Euronav NV (NYSE: EURN & Euronext: EURN) has entered into an agreement for the acquisition of three VLCC newbuilding contracts.
The three VLCCs are currently completing construction at the DSME shipyard in South Korea and are being acquired for an aggregate purchase price of $280.5 million, or $93.5 million per ship. All three vessels will be fitted with exhaust gas scrubbers and ballast water treatment systems.
The vessels are due to be delivered early in the fourth quarter 2020 and in January and February 2021 respectively and will therefore be available for the key winter freight markets in 2020/2021.
“The large tanker fundamentals remain constructive despite substantial headwinds surrounding economic activity linked to the coronavirus that we believe and hope will be temporary,” said Euronav CEO
Hugo De Stoop. “Current disruptions to the freight market have provided an opening for Euronav to be opportunistic and deliver what we believe will be long term value for our stakeholders. This transaction demonstrates our flexibility and our capacity to seize opportunities thanks to a strong balance sheet and a robust liquidity position.”
Euronav says that the transaction is consistent with its core company goals. It notes that these vessels are ex-yard resales, which do not add to existing vessel supply.
Euronav will meet the financing of this acquisition with existing borrowing facilities and debt capacity. The payment profile for this transaction means that the largest portion of the installments on each vessel will be made on delivery of each ship.