Shipping News

John Fredriksen seeks seat on Euronav board

In the latest plot twist in the ongoing drama following the collapse of the planned tanker mega merger of Euronav and Frontline, Famatown Finance Limited today announced that it intends to propose John Fredriksen and Cato H. Stonex as candidates for the Euronav at the company’s upcoming extraordinary general meeting.

Set for March 23, that meeting was called for by Compagnie Maritime Belge (CMB) and the Saverys family for the purpose of booting the entire Euronav supervisory board and replacing it with a slate of CMB nominated candidates.

The Saverys family, which controls CMB, made its opposition to the merger of Euronav with John Fredriksen’s Frontline clear from the get go and has been building its stake in Euronav ever since, with Fredriksen-associated Famatown doing likewise.

In today’s statement, Famatown says that it “further fully reserves its rights as shareholder, including its rights to make further proposals for amendment of the EGM and to exercise its voting rights in its full discretion.”

Here’s how it describes its two nominees:

  • Mr. John Fredriksen (born May 10,1944) is a Norwegian-born Cypriot businessman based in London. Trusts settled by Mr. Fredriksen for the benefit of his close family members control significant interests in shipping, offshore, property, fish farming and other industries where the most known shipping interests are the publicly listed companies Frontline Plc, Golden Ocean Ltd, SFL Corp. Ltd, Flex LNG Ltd and Avance Gas ASA. He has over the last seven decades become one of the most prominent figures in the shipping industry with the key philosophy being efficient and transparent business operations focused on generating shareholder returns.
  • Mr. Cato H. Stonex (born December 17, 1963) is a British Citizen and has had a long career in fund management, initially with J Rothschild Investment Management. He was then a founder partner of Taube Hodson Stonex for 20 years, which managed institutional portfolios of Global Equity mandates. THS was sold to GAM in 2016, since when he has established Partners Investment Company, which has focused on stock picking in small and mid-cap equities, largely in Europe. In 2021 Partners Investment Company LLP became Stonex Capital Partners Ltd and that same year Cato also funded WMC Capital Ltd, an investment company focused on the recovery of the global shipping industry. He has also been involved in a range of other business areas. He has been a long-term investor in German property and is a founder and director of Obotritia, a German conglomerate with interests in property, venture capital and banking. Since 2016 he has been a director of two Spanish property companies, Axiare and Arima, the first of which was sold in 2018 and the second which is listed on the Madrid stock exchange. He has a range of other private business interests. He holds an undergraduate degree from the London School of Economics and Political Science, where he served for ten years as a Governor and is now an Emeritus Governor. He has chaired its Development Committee and is now an advisor to the Endowment Investment Committee. He is closely involved with LSE Ideas, a leading academic think tank.

Yesterday, CMB released a statement ahead of the EGM setting out its reasons for wanting to replace the Euronav board and its strategy for the company.

Noting that on January 9 Frontline had terminated its combination agreement with Euronav in this respect, CMB says:

“Even after the termination, the current board continues to claim that a sale of Euronav to Frontline would be the best strategy for the company and has announced that it is actively trying to force Frontline to buy the company through litigation. The current board has commenced arbitration proceedings against Frontline in connection with the termination of the combination agreement, asserting that its decision to commence those proceedings is ‘in the corporate benefit of Euronav.” On February 8, the emergency arbitration proceedings initiated by Euronav have been fully dismissed by the emergency arbitrator.

“The actions and communications of the current board indicate that its members have become intrinsically linked to, and continue to support, a combination with Frontline. Now that the combination with Frontline has collapsed, CMB believes it is vital that the shareholders of Euronav engage in a renewed discussion on the composition of the supervisory board. Our view is that only new leadership will be able to get the company back on course after these tumultuous times, restore serenity around the debate on the future strategy and promote a constructive dialogue with all of its stakeholders, and properly assess the strategic alternatives available to Euronav, rather than clinging to the ‘bigger is better’ approach taken by the current board.”What is CMB’s strategy for Euronav?

CMB says it “believes that it is time for a new shareholder-aligned supervisory board to develop a strategy designed to continue Euronav as a stand-alone tanker-owning company in the shorter term while focusing on diversification and decarbonization in the longer term.

“CMB believes that Euronav should in a first instance be run as a top-class tanker company, focussing on riding the tanker cycle, paying dividends, buying back shares, rejuvenating its fleet and using its balance sheet to take advantage of business opportunities. CMB further believes that Euronav should remain a stand-alone company and does not need to merge with another tanker company to create added value for its shareholders. However, although CMB is currently one of the two largest shareholders, it only holds 25.00% of the outstanding shares. Other shareholders may have a different view on Euronav’s future strategy.”

CMB says that intends to engage with whatever new supervisory board emerges from the March 23 meeting “and ask them to explore whether, next to running an efficient and value-creating tanker business, new investments could be done to diversify the fleet into other shipping segments and to accelerate the decarbonization in shipping.”

CMB says that during the course of 2021, the possibility of integrating its CMB.TECH clean tech division into Euronav had been discussed with the current board of Euronav, which had repeatedly opposed such a possibility. It notes that it “is still of the opinion that CMB.TECH could indeed be a catalyst to accelerate a strategy of diversification and decarbonization, but is only one of many avenues and definitely not the only one.”

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