Thursday, February 13, 2020

Shipping: Euronav Buys Three Very Large Crude Carriers (EURN)

Following up on February 5's "Euronav Comments on the Tanker Market (EURN; TNK; FRO)", they are putting their money where there collective mouths are.

From World Maritime News, February 12:

Belgium’s tanker shipping company Euronav NV has entered into an agreement for the acquisition via resale of three very large crude carrier (VLCC) newbuilds.
The three ships are currently completing construction at the Daewoo Shipbuilding & Marine Engineering (DSME) shipyard in South Korea.

As informed, the trio is being acquired for an aggregate purchase price of USD 280.5 million or USD 93.5 million per unit. The acquisition will be fully funded by existing borrowing facilities and debt capacity, according to the company.

With this move, Euronav plans to enhance its operational strength and reduce the average age of the company’s VLCC fleet.

To be fitted with exhaust gas scrubber technology and ballast water treatment systems, the vessels are due to be delivered in the fourth quarter of 2020 and in the first quarter of 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,” Hugo De Stoop, CEO of Euronav, commented.

“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.”...MORE
After the war scare glory days, September - December 2019, record charter rates, more demand than they could supply, etc. the tanker stocks have come back to earth—or sea-level—and it's time to think a little longer-term.

Euronav Repurposes The World's Largest Tanker to Fuel Bunker for IMO 2020 Compliant Juice
And that's a lot of juice:

We noted Euronav's purchase of their second of two remaining Ultra Large Crude Carriers back in 2018. Here's it's partner, the slightly smaller* TI Europe:
File photo shows the ULCC TI Europe, one of two 3 million barrel capacity oil tankers currently in the world. Photo: Euronav
*441585 DWT vs  441561 DWT

More on them after the jump.
Like most of the group, the tanker fleets are not in overwhelming demand at the moment what with recession in some countries and slowing economies in others but they seem to be looking ahead to good times with Frontline in particular showing strength and Euronav on the cusp of breaking out of a downtrend:

That was written Monday, September 9, 2019 and the stocks did indeed break out.
It still amazes how stocks can know about upcoming events before they are even a smudge over the horizon.