Euronav to raise $1.1bn to fund Maersk VLCC fleet buy

On Sunday Euronav announced it was to purchase Maersk Tankers VLCC fleet for $980m from Maersk Tankers Singapore. To finance the deal the NYSE Euronext-listed shipowner said it would finalise a $500m bank debt facility in the coming days as well as $235m in mezzanine financing.

The company will also be undertaking a $350m capital increase. There will be a $50m capital increase by the issue of 5.47m new shares at EUR6.70 per share and institutional investors including BHR Capital LLC, Glendon Capital Management LP, GoldenTree Asset Management LP, Solus Alternative Asset Management LP, certain funds managed by York Capital Management Global Advisors, LLC have undertaken to subscribe to the issue.

Euronav will also be asking shareholders to approve a capital increase of up to $300m with the issue of 32.8m shares at the same price of EUR6.70 per share. The capital increase has been reserved for the same institutional investors.

“This acquisition is a first step towards a wider consolidation of the world tanker fleet, with the concurrent benefits of synergy and logistical enhancement to the benefit of all stakeholders,” said Paddy Rodgers ceo of Euronav.

“It is our belief that effective access to capital markets will require tanker owning companies to become larger so as to provide sufficient scale and liquidity to meet the requirements of large institutional investors,” he added.

Following the acquisition Euronav will have a fleet of 26 VLCCs, one ULCC and 23 suezmaxes.