After the plans were already announced last week, Frontline now says an agreement has been reached to resolve the deadlock in Euronav. Frontline will acquire 24 VLCCs in exchange for its shares in Euronav, which will pass to Euronav’s largest shareholder, Compagnie Maritime Belge (CMB).
The ECO fleet of 24 VLCCs have an average age of 5.3 years and are acquired for an aggregate purchase price of USD 2350 million. The acquisition is fully funded through the sale of Frontline’s shares in Euronav to CMB and an attractive debt package.
Also read: Frontline plans to acquire Euronav tankers in exchange for shares
22 of the tankers are Korean built and nine are scrubber fitted. All vessels are on the water, in an environment of long lead times for new capacity to be obtained. The 24 tankers bring the Frontline fleet from 65 to 89 vessels, making the company the largest pure play tanker owner in the public domain measured by DWT. These are the 24 vessels:
Lars H. Barstad, CEO of Frontline Management AS, comments: ‘The structure of the transaction will significantly increase Frontline’s operating leverage as we enter a period of historically low deliveries of new capacity in the tanker market.’
Shares in Euronav to CMB
In connection with the acquisition, Frontline and Famatown Finance Limited have agreed to sell all their shares in Euronav (13.7 million shares, representing 26.12 per cent of Euronav’s issued shares) to CMB at a price of USD 18.43 per share. CMB will then own 49.05 per cent of Euronav’s issued shares (representing 53 per cent of the voting rights).
The sale of the Euronav shares and the acquisition set forth are inter-conditional, and such inter-conditionality has to be approved by the Euronav shareholders meeting through a fifty per cent + 1 vote majority. The deal is further conditional upon customary anti-trust approvals and expected to close in Q4 2023.
As part of the overall agreement, the arbitration action filed by Euronav in January 2023 following Frontline’s withdrawal from their combination agreement will be terminated.
Also read: Frontline abandons Euronav merger attempt
