DHT Holdings, Inc. has entered into an agreement to buy 11 very large crude carriers (VLCCs), including two newbuildings due for delivery in 2018, from BW Group Limited.
BW Group's vessels, which have a total value of US$538m, are scheduled to join their new owner during the second quarter of 2017.
As a result of the acquisition, DHT will have a fleet with an average age of 6.9 years, consisting of 30 VLCCs, including four newbuildings set for delivery in 2018, and two Aframaxes.
"This is a great transaction for DHT and its shareholders. It is projected to be accretive to DHT's earnings and will deliver cost synergies by lowering G&A expenses per ship," said Trygve P. Munthe and Svein Moxnes Harfjeld, DHT's Co-CEOs.
The company said t plans to finance the acquisition by issuing some US$256m of capital stock, consisting of 32 million shares of common stock and 15,700 shares of preferred stock that are mandatorily convertible into 15.7 million shares of common stock subject to DHT shareholder approval.
The implied value of the DHT common stock issued to BW is US$5.37 per share.
DHT will also pay BW Group US$177.36m in cash and assume US$104.16m in remaining obligations with respect to the two newbuildings. The cash requirements associated with the purchase are expected to be financed with bank debt.