Euronav says ousting of entire Supervisory Board not a good idea
Belgian tanker shipping company Euronav believes that the recent request from its shareholder Compagnie Maritime Belge (CMB) to replace the entire Supervisory Board is not a good idea.
CMB’s request came on the back of the fallout between Euronav and John Fredriksen’s Frontline on the planned mega-merger. CMB was against the merger plans at the outset and is now seeking to dismiss the entire board and replace them with members nominated by CMB.
Euronav described the request as ‘unprecedented’ by a minority shareholder, adding that the company has reached out to CMB for more details on their strategy and intentions for Euronav.
“An immediate and abrupt replacement of the entire board, without any transitioning or succession planning, is not in line with those principles and Belgian corporate governance standards. Euronav therefore cannot support or recommend such an idea. Euronav shall also ensure that its strategy, track record and approach are clearly summarised for all of its shareholders ahead of the general meeting,” Euronav said.
Euronav added that it would prefer to continue to seek a constructive discussion with all its shareholders including CMB.
The reaction comes on the back of Euronav’s filing for arbitration against Frontline’s decision to terminate the merger agreement, stressing the decision was unfounded.
The company reported fourth-quarter results earlier today saying that it realized a net profit of USD 234.7 million for the fourth quarter of 2022, reversing from a net loss of 72.2 USD million in the same period in 2021.
The return to profitability was largely assigned to crude tanker recovery as well as fleet rejuvenation efforts that provided operational leverage to upcycle.
The fleet rejuvenation efforts saw disposal of older vessels, including two Suezmaxes and one ULCC, as well as an agreement with Daehan Shipbuilding Co. Ltd. for two Suezmax newbuilding contracts.
The vessels will be sister ships to Cedar and Cypress, built at the same yard. Both vessels are scheduled for delivery in the third quarter of 2024.
On 10 January 2023, Euronav held a naming ceremony for two VLCC newbuildings, Cassius and Camus. VLCC Cassius was delivered on 11 January 2023 and Camus will follow suit in early March 2023.
“Constrained vessel supply conditions within all segments of the large crude tanker market were supplemented further by two key factors during Q4 2022. Firstly, seasonal demand for crude gained traction as consumption rose into the 22/23 winter. Secondly, the EU embargo on Russian oil, effective 5 December 2022, created additional shipping demand as crude trading patterns required longer voyages and therefore captured more shipping capacity,” Hugo De Stoop, CEO of Euronav said.
These supportive catalysts helped drive freight rates to a 30-month high and we believe that the solid base of sector fundamentals (orderbook, fleet age, incoming regulations) will continue to underpin positive conditions within the tanker market for multiple quarters ahead.”
Commenting on the situation with Frontline, De Stoop noted: “Whilst we regret the current situation, we will continue to act professionally and to work to a solution.”
In terms of market outlook, the company said that the large crude tanker market is well-positioned to continue a multi-year upcycle based on strong fundamentals and well supported tanker market specific catalysts:
- Orderbooks at 25 years plus lows
- Contracting constrained by high vessel prices & incoming regulations
- Shipbuilding capacity constrained until 2025/26 by LNG carrier and container orderbook
- Global fleet age average of VLCC & Suezmax segments – highest in 20 years
- Structural ton mile enhancement from Russian dislocation