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Euronav NV announces final year results 2013
Euronav launched an exchange offer on all outstanding bonds with maturity 31 January 2015 in exchange for newly issued convertible bonds maturing 31 January 2018. The final aggregate principal amount of existing convertible bonds that were validly tendered for exchange was USD 125 million, representing a total of 1,250 new convertible bonds which were issued. Today only USD 25 million of the bonds maturing in 2015 remains outstanding.
Euronav signed a 4 year extension of its USD 300 million senior secured credit facility originally signed in April 2009 and which, at the time of the extension, had an outstanding amount of USD 221 million.
The facility, which has been extended until April 2018, will continue to have the same repayment profile of USD 20 million per year.
In December Euronav raised USD 150 million via a private placement of a perpetual convertible preferred equity instrument. The instrument was issued at par and bears an interest of 6% during the first 5 years payable annually in arrears in cash or in shares at the option of the company.
In the last quarter of 2013 Euronav increased its capital on several occasions following the exercise of the conversion option of convertible bonds issued in 2013 and maturing in 2018. That resulted in a share capital of USD 58,936,522.32 represented by 54,223,817 ordinary shares on 31 December 2013.
TANKER
Euronav sold the Newbuilding Suezmax Cap Isabella (2013 – 157,648 dwt) for a selling price of USD 54,000,000. The vessel was taken back under a bareboat charter for a fixed period of 2 years at then applicable market rates and with 3 options in favour of the charterer to extend for a further year. In case of a sale by the owner during the period of the bareboat charter the Company will share in any surplus if the vessel value exceeds a certain threshold. As this transaction was signed before the announcement of the 2012 final figures and is the result of negotiations with previous parties which started in the financial year 2012, the Company recorded the capital loss of USD -32 million still in 2012.
More importantly, however this transaction enabled Euronav to eliminate its only remaining capital expenditure whilst using very limited cash to take delivery of the vessel.
The time charter of the Suezmax Fraternity (2009 - 157,714 dwt) was extended for 12 months as from 2 August 2013 in direct continuation of the existing contract.
Euronav sold the double-hulled VLCC Ardenne Venture (2004 – 318,658 dwt), for USD 41.7 million. The vessel was owned by a 50/50 joint venture company with Wah Kwong Maritime Transport Holdings Ltd.
OFFSHORE
Euronav, jointly with Overseas Shipholding Group Inc., signed a two-year extension of the tranche related to the FSO Africa which is part of the USD 500 million senior secured credit facility originally signed in October 2008. At the time of the extension, USD 45 million was outstanding in respect of the Africa Tranche. At its new maturity (now scheduled for August 2015), the Africa Tranche will be fully repaid. The tranche related to the FSO Asia (part of the same facility) will continue to run until its original maturity in 2017. The facility will also continue to have the same annual repayment profile.
Events occurred after the end of the financial year ending 31 December 2013
On 2 January 2014 the VLCC Ardenne Venture (2004 - 318,658 dwt) was delivered to its new owners after the sale announced on 14 November 2013 for USD 41.7 million. The capital gain for Euronav of approximately USD 2.2 million will therefore be recognized in the first quarter of 2014.
On 3 January 2014 Euronav entered into a contract to acquire fifteen VLCCs from Maersk Tankers Singapore Pte Ltd. for a total acquisition price of USD 980 million payable as the vessels are being delivered. The vessels have an average age of 4 years and will be operated in the Tankers International VLCC Pool of which Euronav is a founding member.
On 7 January 2014 Euronav sold its oldest double-hulled VLCC Luxembourg (1999 – 299,150 dwt) for USD 28 million. The vessel was wholly owned by Euronav. The vessel is foreseen to be delivered to its new owner between 1 May 2014 and mid-June 2014. The vessel will be converted in an FPSO by her new owner and will therefore leave the VLCC trading fleet.
On 10 January 2014 Euronav raised USD 50,000,000 by way of a capital increase under the authorised capital for the financing of the acquisition of the VLCC vessels from Maersk and issued 5,473,571 new shares.
On 4 February 2014 Euronav issued a USD 235 million 7-year bond to the same investors who participated in the capital increase of 10 January 2014 and it has signed a commitment letter for a USD 500 million senior secured credit facility, both for the financing of the acquisition of the VLCC vessels from Maersk.
On 5 February 2014 Euronav entered into timecharter with Maersk Tankers A/S for a period of 12 months for the VLCC Maersk Hojo. Maersk Hojo was delivered to Euronav on 24 March 2014.
On 6 February 2014 Euronav announced its share capital was increased following the contribution in kind of 30 perpetual convertible preferred equity instruments issued on 10 January 2014 which resulted in the issuance of 9,459,286 new ordinary shares.
On 20 February 2014 Euronav released an optional redemption notice, reporting that Euronav will exercise its right to redeem on 9 April 2014 all of the convertible bonds issued in 2013 and maturing in 2018 not converted before 2 April 2014.
On 20 February 2014 Euronav took delivery of the first vessel from Maersk: the Nautilus.
On 24 February 2014 the shareholders approved a capital increase for the Maersk VLCC fleet acquisition up to an amount of USD 300,000,000 against issuance of up to 32,841,528 new shares.
On 25 February 2014 Euronav took delivery of the second vessel from Maersk: the Nucleus.
On 1 March 2014 Euronav Ship Management Antwerp (ESMA) took over the ship management of the vessel FSO Africa, owned by TI Africa Ltd. Her sister vessel FSO ASIA is already in management of ESMA as from the conversion of the vessel into an FSO in 2009. The transition of management was carried out as planned.
Between 1 January and 10 March 2014 Euronav’s share capital increased several times following the exercise of the conversion option of convertible bonds issued in 2013 and maturing in 2018. That resulted in a share capital of USD 130,950,898.60 represented by 120,479,757 ordinary shares as of the day of this press release.
In March 2014 the company agreed to extend the period of the purchase option on the Antarctica (2009 – 315,981 dwt) and the Olympia (2008 – 315,981 dwt) by one month, until April 30th 2014.
On 25 March 2014 after a successful syndication Euronav signed a new USD 500 million senior secured credit facility after a successful syndication. The facility is underwritten by DnB Bank ASA, Nordea Bank Norge ASA and Skandinaviska Enskilda Banken AB acting as Lead Arrangers and Bookrunners and ABN Amro Bank N.V., Danish Ship Finance, ING Bank NV acting as Lead Arrangers and BNP Paribas Fortis NV and ScotiaBank Europe PLC acting as Co-Arrangers and Belfius Bank SA/NV. Nordea is also the facility agent. The facility will be available as from 25 March 2014 for the purpose of financing the acquisition of the Maersk Tankers fleet. The credit facility has a 6-year maturity as from closing the syndication and will bear interest at a rate based on LIBOR plus a margin of 2.75%.
Prospects for 2014
Given the market for tankers in the past couple of years and the difficulties faced by most owners to secure financing, not many newbuilding contracts were placed. Consequently, few vessels (6 VLCCs and 8 Suezmaxes including 6 shuttles) are scheduled to be delivered in 2014. If the scrapping rate in 2014 remains at the same level as in 2013, there would be a negative fleet growth in these segments which has not been seen for quite some time. That should help balancing the fleet and increase rates.
The increase of US shale oil production has caused some concerns with regard to the diminishing demand for oil. The US, which was a heavy importer of crude from West Africa, primarily carried on Suezmax vessels, has therefore reduced its requirement almost entirely. West-African crude has consequently been exported elsewhere, towards North Europe and to the Far East, which should increase the demand for ton-miles and therefore tankers. Moreover, several Latin American countries have been increasing their oil production, often destined to go East, which should also increase ton-miles.
The market is expected to be highly volatile as it has already been so far in the first couple of months of 2014. That should enable owners to lock some voyages at pretty good rates which should have a positive impact on the average TCE result for the year, therefore expected to be better than in 2013.
With consumption in the US rebounding to its strongest level in five years, global oil demand in 2014 will be higher than previously forecasted. The IEA is reporting a growth of 1.3% in 2014 to 92.4 million barrels per day.
The floating platform market remains one of the strongest offshore sectors with an increasing amount of floating production investments being made.
In Mexico multiple offshore yards are under development in the Altamira region and in Brazil several companies have registered for the auction of the massive Libra Block which is estimated to have 8-12 billion barrels of recoverable reserves and a peak output of 1.4 million barrels a day.
The rapidly growing number of drill ships and UDW (Ultra Deep Water) semis is also swiftly increasing the demand for new floating production facilities. By the end of 2013, there were 146 units available for ultra-deep water E&D (Exploration and Development) and it is expected that this growth will continue through the next several years. By the end of 2015 there will be an estimated increase to 180 units.
Source: Euronav NV
Euronav signed a 4 year extension of its USD 300 million senior secured credit facility originally signed in April 2009 and which, at the time of the extension, had an outstanding amount of USD 221 million.
The facility, which has been extended until April 2018, will continue to have the same repayment profile of USD 20 million per year.
In December Euronav raised USD 150 million via a private placement of a perpetual convertible preferred equity instrument. The instrument was issued at par and bears an interest of 6% during the first 5 years payable annually in arrears in cash or in shares at the option of the company.
In the last quarter of 2013 Euronav increased its capital on several occasions following the exercise of the conversion option of convertible bonds issued in 2013 and maturing in 2018. That resulted in a share capital of USD 58,936,522.32 represented by 54,223,817 ordinary shares on 31 December 2013.
TANKER
Euronav sold the Newbuilding Suezmax Cap Isabella (2013 – 157,648 dwt) for a selling price of USD 54,000,000. The vessel was taken back under a bareboat charter for a fixed period of 2 years at then applicable market rates and with 3 options in favour of the charterer to extend for a further year. In case of a sale by the owner during the period of the bareboat charter the Company will share in any surplus if the vessel value exceeds a certain threshold. As this transaction was signed before the announcement of the 2012 final figures and is the result of negotiations with previous parties which started in the financial year 2012, the Company recorded the capital loss of USD -32 million still in 2012.
More importantly, however this transaction enabled Euronav to eliminate its only remaining capital expenditure whilst using very limited cash to take delivery of the vessel.
The time charter of the Suezmax Fraternity (2009 - 157,714 dwt) was extended for 12 months as from 2 August 2013 in direct continuation of the existing contract.
Euronav sold the double-hulled VLCC Ardenne Venture (2004 – 318,658 dwt), for USD 41.7 million. The vessel was owned by a 50/50 joint venture company with Wah Kwong Maritime Transport Holdings Ltd.
OFFSHORE
Euronav, jointly with Overseas Shipholding Group Inc., signed a two-year extension of the tranche related to the FSO Africa which is part of the USD 500 million senior secured credit facility originally signed in October 2008. At the time of the extension, USD 45 million was outstanding in respect of the Africa Tranche. At its new maturity (now scheduled for August 2015), the Africa Tranche will be fully repaid. The tranche related to the FSO Asia (part of the same facility) will continue to run until its original maturity in 2017. The facility will also continue to have the same annual repayment profile.
Events occurred after the end of the financial year ending 31 December 2013
On 2 January 2014 the VLCC Ardenne Venture (2004 - 318,658 dwt) was delivered to its new owners after the sale announced on 14 November 2013 for USD 41.7 million. The capital gain for Euronav of approximately USD 2.2 million will therefore be recognized in the first quarter of 2014.
On 3 January 2014 Euronav entered into a contract to acquire fifteen VLCCs from Maersk Tankers Singapore Pte Ltd. for a total acquisition price of USD 980 million payable as the vessels are being delivered. The vessels have an average age of 4 years and will be operated in the Tankers International VLCC Pool of which Euronav is a founding member.
On 7 January 2014 Euronav sold its oldest double-hulled VLCC Luxembourg (1999 – 299,150 dwt) for USD 28 million. The vessel was wholly owned by Euronav. The vessel is foreseen to be delivered to its new owner between 1 May 2014 and mid-June 2014. The vessel will be converted in an FPSO by her new owner and will therefore leave the VLCC trading fleet.
On 10 January 2014 Euronav raised USD 50,000,000 by way of a capital increase under the authorised capital for the financing of the acquisition of the VLCC vessels from Maersk and issued 5,473,571 new shares.
On 4 February 2014 Euronav issued a USD 235 million 7-year bond to the same investors who participated in the capital increase of 10 January 2014 and it has signed a commitment letter for a USD 500 million senior secured credit facility, both for the financing of the acquisition of the VLCC vessels from Maersk.
On 5 February 2014 Euronav entered into timecharter with Maersk Tankers A/S for a period of 12 months for the VLCC Maersk Hojo. Maersk Hojo was delivered to Euronav on 24 March 2014.
On 6 February 2014 Euronav announced its share capital was increased following the contribution in kind of 30 perpetual convertible preferred equity instruments issued on 10 January 2014 which resulted in the issuance of 9,459,286 new ordinary shares.
On 20 February 2014 Euronav released an optional redemption notice, reporting that Euronav will exercise its right to redeem on 9 April 2014 all of the convertible bonds issued in 2013 and maturing in 2018 not converted before 2 April 2014.
On 20 February 2014 Euronav took delivery of the first vessel from Maersk: the Nautilus.
On 24 February 2014 the shareholders approved a capital increase for the Maersk VLCC fleet acquisition up to an amount of USD 300,000,000 against issuance of up to 32,841,528 new shares.
On 25 February 2014 Euronav took delivery of the second vessel from Maersk: the Nucleus.
On 1 March 2014 Euronav Ship Management Antwerp (ESMA) took over the ship management of the vessel FSO Africa, owned by TI Africa Ltd. Her sister vessel FSO ASIA is already in management of ESMA as from the conversion of the vessel into an FSO in 2009. The transition of management was carried out as planned.
Between 1 January and 10 March 2014 Euronav’s share capital increased several times following the exercise of the conversion option of convertible bonds issued in 2013 and maturing in 2018. That resulted in a share capital of USD 130,950,898.60 represented by 120,479,757 ordinary shares as of the day of this press release.
In March 2014 the company agreed to extend the period of the purchase option on the Antarctica (2009 – 315,981 dwt) and the Olympia (2008 – 315,981 dwt) by one month, until April 30th 2014.
On 25 March 2014 after a successful syndication Euronav signed a new USD 500 million senior secured credit facility after a successful syndication. The facility is underwritten by DnB Bank ASA, Nordea Bank Norge ASA and Skandinaviska Enskilda Banken AB acting as Lead Arrangers and Bookrunners and ABN Amro Bank N.V., Danish Ship Finance, ING Bank NV acting as Lead Arrangers and BNP Paribas Fortis NV and ScotiaBank Europe PLC acting as Co-Arrangers and Belfius Bank SA/NV. Nordea is also the facility agent. The facility will be available as from 25 March 2014 for the purpose of financing the acquisition of the Maersk Tankers fleet. The credit facility has a 6-year maturity as from closing the syndication and will bear interest at a rate based on LIBOR plus a margin of 2.75%.
Prospects for 2014
Given the market for tankers in the past couple of years and the difficulties faced by most owners to secure financing, not many newbuilding contracts were placed. Consequently, few vessels (6 VLCCs and 8 Suezmaxes including 6 shuttles) are scheduled to be delivered in 2014. If the scrapping rate in 2014 remains at the same level as in 2013, there would be a negative fleet growth in these segments which has not been seen for quite some time. That should help balancing the fleet and increase rates.
The increase of US shale oil production has caused some concerns with regard to the diminishing demand for oil. The US, which was a heavy importer of crude from West Africa, primarily carried on Suezmax vessels, has therefore reduced its requirement almost entirely. West-African crude has consequently been exported elsewhere, towards North Europe and to the Far East, which should increase the demand for ton-miles and therefore tankers. Moreover, several Latin American countries have been increasing their oil production, often destined to go East, which should also increase ton-miles.
The market is expected to be highly volatile as it has already been so far in the first couple of months of 2014. That should enable owners to lock some voyages at pretty good rates which should have a positive impact on the average TCE result for the year, therefore expected to be better than in 2013.
With consumption in the US rebounding to its strongest level in five years, global oil demand in 2014 will be higher than previously forecasted. The IEA is reporting a growth of 1.3% in 2014 to 92.4 million barrels per day.
The floating platform market remains one of the strongest offshore sectors with an increasing amount of floating production investments being made.
In Mexico multiple offshore yards are under development in the Altamira region and in Brazil several companies have registered for the auction of the massive Libra Block which is estimated to have 8-12 billion barrels of recoverable reserves and a peak output of 1.4 million barrels a day.
The rapidly growing number of drill ships and UDW (Ultra Deep Water) semis is also swiftly increasing the demand for new floating production facilities. By the end of 2013, there were 146 units available for ultra-deep water E&D (Exploration and Development) and it is expected that this growth will continue through the next several years. By the end of 2015 there will be an estimated increase to 180 units.
Source: Euronav NV
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