International Seaways, Inc. · NYSE:INSW
International Seaways — Merger or Acquisition (March 2021)
19 slides from International Seaways's merger presentation, March 2021
Slide 1: International Seaways / Diamond S Shipping Merger Investor Presentation
International Seaways / Diamond S Shipping Merger Investor Presentation March 2021
Slide 2: Disclaimer
Disclaimer Cautionary Statement Regarding Forward-Looking Statements This presentation contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. International S
Slide 3: Securities Disclaimer
Securities Disclaimer Additional Information and Where to Find It This presentation may be deemed to be solicitation material in respect of the proposed transaction between Seaways and Diamond. In connection with the proposed transaction, Seaways intends to file with the SEC a registration statement
Slide 4: A Transformational Strategic Combination
A Transformational Strategic Combination Today’s Presenters Key Company Information Lois Zabrocky Chief Executive Officer Pro Forma International Seaways Inc. Owned Fully-Delivered Fleet(1) 36 64 100 Owned Tanker DWT Capacity(1) 6.7mm 4.6mm 11.3mm Other Business Units Lightering -- Lightering Jeffre
Slide 5: Transaction Summary
Transaction Summary International Seaways (“INSW”) and Diamond S Shipping (“DSSI”) will merge in a stock-for-stock transaction (the “Transaction”) to create a diversified tanker company with an enterprise value of nearly $2 billion • INSW will merge with DSSI in a stock-for-stock transaction • DSSI
Slide 6: Key Transaction Highlights
Key Transaction Highlights The combination of INSW and DSSI will create a leader in the tanker segment – the second largest US-listed tanker owner by vessel count and the third largest US-listed tanker owner by DWT ▪ Leading tanker platform with diverse fleet of 100 tankers and combined dead-weight
Slide 7: Strategic Vision for New International Seaways
Strategic Vision for New International Seaways Enhance position as a Strong balance sheet preserves Maximize Shareholder Value diversified tanker sector financial flexibility bellwether ◼ Attractive net leverage ratio of ◼ Merger expands INSW operating ◼ Enhanced scale of 100 vessel fleet approximat
Slide 8: Disciplined Capital Allocation – Fleet Renewal
Disciplined Capital Allocation – Fleet Renewal International Seaways Invested $600 million at the bottom of the cycle ▪ Two Suezmax newbuilding resales purchased for $58 million each in 2017 ▪ 2010-built VLCC purchased for $53 million in 2017 ▪ Six VLCCs built 2016 and 2015 purchased for $434 millio
Slide 9: Combined Platform Metrics – Pro Forma Company Visualized
Combined Platform Metrics – Pro Forma Company Visualized 2nd Largest US Listed Tanker Company by Vessel Count(1) 3rd Largest US Listed Tanker Company by DWT(1)(2) (Mdwt) Pro Forma VLCC 14 + 0 = 14 18.7 12.2 yrs 13.0 yrs Suezmax 2 + 13 = 15 10.8 yrs 10.2 yrs 9.7 yrs Aframax / LR2 2 + 1 = 3 9.3 yrs 11
Slide 10: Combined Balance Sheet Strength
Combined Balance Sheet Strength Debt Summary ($ Millions) Capital Structure as of 12/31/20(3) ($ Millions) # Collateral Balance Interest Quarterly Maturity INSW DSSI Name Vessels 12/31/2020 Rate Repayment Date $1,232 $340 Core Facility 14 $271.6 L + 240bps $9.5 2025 $124 $216 $893 Sinosure Facility
Slide 11: Selected Financial Data
Selected Financial Data FY 2020 ($ Millions) INSW DSSI $402 $408 $220 $204 TCE Revenue Adjusted EBITDA Source: See Appendix for TCE and Adjusted EBITDA reconciliation. 11
Slide 12: Significant Transaction Synergies
Significant Transaction Synergies Overview of Potential Cost Synergies (Annually) Clear runway to material cost ($ millions) reductions and revenue $23.3 synergies from complementary platforms $3.0 ▪ Significant reduction in overhead through consolidation of headquarters and workforce, $4.8 eliminat
Slide 13: Market Update – Oil Supply, Demand and Implications
Market Update – Oil Supply, Demand and Implications Oil Supply and Demand ▪ IEA’s March forecast estimates 2021 demand to be up 5.5 mb/d, recovering about 60% of the volume lost in 2020, and increasing to 99.2 mb/d by Q4 2021 ▪ EIA expects a similar 5.4 mb/d increase in demand for 2021 and 3.5 mb/d
Slide 14: Market Update – Product Tanker Demand and Implications
Market Update – Product Tanker Demand and Implications Product Fundamentals ▪ Global refinery throughput up 440 kb/d in January, although February saw a decline of 1.9 mb/d due to frigid weather in US ▪ IEA expects 2Q 2021 refinery throughput to be up 8.0 mb/d year over year and 4.3 mb/d for all of
Slide 15: Market Update – Ship Supply
Market Update – Ship Supply Orderbook Update VLCC Orderbook Recycling Candidates ▪ Orderbook remains at historical lows: (Million DWT) − VLCC 8.1% − Suezmax 10.0% − Aframax/LR2 10.2% 19.2 − Panamax/LR1 1.8% − MR 6.1% ▪ 31 VLCCs ordered in 2019; 41 in 2020; 10 cancelled recently ▪ Ordering tempered b
Slide 16: Closing Remarks
Closing Remarks Transaction will create one of the largest US publicly-listed tanker platforms with over 100 vessels diversified across segment and size, including “power alleys” in large crude and product segments Larger operating footprint and strategic alignment unlocks substantial cost and comme
Slide 17: Appendix
Appendix Se
Slide 18: TCE Reconciliation
TCE Reconciliation International Seaways Diamond S Shipping ($000s) FY 2020 ($000s) FY 2020 Shipping revenues $421,648 Crude Product Fleet Fleet Less: Voyage expenses 19,643 Voyage revenue $235,563 $360,347 Time charter equivalent revenues $402,005 Voyage expense (73,337) (115,244) Amortization of T
Slide 19: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation International Seaways Diamond S Shipping ($000s) FY 2020 ($000s) FY 2020 Net income / (loss) $(5,531) Net income / (loss) $26,396 Income tax provision 1 Interest expense, net 34,401 Interest expense 36,712 Operating income $60,797 Depreciation and amortization 74,343 D
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