Euronav’s greenshoe dance

Paddy Rodgers-led Euronav printed 18,699,000 shares at $12.25 each during the upsized offering, aided by underwriters taking up all their options.

Shares in what is now Wall Street’s largest VLCC owner closed down a fraction at $12.10bn last night with over 1.1 million shares traded, giving the company a market capitalisation of $1.44bn.

Jan Andreas Naess of Fearnley Securities said in a report this morning: “We see the US listing as positive for the company as it will likely increase the shareholder base and liquidity of the share.

“Based on historical mid-cycle multiples on newbuilding parity rates (USD ~42k/day) we see a further ~50\% upside potential for the share.”

Deutsche Bank, Citigroup, J.P. Morgan Securities and Morgan Stanley are acting as joint book-running managers.

DNB Markets, Skandinaviska Enskilda Banken and Evercore Group are acting as senior managers, while ABN Amro Securities, Scotia Capital, Clarkson Capital Markets and KBC Securities are involved as co-managers.

It has taken a fleet of 52 vessels to the New York Stock Exchange, including 26 VLCCs, 23 suezmaxes and two FSOs.

The owner has been banging the drum of consolidation over the past year and chief executive Paddy Rodgers has said it may take its fleet to 100 ships.

Euronav’s flagship deal to date was the $980m capture of 15 VLCCs from Maersk Tankers a year ago.

VesselsValue.com this week priced the ships at $1.067bn, up 8.9\% since swoop was sealed.

“In the capital markets consolidation will be critical because when you are big you should be able to attract liquidity,” Rodgers said at Marine Money yesterday.

“If you have got liquidity the people who might not have risked being a shipowner can become a shipping investor and buy and sell at any point in the cycle.

“That liquidity is more important than pure value as that liquidity gives people the chance to say ‘today I’m going to be a shipowner’. They buy and they can make 100\% in a month, we know that as that’s what the shipping markets are like.”

He added: “The person who buys your share is an investor with you, not a horse that you ride, not someone you sell too when the market is right for you, but someone you respect in the way that nearly all of us respect our shipping banks.”

Euronav’s listing is the first pure shipping IPO in the US since Dorian LPG last year. Three shipping MLPs also floated stateside in 2014.

Euronav’s move comes with VLCCs enjoying the best start to a year since the financial crisis struck in 2008 and only a few months after it delayed the listing due to stock market turbulence.

source:www.tradewindsnews.com