vessel 18 months ago and was part of the project that saw the Port of Antwerp commission the world’s first hydrogen-fueled tugboat earlier this month.
The deal looks to leverage the financial strength of Euronav and harvest capital from its operations to finance CMB.TECH’s vision of a green fleet. The transaction includes nearly $2.5 billion in roll-over debt (bank, leasing, and shipyard liabilities). This includes both net existing financial debt of $510 million and total nominal outstanding capital commitments of just under $2 billion. Of those outstanding capital commitments, CMB reports that will be paid over the coming three years, $1.625 billion has been secured and will be rolled over. The remaining unfunded capital commitment of $361 million will come from Euronav’s cash. In addition to CMB.TECH’s ambitious plans Euronav has orders for new tankers, three VLCCs, and four Suexmax vessels
“Euronav’s older tanker tonnage provides excellent opportunities to recycle capital over time into more future-proof, attractive, and diversified end-markets and contract types,” the companies assert in their statement. “In addition, Euronav’s current customer portfolio is located at the center of the energy transition and looking for low-carbon tanker shipping services.”
Shareholders will have to approve the deal which is expected to close in February 2024. As part of it, the Saverys who lead the management of both companies, report Euronav will become a trade name for the tanker operations while the surviving public company would be renamed CMB.TECH.
The deal comes as they are still cleaning up after the transaction with Frontline. With CMB owning 49 percent of the shares outstanding and controlling 53 percent of the voting rights in Euronav, they were required to launch a takeover offer for the remaining shares. That began at the end of November, but they reiterated they have no intentions to launch a squeeze-out and they plan to keep Euronav (later CMB.TECH) listed on Euronext Brussels and the New York Stock Exchange.