Euronav’s Merger with Gener8 Maritime Is the Deal of the Year

The merger between Belgium’s tanker shipping company Euronav and US-based crude oil shipping company Gener8 Maritime has won the ‘Deal of the Year 2018’ award by Lloyd’s List Global Awards.

The merger was concluded in June this year, creating a large crude tanker operator with a fleet of 76 operating crude tankers, with over a half of that figure being VLCCs. The deal enabled Euronav to expand its fleet by over 40 pct.

The merged entity has balance sheet assets of over USD 4 billion, an estimated pro-forma market capitalization of USD 2 billion based on Euronav’s closing price of USD 9.10 per share on June 11, 2018, and marked-to-market leverage of less than 50%.

 “The merger with Gener8 was a challenging transaction from an operational, financial and legal perspective. It required great commitment, energy and professionalism from our staff and this award is recognition of that sustained effort over a prolonged period.

“The integration of the fleet into our enlarged organization has been delivered on schedule. With tanker market fundamentals continuing to improve, we believe this counter-cyclical investment will deliver strong returns for all our stakeholders going forward,” Paddy Rodgers, CEO of Euronav said.

Rodgers believes the tanker market is about to benefit from improving tanker cycle fundamentals through 2019 as well as developments stemming from regulatory changes to shipping markets from the application of IMO 2020.

Due to the need for greater availability of low sulphur fuel across the globe product tankers are expected to benefit as they would need to transport the cargo to different locations worldwide. This is expected to result in new trade routes and increase the ton mile demand.

As explained earlier, the merger was an important part of the company’s preparation for the 2020 sulphur cap as the deal provided Euronav with “substantially” improved fuel consumption dynamics of its VLCC fleet by reducing average age of this fleet by 25%.

The company plans to comply with the new regulations by burning compliant fuels.