United States

Securities and Exchange Commission

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

 

	December 21, 2017
	Date of Report (Date of earliest event reported)

 

	International Seaways, Inc.
	(Exact Name of Registrant as Specified in Charter)

 

	1-37836-1
	Commission File Number

  

Marshall Islands		98-0467117
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

 

	600 Third Avenue, 39th Floor
	New York, New York  10016

 

(Address of Principal Executive Offices) (Zip Code)

 

Registrant's telephone number, including area code (212) 578-1600

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

 

 

  

Section 7 – Regulation FD

 

Item 7.01

Regulation FD Disclosure.

 

On December 21, 2017, International Seaways, Inc. (the “Company”) made available to investors a presentation (the “Presentation”) entitled “Transaction Update to Shareholders”, a copy of which is attached hereto as Exhibit 99.1, relating to its entry into a binding letter of intent with respect to the acquisition of six VLCC tankers (the “Transaction”). In addition, International Seaways, Inc. (the “Company”) issued a press release relating to the Transasction, as set forth in Item 8.01 below.

 

The information contained in, or incorporated into, this Item 7.01, including Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

Section 8 – Other Events

 

Item 8.01

Other Events.

 

On December 21, 2017, International Seaways, Inc. (the “Company”) issued a press release announcing that it has entered into a binding letter of intent with Euronav with respect to the Transaction. A copy of the press release is attached hereto as Exhibit 99.2 and the contents thereof are incorporated by reference herein.

 

Section 9 – Financial Statements and Exhibits

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits

 

Pursuant to General Instruction B.2 of Form 8-K, the following exhibits are furnished with this Form 8-K.

 

Exhibit No.		Description
99.1		Presentation dated December 21, 2017.
99.2		Press Release dated December 21, 2017.

 

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	INTERNATIONAL SEAWAYS, INC.
	(Registrant)
Date: December 21, 2017	By	/s/ James D. Small III
		Name:	James D. Small III
		Title:	Chief Administrative Officer, Senior Vice President, Secretary and General Counsel

 

  

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Presentation dated December 21, 2017.
99.2		Press Release dated December 21, 2017.

 

 

 

Exhibit 99.1

 

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 1 International Seaways, Inc. Transaction Update to Shareholders December 21, 2017

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 2 Disclaimer Forward - Looking Statements During the course of this presentation, the Company (International Seaways, Inc. (INSW)) may make forward - looking statements or provide forward - looking information. All statements other than statements of historical facts should be considered forward - looking state ments. Some of these statements include words such as ‘‘outlook,’’ ‘‘believe,’’ ‘‘expect,’’ ‘‘potential,’’ ‘‘continue,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘seek,’’ ‘‘pred ict ,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘estimate,’’ ‘‘anticipate,’’ ‘‘target,’’ ‘‘project,’’ ‘‘forecast,’’ ‘‘shall,’’ ‘‘contemplate’’ or the neg ative version of those words or other comparable words. Although they reflect INSW’s current expectations, these statements are not guarantees of future performance, but involve a number of risks, uncertainties, and assumptions which are difficult to predict. Some of the factors that may cause actual out com es and results to differ materially from those expressed in, or implied by, the forward - looking statements include, but are not necessarily limite d to, general economic conditions, competitive pressures, the nature of the Company’s services and their price movements, and the ability to retain key employees. The Company does not undertake to update any forward - looking statements as a result of future developments, new information or other wise. Non - GAAP Financial Measures Included in this presentation are certain non - GAAP financial measures, including Time Charter Equivalent (“TCE”) revenue, EBITDA , Adjusted EBITDA, and total leverage ratios, designed to complement the financial information presented in accordance with generally ac cep ted accounting principles in the United States of America because management believes such measures are useful to investors. TCE revenues, w hic h represents shipping revenues less voyage expenses, is a measure to compare revenue generated from a voyage charter to revenue generated fro m a time charter. EBITDA represents net (loss)/income before interest expense, income taxes and depreciation and amortization expense. Ad justed EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operatin g p erformance. Total leverage ratios are calculated as total debt divided by Adjusted EBITDA. We present non - GAAP measures when we believe that the a dditional information is useful and meaningful to investors. Non - GAAP financial measures do not have any standardized meaning and are ther efore unlikely to be comparable to similar measures presented by other companies. The presentation of non - GAAP financial measures is not intend ed to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. See App endix for a reconciliation of certain non - GAAP measures to the comparable GAAP measures. This presentation also contains estimates and other information concerning our industry that are based on industry publicatio ns, surveys and forecasts. This information involves a number of assumptions and limitations, and we have not independently verified the accu rac y or completeness of the information. Additional Information You should read the Company’s Quarterly Report on Form 10 - Q for the quarter ended September 30, 2017, and the other documents th e Company has filed with the SEC for additional information regarding the Company, its operations and the risks and uncertainti es it faces. You may obtain these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov, or from the Company’s website at www.in tls eas.com.

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Transaction Overview 3 Transaction Summary o International Seaways, Inc. (the “Company” or “INSW”), has agreed to acquire 6 VLCCs from Euronav NV (“ Euronav ”) o Purchase price of $434 million o Will be funded with available liquidity and the anticipated assumption of existing Chinese export agency financing and / or new third - party financing o Vessels are expected to deliver in Q2 2018 o Transaction is subject to certain financing and other conditions Vessel Details o 300,000 DWT VLCC’s constructed at Shanghai Waigaoqiao Shipbuilding Co. o 5 built in 2016 and 1 built in 2015 o Average age of 1.7 years Chinese Export Agency Financing o Transaction includes an existing $311 million Chinese export agency financing o Matures between 2027 and 2028 o Interest Rate of LIBOR plus 2.0% Impact on Fleet Profile and Profitability o Meaningfully increases the size of INSW’s fleet o Reduces INSW fleet age from 11.6 to 9.3 years o Further positions INSW to capitalize on a recovery in both the crude and product tanker sectors

237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Key Transaction Benefits

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Key Transaction Benefits 5 Highly Attractive Existing Financing 3 Important Step in Fleet Modernization 2 Increases Size and Scale 4 Enhances Operating Leverage 6 Significant Enhancement of Tankers International Pool 1 Purchase of Highly Efficient, Modern Sister Ships at an Attractive Price 5

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Purchase of Highly Efficient, Modern Sister Ships at an Attractive Price 6 $136 $140 $144 $168 $107 $112 $101 $88 $81 $103 $104 $90 $83 $ - $20 $40 $60 $80 $100 $120 $140 $160 $180 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $ in Millions Average purchase price of $72.3mm Newbuild Resale Value % Transaction Discount to Historical Average 12- Year Average $111 (35%) Since 2009 $96 (25%) 1 Source: Clarksons.

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Increases Size and Scale 7 DWT (Operated Fleet) (1) # of Vessels (Operated Fleet) (1) 6,031,776 7,837,626 Status Quo Pro Forma 48 54 Status Quo Pro Forma Pro Forma Vessel Type by DWT 2 4,978,532 / 16 VLCCs 316,864 / 2 Suezmax 897,858 / 8 Aframax 853,214 / 12 Panamax 791,158 / 16 MR ULCC / VLCC Suezmax Aframax / LR2 Panamax / LR1 MR Note: Conventional fleet only. Excludes six joint venture vessels. (1) Status Quo DWT and vessel count assumes sale of Seaways Atalmar and Seaways Ambermar .

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Important Step in Fleet Modernization 8 Weighted Average Age by DWT of Operated Fleet 3 1.7 years 11.6 years 9.3 years Acquisition of 6 VLCCs Status Quo Pro Forma 20% Decrease in Avg. Fleet Age Note: Conventional fleet only. Excludes six joint venture vessels.

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Enhances Operating Leverage 9 # of Total Revenue Days (1) 4 17,280 19,440 Status Quo Pro Forma Note: Assumes operated conventional fleet only. (1) Assumes existing fleet to be all spot and assumes 360 revenue days per vessel. Annual Cash Flow Upside ($ in millions) $19.4 $48.6 $97.2 $194.4 +$1,000 +$2,500 +$5,000 +$10,000 Change in Spot Rate in Every Vessel Class Operated Conventional Fleet Only

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Highly Attractive Existing Financing 10 Facility Amount Maturity Interest Rate Amortization and Repayment • Existing debt of $311.0mm (1) is anticipated to be assumed by International Seaways • Mandatory quarterly amortization of 1.667% • Final balloon payment equal to 20% of the applicable loan • Between 2027 and 2028 • Fixed annual interest rate of Libor + 200bps • Chinese Export Agency Financing (1) Estimated March 2018 debt balance. 5

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Significant Enhancement of Tankers International Pool 11 Largest VLCC Pool in the world providing benefits from enhanced commercial operations, economies of scale and higher vessel utilization 6 Note: Pro forma assumes addition of all VLCCs (including 6 vessels to be acquired by INSW) following completion of proposed E URN /GNRT transaction. 7 13 29 44 36 57 Status Quo Pro Forma INSW Other Participants

237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Executing on Fleet Renewal Strategy

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Executing on Fleet Renewal Strategy 13 V ess e l Name Type Built Acquired Price Hatteras Suezmax 2017 Q3 ’17 $58.0 Montauk Suezmax 2017 Q3 ’17 58.0 Raffles VLCC 2010 Q3 ’17 53.0 Strength VLCC 2015 Q2 ‘18 69.0 Supreme VLCC 2016 Q2 ‘18 73.0 Andriotis VLCC 2016 Q2 ‘18 73.0 Success VLCC 2016 Q2 ‘18 73.0 Chiotis VLCC 2016 Q2 ‘18 73.0 Miltiades VLCC 2016 Q2 ‘18 73.0 9 T o t al Vessels Acquired with an Average Age of 2.3 years V ess e l Name Type Built Delivered Price Petromar MR 2001 Q3 ’17 $8.0 Andromar MR 2004 Q4 ’17 11.2 Ambermar (2) MR 2002 Q1 ‘18 Atalmar (2) MR 2004 Q1 ‘18 4 T o t al Vessels Sold with an Average Age of 14.7 years Vessel Acquisitions Fleet Enhancement Vessel Sales Agreed to be acquired from Euronav , anticipated close of Q2 2018 (1) Includes Chartered - in Vessels. (2) Currently under MOA with expected delivery in Q1 2018. 1/1/2017 Pro Forma Conventional Fleet Overview ULCC / VLCC 9 16 Suezmax 0 2 Aframax / LR2 8 8 Panamax / LR1 12 12 MR 13 9 Total Owned On-the-Water Vessels 42 47 Chartered-in Vessels 7 7 Total Operated Fleet 49 54 Weighted Average Age by DWT (1) 12.5 years 9.3 years % Reduction (25.6%) Deadweight Tonnage (1) 5,582,143 7,837,626 % Growth 40.4%

237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Strong Financial Position

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Source: Clarksons , public filings. (1) Includes $30.0 million currently drawn on revolving credit facility at L + 350. (2) EURN and GNRT represent pre - transaction metrics. (3) INSW fleet value includes FSO JV. INSW pro forma for proposed VLCC transaction. One of the Lowest Leverage Profiles in the Sector 15 Loan - to - Value Crude pure - players Product pure - players Mixed Fleet Players Commentary Pro Forma Debt Overview ▪ Adjusted for the assumption of the transaction debt, INSW maintains its sector leading loan - to - value metrics ▪ Weighted average tenor on debt increased from 4.5 years to 6.6 years ▪ Weighted average cost of debt lowered from L + 550 to L + 420 Facility Term Loan B Chinese Export Agency Financing Amount Outstanding (1) $573m $311m Maturity June 2022 2027 – 2028 Annual Amortization 2.500% through Q2 18, 5.000% thereafter 6.668% Interest L + 550 L + 200 90% 83% 80% 77% 73% 69% 66% 61% 58% 52% 44% 0% 25% 50% 75% 100% NNA TNP GNRT STNG TNK FRO ASC NAT DHT INSW EURN (2) (2) (3)

237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Conclusion

International Seaways, Inc. 237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Key Transaction Benefits 5 Highly Attractive Existing Financing 3 Important Step in Fleet Modernization 2 Increases Size and Scale 4 Enhances Operating Leverage 6 Significant Enhancement of Tankers International Pool 1 Purchase of Highly Efficient, Modern Sister Ships at an Attractive Price 17

237 125 49 0 45 115 255 192 0 185 220 255 153 204 255 91 155 213 165 165 165 68 84 106 Q&A

 

 

Exhibit 99.2

 

PRESS RELEASE

 

 

 

INTERNATIONAL SEAWAYS ANNOUNCES AGREEMENT TO ACQUIRE
SIX VLCCs

 

Transaction to Grow Fleet 30% on a DWT Basis, Reduce Average Fleet Age by More Than Two Years and Further Increase Company’s Earnings Power

 

New York, NY – December 21, 2017 – International Seaways, Inc. (NYSE: INSW) (the “Company” or “INSW”), one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products in International Flag markets, today announced it has entered into a binding letter of intent to acquire the holding companies for six 300,000 DWT VLCCs with an average age of 1.7 years from Euronav NV (“Euronav”) in connection with the closing of Euronav’s announced acquisition of Gener8 Maritime, Inc. (“GNRT”). The purchase price for the six-vessel acquisition is $434 million, inclusive of assumed debt.

 

The six vessels that INSW has agreed to acquire include five 2016-built VLCCs and one 2015-built VLCC, each constructed at Shanghai Waigaoqiao Shipbuilding Co., and are expected to be delivered to the Company in the second quarter of 2018. In connection with the transaction, the Company intends to assume the debt currently secured by the acquired vessels, which consists of a $311 million credit facility, maturing between 2027 and 2028, and carrying a fixed annual interest rate of LIBOR plus 2.0%. The transaction is subject to a number of closing conditions, including (i) consummation of Euronav’s announced acquisition of GNRT, (ii) amendment of the Company’s existing credit facility as required to consummate the transaction, (iii) the Company’s receipt of financing necessary to consummate the transaction, (iv) completion of the Company’s due diligence to its reasonable satisfaction, (v) execution of a definitive stock purchase agreement and (vi) receipt of all required third-party consents, third-party approvals and regulatory approvals. The transaction is expected to close in the second quarter of 2018.

 

Following the closing of the transaction, INSW will reduce the average age of its fleet by over two years while expanding the size of its fleet by 30% on a DWT basis. The Company will have a total fleet of 60 vessels, including 54 conventional crude and product tankers and, through its participation in joint ventures, four liquefied natural gas carriers and two floating storage and offloading service vessels. INSW intends to fund the transaction with a combination of available liquidity, the assumption of all or part of the debt currently secured by the vessels and/or new third-party financing.

 

“We are pleased to have entered into this compelling en bloc transaction that positions INSW to further increase its earnings power and industry leadership,” said Lois K. Zabrocky, INSW’s president and CEO. “The agreement to acquire these six modern VLCCs under favorable terms demonstrates the significant progress we have made in implementing our fleet growth and renewal strategy since becoming an independent public company. Over the past year, we have entered into transactions to grow our fleet more than 40% on a DWT basis and reduce its average age by more than three years. With a sizeable and high-quality fleet, we are in a strong position to create long-term shareholder value by capitalizing on a recovery in both the crude and product tanker sectors.”

 

 

Conference Call

 

The Company will host a conference call to discuss its agreement to acquire six VLCCs at 11:00 a.m. Eastern Time (“ET”) on December 21, 2017.

 

To access the call, participants should dial (855) 940-9471 for domestic callers and (412) 317-5211 for international callers. Please dial in ten minutes prior to the start of the call.

 

A live webcast of the conference call will be available from the Investor Relations section of the Company’s website at http://www.intlseas.com/

 

An audio replay of the conference call will be available starting at 1:00 p.m. ET on Thursday, December 21, 2017 through 11:59 p.m. ET on Thursday, December 28, 2017 by dialing (877) 344-7529 for domestic callers and (412) 317-0088 for international callers, and entering Access Code 10115319.

 

About International Seaways, Inc.

 

International Seaways, Inc. (NYSE: INSW) is one of the largest tanker companies worldwide providing energy transportation services for crude oil and petroleum products in International Flag markets. International Seaways owns and operates a fleet of 56 vessels, including one ULCC, nine VLCCs, two Suezmaxes, eight Aframaxes/LR2s, 12 Panamaxes/LR1s and 18 MR tankers. Through joint ventures, it has ownership interests in four liquefied natural gas carriers and two floating storage and offloading service vessels. International Seaways has an experienced team committed to the very best operating practices and the highest levels of customer service and operational efficiency. International Seaways is headquartered in New York City, NY. Additional information is available at www.intlseas.com.

 

Forward-Looking Statements

 

This release contains forward-looking statements. In addition, the Company may make or approve certain statements in future filings with the Securities and Exchange Commission (SEC), in press releases, or in oral or written presentations by representatives of the Company. All statements other than statements of historical facts should be considered forward-looking statements. These matters or statements may relate to the Company’s plans to acquire new vessels, issue dividends, its prospects, including statements regarding trends in the tanker markets, possibilities of strategic alliances, investments and consolidation, and share repurchases. Forward-looking statements are based on the Company’s current plans, estimates and projections, and are subject to change based on a number of factors. Investors should carefully consider the risk factors outlined in more detail in the Annual Report on Form 10-K for the Company and in similar sections of other filings made by the Company with the SEC from time to time. The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements and written and oral forward-looking statements attributable to the Company or its representatives after the date of this release are qualified in their entirety by the cautionary statements contained in this paragraph and in other reports previously or hereafter filed by the Company with the SEC.

 

Investor Relations & Media Contact:

David Siever, International Seaways, Inc.

(212) 578-1635

[email protected]

 

 

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