SCHEDULE 13D: CMB.TECH Acquires 40.8% Stake in Golden Ocean Group, Signaling Strategic Diversification into Dry Bulk Shipping

CMB.TECH Bermuda Ltd., a subsidiary of CMB.TECH NV, has acquired an 81.36 million share stake, representing 40.8% of Golden Ocean Group Limited, from Hemen Holding Limited for approximately $1.18 billion, funded primarily through bridge facilities.

Summary

• CMB.TECH Bermuda Ltd. acquired 81,363,730 common shares of Golden Ocean Group Limited (GOGL) from Hemen Holding Limited.
• The acquisition represents approximately 40.8% of Golden Ocean's outstanding shares, excluding treasury shares, based on 199,403,293 shares outstanding as of December 31, 2024.
• The purchase price was USD 14.49 per share, totaling an aggregate of USD 1,178,960,447.70.
• The transaction was financed through a bridge facilities agreement providing USD 1,150,000,000 as a term loan bridge facility and an additional USD 250,000,000 as a term loan bridge facility, with the remainder from CMBT working capital.
• The lenders for the bridge facilities include Credit Agricole Corporate and Investment Bank, KBC Bank NV, and Societe Generale.
• The acquisition is part of CMB.TECH's strategic objective of diversification and its intention to become a long-term shareholder in Golden Ocean, investing in a modern dry bulk fleet.
• CMB.TECH has identified a bank syndicate to refinance all or parts of Golden Ocean's current outstanding debt, estimated at approximately USD 1,250,000,000.
• The closing of the transaction is expected to take place on March 12, 2025.
• The bridge loans are to be repaid in full nine months following the agreement date (March 4, 2025), with an option for two six-month extensions.

Sentiment

Score: 7

Explanation: The document outlines a significant strategic acquisition with clear financing and a stated long-term commitment. While it involves substantial bridge debt and associated repayment/refinancing requirements, the strategic rationale for diversification and the intent to refinance existing debt are positive. The detailed financial covenants and conditions subsequent indicate a structured approach, but also highlight the financial obligations and potential risks if targets are not met. Overall, the sentiment is positive due to the strategic expansion and clear path forward, balanced by the inherent risks of large-scale debt-funded acquisitions.

Positives

• The acquisition aligns with CMB.TECH's strategic objective of diversification, expanding its presence in the modern dry bulk fleet sector.
• CMB.TECH intends to be a long-term shareholder in Golden Ocean, suggesting stability and a commitment to the acquired entity.
• A bank syndicate has been identified to refinance Golden Ocean's existing debt, potentially improving its financial structure and reducing uncertainty.
• The transaction is unconditional, indicating a firm commitment and clear path to completion.

Negatives

• The acquisition is heavily reliant on bridge financing totaling USD 1.4 billion, which needs to be repaid or refinanced within nine months, with extension options.
• The document outlines various mandatory prepayment triggers, including distributions from MergeCo/Target and proceeds from Permitted Take-Out Financing, which could create pressure on cash flow management.
• The financial covenants, including maintaining a Consolidated Working Capital of at least USD 0 and specific Value Adjusted Equity Ratios, impose strict financial discipline on the Group.

Risks

• Failure to refinance the bridge facilities within the initial nine-month period or extended periods could lead to financial strain.
• Non-compliance with financial covenants (Consolidated Working Capital, Free Liquid Assets, Value Adjusted Equity Ratio) could trigger an Event of Default.
• Cross-default provisions mean a default on other Financial Indebtedness of the Borrower, Target, or any Group/Target Group member exceeding USD 10,000,000 could trigger an Event of Default.
• Sanctions Events, including any Sanctions Relevant Person becoming a Sanctioned Person or violating Sanctions, could lead to commitment cancellation and immediate loan repayment.
• A Borrower Change of Control or Target Change of Control (after SPA Closing Date) would result in immediate cancellation of facilities and all outstanding amounts becoming due.
• Litigation, arbitration, or administrative proceedings against the Group or Target Group that could have a Material Adverse Effect are a risk.
• The inability to complete the Takeover (acquisition of all outstanding Target shares) within five months after the SPA Closing Date would trigger additional security requirements (Bermuda law share charge over Target Shares).
• Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws and regulations could lead to an Event of Default.

Future Outlook

CMB.TECH aims to become a long-term shareholder in Golden Ocean, investing in a modern dry bulk fleet as part of its diversification strategy. The company plans to engage with Golden Ocean's board, management, and employees to drive long-term growth and innovation. CMB.TECH has identified a bank syndicate to refinance Golden Ocean's existing debt and anticipates exploring potential strategic options, including commercial cooperation, operational and technical partnerships, and/or other forms of business combinations. The Takeover of Golden Ocean is expected to be completed within five months of the SPA Closing Date, followed by further refinancing and cash upstreaming activities.

Management Comments

• "The acquisition of the Golden Ocean shares from Hemen represents a significant milestone in CMB.TECHs diversification strategy. We look forward to engaging with the board, management and employees of Golden Ocean and to build on Golden Oceans and Mr. Fredriksens strong legacy to drive long-term growth and innovation."

Industry Context

This acquisition signifies a notable consolidation and strategic shift within the marine transportation sector, specifically the dry bulk segment. CMB.TECH, a diversified maritime group, is expanding its footprint by acquiring a significant stake in Golden Ocean, one of the largest listed owners of large-size modern dry bulk vessels. This move suggests a long-term commitment to the dry bulk market, potentially driven by expectations of future demand or a desire to leverage Golden Ocean's established fleet and operational expertise. The emphasis on a 'modern dry bulk fleet' also hints at an industry trend towards newer, potentially more efficient or environmentally compliant vessels.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• No litigation, arbitration, or administrative proceedings of or before any court, arbitral body, or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect, have been started or threatened against any member of the Group or the Target Group (to the best of their knowledge and based on publicly available information until SPA Closing Date).
• No judgment or order of a court, arbitral body, or agency which might reasonably be expected to have a Material Adverse Effect has been made against any member of the Group or the Target Group (to the best of their knowledge and based on publicly available information until SPA Closing Date).

Related Party Transactions

• The core transaction involves the acquisition of 81,363,730 shares in Golden Ocean Group Limited by CMB.TECH Bermuda Ltd. from Hemen Holding Limited, which was the reference shareholder of the Issuer.
• The document permits the acquisition of any vessels from the CMB Group as an exception to general acquisition restrictions.
• The document outlines restrictions on arrangements with the Majority Shareholder (CMB NV, Saverco NV, and Marc Saverys and their descendants/trusts), including cash pooling, being a creditor, or transferring assets, unless on arms' length terms and within specified limits.

Stakeholder Impact

• **Shareholders (Hemen Holding Limited):** Hemen Holding Limited is selling its entire 40.8% stake, realizing approximately USD 1.18 billion in proceeds, marking a significant exit from Golden Ocean.
• **Shareholders (CMB.TECH NV):** CMB.TECH NV and its related entities are becoming the largest shareholder in Golden Ocean, signaling a long-term investment and strategic diversification, which could be positive for their own shareholders.
• **Shareholders (Golden Ocean Group Limited):** The acquisition by a strategic long-term investor like CMB.TECH could bring stability and new strategic direction, potentially benefiting Golden Ocean's remaining shareholders.
• **Employees (Golden Ocean Group Limited):** CMB.TECH's CEO expressed looking forward to engaging with Golden Ocean's employees, suggesting a focus on continuity and collaboration rather than immediate disruption.
• **Creditors (Golden Ocean Group Limited):** CMB.TECH's stated intention to refinance Golden Ocean's existing debt with a bank syndicate could provide financial stability and potentially more favorable terms for creditors.
• **Creditors (CMB.TECH NV):** The significant bridge financing taken on by CMB.TECH creates new debt obligations, which will need to be managed and refinanced, impacting their creditors.
• **Customers & Suppliers (Golden Ocean Group Limited):** The strategic investment and potential for operational and technical partnerships could lead to enhanced services or stability in relationships with customers and suppliers.

Next Steps

• Closing and settlement of the transaction on March 12, 2025.
• Repayment of bridge loans in full on the date nine months following March 4, 2025, with options for two six-month extensions.
• CMB.TECH to engage with Golden Ocean's board, management, and employees to drive long-term growth and innovation.
• Refinancing of Golden Ocean's current outstanding debt by a bank syndicate identified by CMB.TECH.
• Potential exploration of strategic options, including commercial cooperation, operational and technical partnerships, and/or other forms of business combinations.
• Borrower to leverage controlling voting power as shareholder of the Target to ensure execution and closing of Target Fleet Refinancing Facilities Multilender and utilization of the First Tranche to prepay Target debt as soon as practically possible after SPA Closing Date.
• Borrower to leverage controlling voting power as shareholder of the Target to reach the Takeover Closing Date as soon as practically possible after SPA Closing Date.
• Borrower to leverage controlling voting power as shareholder of the Target to refrain from major new investments or acquisitions (other than Permitted Transactions) that could impede the Takeover, Merger, Target Fleet Refinancing Facilities, Permitted Take-out Financing, or cash upstreaming.
• Borrower to leverage controlling voting power as shareholder of the Target to utilize the Top-Up Tranche under Target Fleet Refinancing Facilities Multilender and upstream proceeds to the Borrower as soon as practically possible after Takeover Closing Date.
• Borrower to leverage controlling voting power as shareholder of the Target to execute, close, and utilize the Target Fleet Refinancing Facility HCOB by December 31, 2025, at the latest.
• If the Takeover Closing Date does not occur within five months after the SPA Closing Date, MergeCo will grant a Bermuda law governed share charge over all Target Shares.
• If an Obligor becomes a holder of shares in MergeCo, they will immediately grant a Bermuda law governed share charge over those shares.

Key Dates

Keywords

CMB.TECH, Golden Ocean Group, GOGL, Hemen Holding Limited, SEC Schedule 13D, Acquisition, Dry Bulk Shipping, Marine Transportation, Bridge Financing, Share Purchase Agreement, Corporate Diversification, Refinancing, Financial Covenants, Takeover, Shipping Industry