Marc Saverys might be lucky to have his sons carry on in the family shipping business.
But arguably the toughest question at Euronav and CMB.TECH capital markets day on 12 January was related to corporate governance.
What would investors think about three family members on the soon-to-be merged Belgian company’s five-man board?
It was a question which Euronav chief executive Alexander Saverys was ready for.
He and his two brothers — board members Michael and Ludovic — had the biggest skin in the game given the family’s 53.5% ownership of the company, so were aligned with value creation as any other shareholder.
Without a reference shareholder, and without a representative in the management board, Euronav had traded below net asset value, he added.
So, it was for Saverys and his brothers to prove that having the family on board was a positive for the soon-to-be merged company, to be renamed CMB.TECH.
“Watch this space and please judge us on the value creation and not just because we have the same last name,” he said.
Generation change
The response might have had their father Marc purring with satisfaction.
The patriarch, who has the role of Euronav/CMB.TECH chairman, has long given his backing to the green agenda that his sons are taking.
That reflected “the change of generation, perhaps of change of the world of today”, the senior Saverys said.
The green issue was at the heart of the titanic battle between the Saverys and John Fredriksen for control of the Euronext and NYSE-listed Euronav (which the elder Saverys says kept him young).
“In the end, let’s face it, we have more or less the outcome that we wanted,” Marc said.
The Saverys control tanker giant Euronav, which remains headquartered in Antwerp following the sale of 24 VLCCs to Frontline for $2.35bn in cash.
The potential benefits of the deal were spelt out ahead of a special general meeting on 7 February when shareholders will vote on the $1.15bn acquisition by Euronav of 100% of the shares of CMB.Tech.
Attention will then shift towards a tender that CMB will make for outstanding Euronav shares which ends on 15 March.
The company will make a mandatory offer at a bid price of $17.86 per share, which is a historic high although just below the net asset value of $18.43 per share.
“We believe that this will be an interesting entry opportunity for the existing investors to stay in or the new investors obviously to take part in this predicted upside,” chief financial officer Ludovic Saverys said.
New breed of investors
The Saverys hope to win over new and existing shareholders.
“We’ve said clearly that we would like a very big free float, so we hope that a lot of people will stay in the stock,” he said. “But people that want to exit have the opportunity to exit and what will be will be.
“This is a large investable company with more than 150 vessels, of which a big chunk will be powered by ammonia and hydrogen.
“Do you think that is a compelling story? Then you should step in. If you think that is not a compelling story, then you can step out.”
He believes interest to come from “grey to green funds that see a lot of sense in coming into a company today that has cash flows today on the water”.
“But believe that it’s good to reinvest these cash flows into these new green ‘future-proof’ solutions,” Alexander Saverys said.
“And I think that’s a new breed of investor we will gradually attract in the following weeks.”
Diversification
The focus of CMB.TECH is on a diversified fleet. That is a change from the previous generations’ preference for companies focused on one sector such as gas carriers, bulk or tankers.
“The danger is you’re forced to invest regardless of the cycle and in upcycle are wary to sell vessels, so hold on for too long and don’t invest in other asset types when you should,” chief executive Alexander Saverys said.
Therefore the timing is right for investing in a fleet that will utilise zero carbon fuels such as hydrogen and ammonia.
“We are talking to quite a large number of clients that are willing to take that risk with us,” chief chartering officer Michael Saverys said.
“We are looking at the mining companies obviously, they have enormous interest in what’s happening. They also see at the same time the extraordinary rapidity with which the fleet is ageing,” he added.
Going forward, the hope is that CMB.TECH can attach the green tag to any segment of shipping or industrial sector.
“The common denominator is the green element, it’s not the fleet specificity. That’s what you call value creation,” chief strategy officer Benoit Timmermans said.
