Euronav demands emergency arbitration over Frontline’s merger termination
Belgian tanker shipping giant Euronav has filed a request for emergency arbitration over Frontline’s decision to end the planned merger of the two companies.
“Euronav is requesting to suspend such termination pending a determination on the merits pursuing primarily the specific performance of the combination agreement. Another request regarding such merits of Frontline having unilaterally terminated the Combination Agreement will be filed soon,” the company said.
Frontline confirmed that it has received the emergency arbitration request for urgent interim and conservatory measures following its decision to terminate the combination agreement.
“Frontline is currently analysing this request with its legal advisors. Frontline once again confirms that its decision to terminate the combination agreement was entirely lawful,” the company noted.
Euronav added that following the acquisition of additional shares by Famatown Finance Limited, Frontline plc, Famatown Finance Limited, Hemen Holding Limited and Geveran Trading Co. Limited. could be qualified as a related party.
“As a precautionary measure the Supervisory Board has therefore taken the decision in relation to the initiation of proceedings against Frontline plc, Famatown Finance Limited, Hemen Holding Limited and Geveran Trading Co. Limited in accordance with the procedure provided for in article 7:116 of the Belgian Code of Companies and Associations,” Euronav said.
The regulation prescribes that listed companies must apply the intra-group conflict procedure under Article 7:97 of the board of directors and Article 7:116 of the supervisory board in relation to transactions of the listed company with any related party.
Euronav reiterated its position that Frontline’s unilateral termination of the combination deal had no basis and that Frontline failed to provide a satisfactory reason for its decision.
“After careful consideration, the Supervisory Board, entirely composed of independent directors, has considered that this decision is in the corporate benefit of Euronav,” the tanker owner explained.
“Euronav continues to communicate and maintain a constructive dialogue with its shareholders and will update the market in accordance with applicable regulations.”
The arbitration is being sought after Saverys-family led CMB, Euronav’s largest shareholder, launched a bid to oust all members of Euronav’s supervisory board. CMB has vehemently opposed the merger plans describing the move as detrimental to the company’s future.