Shipowner Alexander Saverys: 'Passing Euronav to the Vikings is not a good idea'

09 april 2022
today at
10:00

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The Saverys family does not agree at all with the merger of the oil tanker shipping companies Euronav and Frontline. ‘We have to move away from the transport of crude oil,’ says Alexander Saverys of CMB, Euronav’s largest shareholder.

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The management of the Belgian oil shipping company Euronav wants to merge with its Norwegian rival Frontline of shipping magnate John Fredriksen to become the largest oil tanker shipping company in the world. But the Saverys family, which increased its stake in Euronav to 13.2 percent in recent months after exiting and is now again the largest shareholder, disagrees. ‘Adding more oil to an oil company in a world in need of rapid greenhouse gas reductions is not a good strategy,’ says Alexander Saverys of CMB, from which Euronav was once split off.

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According to him, Euronav should move away from the transport of crude oil and focus on greening and decarbonising shipping and heavy industry. ‘We have expanded Euronav into a large tanker shipping company. Successfully. But at a certain point we have seen that shareholders, society and our customers are looking for something else. In the meantime, the European Green Deal has come into effect and the energy transition is central. We have to provide an answer to that. Selling the company to a Norwegian competitor is not a solution. The exclusive focus on fossil fuels and the associated geopolitical risks could even endanger the company’.

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Adding more oil to an oil company in a world in need of rapid greenhouse gas reductions is not a good strategy.

Alexander Saverys

CEO CMB and largest shareholder of Euronav

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Saverys has an alternative plan ready. He wants to merge CMB.TECH, its fast-growing energy subsidiary that specializes in large hydrogen projects, with Euronav. ‘CMB.TECH needs growth capital. We want to turbocharge that, because we think we have a fantastic story there. You can perfectly turn Euronav into a major maritime and industrial cleantech player with a diversified fleet powered by hydrogen and ammonia. That fleet will eventually have to transport the new green fuels, instead of oil.’

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Does that mean the oil tankers have to be sold?

Alexander Saverys: ‘We want to do that gradually, but in an intelligent way. We have also done that at CMB. We are gradually phasing out the transport of coal there and we are investing the proceeds from the operation and sale of ships in the greening of shipping.’

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Should Euronav’s oil tankers be replaced by hydrogen and ammonia vessels?

Saverys: ‘Yes. This can be done over a period of five to ten years. The proceeds of the few good oil years that are likely to come will then be massively reinvested in green hydrogen and ammonia. Euronav has plenty of tanker know-how and knows everything about how to handle those products.’

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‘We’ you say?

Saverys: ‘We are the largest shareholder. As a family we have never owned as many shares as we do today. We consider Euronav as our company. We almost ran out of capital for a moment because we had other cats to flog in CMB. We had to survive a small crisis and invest a lot in CMB Tech. We say ‘we’ because we still believe that the people at Euronav have the same DNA as us. My father founded and grew that company. The only thing less ‘we’ today is our board of directors and management. They have clearly chosen the path of selling to the Vikings. We regret that, but bon, we are not going to dwell on it too long. We have a great plan. We will now first of all try to adjust the board of directors. I read in the newspaper that Hugo (De Stoop, the CEO of Euronav ed.) warmly welcomes us to its board of directors. We’re going to take him at his word. We are going to propose some super candidates at the general meeting in May. We guarantee that there will be a board that shares our vision. There is still a strong Belgian anchorage in Euronav’s shareholding. If a choice has to be made between a sale to a company from Bermuda or a new impetus in which the energy transition is central, the people who follow our hydrogen story at CMB.TECH realize that option two, at least in my view, is much better for value creation. .’

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CMB.TECH

CMB.TECH is the fast-growing energy division of the dry bulk shipping company CMB. It specializes in the hydrogen economy. It all started with the construction of a small hydrogen passenger ship in 2017. Meanwhile, CMB.TECH has developed a hydrogen and diesel marine engine for its own new ships, builds hydrogen ferries and offshore vessels and develops green hydrogen and filling stations for ships, buses , cars and industry. In Namibia, CMB acquired a huge piece of land for the construction of a 20 km² solar park and a hydrogen and an ammonia plant. It wants to use the renewable energy to make hydrogen, convert it into ammonia and then export the ammonia by ship to the port of Antwerp, where it can be used to make companies’ production processes greener.

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‘The contrast couldn’t be greater. I am glad that there is now a very clear choice before us. Fredriksen is doing us a favor. You have the old world, and the new. We’re going for the new one. But we will have to work step by step. First the board of directors. Then the rest.’

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Are you going to buy additional shares?

Saverys: ‘That could be good. We don’t rule that out.’

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Can you block the merger plans?

Saverys: ‘With our share package and the possible help of other shareholders, we have a strong minority that people have to listen to at the general meeting. Everything is decided there. Am I sure we’ll get it all through? New. Are we going to do everything we can to get everything through? Most certainly.’

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Did you talk to Fredriksen?

Saverys: ‘Nothing came of that. The discussions have been stopped for a while. We also had several discussions with management and the board of directors. The press release came on Thursday. Receipt. We are not naive. We knew this could happen. But we didn’t know it was coming or what was to be announced. What we did know was that the board of directors and management did not agree with us’.

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Why not?

Saverys: ‘They think they create added value by merging two oil companies. They don’t think our vision on the greening of shipping is a good story. Our big advantage is: we are a family business, we have time, patience and stamina. Hugo refers to Fredriksen’s advanced age and the lack of succession in his group and says it’s a good deal for Frontline. But they do not explain why it is a good story for Euronav, for the Belgian banks in Euronav, for the Belgian employees at Euronav and for the Belgian anchoring of that company. That’s a bad deal for Euronav! Also for the merger group and the shareholders of Frontline, by the way.’

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You are not on the board of directors.

Saverys: ‘But we can add items to the general meeting and help determine the agenda. Blocking the fusion is difficult. But I would like to see whether 75 percent of the shareholders think the merger is such a fantastic idea.’

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What now?

Saverys: “I suppose new talks will follow in the coming weeks. We were not aware of what was communicated on Thursday. Hence our message: there is no deal between Fredriksen and Saverys. We disapprove of the merger and we have an alternative plan. Sometimes there is no choice but to sell abroad. But here it is. There is a family who wants to keep the company in Belgium and who has other ideas than transporting oil for the next thirty years. We deeply regret that the management and board of directors are not following us in this. The last word has not yet been said here.’

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You say that Euronav is run by people with a different vision. Does that mean that the position of CEO Hugo De Stoop is under discussion?

Saverys: ‘If you read what Hugo says in interviews, it is clear that we are on a different wavelength. (laughs) We know each other very well. More talks will follow. But if he says, without notifying us, we’re going directly against what you’ve been telling us for the past few months, then I think we should just say we don’t agree. The rest will be discussed at the general meeting.’

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Communication about the planned merger could therefore wait.

Saverys: ‘Correct. Euronav has played a bit of panic football. The general meeting is approaching and Euronav has taken flight. There is very little in the press release. What about stock exchange listings, valuations, what will the merger look like…? I think people were afraid that we would come up with an announcement before the general meeting.’

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Euronav has played a bit of panic football.

Alexander Saverys

CEO CMB

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Did you intend to?

Saverys: ‘No, especially at the general meeting we wanted to supplement the board of directors with people who share our vision. And then shift up a gear and tell our CMB.TECH story. We want to know our shareholders. There are pure oil shareholders in Euronav, but also a number of long-term shareholders. We are now going to talk to investors who want to step into our story. It will be interesting and exciting days’.

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Will another Saverys run the business if your plan succeeds?

Saverys: “There’s someone from the family on our list of proposed directors anyway. Euronav is our baby. Although only for 13.2 percent, but still. People know that we have a long-term vision. We are passionate about what we do. Sometimes we say things that may not be acceptable to everyone. Analysts, for example, think the merger is a fantastic story. Frontline plus Euronav, oil and more oil, and synergies, which we don’t see by the way. I think people appreciate our authenticity. These are the people we want to have and keep on board at Euronav’.

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Shipowner Alexander Saverys: ‘Passing Euronav to the Vikings is not a good idea’