Transaction to Grow Fleet 30% on a DWT Basis, Reduce Average Fleet Age by More Than Two Years and Further Increase Company’s Earnings Power
International Seaways, Inc. (NYSE: INSW) (INSW), one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products in International Flag markets, Thursday announced it has entered into a binding letter of intent to acquire the holding companies for six 300,000 DWT VLCCs with an average age of 1.7 years from Euronav NV (Euronav) in connection with the closing of Euronav’s announced acquisition of Gener8 Maritime, Inc. (GNRT). The purchase price for the six-vessel acquisition is $434 million, inclusive of assumed debt.
The six vessels that INSW has agreed to acquire include five 2016-built VLCCs and one 2015-built VLCC, each constructed at Shanghai Waigaoqiao Shipbuilding Co., and are expected to be delivered to the Company in the second quarter of 2018. In connection with the transaction, the Company intends to assume the debt currently secured by the acquired vessels, which consists of a $311 million credit facility, maturing between 2027 and 2028, and carrying a fixed annual interest rate of LIBOR plus 2.0%.
The transaction is subject to a number of closing conditions, including (i) consummation of Euronav’s announced acquisition of GNRT, (ii) amendment of the Company’s existing credit facility as required to consummate the transaction, (iii) the Company’s receipt of financing necessary to consummate the transaction, (iv) completion of the Company’s due diligence to its reasonable satisfaction, (v) execution of a definitive stock purchase agreement and (vi) receipt of all required third-party consents, third-party approvals and regulatory approvals. The transaction is expected to close in the second quarter of 2018.
Following the closing of the transaction, INSW will reduce the average age of its fleet by over two years while expanding the size of its fleet by 30% on a DWT basis. The Company will have a total fleet of 60 vessels, including 54 conventional crude and product tankers and, through its participation in joint ventures, four liquefied natural gas carriers and two floating storage and offloading service vessels. INSW intends to fund the transaction with a combination of available liquidity, the assumption of all or part of the debt currently secured by the vessels and/or new third-party financing.
“We are pleased to have entered into this compelling en bloc transaction that positions INSW to further increase its earnings power and industry leadership,” said Lois K. Zabrocky, INSW’s president and CEO.
“The agreement to acquire these six modern VLCCs under favorable terms demonstrates the significant progress we have made in implementing our fleet growth and renewal strategy since becoming an independent public company. Over the past year, we have entered into transactions to grow our fleet more than 40% on a DWT basis and reduce its average age by more than three years. With a sizeable and high-quality fleet, we are in a strong position to create long-term shareholder value by capitalizing on a recovery in both the crude and product tanker sectors.”
Source: International Seaways