Scorpio Tankers Merges with Navig8 Product Tankers
Scorpio Tankers has entered into definitive agreements to merge with Navig8 Product Tankers and acquire Navig8’s 27 operating product tankers.
Subject to the terms and conditions of these agreements, Scorpio will acquire four LR1 tankers prior to the closing of the Merger (the LR1 Vessel Acquisitions) and the remaining 23 tankers upon the closing of the merger in exchange for the issuance of 55 million shares of Scorpio common stock to the Navig8 shareholders.
In connection with the LR1 vessel acquisitions, Scorpio will pay cash consideration of $42.2 million, which is net of assumed debt. This cash is expected to remain with Navig8 through closing and will form part of the balance sheet of the combined company, subject to the terms and conditions of the merger agreement.
Through the merger, Scorpio is acquiring an operating fleet of 27 eco-design product tankers, comprised of 15 LR2s and 12 LR1s with a weighted average age of 0.9 years and an aggregate carrying capacity of approximately 2.6 million dwt.
Following the completion of the merger, on a fully delivered basis, Scorpio’s operating fleet will consist of 105 owned or finance leased tankers (38 LR2 tankers, 12 LR1 tankers, 41 MR tankers and 14 Handymax tankers) with a weighted average age of approximately 1.9 years, and 19 time or bareboat chartered-in tankers (one LR2 tanker, nine MR tankers and nine Handymax tankers).
In addition, Scorpio has contracts for the construction of six newbuilding MR product tankers expected to be delivered to them throughout the remainder of 2017 and first quarter of 2018. Scorpio has also entered into an agreement to sell two MR product tankers, which is expected to close in June 2017.
According to Scorpio, certain Navig8 shareholders have agreed to vote their Navig8 shares in favor of the merger, subject to certain exceptions. These shareholders constitute a majority of Navig8’s outstanding common shares and, accordingly, it is expected that the merger will be approved.
Scorpio said it will appoint one additional independent director that will be selected by Scorpio’s board of directors and to be effective at the closing of the merger.
Scorpio said it will appoint one additional independent director that will be selected by Scorpio’s board of directors and to be effective at the closing of the merger.
