Eneti announced that it will acquire Seajacks for approximately 8.13 million shares, $299 million of assumed net debt, $74 million of newly-issued redeemable notes, and $12 million of cash.
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Eneti Inc. announced that one of its wholly-owned direct subsidiaries entered into a binding agreement with Marubeni Corporation, INCJ, Ltd. and Mitsui O.S.K., Lines Ltd. under which Eneti will acquire 100% of Atlantis Investorco Limited, the parent of Seajacks International Limited, for consideration of approximately 8.13 million shares, $299 million of assumed net debt, $74 million of newly-issued redeemable notes, and $12 million of cash.
The share consideration is comprised of 7,433,031 common shares and 700,000 preferential shares in Eneti, subject to closing adjustments. The preferred shares hold a liquidation preference, will receive regular dividends, are without voting rights, and will be converted to common shares (subject to certain conditions).
In order to satisfy a portion of Seajacks’ debt, the Sellers will receive cash consideration of $12 million. At closing, the Company will issue subordinated redeemable notes totaling $73,599,849.
Eneti will also assume $87,650,000 of subordinated, non-amortizing debt due in September 2022 and owed to financial institutions with guarantees provided by the Sellers. The remaining existing secured debt of approximately $267,532,868 will be satisfied in full upon closing of the transaction.
Upon closing, existing Eneti shareholders will own 58% of Eneti and the Sellers will own 42%. As a result of the transaction, Mr. Hiroshi Tachigami of Marubeni Corporation, and Mr. Peter Niklai of INCJ, Ltd. will join the Eneti Board of Directors.
As part of the transaction, Eneti has received a commitment from ING Bank N.V. for a senior secured non-amortizing revolving credit facility of up to $60 million. The credit facility, which includes sub-limits for performance bonds, has a final maturity of August 2022 and bears interest at LIBOR plus a margin of 2.45% per annum, and is subject to certain conditions precedent and the execution of definitive documentation.
As a result of the transaction, provisions in the employment contracts of certain Eneti executives will trigger payments in the aggregate amount of $30 million. In order to avoid adverse US tax consequences, the Company is required to incur these costs at the time of the transaction
The U.S. senior executive officers receiving these payments have agreed not to receive salaries for a period of three years and bonuses for a period of four years.
The transaction, which has been approved by the Boards of Directors of Eneti and the Sellers, is expected to close by the middle of the third quarter of 2021.
Additionally, the Company signed binding agreements with counterparties in Japan to transfer the existing lease finance arrangements of the SBI Tango, SBI Echo, and SBI Hermes, Ultramax bulk carriers built in 2015, 2015, and 2016 respectively, and SBI Rumba and SBI Samba, Kamsarmax bulk carriers built in 2015, to affiliates of Scorpio Holdings Limited (“SHLâ€) for consideration of $16 million.
This transaction was approved by the Company’s independent directors in January 2021. The final vessel was delivered in July 2021, and marks the conclusion of the Company’s exit from the dry bulk sector announced on December 20, 2020. ■