Locked and loaded

Euronav has the firepower to replicate its $1bn takeover of the Maersk VLCC fleet without the need for further equity raises, RS Platou Markets says.
Euronav: Buying 15 VLCCs from Maersk Tankers.

Euronav: Buying 15 VLCCs from Maersk Tankers.

Euronav revealed the capture of the 15 VLCCs on Sunday and yesterday laid out details of a massive funding package to support the swoop.

Five heavyweight investors are poised to take $350m in fresh shares, with loans running to $735m expected to be signed off shortly.

Frode Morkedal and Herman Hildan, analysts at RS Platou Markets, believe Euronav is “reloading for another attack”.

They explain given the loans in store, Euronav will need only $245m of the $350m it plans to raise to complete the takeover. And it has yet to touch the $150m collected in December.

“In other words, Euronav can replicate the Maersk transaction assuming that all new equity will go for growth,” they wrote in a note to clients.

Fast mover

As TradeWinds first predicted on 30 December, Euronav beat Peter Georgiopoulos-led Genmar to the purchase of the Maersk VLCC fleet.

It paid $980m for the ships in a deal chief executive Paddy Rodgers revealed took three weeks to put together.

The takeover means it took only five days of 2014 for investment in secondhand VLCCs to reach a three-year high.

A first step

Euronav said on Sunday it retains an appetite for expansion and has described the Maersk deal as the first step in the wider consolidation of the crude tanker market.

“The only thing I can see is getting one good night’s sleep in the next week,” Rodgers quipped when asked about future plans on Monday. “We won’t be buying another $1bn fleet in the next week.”

Shares in Euronav fell back by over 3% to EUR 8.95 ($12.20) each today.

The stock flew up by over 20% on the back of the takeover yesterday; prompting one observer to quip some investors would have made the easiest money in the history of the shipping industry.

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