Euronav NV, the Belgian tanker operator, has made significant advances in its strategic pivot towards environmentally-friendly shipping with notable acquisitions and fleet expansion plans.
Euronav Signs $1.15 Billion Contract with CMB.TECH
On December 22, 2023, Euronav signed an agreement with its controlling shareholder CMB to purchase 100% of cleantech maritime group CMB.TECH for $1.15 billion cash.
Euronav's renewed strategy of diversification, decarbonization, and optimization of its crude oil tanker fleet finds a perfect partner in CMB.TECH. This company boasts a future-proof fleet of 106 low-carbon vessels - 46 currently under construction - powered by dual fuel diesel-hydrogen, ammonia or monofuel hydrogen engines.
Financial support comes from cash proceeds of the sale of part of Euronav's VLCC fleet to Frontline announced October 9, 2023 for $2.496 billion rollover debt covering bank, leasing, and shipyard liabilities. According to Euronav CEO Alexander Saverys, this deal solves prior strategic issues between Frontline and Famatown Finance which allowed fast implementation of diversification plans.
CMB intends to maintain listings on both Euronext Brussels and NYSE with no squeeze-out planned post-offer. This acquisition puts CMB Group in an advantageous position for the transition, positioning Euronav for change by changing to CMB.TECH while keeping Euronav as tanker brand name. CMB plans a corporate name change from Euronav to CMB.TECH while still using Euronav tanker brand.
Procuring Shareholder Approval Opens the Way for Transaction
Euronav shareholders approved the CMB.TECH acquisition at a special general meeting, clearing away one of the major impediments under Article 7:152 BBCA.
CMB issued a mandatory takeover offer for remaining Euronav shares at $17.86 each following a $0.57 dividend payment on December 20, with an indicative timeline for transaction completion occurring by February 2024, then offering period ending in March.
On January 12th 2024 at Euronav HQ, they hosted their Capital Markets Day to share updates on their strategy of becoming an authority in sustainable shipping.
Expanded Fleet with Ammonia-Powered VLCCs and Secondhand Purchases
Euronav's rebuild is proceeding rapidly following its Frontline deal and transfer of 24 VLCCs, and includes ordering three ammonia-fueled VLCCs from Bocimar bulker yard as well as newbuild VLCC for $112.2 million with options to add more vessels in August 2023.
Valero ordered two Suezmax newbuilds at Daehan Shipbuilding that will be time-chartered long-term and delivered between April/May 2026.
Euronav expanded by purchasing four secondhand VLCCs for $342 million - reinforcing its commitment to creating an innovative fleet with low carbon emissions.
Strategic Implications of Decarbonisation in the Maritime Environment
Euronav now enjoys priority rights when competing against CMB's dry-bulk, chemical tanker and container fleets for charters exceeding three months.
As customer demand for low-carbon services rises, Euronav will convert older tonnage into future-proof assets through its Flywheel strategy of production, bunkering and operation of hydrogen and ammonia fuels.
Conditions for closing include shareholder approval - already achieved - and waivers of change-of-control provisions. Any remaining unfunded commitments of $361 million will be funded using Euronavs cash; with $1.625 billion secured and rolled over.