Euronav to raise $1.085 billion

JANUARY 7, 2014 — Antwerp, Belgium, headquartered Euronav is to raise $1.085 billion to fund the $980 million acquisition of 15 VLCCs from Maersk Tankers that it announced Sunday. It will raise the money through a capital increase, bank debt and mezzanine financing.

The company says that the board of directors has decided to raise $50,000,000 by way of a capital increase under the authorised capital and that 5,473,571 new shares will be issued upon full payment of the subscription price, which is expected to be at or around 10 January 2014. The subscription price for the shares was set at EUR 6.70  per share which is above the average closing price of the Euronav share during the 30 calendar days prior to yesterday's board decision and takes into account a EUR/USD exchange rate of 1.3634.

Trading in the shares on the Euronext Brussels exchange resumed after yesterday's announcement and opened at EUR 9.25 this morning.

A group of external 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 and their affiliates, undertook to subscribe to the capital increase also committed to subscribe to a subsequent capital increase, subject to successful debt funding and shareholders' approval.

Euronav says that both the capital increase under authorised capital and the subsequent capital increase to be decided upon by the shareholders' meeting are substantially oversubscribed.

An extraordinary shareholders' meeting will be convened in February, where the shareholders will be requested to approve a capital increase up to an amount of $300,000,000 against issuance of up to 32,841,528 new shares. That capital increase will also be reserved to the same institutional investors and the issue price proposed for this capital increase was also set yesterday at EUR 6.70 per share.

Euronav says that to complete the funding of the Maersk VLCC it will finalize in the coming days a $500 million bank debt facility as well as $235 million of mezzanine financing.

Paddy Rodgers, CEO of Euronav, yesterday called the acquisition "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.

"Euronav led the way in 1999 with the establishment of the first VLCC pool, Tankers International LLC and 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. That also fits well with the industry requirement for long-term stable companies, who are owners, operators and managers with a strong operational reputation and a good understanding of the markets. Euronav has effectively become the only platform of comparable size dedicated to the crude oil tanker sector and has ambitions to grow further."