Scorpio Tankers Inc. Announces Merger Agreement with Navig8 Product Tankers Inc. and the Launch of a Concurrent Public Offering of Common Shares

Transcription

1 Scrpi Tankers Inc. Annunces Merger Agreement with Navig8 Prduct Tankers Inc. and the Launch f a Cncurrent Public Offering f Cmmn Shares MONACO May 23, 2017 Scrpi Tankers Inc. (NYSE: STNG) ( Scrpi ) annunced tday that it has entered int definitive agreements t merge with Navig8 Prduct Tankers Inc. (NOTC: EIGHT) ( Navig8 ) and acquire Navig8 s 27 perating prduct tankers (the Merger ). Subject t the terms and cnditins f these agreements, Scrpi will acquire fur LR1 tankers prir t the clsing f the Merger (the LR1 Vessel Acquisitins ) and the remaining 23 tankers upn the clsing f the Merger in exchange fr the issuance f 55 millin shares f Scrpi cmmn stck t the Navig8 sharehlders. In cnnectin with the LR1 Vessel Acquisitins, Scrpi will pay cash cnsideratin f $42.2 millin, which is net f assumed debt. This cash is expected t remain with Navig8 thrugh clsing and will frm part f the balance sheet f the cmbined cmpany, subject t the terms and cnditins f the merger agreement. Scrpi als annunced tday the launch f an underwritten public ffering f up t $200.0 millin f its shares f cmmn stck (the Offering ). Mrgan Stanley is acting as sle bk-running manager in the Offering. ABN AMRO, Clarksns Platu Securities AS, Evercre ISI, Paret Securities, and Seaprt Glbal Securities are acting as c-managers. Scrpi als intends t grant the underwriters a 30-day ptin t purchase up t $30.0 millin additinal shares f its cmmn stck. Scrpi Services Hlding Limited, a related party f Scrpi, has indicated an interest in purchasing at least $20.0 millin f Scrpi cmmn stck in the Offering. The net prceeds f the Offering are expected t be used t prvide cash t further strengthen Scrpi s balance sheet and enhance liquidity, fr the payment f csts related t the Merger, t fund the purchase price f the LR1 Vessel Acquisitins, and the remainder, if any, fr general crprate purpses. Merger Overview Thrugh the Merger, Scrpi is acquiring an perating fleet f 27 ec-design prduct tankers, cmprised f 15 LR2s and 12 LR1s with a weighted average age f 0.9 years and an aggregate carrying capacity f apprximately 2.6 millin dwt. Fllwing the cmpletin f the Merger, n a fully delivered basis, Scrpi s perating fleet will cnsist f 105 wned r finance leased tankers (38 LR2 tankers, 12 LR1 tankers, 41 MR tankers and 14 Handymax tankers) with a weighted average age f apprximately 1.9 years, and 19 time r barebat chartered-in tankers (ne LR2 tanker, nine MR tankers and nine Handymax tankers). In additin, as f the date heref, Scrpi has cntracts fr the cnstructin f six newbuilding MR prduct tankers, which Scrpi refers t as its Newbuilding Prgram. The vessels in Scrpi s Newbuilding Prgram are expected t be delivered t them thrughut the remainder f 2017 and first quarter f Scrpi has als entered int an agreement t sell tw MR prduct tankers, which is expected t clse in June Certain Navig8 sharehlders have agreed t vte their Navig8 shares in favr f the Merger, subject t certain exceptins. These sharehlders cnstitute a majrity f Navig8 s utstanding cmmn shares and, accrdingly, it is expected that the Merger will be apprved. In additin, Scrpi will appint ne additinal independent directr that will be selected by Scrpi s bard f directrs and t be effective at the clsing f the Merger.

2 Benefits f the Merger, Upn Cmpletin Scrpi will be the largest wner f prduct tankers listed n a U.S. securities exchange, with a fully delivered fleet f 105 vessels (38 LR2 tankers, 12 LR1 tankers, 41 MR tankers, and 14 Handymax tankers) with a weighted average age f apprximately 1.9 years, and 19 time r barebat chartered-in tankers (ne LR2 tanker, nine MR tankers and nine Handymax tankers). The size f the cmbined cmpany prvides it with substantial ecnmies f scale: Significant presence acrss adjacent prduct tanker segments will prvide fr enhanced custmer relatinships and increased vessel utilizatin. Cmmercial and perating csts will benefit frm scale efficiencies. The availability, terms, and quality f financing will prvide significant advantages cmpared t its peers. Ging frward, the cmbined cmpany s capitalizatin, quality fleet, and the cmmercial and technical platfrm f its manager make it well-psitined t capitalize n further cnslidatin pprtunities. The Merger has been unanimusly apprved by the bard f directrs f Scrpi and, based upn the recmmendatin f a transactin cmmittee f disinterested directrs, unanimusly apprved by the bard f directrs f Navig8. The transactin cmmittee negtiated the Merger n behalf f Navig8. Based n Scrpi s clsing price n May 22, 2017, the cnsideratin reflects a ttal equity value fr Navig8 f apprximately $228.8 millin and a ttal enterprise value f apprximately $1.1 billin, including the assumptin f debt. The cmpletin f the Merger, including the LR1 Vessel Acquisitins, is subject t the cmpletin f the Offering and certain custmary cnditins, including withut limitatin, apprval f the Merger by hlders f a majrity f the utstanding shares f cmmn stck f Navig8 (excluding the LR1 Vessel Acquisitins), clearance by the U.S. Securities and Exchange Cmmissin (the SEC ) f a registratin statement t be filed by Scrpi t register the shares f cmmn stck f Scrpi t be issued in the Merger (the New Registratin Statement ), and the listing f such shares n the New Yrk Stck Exchange. The Merger is expected t clse in the secnd r third quarter f Seward & Kissel LLP is serving as legal cunsel t Scrpi in cnnectin with the Merger and Wachtell, Liptn, Rsen & Katz is serving as legal cunsel t the transactin cmmittee f Navig8. Perella Weinberg Partners LP is serving as financial advisr t Scrpi s bard f directrs and PJT Partners LP is serving as financial advisr t Navig8. Seward & Kissel LLP is als serving as legal cunsel t Scrpi in cnnectin with the Offering. This press release shall nt cnstitute an ffer t sell r the slicitatin f an ffer t buy these securities, nr shall there be any sale f these securities, in any state r ther jurisdictin in which such ffer, slicitatin r sale wuld be unlawful prir t registratin r qualificatin under the securities laws f any such state r ther jurisdictin. This Offering is being made nly by means f a prspectus supplement and accmpanying base prspectus. A prspectus supplement related t the Offering will be filed with SEC and will be available n the SEC s website lcated at When available,

3 cpies f the prspectus supplement and the accmpanying base prspectus relating t this Offering may be btained frm Mrgan Stanley, Attn: Prspectus Department, 180 Varick Street, 2 nd Flr, New Yrk, NY Fr further infrmatin abut the Merger, please refer t the New Registratin Statement t be filed by Scrpi with the SEC. Abut Scrpi Tankers Inc. Scrpi is a prvider f marine transprtatin f petrleum prducts wrldwide. Scrpi currently wns 78 prduct tankers (23 LR2, 41 MR tankers and 14 Handymax tankers) with an average age f 2.4 years and time r barebat charters-in 19 prduct tankers (ne LR2, nine MR and nine Handymax tankers). Scrpi als has cntracted fr six newbuilding MR prduct tankers which are expected t be delivered thrughut the remainder f 2017 and the first quarter f Scrpi has als entered int an agreement t sell tw MR prduct tankers, which is expected t clse in June Additinal infrmatin abut Scrpi is available at Scrpi s website which is nt a part f this press release. Abut Navig8 Prduct Tankers Inc. Navig8 is a Marshall Islands crpratin frmed fr the purpse f acquiring and perating LR1 and LR2 tankers with fuel-efficient specificatins and carrying capacities between 74,000 dwt and 113,000 dwt in the internatinal prduct tanker market. Navig8 currently has a fleet f 27 ec-design prduct tankers (15 LR2 and 12 LR1 tankers). These vessels were financed thrugh bank debt, sale leaseback transactins and cash n hand. All f Navig8 s vessels are perated in pls managed by the Navig8 Grup. Frward-Lking Statements Matters discussed in this press release may cnstitute frward-lking statements. The Private Securities Litigatin Refrm Act f 1995 prvides safe harbr prtectins fr frward-lking statements in rder t encurage cmpanies t prvide prspective infrmatin abut their business. Frward-lking statements include statements cncerning plans, bjectives, gals, strategies, future events r perfrmance, and underlying assumptins and ther statements, which are ther than statements f histrical facts. Scrpi and Navig8 desire t take advantage f the safe harbr prvisins f the Private Securities Litigatin Refrm Act f 1995 and is including this cautinary statement in cnnectin with this safe harbr legislatin. The wrds believe, expect, anticipate, estimate, intend, plan, target, prject, likely, may, will, wuld, culd and similar expressins identify frward-lking statements. The frward-lking statements in this press release are based upn varius assumptins, many f which are based, in turn, upn further assumptins, including withut limitatin, management s examinatin f histrical perating trends, data cntained in cmpany recrds and ther data available frm third parties. Althugh management believes that these assumptins were reasnable when made, because these assumptins are inherently subject t significant uncertainties and cntingencies which are difficult r impssible t predict and are beynd the cmpanies cntrl, there can be n assurance that Scrpi r Navig8 will achieve r accmplish these expectatins, beliefs r prjectins. The parties undertake n bligatin, and specifically decline any bligatin, except as

4 required by law, t publicly update r revise any frward-lking statements, whether as a result f new infrmatin, future events r therwise. In additin t these imprtant factrs, ther imprtant factrs that, in ur view, culd cause actual results t differ materially frm thse discussed in the frward-lking statements include the ability f Scrpi and Navig8 t successfully cmplete the prpsed Merger n anticipated terms and timing, including btaining required sharehlder and regulatry apprvals, unfreseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, ecnmic perfrmance, indebtedness, financial cnditin, lsses, future prspects, business and management strategies fr the management, expansin and grwth f the new cmbined cmpany s peratins and ther cnditins t the cmpletin f the acquisitin, risks relating t the integratin f Navig8 s peratins and the pssibility that the anticipated synergies and ther benefits f the prpsed acquisitin will nt be realized r will nt be realized within the expected timeframe, the utcme f any legal prceedings related t the Merger, the ability f Scrpi t cnsummate the Offering, the failure f cunterparties t fully perfrm their cntracts with us, the strength f wrld ecnmies and currencies, general market cnditins, including fluctuatins in charter rates and vessel values, changes in demand fr tanker vessel capacity, changes in ur perating expenses, including bunker prices, drydcking and insurance csts, the market fr ur vessels, availability f financing and refinancing, charter cunterparty perfrmance, ability t btain financing and cmply with cvenants in such financing arrangements, changes in gvernmental rules and regulatins r actins taken by regulatry authrities, ptential liability frm pending r future litigatin, general dmestic and internatinal plitical cnditins, ptential disruptin f shipping rutes due t accidents r plitical events, vessels breakdwns and instances f ff-hires, and ther factrs. Please see Scrpi s filings with the SEC fr a mre cmplete discussin f certain f these and ther risks and uncertainties. IMPORTANT INFORMATION FOR INVESTORS In cnnectin with the prpsed merger, Scrpi will file with the SEC a registratin statement n Frm F 4 that will cnstitute a prspectus f Scrpi and include a prxy statement f Navig8. Scrpi als plans t file ther relevant dcuments with the SEC regarding the prpsed transactin. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Yu may btain a free cpy f the prxy statement/prspectus (if and when it becmes available) and ther relevant dcuments filed by Scrpi with the SEC at the SEC s website at In additin, yu will be able t btain free cpies f these dcuments by phne, e mail r written request by cntacting the investr relatins department f Scrpi r Navig8 at the fllwing: Scrpi Tankers Inc. Navig8 Prduct Tankers Inc. 9, Bulevard Charles III 2 nd Flr, Kinnaird Huse Mnac Pall Mall East, Lndn SW1Y 5AU Attn: Investr Relatins Attn: Investr Relatins The issuer has filed a registratin statement (including a prspectus) with the SEC fr the ffering t which this cmmunicatin relates. Befre yu invest, yu shuld read the prspectus in that registratin statement and ther dcuments the issuer has filed with the SEC fr mre cmplete

5 infrmatin abut the issuer and this ffering. Yu may get these dcuments fr free by visiting EDGAR n the SEC Web site at NO OFFER OR SOLICITATION This press release shall nt cnstitute an ffer t sell r the slicitatin f an ffer t buy any securities, nr shall there be any sale f securities in any jurisdictin in which such ffer, slicitatin r sale wuld be unlawful prir t registratin r qualificatin under the securities laws f any such jurisdictin. N ffering f securities shall be made except by means f a prspectus meeting the requirements f Sectin 10 f the U.S. Securities Act f 1933, as amended. Scrpi Tankers Inc