Euronav chief executive Hugo de Stoop has written to staff to reassure them over job prospects and losing their company name if the merger with Frontline goes through.
In the letter, the Belgian boss said: “I know that people can be anxious in these circumstances and whilst we do not have all the answers to all the questions, it is important to remember that the Frontline model is different to ours.”
John Fredriksen-controlled Frontline’s operation is more outsourced, focused on third-party independent ship managers to operate and crew ships.
“Therefore, there is relatively little overlap of personnel and a great collection of talents on both sides,” De Stoop wrote.
The CEO goes on to say it would be remiss not to address the combined company being called Frontline, despite Euronav shareholders owning 60% of the group if the deal completes.
“The group name change will — I am sure — disappoint or concern some of you. In these mega-transactions, too much time is spent on things such as the name of the company,” De Stoop added.
He argues that Frontline, founded in 1986 and listed in 1997, is a much older company.
The name is also associated with “arguably the most successful shipping entrepreneur of recent times, John Fredriksen”.
“Whilst Euronav has done an extraordinary job in the last 25 years to build its name and reputation in both capital markets and shipping markets, we had to make a choice,” De Stoop said.
“Our values do not change, our way of working does not change, and we have been given the honour and the responsibility of leading the combined company. That’s what is important,” he added.
Other elements are more important
In a US Securities and Exchange Commision (SEC), filing the Belgian company also says: “Structurally you always have a surviving entity by nature. Clearly, in any deal one equity class has to remain and replace the other.”
Euronav stresses that other elements are more important.
Frontline brings historically better capital market pricing than Euronav, as well as the support of John Fredriksen and a longer established position in capital markets, management argues.
Euronav offers a strong executive team, proven sustainability credentials and integrated fleet management and operations, the company said.
The Belgian shipowner does not think the country is losing a crown jewel through the transaction, or that De Stoop will be replaced.
It believes the opposite in fact, with the operational base still set to be in Antwerp.
“Frontline has also a huge collection of talents and main offices in Oslo. Norway is a shipping country and it is very important to keep an organisation there as well but that does not mean Belgium is losing,” Euronav said.
“It is highly complementary also because of the systems under which we operate,” the company added.
