21st December 2017
Euronav and Gener8 announced that they have reached an agreement on a stock-for-stock merger for the entire issued and outstanding share capital of Gener8, which would become a wholly-owned subsidiary of Euronav.
The combined company will have a fleet of 75 crude tankers, including 44 VLCCs and 28 Suezmax crude tankers, representing over 18 million dwt in total.
In addition, the new tanker operator would boast balance sheet assets worth over USD 4 billion and a liquidity position estimated at more than USD 750 million, including cash on hand and undrawn loans.
In line with the terms of the deal, approximately 60.9 million of new Euronav shares will be issued to Gener8 shareholders, with the exchange ratio of 0.7272 Euronav shares for each Gener8 share.
The exchange ratio implies a premium of 35 percent paid on Gener8 shares based on the closing share prices on December 20, 2017.
Upon closing, Euronav shareholders will own around 72 pct and Gener8 shareholders will own 28 pct of the issued share capital of the combined company.
“The merger between Euronav and Gener8 is expected to deliver real value for both sets of shareholders. The financial strength of the combined entity together with a strong leadership team will make it well placed to navigate the tanker cycle,” Carl Steen, Chairman of Euronav said.
“I have been a vocal advocate for consolidation in the shipping industry and have always stated that we would be a willing buyer or seller depending upon what is best for our shareholders. This transaction creates the largest independent VLCC fleet in the world. The combined company has a very bright future that will benefit both Gener8 and Euronav shareholders,” Peter Georgiopoulos, Chairman and CEO of Gener8 said.
The merger is subject to the approval of Gener8’s shareholders and some of its lenders.
Euronav as the combined entity will remain listed on NYSE and Euronext under the symbol “EURN.”
Carl Steen, Paddy Rodgers and Hugo De Stoop will remain respectively Chairman of the Board, CEO and CFO of the company following the merger.
Euronav added that a third-party tanker owner has agreed to purchase six VLCCs from the combined entity upon closing of the merger at a price of USD 434 million.
“The sale will allow Euronav to maintain sustainable and robust financial ratios and keep leverage and liquidity well within management’s desired levels,” the company added.