Genmar buys Navig8 VLCC fleet

The deal, which is being described as a merger, will see Oaktree-backed Genmar take Navig8’s 14 strong newbuilding programme in what would be Georgiopoulos’ second VLCC fleet deal in less than a year.

It still requires approval of both companies’ boards, and is expected to close early in 2015, according to a source familiar with the discussions.

A union of Genmar and Navig8’s crude tankers would see Oaktree as the major shareholder in a company owning 28 VLCCs, including 21 newbuildings.

Neither company would comment on the deal when approached by TradeWinds.

All of the tankers will be commercially managed by Navig8, with Genmar’s trading vessels moving from the Unique pool to Navig8’s VL8 pool, which currently has 35 vessels committed.

The future of the Unique pool with charterer Unipec has not yet been determined, sources indicate.

The surviving company will be General Maritime Management, with the executive team of chairman Georgiopoulos, chief executive officer John Tavlarios and chief financial officer Leonidas Vrondissis remaining intact.

Navig8 principals Nicolas Busch and Gary Brocklesby (pictured) are to be consultants to management.

Rumours of a combination first circulated in early November, but were privately denied at the time. A source familiar with the talks gives the following rationale.

“There’s been an emphasis on consolidation, and this is another step in that direction,” he said.

“General Maritime not only brings tanker experience but long experience on Wall Street. Navig8 brings a wealth of commercial market knowledge. The strengths are complementary.”

With Oaktree owning Genmar and also having close ties with Navig8 — the two have a joint venture in Navig8 Chemical Tankers — questions are bound to be raised about its role in the deal.

No private equity pressure

“Did anyone in private equity force a transaction? No, absolutely not,” said the source. “Were there shareholders on both sides who were glad to see it happen? Absolutely.”

Navig8 was one of the early movers in the late 2013 VLCC newbuilding rush, with orders for its first eight tankers at Hyundai Samho and SWS reaching around $764m.

Two further VLs at Hyundai Heavy Industries (HHI) were priced at between $102m and $105m in March, with two more booked at Hanjin’s yard in the Philippines and the remaining two at SWS.

Navig8 made its move into VLCC ownership with the support of private equity and listed under the banner of Navig8 Crude on the over-the-counter-market in Oslo.

It is suggested some of those funds are now looking to liquefy their asset and are in favour of a deal with Genmar.

Strike two

Georgiopoulos was the front-runner for the 15 Maersk Tankers VLCCs that ultimately went to Euronav last January.

His disappointment did not last long. In March he swept up the seven newbuildings Scorpio Tankers had amassed with a $735m move.

Genmar would overtake John Fredriksen and John Angelicoussis to become the world’s fifth largest VLCC owner if the deal is completed.

NIOC is presently the largest with 37, followed by Mitsui OSK Lines, Bahri and NYK, according to Clarksons.

source:www.tradewindsnews.com