Scorpio Tankers Inks Merger Agreement with Navig8

Scorpio Tankers has signed agreements to merge with Navig8 Product Tankers.
Image: Scorpio Tankers

Scorpio Tankers Inc. (Scorpio) today announced that it has entered into definitive agreements to merge with Navig8 Product Tankers Inc. (Navig8), acquiring Navig8's 27 operating product tankers in the process.

Under the terms and conditions of these agreements, Scorpio will acquire four LR1 tankers prior to the closing of the merger 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 is set to 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," explained Scorpio.

Upon completion of the merger, Scorpio says it will be the largest owner of product tankers listed on a U.S. securities exchange, with a fully delivered fleet of 105 vessels.

Alongside the development, Scorpio also announced the launch of an underwritten public offering of up to $200.0 million of its shares of common stock, with net proceeds of the offering slated to be used to provide cash to further strengthen Scorpio's balance sheet and enhance liquidity.

"Going forward, the combined company's capitalisation, quality fleet, and the commercial and technical platform of its manager make it well-positioned to capitalize on further consolidation opportunities," stated Scorpio.

Scorpio says that, based on its closing price on May 22, the consideration reflects a total equity value for Navig8 of approximately $228.8 million and a total enterprise value of approximately $1.1 billion, including the assumption of debt.