425 1 d396928d425.htm 425 425

Filing under Rule 425 under the U.S. Securities Act of 1933

Filing by: Scorpio Tankers Inc.

Subject Company: Navig8 Product Tankers Inc.

Commission File No. of Scorpio Tankers Inc.: 001-34677

Date: May 24, 2017

IMPORTANT INFORMATION FOR INVESTORS

In connection with the proposed merger of Scorpio Tankers Inc. (“Scorpio”) and Navig8 Product Tankers Inc. (“Navig8”) (the “Proposed Merger”), Scorpio will file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form F–4 that will constitute a prospectus of Scorpio and include a proxy statement of Navig8. Scorpio also plans to file other relevant documents with the SEC regarding the Proposed Merger. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the proxy statement/prospectus (if and when it becomes available) and other relevant documents filed by Scorpio with the SEC at the SEC’s website at www.sec.gov.

In addition, you will be able to obtain free copies of these documents by phone, e–mail or written request by contacting the investor relations department of Scorpio or Navig8 at the following:

 

  Scorpio Tankers Inc.    Navig8 Product Tankers Inc.
  9, Boulevard Charles III    2nd Floord, Kinnaird House
  Monaco 98000    1 Pall Mall East, London
     SW1Y 5AU
  Attn: Investor Relations    Attn: Investor Relations
 

+377-9798-5716

info@scorpiotankers.com

  

+1 203 975 4788

info@navig8producttankers.com

 


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Investor Presentation May 2017


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Disclaimer and Forward-looking Statements This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Scorpio Tankers Inc.’s (“Scorpio’s”) current views with respect to future events and financial performance. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect” and similar expressions identify forward-looking statements. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in Scorpio’s records and other data available from third parties. Although Scorpio believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the control of Scorpio, Scorpio cannot assure you that Scorpio will achieve or accomplish these expectations, beliefs or projections. Risks and uncertainties include, but are not limited to, the failure of counterparties to fully perform their contracts with Scorpio, the strength of world economies and currencies, general market conditions, including fluctuations in charter hire rates and vessel values, changes in demand in the tanker vessel markets, changes in Scorpio’s operating expenses, including bunker prices, drydocking and insurance costs, the fuel efficiency of our vessels, the market for Scorpio’s vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities including those that may limit the commercial useful lives of tankers, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports Scorpio files with the Securities and Exchange Commission, or the Commission, and the New York Stock Exchange, or NYSE. In addition, there are risks that the proposed merger transaction (discussed herein) does not close when expected or at all because one or more conditions to the closing are not satisfied on a timely basis or at all, or that the anticipated benefits of the proposed merger transaction are not realized as a result of such things as the strength or weakness of the economy and competitive factors in the areas where we and the proposed merger party do business; the effects of competition in the markets in which we or the proposed merger party operate; the impact of changes in the laws and regulations regulating the seaborne transportation or refined petroleum products industries or affecting domestic and foreign operations; judicial or regulatory judgments and legal proceedings; the ability to successfully integrate the two companies; success in retaining the services of executives, key personnel and other employees that the combined company needs to realize all of the anticipated benefits of the proposed merger transaction; the risk that expected synergies and benefits of the proposed merger transaction will not be realized within the expected time frame or at all; reputational risks; and other factors that may affect future results of us or the proposed merger party, including changes in trade policies, timely development and introduction of new products and services, changes in tax laws, technological and regulatory changes, and adverse developments in general market, business, economic, labor, regulatory and political conditions. Scorpio undertakes no obligation to update or revise any forward-looking statements. These forward-looking statements are not guarantees of Scorpio’s future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements. Scorpio has filed a registration statement (including a prospectus) and has or expects to file a preliminary prospectus supplement with the Securities and Exchange Commission (SEC) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the preliminary prospectus supplement and other documents Scorpio files with the SEC for more complete information about Scorpio and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. 2


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Offering Summary Issuer (Ticker / Exchange): Scorpio Tankers Inc. (STNG / NYSE) Offering Size: $200 million / 100% primary Over-Allotment Option: 15% (100% primary) Cash to further strengthen the balance sheet and enhance liquidity, costs Use of Proceeds: related to the proposed merger, acquisition of four LR1 vessels from Navig8 Product Tankers Inc. (NPTI) and general corporate purposes Lock-up: 90 days for the Company, Officers and Directors Sole Bookrunner: Morgan Stanley Expected Pricing: Week of May 22nd, 2017 Scorpio Services Holding Limited has indicated an interest in participating for Insider Participation: at least $20 million 3


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Scorpio Overview – Today (1)(2) Leading Product Tanker Company Scorpio is the world’s largest product tanker company By Q1-18, the Company expects to own a fleet of 82 product tankers (76 vessels currently on the water and 6 vessels under construction) Vessels employed in well-established pools managed by Scorpio Group, which have historically outperformed the charter market Well-positioned to take advantage of upside in product tanker market NYSE-compliant governance and transparency The Company is headquartered in Monaco, incorporated in the Marshall Islands and is exempt from U.S. income tax Fleet Summary 76 product tankers on the water with an average age of 2.4 years 23 LR2s (110,000 DWT, ~750,000 bbls) 39 MRs (50,000 DWT, ~275,000 bbls) 14 Ice-Class Handymax (39,000 DWT, ~200,000 bbls) 6 vessels under construction 6 MRs contracted to be delivered in 2017 & 2018 19 product tankers time / bareboat chartered-in Notes: (1) Metrics not adjusted for Proposed Merger transaction (2) Metrics exclude two MR vessels currently held for sale 4


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Proposed Merger Overview to acquire NPTI in exchange for 55 million(1) Scorpio newly issued shares in STNG NPTI shareholders to own ~24% post transaction (before proposed equity offering) NPTI’s fleet consists of high quality vessels, comprised of 15 LR2s and 12 LR1s Modern fleet, average age of 0.9 years All vessels currently on the water with no outstanding capex Commercial and technical management of NPTI fleet will be transitioned to Scorpio Group following the closing of the transaction $200 million equity offering to fund acquisition of 4 LR1 vessels from NPTI prior to the closing of Proposed Merger, cover costs related to the Proposed Merger and ensure adequate liquidity and comfortable covenant compliance for pro forma STNG Proposed Merger Transaction closing conditioned on the closing of the equity offering and other conditions (2) Assumption of $919 million of existing NPTI bank debt & sale leaseback facilities (subject to lender consents) Aggregate payment of $156 million (3) to acquire 4 LR1 vessels from NPTI NPTI Series Preference Shares to be redeemed in cash by Scorpio at closing ($38.6 million(4) A ) Transaction closing targeted for the third quarter of 2017 Notes: (1) A further 1.5MM shares are being issued to Navig8 Group in relation to additional pool termination expenses (2) As of 03/31/17 (3) Includes $38MM in cash and $118MM in debt (already included within the $919MM assumption of NPTI bank debt & sale leaseback facilities) (4) Includes Preference Shares redemption premium of $6.4MM 5


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Proposed Merger Highlights Highly complementary fleet of newly built, high quality vessels, which enlarges STNG’s fleet 1 and extends coverage to all product tanker classes – NPTI is the only available fleet that is younger than STNG’s Solidifies leadership position in product tankers, more than doubling STNG’s presence in the 2 LR segment – this is a unique fleet that cannot be replicated Commercial benefits from greater presence in leading product tankers pools that increase 3 utilization – consistently outperforming the market Enhances STNG position in market with solid fundamentals – low orderbook levels, 4 diminished shipyard capacity and positive demand dynamics Benefits from larger market capitalization, free float and stock liquidity – highly attractive 5 stock for product tanker exposure Conservative capital structure supported by this transaction to achieve strong liquidity, 6 comfortable covenant compliance and a strengthened balance sheet 6


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1 Highly Complementary Fleet of Newly Built Vessels (1) 60 2.8 Avg. Age of Vessels (Owned Fleet Only) 50 6 (2) 1.5 9 40 1 Vessels 30 15 2.6 of # 20 39 (3) 1.0 9 23 10 12 14 0 LR2 LR1 MR Handymax STNG NPTI TC-In / Bareboat Chartered-In Total Newbuilds Notes: Owned vessels as of 05/23/17 Refers to STNG MR vessels Excludes two MR vessels currently held for sale 7


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2 Economies of Scale from being Largest Tanker Owner World’s Largest Product Tanker Owner Becomes Larger Avg. Age of Vessels (Owned Fleet Only) 2.0 120 109 (1) 27 11.2 8.6 80 77 74 7.7 4.4 Vessels 23 17 8.9 20 60 of 56 # 51 24 14 40 20 59 60 54 42 36 31 0 Scorpio Tankers * TORM A/S A.P. Moller China COSCO Sinokor Merchant SCF Group Shipping HM & MR LR1 & LR2 NPTI (LR1 & LR2) Note: * Pro forma for Proposed Merger Transaction including the acquisition of 4 LR1s from NPTI, which is expected to close following the closing of the equity offering. Includes newbuildings currently on order (1) Excludes two MR vessels currently held for sale Source: Clarksons Research Services, May 2017 8


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2 Young and Efficient Fleet to Drive Superior Performance Scorpio Average Age vs. Worldwide Fleet 14.0 12.4 12.0 10.0 9.4 8.8 (Years) 8.2 8.0 Age Average 6.0 4.0 2.9 2.5 2.0 1.5 0.9 0.0 Handymax MR LR1 LR2 Scorpio Tankers Active Fleet Source: Clarksons Research Services, April 2017 9


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3 Scorpio Pools Have Consistently Outperformed Market Pool Performance ($/day) $30,000 $20,000 Scorpio Handymax Tanker $10,000 Pool (SHTP) $0 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Scorpio Handymax Pool Handymax Benchmark (TD16—TD18—TC6 -BALTIC/CONT) $30,000 $20,000 Scorpio MR Pool $10,000 (SMRP) $0 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Scorpio MR Clarksons MR $50,000 $40,000 $30,000 Scorpio LR2 Tanker Pool $20,000 (SLR2P) $10,000 $0 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Scorpio LR2 LR2 Benchmark (AG / EAST—AG / WEST—UKC / EAST) 10


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Market Fundamentals: Product Tanker Supply at Historical 4 Lows Newbuildings at Twenty Year Low 2017 Newbuilding Contracts YTD Handymax MR LR1 LR2 Total 2 7 2 8 19 # of Vessels 600 491 500 400 300 217 200 160 98 100 47 0 2006 2007 2008 2009 2010 299 190 126 108 80 17 19 2011 2012 2013 2014 2015 2016 2017 YTD HM & MR LR1 LR2 Total Source: Clarksons Research Services, February 2017 and May 2017 11


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Market Fundamentals: Positive Demand Outlook for 4 Product Tankers Seaborne Product Exports & Global Demand Seaborne Product Exports (mb/d) Global Oil Demand (mb/d) 25 100 20 90 15 80 10 70 2000 2002 2004 2006 2008 2010 2012 2014 2016 Seaborne Refined Product Exports Global Demand Seaborne Refined Product Exports as % of Oil Demand (%) 25 Refined Products 20 15 10 2000 2002 2004 2006 2008 2010 2012 2014 2016 Structural Drivers in Demand for Refined Products Trade Between 2000-2016, ton miles have increased an average of 4.4% per year Reduction in oil prices has lead to an increase in the production of refined products, and consequently the quantity to be transported U.S. has emerged as a refined products powerhouse, becoming the world’s largest product exporter Changes in refinery locations, expansion of refining capacity in Asia and Middle East as well as a reduction in OECD refining capacity (Europe & Australia) Growing consumption in Latin America, Africa and non-China / Japan Asia and lack of corresponding refining capacity growth Balance of trade needs of each particular region-gasoline / diesel trade between U.S. / Europe is a prime example Source: Clarksons Research Services, BP and IEA 12


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STNG Market Capitalization and Trading Liquidity Likely 5 To Be Enhanced Scorpio Represents Most Liquid Product Tanker Operator (1) ($MM) STNG is Trading Liquidity ($MM pd) 105MM in new shares $1,400 issued will significantly currently most Sources ($MM) $16 enhance market liquid public Equity for M&A Transaction (55MM STNG Shares) (2) 220 (2) tanker stock (1); capitalization expect this to Equity Raise (50MM STNG Shares) (2) 200 $14 $1,200 improve pro Uses ($MM) forma for NPTI Purchase Price (55MM STNG Shares) (2) 220 transaction Preferred Share Redemption Cost 39 $12 $1,000 $420 M&A Transaction-Related Costs 44 Equity Raise Expenses 13 $10 $800 Cash to Balance Sheet 104 $8 $1,256 $600 $1,080 $6 $400 $730 $734 $730 $4 $621 $537 $443 $200 $323 $2 $265 $248 $0 $0 Euronav US Scorpio Pro Frontline Nordic Scorpio TORM DHT Gener 8 Teekay Ardmore Navios Mar. Forma American Tankers Holdings Maritime Tankers Shipping Acquisition Tankers Corp Market Cap ($MM) New Equity (3) Trading Liquidity ($MM pd) Notes: (1) As measured by average daily trading liquidity over last 3 months in millions (USD) per day as of 05/16/17 (2) Assumes STNG stock price of $4.00 (3) Includes both equity issued in Proposed Merger Transaction and concurrent equity raise Source: Average daily value as of Bloomberg on 05/16/17; Market capitalizations as of 05/16/17 13


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Strong Balance Sheet and Liquidity Maintained in 6 Pro Forma STNG Cash Net Debt / Capitalization (4) $300 70% 60% 57.9% $250 56.7% 50% $200 40% $187 $150 $256 30% $39 $100 20% $44 (1) $129 $50 $38(2) 10% $38(2) $21 0% $0 Scorpio Standalone Scorpio Pro Forma Scorpio Preferred Trans. Cash for NPTI (3) Net Scorpio 3/31 Share Adj. NPTI Proceeds Pro Forma Redemption Acquisition from Equity Vessels Raise Notes: (1) Includes change of control, transaction fees and debt / legal fees (2) Purchase price of $42MM less the release of $4MM of restricted cash for a net cash impact of $38MM (3) Inclusion of cash consideration paid for NPTI 4 LR1 “Acquisition Vessels”, which will remain on NPTI’s balance sheet between sign and close of the Proposed Merger transaction (4) As of 03/31/17. Net debt and capitalization includes convertible bonds at carrying value and excludes deferred financing fees Source: Company filings; Company materials; Management estimates 14


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Pro Forma STNG Fleet List Owned Vessels (1) Name Year DWT Type STI Comandante May-14 38,734 HM STI Brixton Jun-14 38,734 HM STI Pimlico Jul-14 38,734 HM STI Hackney Aug-14 38,734 HM STI Acton Sep-14 38,734 HM STI Fulham Sep-14 38,734 HM STI Camden Sep-14 38,734 HM STI Battersea Oct-14 38,734 HM STI Wembley Oct-14 38,734 HM STI Finchley Nov-14 38,734 HM STI Clapham Nov-14 38,734 HM STI Poplar Dec-14 38,734 HM STI Hammersmith Jan-15 38,734 HM STI Rotherhithe Jan-15 38,734 HM STI Amber Jul-12 49,990 MR STI Topaz Aug-12 49,990 MR STI Ruby Sep-12 49,990 MR STI Garnet Sep-12 49,990 MR STI Onyx Sep-12 49,990 MR STI Fontvieille Jul-13 49,990 MR STI Ville Sep-13 49,990 MR STI Opera Jan-14 49,990 MR STI Duchessa Jan-14 49,990 MR STI Texas City Mar-14 49,990 MR STI Meraux Apr-14 49,990 MR STI San Antonio May-14 49,990 MR STI Venere Jun-14 49,990 MR STI Virtus Jun-14 49,990 MR STI Aqua Jul-14 49,990 MR STI Benicia Sep-14 49,990 MR STI Regina Sep-14 49,990 MR STI St Charles Sep-14 49,990 MR STI Yorkville Oct-14 49,990 MR STI Memphis Nov-14 49,995 MR STI Milwaukee Nov-14 49,990 MR STI Battery Nov-14 49,990 MR STI Soho Dec-14 49,990 MR STI Tribeca Jan-15 49,990 MR STI Gramercy Jan-15 49,990 MR Name Year DWT Type STI Bronx Feb-15 49,990 MR STI Pontiac Mar-15 49,990 MR STI Manhattan Mar-15 49,990 MR STI Queens Apr-15 49,990 MR STI Osceola Apr-15 49,990 MR STI Notting Hill May-15 49,687 MR STI Seneca Jun-15 49,990 MR STI Westminster Jun-15 49,990 MR STI Brooklyn Jul-15 49,990 MR STI Black Hawk Sep-15 49,990 MR STI Galata Mar-17 50,000 MR STI Bosphorus Apr-17 50,000 MR Excel Nov-15 74,000 LR1 Excelsior Jan-16 74,000 LR1 Expedite Jan-16 74,000 LR1 Exceed Feb-16 74,000 LR1 Experience Mar-16 74,000 LR1 Express May-16 74,000 LR1 Executive May-16 74,000 LR1 Excellence May-16 74,000 LR1 Pride Jul-16 74,000 LR1 Providence Aug-16 74,000 LR1 Precision Oct-16 74,000 LR1 Prestige Nov-16 74,000 LR1 STI Elysees Jul-14 109,999 LR2 STI Madison Sep-14 109,999 LR2 STI Park Sep-14 109,999 LR2 STI Orchard Sep-14 109,999 LR2 STI Sloane Nov-14 109,999 LR2 STI Condotti Nov-14 109,999 LR2 STI Rose Jan-15 109,999 LR2 STI Veneto Jan-15 109,999 LR2 STI Alexis Feb-15 109,999 LR2 STI Winnie Mar-15 109,999 LR2 STI Oxford Apr-15 109,999 LR2 STI Lauren Apr-15 109,999 LR2 STI Connaught May-15 109,999 LR2 STI Spiga Jun-15 109,999 LR2 STI Savile Row Jun-15 109,999 LR2 Name Year DWT Type STI Kingsway Aug-15 109,999 LR2 STI Lombard Aug-15 109,999 LR2 STI Carnaby Sep-15 109,999 LR2 STI Grace Mar-16 109,999 LR2 STI Jermyn Jun-16 109,999 LR2 STI Selatar Feb-17 109,999 LR2 STI Rambla Mar-17 109,999 LR2 Solidarity Nov-15 109,999 LR2 Stability Jan-16 109,999 LR2 Solace Jan-16 109,999 LR2 Symphony Feb-16 109,999 LR2 Sanctity Mar-16 109,999 LR2 Steadfast May-16 109,999 LR2 Supreme Aug-16 109,999 LR2 Grace May-16 113,000 LR2 Gallantry Jun-16 113,000 LR2 Guard Aug-16 113,000 LR2 Guide Oct-16 113,000 LR2 Goal Nov-16 113,000 LR2 Gauntlet Jan-17 113,000 LR2 Gladiator Jan-17 113,000 LR2 Gratitude May-17 113,000 LR2 NPTI Vessel 2017 & 2018 Delivery Schedule Name Year DWT Type STI Leblon Jul-17 50,000 MR STI La Boca Jul-17 50,000 MR STI San Telmo Sep-17 50,000 MR STI Donald C. Trauscht Oct-17 50,000 MR STI Esles II Dec-17 50,000 MR STI Jardins Jan-18 50,000 MR Note: (1) Excludes two MR vessels currently held for sale 15