Hafnia acquires a modern fleet of 32 fuel-efficient IMO II tankers

Nov 18 2021


Hafnia Limited ("Hafnia", the "Company", OSE ticker code: "HAFNI") has entered into a share purchase agreement to acquire all outstanding shares in Chemical Tankers Inc ("CTI") (the "Transaction"), thereby taking over control of CTI's fleet of 32 modern and fuel-efficient IMO II product/chemical tankers (the "CTI fleet").

The CTI fleet consists exclusively of high specification ECO design vessels, constructed at leading shipyards, and is comprised of the following:

• 6 x MR (49,000 dwt) IMO II coated tankers built in Korea between 2015 and 2016

• 18 x Handy (38,000 dwt) IMO II coated tankers built in Korea between 2015 and 2016

• 8 x Intermediate (25,000 dwt) IMO II Stainless Steel tankers built in Japan between 2016 and 2017

 

In exchange for all outstanding shares in CTI, CTI's shareholders will receive shares in Hafnia (the "Consideration") representing 21.5% of the outstanding shares in the combined entity. The Consideration has been determined through a NAV for NAV framework, based on broker values and Q1 2021 balance sheets adjusted for other assets and liabilities within each business. Following the Transaction, and based on the current shareholding in CTI, CTI's major shareholder, funds managed by Oaktree Capital Management, L.P. (“Oaktree”), will hold 20.4% of the shares in the combined entity.

 

Hafnia has long been an advocate of consolidation. The Transaction underscores Hafnia's commitment to grow its platform to maximise stakeholder value. Consolidation enables Hafnia to achieve improved earnings capability through the shipping cycle. Most importantly, the Transaction will complement Hafnia’s existing commercial activities in the Handy and MR segments whilst enabling enhanced trading flexibility through the ability to carry both clean petroleum products and chemicals, limiting ballast time by optimising triangulation and offering material cost synergies.

 

"The addition of the CTI fleet will help enhance our resilience in the face of volatile markets and create a more sustainable and future-proof transportation business that will include the ability to transport methanol, in addition to many other cargoes. I am grateful to Oaktree and the deal teams on both sides for their hard work towards the completion of the Transaction." said Hafnia CEO Mikael Skov.

 

For CTI's shareholders, the Transaction represents an opportunity to enhance its returns through access to greater economies of scale, lower cost of debt and upside exposure to a recovering product tanker market.

 

"This merger is the culmination of a thorough strategic process. It will allow CTI shareholders to benefit from the scale and commercial capabilities of Hafnia, while enabling Hafnia to expand its platform with a sizeable and young ECO design IMO II product/chemical tanker fleet. The addition of the CTI fleet brings with it new trading capabilities which, combined with Hafnia’s existing fleet and platform, will enhance the combined group earnings generation. We believe we've identified a best-in-class partner in Hafnia and are excited to embark on a promising journey alongside the BW Group and other Hafnia shareholders." said Guillaume Bayol, Managing Director at Oaktree.

 

The Transaction remains subject to consent or waivers from some of CTI's existing financiers, and Hafnia expects the Transaction to close before the 1st of February 2022. Following the Transaction, Hafnia will operate a fleet of 233 product and chemical tankers, making it the world's largest operator in the product and chemical tanker segment. Its owned and chartered-in fleet will grow to 133 product and chemical tankers ranging in size from 25,000 dwt to 115,000 dwt. The Transaction will reduce the average age of Hafnia’s fleet to 7 years and increase the proportion of ECO ships in the Hafnia fleet.

 

This Transaction marks a significant milestone on Hafnia’s journey towards more sustainable shipping, contributing to ongoing efforts to modernise the fleet and introduce operational efficiencies resulting in improved environmental performance. The Company continues to be on track to achieve the IMO’s 2030 goal of a 40% reduction in carbon intensity by 2028.

 

The Company has retained Gorrissen Federspiel and Advokatfirmaet Thommessen as legal advisors, while CTI has retained Fearnley Securities and PJT Partners as financial advisors, and Linklaters LLC and Advokatfirmaet Wiersholm as legal advisors in connection with the Transaction.

 



Related News

SvanehĂžj hits record order intake in 2021

(Jan 14 2022)

Demand for LNG-fuelled newbuilds is growing across the shipping industry.



OCIMF and PIANC sign a memorandum of understanding

(Jan 14 2022)

The World Association for Waterborne Transport Infrastructure (PIANC) and the Oil Companies International Marine Forum (OCIMF) have signed a memorandum of understanding (MoU) to formalise their long-standing working relationship.



Poten's Weekly Opinion: A (Tanker) Year to Forget

(Jan 14 2022)

Top Reported Dirty Spot Charterers for 2021.



Signal analysis of trends across major vessel sizes in 2021 tanker freight market

(Jan 14 2022)

Using Signal Ocean data, Signal Group has analysed the trends and changes across the major vessel sizes in the dry and tanker freight market for 2021.



China gorges on cheap, sanctioned oil from Iran and Venezuela

(Jan 14 2022)

China doubled down on imports of Iranian and Venezuelan crude in 2021., taking the most from the U.S.-sanctioned regimes in three years, as refiners brushed off the risk of penalties to scoop up cheap oil.



Dec 2021

Filters or filterless BWMS - kites for tankers - biofuels - LPG - LNG - methanol - ammonia