424B3 1 tm2113935-5_424b3.htm 424B3 tm2113935-5_424b3 - none - 42.9063355s
 Filed Pursuant to Rule424(b)(3)
 Registration No. 333-255774
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To the stockholders of International Seaways, Inc. and shareholders of Diamond S Shipping Inc.
TRANSACTION PROPOSED — YOUR VOTE IS VERY IMPORTANT
Dear investors:
On March 30, 2021, International Seaways, Inc., or INSW, Dispatch Transaction Sub, Inc., a wholly owned subsidiary of INSW, or Merger Sub, and Diamond S Shipping Inc., or Diamond S, entered into an Agreement and Plan of Merger, or the merger agreement, pursuant to which, subject to approval of INSW stockholders and Diamond S shareholders and the satisfaction or (to the extent permitted by law) waiver of other specified closing conditions, INSW and Diamond S will combine in an all-stock merger of equals, or the merger. At the completion of the merger, Merger Sub will merge with and into Diamond S, with Diamond S surviving the merger and becoming a wholly owned subsidiary of INSW. Each of the common stock of INSW and the common stock of Diamond S is traded on the New York Stock Exchange, or the NYSE, under the symbols “INSW” and “DSSI,” respectively. The common stock of the combined company will be listed on the NYSE under the symbol “INSW.”
If the merger is completed, each share of Diamond S common stock (other than shares held by Diamond S, INSW, Merger Sub or any of their respective direct or indirect wholly owned subsidiaries) will be converted into the right to receive 0.55375 validly issued, fully paid and non-assessable shares of common stock of INSW (and, if applicable, cash in lieu of fractional shares), or the merger consideration, less any applicable withholding taxes. Based on the current number of shares of Diamond S common stock outstanding, INSW expects to issue approximately 22,683,532 shares of INSW common stock to holders of Diamond S common stock in the aggregate in the merger. Based on the current number of shares of INSW common stock and Diamond S common stock outstanding and reserved for issuance, we estimate that, immediately following the consummation of the merger, pre-merger INSW stockholders will own approximately 55.75% and former Diamond S shareholders will own approximately 44.25% of the common stock of the combined company. Prior to the consummation of the merger, INSW is permitted to pay a special dividend to INSW stockholders in an aggregate amount equal to $31.5 million, which special dividend will not result in a change to the base exchange ratio. The base exchange ratio is subject to an upward adjustment to the extent that INSW sells any interest in, or assets of, its TI Asia Limited or TI Africa Limited joint ventures prior to the consummation of the merger and pays a special dividend to INSW’s stockholders from the proceeds of any such sale (up to a maximum of $25 million). For more details on the merger consideration, see “The Merger Agreement — Merger Consideration.”
Each of INSW and Diamond S is holding a special meeting of its respective stockholders or shareholders, as applicable, to vote on the proposals necessary to complete the merger. Information about each meeting, the merger and the other business to be considered by stockholders of INSW and shareholders of Diamond S at the respective special meetings is contained in this joint proxy statement/prospectus. Any stockholder of INSW or shareholder of Diamond S entitled to attend and vote at the applicable special meeting is entitled to appoint a proxy to attend and vote on such stockholder’s or shareholder’s behalf. Such proxy need not be a holder of INSW common stock or Diamond S common stock. We urge you to read this joint proxy statement/prospectus and the annexes and documents incorporated by reference carefully. You should also carefully consider the risks that are described in the “Risk Factors.”
Your vote is very important regardless of the number of shares of INSW common stock or Diamond S common stock that you own. The merger cannot be completed without (1) the adoption of the merger agreement by the affirmative vote of holders of at least a majority of the outstanding shares of Diamond S common stock entitled to vote on the authorization of the merger agreement at the Diamond S special meeting and (2) the approval of the issuance of INSW common stock to Diamond S shareholders in connection with the merger by the affirmative vote of the holders of a majority of the outstanding shares of INSW common stock present and entitled to vote at the INSW special meeting.
Whether or not you plan to attend the INSW special meeting or the Diamond S special meeting, please submit your proxy as soon as possible to make sure that your shares are represented at the applicable meeting.
We look forward to the successful combination of INSW and Diamond S.
Sincerely,
Lois K. Zabrocky
President and
Chief Executive Officer
International Seaways, Inc.
Craig H. Stevenson, Jr.
President and
Chief Executive Officer
Diamond S Shipping Inc.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger or the other transactions described in this joint proxy statement/prospectus or the securities to be issued in connection with the merger or determined if this joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
The accompanying joint proxy statement/prospectus is dated June 11, 2021 and is first being mailed to stockholders of INSW and shareholders of Diamond S on or about June 11, 2021.

 
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INTERNATIONAL SEAWAYS, INC.
600 Third Avenue, 39th Floor
New York, New York 10016
(212) 578-1600
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on July 13, 2021
To the Stockholders of International Seaways, Inc.:
We cordially invite you to attend the special meeting of stockholders (the “INSW special meeting”) of International Seaways, Inc. (“INSW”), which will be held virtually, via live webcast at www.virtualshareholdermeeting.com/INSW2021SM, at 10:00 a.m., Eastern Time, on July 13, 2021, for the following purposes:
1.
Approval of the INSW Share Issuance.   To vote on a proposal (the “INSW share issuance proposal”) to approve the issuance (the “INSW share issuance”) of INSW common stock, no par value (“INSW common stock”), as consideration to Diamond S Shipping Inc. (“Diamond S”) shareholders in connection with the merger contemplated by the Agreement and Plan of Merger, dated as of March 30, 2021, by and among INSW, Dispatch Transaction Sub, Inc., a wholly owned subsidiary of INSW (“Merger Sub”) and Diamond S; and
2.
Adjournment of the INSW Special Meeting.   To vote on a proposal (the “INSW adjournment proposal”) to approve the adjournment of the INSW special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the INSW special meeting to approve the INSW share issuance proposal.
INSW will transact no other business at the INSW special meeting, except such business as may properly be brought before the INSW special meeting or any adjournment or postponement thereof. Please refer to the joint proxy statement/prospectus of which this notice is a part for further information with respect to the business to be transacted at the INSW special meeting.
A special committee of the INSW board of directors (the “INSW Board”) has fixed the close of business on June 11, 2021 as the record date for the INSW special meeting (the “INSW record date”). Only INSW stockholders of record at that time are entitled to receive notice of, and to vote at, the INSW special meeting or any adjournment or postponement thereof. INSW is commencing its solicitation of proxies on or about June 11, 2021. INSW will continue to solicit proxies until the date of the INSW special meeting.
Completion of the merger is conditioned upon, among other things, approval of the INSW share issuance proposal by the INSW stockholders, which requires the affirmative vote of the holders of a majority of the outstanding shares of INSW common stock present and entitled to vote at the INSW special meeting.
The INSW Board unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, including the merger, and determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger and the INSW share issuance are advisable and fair to and in the best interests of INSW and its stockholders, and unanimously recommends that INSW stockholders vote:

“FOR” the INSW share issuance proposal; and

“FOR” the INSW adjournment proposal.
 

 
Your vote and that your shares be represented at the meeting are both very important, regardless of the number of shares of INSW common stock that you own. The votes cast in favor of the INSW share issuance proposal must exceed the aggregate of votes cast against the INSW share issuance proposal and abstentions. Whether or not you expect to attend the INSW special meeting virtually, to ensure your representation at the INSW special meeting, we urge you to submit a proxy to vote your shares of INSW common stock as promptly as possible by (1) visiting the Internet site listed on the INSW proxy card, (2) calling the toll-free number listed on the INSW proxy card or (3) submitting your INSW proxy card by mail by using the provided self-addressed, stamped envelope. Submitting a proxy will not prevent you from voting in person (by participating through the virtual meeting website), but it will help to secure a quorum and avoid added solicitation costs. Any eligible holder of INSW common stock who is present at the INSW special meeting may vote in person (by participating through the virtual meeting website ), thereby revoking any previous proxy. In addition, a proxy may also be revoked in writing before the INSW special meeting in the manner described in the accompanying joint proxy statement/prospectus. If your shares of INSW common stock are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by the bank, broker or other nominee.
The INSW special meeting will be conducted solely as a virtual meeting via the Internet. There will be no physical meeting location and the meeting will only be conducted via live webcast through the virtual meeting website. If you are a shareholder of record as of the INSW record date for the INSW special meeting and you plan to attend the INSW special meeting virtually, visit www.virtualshareholdermeeting.com/INSW2021SM. On the day of the INSW special meeting, shareholders may begin to log in to the virtual meeting website beginning at 9:45 a.m. Eastern Time, and the meeting will begin promptly at 10:00 a.m. Eastern Time. Please allow ample time for online login.
The enclosed joint proxy statement/prospectus provides a detailed description of the merger and the merger agreement and the other matters to be considered at the INSW special meeting. We urge you to carefully read this joint proxy statement/prospectus, including any documents incorporated by reference herein, and the annexes in their entirety. If you have any questions concerning either of the proposals in this notice, the merger or the joint proxy statement/prospectus, would like additional copies or need help voting your shares of INSW common stock, please contact INSW’s’ proxy solicitor:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders may call toll free: (877) 687-1866
Banks and Brokers may call collect: (212) 750-5833
By Order of the International Seaways, Inc. Board of Directors,
   
James D. Small, III
Chief Administrative Officer, Senior Vice President, General Counsel and Secretary
New York, New York
June 11, 2021
 

 
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DIAMOND S SHIPPING INC.
33 Benedict Place
Greenwich, Connecticut 06830
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on July 13, 2021
To the Shareholders of Diamond S Shipping Inc.:
We are pleased to invite you to attend and notice is hereby given that Diamond S Shipping Inc., referred to as Diamond S, will hold a special meeting of its shareholders, referred to as the Diamond S special meeting, which will be conducted solely as a virtual meeting via the Internet at www.virtualshareholdermeeting.com/DSSI2021SM on July 13, 2021 at 10:00 a.m. Eastern Time for the following purposes:
1.
Authorization and Approval of the Merger Agreement.   To vote on a proposal to authorize and approve the Agreement and Plan of Merger, dated as of March 30, 2021, by and among International Seaways, Inc., Dispatch Transaction Sub, Inc. and Diamond S, referred to as the merger agreement, which is further described in the section entitled “The Merger Agreement,” a copy of which merger agreement is attached as Annex A to the joint proxy statement/prospectus accompanying this notice, referred to as the Diamond S merger proposal;
2.
Diamond S Merger-Related Compensation.   To vote on a proposal to approve, by advisory (non-binding) vote, certain compensation arrangements that may be paid or become payable to Diamond S’ named executive officers in connection with the merger contemplated by the merger agreement, referred to as the Diamond S merger-related compensation proposal; and
3.
Adjournment of the Diamond S Special Meeting.   To vote on a proposal to approve the adjournment of the Diamond S special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Diamond S special meeting to approve the Diamond S merger proposal, referred to as the Diamond S adjournment proposal.
Diamond S will transact no other business at the Diamond S special meeting, except such business as may properly be brought before the Diamond S special meeting or any adjournment or postponement thereof. Please refer to the joint proxy statement/prospectus of which this notice is a part for further information with respect to the business to be transacted at the Diamond S special meeting.
The Diamond S board of directors, referred to as the Diamond S Board, delegated authority to the officers of Diamond S to fix the record date and who have fixed the close of business on June 11, 2021 as the record date for the Diamond S special meeting, referred to as the Diamond S record date. Only Diamond S shareholders of record at that time are entitled to receive notice of, and to vote at, the Diamond S special meeting or any adjournment or postponement thereof. Diamond S is commencing its solicitation of proxies on or about June 11, 2021. Diamond S will continue to solicit proxies until the date of the Diamond S special meeting.
Completion of the merger is conditioned, among other things, upon authorization and approval of the merger agreement by the Diamond S shareholders, which requires the affirmative vote of holders of a
 

 
majority of the outstanding shares of Diamond S common stock entitled to vote on the authorization of the merger agreement at the Diamond S special meeting in favor of such authorization.
The Diamond S Board has unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, including the merger; determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to and in the best interests of Diamond S and its shareholders; and unanimously recommends that Diamond S shareholders vote:
“FOR” the Diamond S Merger Proposal;
“FOR” the Diamond S Advisory Compensation Proposal; and
“FOR” the Diamond S Adjournment Proposal.
Your vote is very important regardless of the number of shares of Diamond S common stock that you own. A failure to vote your shares, or to provide instructions to your bank, broker or nominee as to how to vote your shares, is the equivalent of a vote against the Diamond S merger proposal. Whether or not you expect to attend the Diamond S special meeting in person (by participating through the virtual meeting website), to ensure your representation at the Diamond S special meeting, we urge you to submit a proxy to vote your shares as promptly as possible by (1) visiting the Internet site listed on the Diamond S proxy card, (2) calling the toll-free number listed on the Diamond S proxy card or (3) submitting your Diamond S proxy card by mail by using the provided self-addressed, stamped envelope. Submitting a proxy will not prevent you from voting in person (by participating through the virtual meeting website), but it will help to secure a quorum and avoid added solicitation costs. Any eligible holder of Diamond S common stock who is virtually present at the Diamond S special meeting may vote in person (by participating through the virtual meeting website), thereby revoking any previous proxy. In addition, a proxy may also be revoked in writing before the Diamond S special meeting in the manner described in the accompanying joint proxy statement/prospectus. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by the bank, broker or other nominee.
The Diamond S special meeting will be conducted solely as a virtual meeting via the Internet. There will be no physical meeting location and the meeting will only be conducted via live webcast through the virtual meeting website. If you are a shareholder of record as of the Diamond S record date for the Diamond S special meeting and you plan to attend the Diamond S special meeting virtually, visit www.virtualshareholdermeeting.com/DSSI2021SM and enter the 16-digit control number on the proxy card, voting instruction form or notice you received. On the day of the Diamond S special meeting, shareholders may begin to log in to the virtual meeting website beginning at 9:45 a.m. Eastern Time, and the meeting will begin promptly at 10:00 a.m. Eastern Time. Please allow ample time for online login.
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Diamond S special meeting. If you encounter any difficulties accessing the virtual Diamond S special meeting during check-in or the Diamond S special meeting itself, please call the technical support number that will be posted on the virtual meeting platform log-in page.
The enclosed joint proxy statement/prospectus provides a detailed description of the merger and the merger agreement and the other matters to be considered at the Diamond S special meeting. We urge you to carefully read this joint proxy statement/prospectus, including any documents incorporated by reference herein, and the annexes in their entirety. If you have any questions concerning any of the proposals in this notice, the merger or the joint proxy statement/prospectus, would like additional copies or need help voting your shares of common stock, please contact Diamond S’ proxy solicitor or Diamond S:
Okapi Partners LLC
1212 Avenue of the Americas, 24th Floor
New York, NY 10036
Telephone: (212) 297-0720
Email: info@okapipartners.com
 

 
OR
Diamond S Shipping Inc.
33 Benedict Place
Greenwich, Connecticut 06830
Attention: Investor Relations
Telephone: 212-517-0810
E-mail: ir@diamondsshipping.com
By Order of the Diamond S Shipping Inc. Board of Directors,
Anoushka Kachelo
General Counsel and Secretary
Greenwich, Connecticut
June 11, 2021
 

 
REFERENCES TO ADDITIONAL INFORMATION
The accompanying joint proxy statement/prospectus incorporates by reference important business and financial information about INSW and Diamond S from other documents that are not included in or delivered with the accompanying joint proxy statement/prospectus. For a listing of the documents incorporated by reference into the accompanying joint proxy statement/prospectus, see “Where You Can Find More Information.”
You can obtain any of the documents incorporated by reference into the accompanying joint proxy statement/prospectus without charge by requesting them in writing or by telephone as follows:
For INSW Stockholders:
International Seaways, Inc.
600 Third Avenue, 39th Floor
New York, New York 10016
Attention: Investor Relations
(212) 578-1600
For Diamond S Shareholders:
Diamond S Shipping Inc.
33 Benedict Place, 2nd Floor
Greenwich, Connecticut 06830
Attention: Investor Relations
(212) 517-0810
To receive timely delivery of the documents in advance of the INSW special meeting and the Diamond S special meeting, you should make your request no later than July 6, 2021.
You may also obtain any of the documents incorporated by reference into the accompanying joint proxy statement/prospectus without charge through the Securities and Exchange Commission (the “SEC”) website at www.sec.gov. In addition, you may obtain copies of documents filed by INSW with the SEC on INSW’s Internet website at http://www.intlseas.com under the tab “Investor Relations,” then under the tab “SEC Filings” or by contacting INSW’s Investor Relations department at International Seaways, Inc., Investor Relations, 600 Third Avenue, 39th Floor, New York, New York 10016 or by calling (212) 578-1600. You may also obtain copies of documents filed by Diamond S with the SEC on Internet website at http://www.diamondsshipping.com under the tab “Investor Relations”, then under the heading “Financials” and then under the heading “SEC Filings” or by contacting Diamond S’ Investor Relations department at Diamond S Shipping Inc., Investor Relations, 33 Benedict Place, 2nd Floor, Greenwich, Connecticut 06830 or by calling (212) 517-0810.
We are not incorporating the contents of the websites of the SEC, INSW, Diamond S or any other entity or any other website into the accompanying joint proxy statement/prospectus. We are providing the information about how you can obtain certain documents that are incorporated by reference into the accompanying joint proxy statement/prospectus at these websites only for your convenience.
 
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ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS
This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by INSW (File No. 333-255774), constitutes a prospectus of INSW under Section 5 of the Securities Act of 1933, as amended, with respect to the shares of common stock, no par value, of INSW to be issued to Diamond S shareholders pursuant to the merger agreement. This document also constitutes a joint proxy statement of each of INSW and of Diamond S under Section 14(a) of the Securities Exchange Act of 1934. It also constitutes a notice of meeting with respect to the Diamond S special meeting, at which Diamond S shareholders will be asked to consider and vote upon the Diamond S merger proposal and certain other proposals and it constitutes a notice of meeting with respect to the INSW special meeting, at which INSW stockholders will be asked to consider and vote upon the INSW share issuance proposal and certain other proposals.
INSW has supplied all information contained or incorporated by reference into this joint proxy statement/prospectus relating to INSW and Dispatch Transaction Sub, Inc., and Diamond S has supplied all such information relating to Diamond S.
You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. INSW and Diamond S have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated as of the date set forth above on the cover page of this joint proxy statement/prospectus, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date. Further, you should not assume that the information incorporated by reference into this joint proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to INSW stockholders or Diamond S shareholders nor the issuance by INSW of shares of INSW common stock pursuant to the merger agreement will create any implication to the contrary.
This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.
Unless otherwise indicated or as the context otherwise requires, all references in this joint proxy statement/prospectus to:

“A&R debt agreements” refers to the amendment and restatement agreements pursuant to which certain of the existing debt agreements have been amended and restated in connection with the merger

“articles of merger” refers to the articles of merger with respect to the merger to be duly executed and filed with the Registrar or Deputy Registrar of Corporations of the Republic of the Marshall Islands as provided under the BCA

“base exchange ratio” refers to 0.55375 shares of INSW common stock per share of Diamond S common stock

“BCA” refers to the Marshall Islands Business Corporations Act

“Capital Support Agreement” refers to that certain voting and support agreement, dated as of March 30, 2021, by and between INSW and Capital Maritime & Trading Corp., Crude Carriers Investments Corp., and Capital GP L.L.C.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act, passed in 1985.

“Code” refers to the Internal Revenue Code of 1986, as amended

“combined company” refers to INSW, following completion of the merger

“CSMC” refers to Capital Ship Management Corp., a company duly organized and existing under the laws of Panama

“debt amendment letters” refers to, collectively, (a) the Waiver and Amendment Request Letter, dated March 9, 2021, by and among Diamond S, INSW and the required lenders under the $525 Million Nordea Facility with respect to the $525 Million Nordea Facility, (b) the Waiver and
 
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Amendment Request Letter, dated March 9, 2021, by and among Diamond S, INSW and the required lenders under the $360 Million Nordea Facility with respect to the $360 Million Nordea Facility and (c) the Consent and Amendment Letter, dated March 30, 2021, by and among the NT Suez Holdco LLC, NT Suez GP LLC, NT Suez One LLC, NT Suez Two LLC, INSW and the lenders under the NT Suez Facility

“debt consents” refers to, collectively, (a) the letter agreement, dated March 30, 2021, by and among Diamond S and certain subsidiaries of Diamond S, INSW and the lenders set forth therein with respect to the $360 Million Nordea Facility, (b) the letter agreement, dated March 30, 2021, by and among Diamond S and certain subsidiaries of Diamond S, INSW and the lenders set forth therein with respect to the $525 Million Nordea Facility and (c) the Consent and Amendment Letter, dated March 30, 2021, by and among NT Suez Holdco LLC, NT Suez GP LLC, NT Suez One LLC, NT Suez Two LLC, INSW and the lenders under the NT Suez Facility

“Diamond S” refers to Diamond S Shipping Inc., a Republic of the Marshall Islands corporation

“Diamond S adjournment proposal” refers to the proposal to adjourn the Diamond S special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Diamond S special meeting to approve the Diamond S merger proposal

“Diamond S advisory compensation proposal” refers to the proposal that Diamond S shareholders approve, by advisory (non-binding) vote, certain compensation arrangements that may be paid or become payable to Diamond S’ named executive officers in connection with the merger contemplated by the merger agreement

“Diamond S Board” refers to the Diamond S board of directors

“Diamond S common stock” refers to the common stock of Diamond S, $0.001 par value per share

“Diamond S equity awards” refers to the aggregate Diamond S PSU awards, Diamond S RSU awards and Diamond S restricted share awards

“Diamond S merger proposal” refers to the proposal that Diamond S shareholders authorize and approve the merger agreement

“Diamond S merger-related compensation proposal” refers to the proposal that Diamond S shareholders approve, by advisory (non-binding) vote, certain compensation arrangements that may be paid or become payable to Diamond S’ named executive officers in connection with the merger contemplated by the merger agreement

“Diamond S PSUs” refers to an award of performance-based vesting restricted stock units relating to Diamond S common stock

“Diamond S RSUs” refers to the outstanding restricted stock units as of the effective time of the merger under the Diamond S Shipping Inc. 2019 Equity and Incentive Plan

“Diamond S record date” refers to June 11, 2021

“Diamond S shareholder” or “Diamond S shareholders” refers to one or more holders of Diamond S common stock, as applicable

“Diamond S shareholder approval” refers to the affirmative vote of holders of a majority of the shares of Diamond S common stock outstanding and represented in person (via the virtual meeting website) or by proxy at the Diamond S special meeting and entitled to vote at the Diamond S special meeting, assuming a quorum is present

“Diamond S special meeting” refers to the special meeting of Diamond S shareholders to consider and vote upon the Diamond S merger proposal and related matters

“effective time” refers to the time that the articles of merger are duly filed with the Registrar or Deputy Registrar of Corporations of the Republic of the Marshall Islands or on such later date and time as shall be agreed to by Diamond S and INSW and specified in the articles of merger in accordance with the BCA
 
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“Exchange Act” refers to the Securities Exchange Act of 1934, as amended

“exchange ratio” refers to 0.55375 shares of INSW common stock per share of Diamond S common stock, or the base exchange ratio as it may be adjusted on the occurrence of an exchange ratio adjustment event

“exchange ratio adjustment amount” refers to a ratio necessary to cause the number of validly issued, fully paid and non-assessable shares of INSW common stock issuable to Diamond S shareholders at the effective time to equal (a) the implied pro forma ownership, plus (b) 0.0067 multiplied by a fraction, (i) the numerator of which is the amount of the INSW FSO dividend and (ii) the denominator of which is $25 million

“exchange ratio adjustment event” refers to, following the consummation of a sale by INSW of any of its interest in the FSO Joint Ventures or any of the assets of the FSO Joint Ventures, coupled with the declaration and payment by INSW of the INSW FSO dividend

“excluded shares” refers to shares of Diamond S common stock held by Diamond S, INSW, Merger Sub or by any of their respective direct or indirect wholly owned subsidiaries

“existing debt agreements” refers to (i) the Credit Agreement, dated as of December 23, 2019 (the “$525 Million Nordea Facility”), by and among Diamond S, as borrower, Nordea Bank Abp, New York Branch, as administrative agent and collateral agent, Nordea Bank Abp, New York Branch, Skandinaviska Enskilda Banken AB (PUBL) and Crédit Agricole Corporate & Investment Bank, as bookrunners and lead arrangers, and each of the lenders from time to time party thereto, (ii) the Credit Agreement, dated as of March 27, 2019 (the “$360 Million Nordea Facility”), by and among Diamond S, as borrower, Nordea Bank Abp, New York Branch, as administrative agent and collateral agent, Nordea Bank Abp, New York Branch, Skandinaviska Enskilda Banken AB (PUBL) and Crédit Agricole Corporate & Investment Bank, as bookrunners and lead arrangers, and each of the lenders from time to time party thereto, as amended by that certain Amendment Letter, dated as of May 14, 2019 and (iii) the Credit Agreement, dated as of August 9, 2016 (the “NT Suez Facility”), by and among NT Suez Holdco LLC, as borrower, NT Suez GP LLC, as parent guarantor, Crédit Agricole Corporate & Investment Bank, as administrative agent and collateral agent, Crédit Agricole Corporate & Investment Bank and NIBC Bank N.V., as lead arrangers, and each of the lenders from time to time party thereto, as amended by that certain consent letter dated November 27, 2018

“FSO Joint Ventures” refers to TI Asia Limited and TI Africa Limited

“GAAP” refers to accounting principles generally accepted in the United States

“HSR Act” refers to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended

“implied pro forma ownership” means a decimal equal to (a) the number of issued and outstanding shares of Diamond S common stock (other than excluded shares) as of March 30, 2021, multiplied by the base exchange ratio, (b) divided by the sum of (i) the issued and outstanding shares of INSW common stock as of March 24, 2021 (excluding any shares of INSW common stock held by INSW or its subsidiaries) and (ii) the number of shares set forth in clause (a)

“INSW” refers to International Seaways, Inc., a Republic of the Marshall Islands corporation

“INSW adjournment proposal” refers to the proposal to adjourn the INSW special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the INSW special meeting to approve the INSW share issuance proposal

“INSW Board” refers to the INSW board of directors

“INSW common stock” refers to the common stock of INSW, no par value

“INSW FSO dividend” refers to a dividend payable by INSW to the holders of INSW common stock (a) with a record date for such dividend occurring prior to the effective time, (b) which dividend is payable following the consummation of a sale by INSW of any interest in the FSO Joint Ventures or any of the assets of the FSO Joint Ventures solely from the proceeds of such sale and (c) the aggregate amount of which dividend shall not be in excess of $25 million
 
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“INSW record date” refers to June 11, 2021

“INSW share issuance proposal” refers to the proposal that INSW stockholders approve the issuance of INSW common stock to Diamond S shareholders in connection with the merger

“INSW special dividend” refers to a dividend payable by INSW to the holders of INSW common stock as of a record date prior to the effective time, in an aggregate amount equal to $31.5 million

“INSW special meeting” refers to the special meeting of INSW stockholders to consider and vote upon the INSW share issuance proposal and related matters

“INSW stockholder” or “INSW stockholders” refers to one or more holders of INSW common stock, as applicable

“INSW stockholder approval” refers to the affirmative vote of the holders of a majority of the outstanding shares of INSW common stock present and entitled to vote on the INSW share issuance proposal at the INSW Special Meeting

“IRS” refers to the Internal Revenue Service

“Jefferies” refers to Jefferies LLC

“merger” refers to the merger of Merger Sub with and into Diamond S, with Diamond S being the surviving corporation in the merger

“merger agreement” refers to the Agreement and Plan of Merger, dated as of March 30, 2021, by and among INSW, Merger Sub and Diamond S

“merger consideration” refers to the right of Diamond S shareholders to receive the exchange ratio

“Merger Sub” refers to Dispatch Transaction Sub, Inc., a Republic of the Marshall Islands corporation and a wholly owned subsidiary of INSW

“Moelis” refers to Moelis & Company LLC

“NYSE” refers to the New York Stock Exchange

“SEC” refers to the Securities and Exchange Commission

“Securities Act” refers to the Securities Act of 1933, as amended

“special meetings” refers to the INSW special meeting and the Diamond S special meeting, collectively

“subsidiary” or “subsidiaries” refers to any person, any other person of which (a) at least a majority of the outstanding shares of capital stock of, or other equity interests, having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or organization is directly or indirectly owned or controlled by such person or by any one or more of its subsidiaries, or by such person and one or more of its subsidiaries or (b) with respect to a partnership, such person or any other subsidiary of such person is a general partner of such partnership

“termination agreements” refers to, collectively, (i) the Termination Agreement, by and between Diamond S and Capital Ship Management Corp., (ii) the Termination of Director Designation Agreement and Resale and Registration Rights Agreement, by and among Diamond S, Capital Maritime & Trading Corp., Capital GP L.L.C. and Crude Carriers Investments Corp and (iii) the Termination of Director Designation Agreement, by and among Diamond S, WL Ross & Co., LLC and certain of its affiliates

“we”, “our” and “us” refer to INSW and Diamond S, collectively

“WL Ross Support Agreement” refers to that certain voting and support agreement, dated as of March 30, 2021, by and between INSW and certain affiliates of WL Ross & Co., LLC
 
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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION
The following questions and answers briefly address some commonly asked questions about the merger, the merger agreement, the transactions contemplated by the merger agreement, the INSW special meeting and the Diamond S special meeting. They may not include all the information that is important to INSW stockholders and Diamond S shareholders. INSW stockholders and Diamond S shareholders should carefully read this entire joint proxy statement/prospectus, including the annexes and the other documents referred to or incorporated by reference herein.
Q:   What is the merger?
A:   INSW, Merger Sub and Diamond S have entered into a merger agreement. A copy of the merger agreement is attached as Annex A to this joint proxy statement/prospectus. The merger agreement contains the terms and conditions of the proposed stock-for-stock merger between INSW and Diamond S, whereby INSW and Diamond S will combine in an all-stock merger of equals. Under the merger agreement, subject to satisfaction or (to the extent permitted by law) waiver of the conditions set forth in the merger agreement and described hereafter, in each case prior to the completion of the merger, Merger Sub will merge with and into Diamond S, with Diamond S continuing as the surviving corporation and a wholly owned subsidiary of INSW. As a result of the merger, Diamond S will no longer be a publicly-held company. Following the merger, Diamond S common stock (which is currently listed on the NYSE under the symbol “DSSI”) will be delisted from the NYSE, and deregistered under the Exchange Act. Following the completion of the merger, the name of the combined company will be International Seaways, Inc. and the common stock of the combined company will be listed on the NYSE under the symbol “INSW.”
Q:   Why am I receiving these materials?
A:   You are receiving this joint proxy statement/prospectus to help you decide how to vote your shares of INSW common stock or Diamond S common stock with respect to the INSW share issuance proposal or the Diamond S merger proposal, as the case may be, and the other matters to be considered at the special meetings.
The merger cannot be completed unless, among other things, (1) INSW stockholders approve the issuance of INSW common stock to Diamond S shareholders in connection with the INSW special meeting and (2) Diamond S shareholders adopt the merger agreement at the Diamond S special meeting.
This joint proxy statement/prospectus constitutes both a joint proxy statement of INSW and Diamond S and a prospectus of INSW. It is a joint proxy statement because each of the INSW Board and the Diamond S Board is soliciting proxies from its respective stockholders or shareholders, as applicable. It is a prospectus because INSW will issue shares of INSW common stock in exchange for outstanding shares of Diamond S common stock in the merger. Information about the INSW special meeting, the Diamond S special meeting, the merger, the merger agreement and the other business to be considered by INSW stockholders at the INSW special meeting and the Diamond S shareholders at the Diamond S special meeting is contained in this joint proxy statement/prospectus. INSW stockholders and Diamond S shareholders should read this information carefully and in its entirety. The enclosed voting materials allow INSW stockholders and Diamond S shareholders to vote their shares by proxy without attending the applicable special meeting virtually.
Q:   What will Diamond S shareholders receive in the merger?
A:   If the merger is completed, each share of Diamond S common stock (other than excluded shares) will be converted into the merger consideration, which is the right to receive 0.55375 fully paid and non-assessable shares of INSW common stock, and, if applicable, cash in lieu of fractional shares. The base exchange ratio is subject to an upward adjustment to the extent INSW sells any interest in the FSO Joint Ventures or any of the assets of the FSO Joint Ventures prior to the effective time and declares and pays a special dividend to INSW stockholders with a record date for such dividend occurring prior to the effective time from the proceeds of any such sale (up to a maximum of $25 million). The merger consideration is described in more detail in “The Merger Agreement — Merger Consideration.”
 
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Q:   What will INSW stockholders receive in the merger?
A:   INSW stockholders will not receive any merger consideration, and their shares of INSW common stock will remain outstanding and will constitute shares of the combined company. Following the merger, shares of INSW common stock will continue to be traded on the NYSE under the symbol “INSW.”
Q:   Will I still be paid dividends prior to the completion of the merger?
A:   Yes. During the pendency of the merger, without the consent of Diamond S, INSW may declare and pay a regular quarterly cash dividend in an amount per share of up to $0.06 per quarter, the INSW special dividend and the INSW FSO dividend. It is expected that INSW will declare and pay the INSW special dividend prior to the closing of the merger, with a record date on or after the date of the INSW special meeting.
Diamond S has not paid any cash dividends since its inception. The terms of the merger agreement limit the ability of Diamond S to declare or pay dividends prior to the completion of the merger without INSW’s consent. In addition, certain of Diamond S’ debt instruments place restrictions on its ability to pay cash dividends.
Q:   What respective equity stakes will INSW stockholders and Diamond S shareholders hold in the combined company immediately following the merger?
A:   As of the date of this joint proxy statement/prospectus, based on the current number of shares of INSW common stock and Diamond S common stock outstanding and reserved for issuance and assuming the INSW FSO dividend is not paid, we estimate that, immediately following completion of the merger, pre-merger holders of INSW common stock will own approximately 55.75% and former holders of Diamond S common stock will own approximately 44.25% of the common stock of the combined company. The equity stake of INSW stockholders and Diamond S shareholders in the combined company immediately following the merger will depend on the number of shares of INSW common stock and Diamond S common stock issued and outstanding immediately prior to the merger and whether an exchange ratio adjustment event has occurred prior to the effective time of the merger.
Q:   Will the market value of the merger consideration change between the date of this joint proxy statement/prospectus and the time the merger is completed?
A:   Yes. Although the number of shares of INSW common stock that holders of Diamond S common stock will receive is fixed, the market value of the merger consideration will fluctuate between the date of this joint proxy statement/prospectus and the completion of the merger based upon the trading price of shares of INSW common stock. Any fluctuation in the trading price of shares of INSW common stock after the date of this joint proxy statement/prospectus will change the market value of the shares of INSW common stock that holders of Diamond S common stock will receive.
Q:   When do INSW and Diamond S expect to complete the transaction?
A:   INSW and Diamond S are working to complete the transaction as soon as practicable. We currently expect that the merger will be completed in the third quarter of 2021 after the Diamond S special meeting and the INSW special meeting (assuming the Diamond S shareholder approval and the INSW stockholder approval are obtained at the respective special meetings). Neither Diamond S nor INSW can predict, however, the actual date on which the merger will be completed because it is subject to conditions beyond each company’s control, including obtaining necessary regulatory approvals.
Q:   What are INSW stockholders being asked to vote on?
A:   INSW stockholders are being asked to vote on the following proposals:
1.
Approval of the INSW Share Issuance.   To vote on a proposal to authorize and approve the issuance of INSW common stock, no par value, to Diamond S shareholders in connection with the merger agreement, referred to as the INSW share issuance proposal; and
2.
Adjournment of the INSW Special Meeting.   To vote on a proposal to approve the adjournment of the INSW special meeting to a later date or dates, if necessary or appropriate, to solicit additional
 
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proxies in the event there are not sufficient votes at the time of the INSW special meeting to approve the INSW share issuance proposal, referred to as the INSW adjournment proposal.
Approval of the INSW share issuance proposal by INSW stockholders is required for completion of the merger.
Q:   What are Diamond S shareholders being asked to vote on?
A:   Diamond S shareholders are being asked to vote on the following proposals:
1.
Adoption of the Merger Agreement.   To vote on a proposal to adopt the merger agreement, which is further described in the section entitled “The Merger Agreement”, and a copy of which merger agreement is attached as Annex A to this joint proxy statement/prospectus, referred to as the Diamond S merger agreement proposal;
2.
Diamond S Merger-Related Compensation.   To vote on a proposal to approve, by advisory (non-binding) vote, certain compensation arrangements that may be paid or become payable to Diamond S’ named executive officers in connection with the merger contemplated by the merger agreement, referred to as the Diamond S merger-related compensation proposal; and
3.
Adjournment of the Diamond S Special Meeting.   To vote on a proposal to approve the adjournment of the Diamond S special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Diamond S special meeting to approve the Diamond S merger proposal, referred to as the Diamond S adjournment proposal.
Approval of the Diamond S merger proposal by Diamond S shareholders is required for completion of the merger.
Q:   What vote is required to approve each proposal at the INSW special meeting?
A:   The INSW Share Issuance Proposal:   The affirmative vote of the holders of a majority of the outstanding shares of INSW common stock present and entitled to vote (in person or by proxy) at the INSW special meeting is required to approve the INSW share issuance proposal.
The INSW Adjournment Proposal:   The affirmative vote of the holders of a majority of the outstanding shares of INSW common stock present and entitled to vote (in person or by proxy) at the INSW special meeting is required to approve the INSW adjournment proposal.
Q:   What vote is required to approve each of the proposals at the Diamond S special meeting?
A:   The Diamond S Merger Proposal:   The affirmative vote of the holders of at least a majority of the outstanding shares of Diamond S common stock entitled to vote (in person or by proxy) at the Diamond S special meeting is required to authorize and approve the Diamond S merger proposal.
The Diamond S Merger-Related Compensation Proposal:   The affirmative vote of the votes cast by holders outstanding shares of Diamond S common stock entitled to vote (in person or by proxy) at the Diamond S special meeting is required to approve the Diamond S merger-related compensation proposal.
The Diamond S Adjournment Proposal:   The affirmative vote of a majority of the votes cast by holders of outstanding shares of Diamond S common stock entitled to vote (in person or by proxy) at the Diamond S special meeting is required to approve the Diamond S adjournment proposal.
Q:   Why am I being asked to consider and vote on the Diamond S merger-related compensation proposal?
A:   Under SEC rules, Diamond S is required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to Diamond S’ named executive officers that is based on or otherwise relates to the merger, or “golden parachute” compensation.
 
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Q:   What happens if Diamond S shareholders do not approve, by non-binding, advisory vote, the Diamond S merger-related compensation proposal?
A:   The vote on the Diamond S merger-related compensation proposal is separate and apart from the votes to approve the other proposals being presented at the Diamond S special meeting. Because the vote on the Diamond S merger-related compensation proposal is advisory in nature only, it will not be binding on Diamond S, INSW or the combined company in the merger. Accordingly, the merger-related compensation will be paid to Diamond S’ named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if Diamond S shareholders do not approve the Diamond S merger-related compensation proposal.
Q:   Do any of INSW’s or Diamond S’ directors or executive officers have interests in the merger that may differ from those of INSW stockholders or Diamond S shareholders?
A:   Certain of INSW’s non-employee directors and executive officers and Diamond S’ non-employee directors and executive officers have certain interests in the merger that may be different from, or in addition to, the interests of INSW stockholders and Diamond S shareholders generally. The INSW Board was aware of the interests of INSW’s directors and executive officers, the Diamond S Board was aware of the interests of Diamond S’ directors and executive officers, and each board considered such interests when it approved the merger agreement and the transactions contemplated thereby and in making its recommendations to its respective stockholders or shareholders, as applicable. For more information regarding these interests, see sections entitled “The Merger — Interests of Certain of INSW’s Directors and Executive Officers in the Merger” and “The Merger — Interests of Diamond S’ Directors and Executive Officers in the Merger.”
Q:   How many votes do I have?
A:   Each INSW stockholder is entitled to one vote for each share of INSW common stock held of record as of the INSW record date and each Diamond S shareholder is entitled to one vote for each share of Diamond S common stock held of record as of the Diamond S record date.
As of the close of business on June 1, 2021, there were 28,087,011 shares of INSW common stock outstanding. As of the close of business on June 1, 2021, there were 40,612,811 shares of Diamond S common stock outstanding. As summarized below, there are some important distinctions between shares held of record and those owned beneficially in street name.
Q:   Are there any INSW stockholders who have already committed to voting in favor of any of the proposals at the INSW special meeting?
A:   Contemporaneously with the execution of the merger agreement, Diamond S entered into a voting and support agreement (a copy of which is attached as Annex D to this joint proxy statement/prospectus) with certain INSW stockholders affiliated with Cyrus Capital Partners, L.P. (collectively, the “Cyrus stockholders”), pursuant to which the Cyrus stockholders agreed, among other things, subject to the terms and conditions thereof, to vote all of the shares of INSW common stock held by the Cyrus stockholders as of such date in favor of the INSW share issuance proposal at the INSW special meeting. The Cyrus stockholders beneficially owned approximately 14.3% of the outstanding shares of INSW common stock as of June 1, 2021. For more information, please see “The Merger Agreement — Cyrus Support Agreement.”
Q:   Are there any Diamond S shareholders who have already committed to voting in favor of the proposals at the Diamond S special meeting?
A:   Contemporaneously with the execution of the merger agreement, INSW entered into voting and support agreements with certain Diamond S shareholders affiliated with WL Ross & Co., LLC (collectively, the “WL Ross shareholders”) (a copy of which is attached as Annex E to this joint proxy statement/prospectus) and certain Diamond S shareholders affiliated with Capital Maritime & Trading Corp. (“CMTC”) (collectively, the “Capital shareholders”) (a copy of which is attached as Annex F to this joint proxy statement/prospectus), pursuant to which the WL Ross shareholders and the Capital shareholders have each agreed, among other things, subject to the terms and conditions thereof, to vote all of the shares of Diamond S common stock held by the WL Ross shareholders and the Capital shareholders as of such date
 
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in favor of the Diamond S merger proposal and the approval of the transactions contemplated thereby, including the merger, at the Diamond S special meeting. For more information, please see “The Merger Agreement — WL Ross Support Agreement.” The Capital shareholders beneficially owned 6.9% of the outstanding shares of Diamond S common stock and the WL Ross shareholders beneficially owned 22% of the outstanding shares of Diamond S common stock as of June 1, 2021.
Q:   What constitutes a quorum for the INSW special meeting?
A:   The holders of a majority of the shares of INSW common stock outstanding as of the INSW record date and entitled to vote, present in person or by proxy, will constitute a quorum for the transaction of business at the INSW special meeting. Abstentions (which are described below) will count for purposes of determining the presence of a quorum for the transaction of business at the INSW special meeting.
Q:   What constitutes a quorum for the Diamond S special meeting?
A:   The holders of a majority of the shares of Diamond S common stock issued and outstanding as of the Diamond S record date and entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Diamond S special meeting. Abstentions (which are described below) will count for purposes of determining the presence of a quorum for the transaction of business at the Diamond S special meeting.
Q:   How does the INSW Board recommend that INSW stockholders vote?
A:   The INSW Board unanimously recommends that INSW stockholders vote: “FOR” the INSW share issuance proposal and “FOR” the INSW adjournment proposal.
Q:   How does the Diamond S Board recommend that Diamond S shareholders vote?
A:   The Diamond S Board recommends that Diamond S shareholders vote: “FOR” the Diamond S merger proposal, “FOR” the Diamond S merger-related compensation proposal and “FOR” the Diamond S adjournment proposal.
Q:   Why did the INSW Board approve the merger agreement and the transactions contemplated by the merger agreement, including the merger?
A:   For information regarding the INSW Board’s reasons for approving the merger agreement and the transactions contemplated by the merger agreement, including the merger, and recommending that INSW stockholders approve the INSW share issuance proposal, see the section entitled “The Merger — Recommendation of the INSW Board and its Reasons for the Transaction.”
Q:   Why did the Diamond S Board approve the merger agreement and the transactions contemplated by the merger agreement, including the merger?
A:   For information regarding the Diamond S Board’s reasons for approving and recommending the adoption of the merger agreement and the transactions contemplated by the merger agreement, including the merger, see the section entitled “The Merger — Recommendation of the Diamond S Board and its Reasons for the Transaction.”
Q:   What if I hold shares in both INSW and Diamond S?
A:   If you hold shares of both INSW common stock and Diamond S common stock, you will receive two separate packages of proxy materials. A vote cast as a holder of INSW common stock will not count as a vote of Diamond S common stock, and a vote of Diamond S common stock will not count as a vote of INSW common stock. Therefore, please submit separate proxies for your shares of INSW common stock and your shares of Diamond S common stock.
Q:   What do I need to do now?
A:   After carefully reading and considering the information contained in this joint proxy statement/prospectus, please vote your shares as soon as possible so that your shares will be represented at the INSW special meeting or Diamond S special meeting, as applicable. Please follow the instructions set forth on the
 
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INSW proxy card or Diamond S proxy card, as applicable, or on the voting instruction form provided by the record holder if your shares are held in the name if your bank, broker or other nominee.
If you are a Diamond S shareholder, please do not submit your stock certificates at this time. If the merger is completed, you will receive instructions for surrendering your stock certificates for shares of INSW common stock from the exchange agent.
Q:   Does my vote matter?
A:   Yes. The merger cannot be completed unless the INSW share issuance proposal is approved by the affirmative vote of a majority of the votes cast by holders of outstanding shares of INSW common stock entitled to vote (in person or by proxy) at the INSW special meeting and the Diamond S merger proposal is approved by the affirmative vote of the holders of a majority of the shares of Diamond S common stock issued and outstanding and entitled to vote (in person or by proxy) at the Diamond S special meeting.
Q:   How do I vote?
A:   If you are a record holder of INSW as of the INSW record date, you are entitled to receive notice of, and cast a vote at, the INSW special meeting. If you are a record holder of Diamond S as of the Diamond S record date, you are entitled to receive notice of, and cast a vote at, the Diamond S special meeting. Each holder of INSW common stock is entitled to cast one vote on each matter properly brought before the INSW special meeting for each share of INSW common stock that such holder owned of record as of the INSW record date. Each holder of Diamond S common stock is entitled to cast one vote on each matter properly brought before the Diamond S special meeting for each share of Diamond S common stock that such holder owned of record as of the Diamond S record date. You may submit your proxy before the INSW special meeting or the Diamond S special meeting in one of the following ways:

Telephone voting — use the toll-free number shown on your proxy card;

Via the Internet — visit the website shown on your proxy card to vote via the Internet; or

Mail — complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope.
If you are a INSW record holder, you may also cast your vote virtually at the INSW special meeting by following the instructions at www.proxyvote.com. If you decide to attend the INSW special meeting virtually and vote at the meeting, your vote will revoke any proxy previously submitted.
The INSW special meeting will begin promptly at 10:00 a.m., Eastern Time, on July 13, 2021. INSW encourages its stockholders to access the meeting prior to the start time leaving ample time for check-in. Please follow the instructions outlined in this joint proxy statement/prospectus.
If you are a Diamond S record holder, you may also cast your vote virtually at the Diamond S special meeting by following the instructions at www.proxyvote.com. If you decide to attend the Diamond S special meeting virtually and vote at the meeting, your vote will revoke any proxy previously submitted.
The Diamond S special meeting will begin promptly at 10:00 a.m., Eastern Time, on July 13, 2021. Diamond S encourages its shareholders to access the meeting prior to the start time leaving ample time for check-in. Please follow the instructions outlined in this joint proxy statement/prospectus.
Even if you attend the INSW special meeting or Diamond S special meeting virtually, INSW and Diamond S recommend that you vote your shares in advance as described above so that your vote will be counted if you later decide not to or become unable to attend the INSW special meeting or Diamond S special meeting, as applicable.
Your proxy card or a legal proxy is not an admission ticket. To obtain an admission ticket, record owners should go to www.proxyvote.com or call 1-800-690-6903. You will need to enter your 16-digit control number, which can be found on your voting instruction form or proxy card. Your 16-digit control number will pre-register you for the special meeting. If you have questions about admission to the Diamond S special meeting or INSW special meeting, please call 1-800-690-6903.
 
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If your shares are held in “street name,” through a bank, broker or other nominee, that institution will send you separate instructions describing the procedures for voting your shares.
Q:   What is the difference between holding shares as a record holder and as a beneficial owner?
A:   You are a “record holder” if your shares are registered directly in your name with INSW’s transfer agent, Computershare Trust Company, N.A., referred to as Computershare, or Diamond S’ transfer agent, which is also Computershare. As the record holder, you have the right to vote virtually at the INSW special meeting or the Diamond S special meeting, as applicable. You may also vote by Internet, telephone or mail, as described in the notice and above under the heading “How do I vote?”. You are deemed to beneficially own shares in “street name” if your shares are held by a bank, broker or other nominee. Your bank, broker or other nominee will send you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. If you beneficially own your shares, you are invited to attend the INSW special meeting or Diamond S special meeting, as applicable, virtually; however, you may not vote your shares in person at the INSW special meeting or the Diamond S special meeting, as applicable, unless you obtain a “legal proxy” from your bank, broker or other nominee that holds your shares, giving you the right to vote the shares at the INSW special meeting or the Diamond S special meeting, as applicable.
Q:   If my shares are held in “street name” by a bank, broker or other nominee, will my bank, broker or other nominee vote my shares for me?
A:   If your shares are held in “street name” by a bank, broker or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your bank, broker or other nominee. Please note that you may not vote shares held in street name by returning a proxy card directly to INSW or Diamond S, as applicable, or by voting virtually at the INSW special meeting or Diamond S special meeting, as applicable, unless you provide a “legal proxy,” which you must obtain from your bank, broker or other nominee. Your bank, broker or other nominee is obligated to provide you with a voting instruction card for you to use.
Banks, brokers or other nominees who hold shares in street name for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers or other nominees are not allowed to exercise their voting discretion with respect to the approval of matters determined to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at each of the INSW special meeting and the Diamond S special meeting are “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the bank, broker or other nominee does not have discretionary voting power.
If you are a beneficial owner of INSW common stock and you do not instruct your bank, broker or other nominee on how to vote your shares:

your bank, broker or other nominee may not vote your shares on the INSW share issuance proposal, which broker non-votes, if any, will have no effect on the outcome of such proposal; and

your bank, broker or other nominee may not vote your shares on the INSW adjournment proposal, which broker non-votes, if any, will have no effect on the outcome of such proposal.
If you are a beneficial owner of Diamond S common stock and you do not instruct your bank, broker or other nominee on how to vote our shares:

your bank, broker or other nominee may not vote your shares on the Diamond S merger proposal, which broker non-votes, if any, will have the same effect as a vote “AGAINST” such proposal;

your bank, broker or other nominee may not vote your shares on the Diamond S merger-related compensation proposal, which broker non-votes, if any, will have no effect on the outcome of such proposal; and

your bank, broker or other nominee may not vote your shares on the Diamond S adjournment proposal, which broker non-votes, if any, will have no effect on the outcome of such proposal.
 
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Q:   What if I fail to vote or abstain?
A:   For purposes of the INSW special meeting, an abstention occurs when a INSW stockholder attends the INSW special meeting virtually and does not vote or returns a proxy with an “abstain” instruction.
INSW Share Issuance Proposal:   An abstention will have the same effect as a vote cast “AGAINST” the INSW share issuance proposal. If a INSW stockholder is not present virtually at the INSW special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal.
INSW Adjournment Proposal:   An abstention will have the same effect as a vote cast “AGAINST” the INSW adjournment proposal. If a INSW stockholder is not present virtually at the INSW special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal.
For purposes of the Diamond S special meeting, an abstention occurs when a Diamond S shareholder attends the Diamond S special meeting virtually and does not vote or returns a proxy with an “abstain” instruction.
Diamond S Merger Proposal:   An abstention will have the same effect as a vote cast “AGAINST” the Diamond S merger proposal. If a Diamond S shareholder is not present virtually at the Diamond S special meeting and does not respond by proxy, it will have the effect of a vote cast “AGAINST” such proposal.
Diamond S Merger-Related Compensation Proposal:   An abstention will have the same effect as a vote cast “AGAINST” the Diamond S merger-related compensation proposal. If a Diamond S shareholder is not present virtually at the Diamond S special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal.
Diamond S Adjournment Proposal:   An abstention will have the same effect as a vote cast “AGAINST” the Diamond S adjournment proposal. If a Diamond S shareholder is not present virtually at the Diamond S special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal.
Q:   What will happen if I return my proxy or voting instruction card without indicating how to vote?
A:   If you sign and return your proxy or voting instruction card without indicating how to vote on any particular proposal, the common stock represented by your proxy will be voted as recommended by the INSW Board or the Diamond S Board, as applicable, with respect to that proposal.
Q:   May I change or revoke my vote after I have delivered my proxy or voting instruction card?
A:   Yes. If you are a record holder, you may change or revoke your vote before your proxy card is voted at the INSW special meeting or Diamond S special meeting, as applicable, as described herein. You may do so in one of the following four ways:

by logging onto the Internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card, in each case, if you are eligible to do so;

by sending a notice of revocation to the corporate secretary of INSW or Diamond S, as applicable;

by sending a completed proxy card bearing a later date than your original proxy card; or

by attending the INSW Special Meeting or the Diamond S Special Meeting virtually, as applicable, and voting.
If you choose any of the first three methods, you must take the described action no later than the beginning of the INSW special meeting or the Diamond S special meeting, as applicable.
If your shares are held in an account at a bank, broker or other nominee and you have delivered your voting instruction card or otherwise given instruction on how to vote your shares to your bank, broker or other nominee, you should contact your bank, broker or other nominee to change your vote.
 
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Q:   What are the material U.S. federal income tax consequences of the merger to holders of Diamond S common stock?
A:   It is intended that, for U.S. federal income tax purposes, (i) the merger qualify as a “reorganization” under Section 368(a) of the Code, to which each of INSW, Merger Sub, and Diamond S are parties under Section 368(b) of the Code, and (ii) the merger not result in the recognition of gain under Section 367(a)(1) of the Code (other than, in certain circumstances, a transfer by a holder of Diamond S common stock that is a United States person (as defined in Section 7701 of the Code) and that holds 5% or more by vote or by value (within the meaning of Treasury Regulations Section 1.367(a)¬-3(b)(1)(i)) of the INSW common stock outstanding immediately following the merger) (the “Intended Tax Treatment”). If the merger so qualifies, U.S. Holders (as defined below in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger”) of Diamond S common stock generally should not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of Diamond S common stock for INSW common stock. Although the parties will use commercially reasonable efforts to make such modifications or amendments to the structure as would permit the Intended Tax Treatment to be attained, the completion of the merger is not conditioned upon the receipt of an opinion of counsel to the effect that the merger qualifies for the Intended Tax Treatment. In addition, neither Diamond S nor INSW intends to request a ruling from the IRS regarding the U.S. federal income tax consequences of the merger. Accordingly, no assurance can be given that the IRS will not challenge the Intended Tax Treatment or that a court would not sustain such a challenge. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” and consult your own tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
Q:   Where can I find the voting results of the INSW special meeting and the Diamond S special meeting?
A:   The preliminary voting results will be announced at each of the INSW special meeting and the Diamond S special meeting. In addition, within four business days following certification of the final voting results, each of INSW and Diamond S intends to file the final voting results with the SEC on a Current Report on Form 8-K.
Q:   Are holders of INSW common stock or Diamond S common stock entitled to dissenters or appraisal rights?
A:   No. Holders of INSW common stock and holders of Diamond S common stock are not entitled to appraisal rights under the BCA. For more information, see the section entitled “The Merger — No Dissenters or Appraisal Rights.”
Q:   What happens if I sell my shares of INSW common stock after the INSW record date but before the INSW special meeting?
A:   The INSW record date for the INSW special meeting is earlier than the date of the INSW special meeting and earlier than the date that the merger is expected to be completed. If you sell or otherwise transfer your shares of INSW common stock after the INSW record date but before the date of the INSW special meeting, you will retain your right to vote at the INSW special meeting.
Q:   What happens if I sell my shares of Diamond S common stock after the Diamond S record date but before the Diamond S special meeting?
A:   The Diamond S record date for the Diamond S special meeting is earlier than the date of the Diamond S special meeting and earlier than the date that the merger is expected to be completed. If you sell or otherwise transfer your shares of Diamond S common stock after the Diamond S record date but before the date of the Diamond S special meeting, you will retain your right to vote at the Diamond S special meeting. However, you will not have the right to receive the merger consideration to be received by Diamond S shareholders in the merger. In order to receive the merger consideration, you must hold your shares through the completion of the merger.
 
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Q:   Are there any risks that I should consider in deciding whether to vote in favor of the INSW share issuance proposal or the Diamond S merger proposal, or the other proposals to be considered at the INSW special meeting or the Diamond S special meeting, as applicable?
A:   Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors.” You also should read and carefully consider the risk factors of INSW and Diamond S contained in the documents incorporated by reference into this joint proxy statement/prospectus.
Q:   What are the conditions to completion of the merger?
A:   In addition to the approval of the INSW share issuance proposal by the INSW stockholders and of the Diamond S merger proposal by the Diamond S shareholders as described above, completion of the merger is subject to the satisfaction or (to the extent permitted by law) waiver of a number of other conditions, including:

the expiration or termination of the applicable waiting period under the HSR Act;

the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part and the absence of any stop order suspecting the effectiveness of the Form S-4;

the approval of the listing on the NYSE of the INSW common stock forming part of the merger consideration, subject to official notice of issuance;

the absence of an injunction or law prohibiting the merger promulgated by a governmental entity of competent jurisdiction;

the execution and delivery by the required lenders of the each of the A&R debt agreements and the debt amendment letters and debt consents are in full force and effect;

the accuracy of the representations and warranties of INSW and Diamond S, as applicable, made in the merger agreement (subject to the materiality standards set forth in the merger agreement);

the performance by INSW or Diamond S, as applicable, of its pre-closing covenants and obligations under the merger agreement in all material respects; and

delivery of an officer certificate by the other party certifying the satisfaction of the conditions described in the preceding two bullet points.
Q:   Whom should I contact if I have any questions about the proxy materials or voting?
A:   If you have any questions about the proxy materials, or if you need assistance submitting your proxy or voting your shares or need additional copies of this joint proxy statement/prospectus or the enclosed INSW proxy card or Diamond S proxy card, as applicable, you should contact Innisfree M&A Incorporated, referred to as Innisfree, the proxy solicitation agent for INSW, at 501 Madison Avenue, 20th Floor; New York, NY 10022 or 877-687-1866 (for stockholders) or 212-750-5833 (for banks and brokers), or Okapi Partners LLC, referred to as Okapi, the proxy solicitation agent for Diamond S, at 1212 Avenue of the Americas, 24th Floor; New York, NY 10036 or by telephone at (212) 297-0720 or by email at info@okapipartners.com.
 
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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
For convenience, provided below is a brief summary of certain information in this joint proxy statement/prospectus. This summary highlights selected information from this joint proxy statement/prospectus and does not contain all of the information that may be important to you as a stockholder of INSW or a shareholder of Diamond S. To understand the merger fully and for a more complete description of the terms of the merger, you should read this entire joint proxy statement/prospectus carefully, including its annexes and the other documents to which you are referred. Additionally, important information, which you are urged to read, is contained in the documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.” Items in this summary include a page reference directing you to a more complete description of those items.
Parties to the Merger (See page 44)
International Seaways, Inc.
INSW owns and operates a fleet of oceangoing vessels engaged primarily in the transportation of crude oil and petroleum products in the International Flag trade. INSW’s vessel operations are organized into two segments: Crude Tankers and Product Carriers. At December 31, 2020, INSW owned or operated an International Flag fleet of 36 vessels (totaling an aggregate of 6.1 million deadweight tons — “dwt”). INSW Common Stock is publicly traded on the NYSE, under the ticker symbol “INSW.” INSW’s principal executive offices are located at 600 Third Avenue, 39th Floor, New York, New York 10016, and its telephone number is (212) 578-1600. INSW’s website address is www.intlseas.com. Information contained on INSW’s website does not constitute part of this joint proxy statement/prospectus.
Diamond S Shipping Inc.
Diamond S, together with its subsidiaries, is one of the largest publicly listed owners and operators of crude and product tankers in the world. Diamond S provides seaborne transportation of crude oil, refined petroleum and other products in the international shipping markets. As of June 1, 2021, Diamond S’ operating fleet consisted of 64 vessels with an aggregate carrying capacity of approximately 4.6 million dwt. Diamond S’ vessel operations are composed of two segments: crude tankers, which consists of 13 Suezmax vessels and one Aframax vessel, and product tankers, which consists of 50 medium range (“MR”) vessels.
Diamond S’ principal executive offices are located at 33 Benedict Place, Greenwich, Connecticut 06830, and its telephone number is (212) 517-0810. Diamond S’ website address is www.diamondsshipping.com. Information contained on Diamond S’ website does not constitute part of this joint proxy statement/prospectus. Diamond S’ stock is publicly traded on the NYSE, under the ticker symbol “DSSI.” Additional information about Diamond S is included in the documents incorporated by reference in this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information.”
Dispatch Transaction Sub, Inc.
Dispatch Transaction Sub, Inc., a wholly-owned subsidiary of INSW, is a Republic of Marshall Islands corporation incorporated on March 26, 2021 for the purpose of effecting the merger. Dispatch Transaction Sub, Inc. has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement. The principal executive offices of Dispatch Transaction Sub, Inc. are located at 600 Third Avenue, 39th Floor, New York, New York 10016, and its telephone number is (212) 578-1600.
The Merger and the Merger Agreement (See page 45 and 96)
The terms and conditions of the merger are contained in the merger agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus. You are encouraged to read the merger agreement carefully and in its entirety, as it is the primary legal document that governs the merger.
Pursuant to the merger agreement, Merger Sub will merge with and into Diamond S, the separate corporate existence of Merger Sub will cease and Diamond S will continue as the surviving corporation in
 
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the merger as a wholly owned subsidiary of INSW. Following the merger, Diamond S common stock will be delisted from the NYSE, will be deregistered under the Exchange Act and will cease to be publicly traded.
Merger Consideration (See page 96)
Subject to the terms and conditions set forth in the merger agreement, at the effective time, Diamond S shareholders will have the right to receive, with respect to each share of Diamond S common stock they hold at the effective time, 0.55375 validly issued, fully paid and non-assessable shares of INSW common stock, with cash paid in lieu of fractional shares of INSW common stock. The base exchange ratio will result in INSW stockholders owning approximately 55.75% of the outstanding shares of INSW common stock following the effective time and the pre-effective time Diamond S shareholders owning approximately 44.25% of the outstanding shares of INSW common stock following the effective time.
Unless INSW sells any interest in the FSO Joint Ventures prior to the closing of the merger and pays a special dividend to INSW stockholders from the proceeds of any such sale, the base exchange ratio is not subject to adjustment. The merger agreement does not contain any provision that would adjust the applicable exchange ratios based on fluctuations in the market value of either company’s common stock.
Fractional shares will not be issued in accordance with the merger. Any Diamond S shareholders that would have received a fractional share of INSW’s common stock based on the exchange ratio will instead receive an amount in cash equal to the product of such fractional part of a share of INSW’s common stock, multiplied by the volume-weighted average trading price of INSW common stock for the ten trading days preceding the date of the closing. It is expected that Cede & Co., as nominee for the Depository Trust Company, will be treated as a single holder for purposes of receiving cash in lieu of fractional shares.
The INSW Special Meeting (See page 121)
Time, Place and Purpose of the INSW Special Meeting
The INSW special meeting to consider and vote upon the INSW share issuance proposal and related matters will be held virtually at www.virtualshareholdermeeting.com/INSW2021SM, on July 13, 2021 at 10:00 a.m., Eastern Time. The INSW special meeting is being held to consider and vote on the following proposals:

to approve the INSW share issuance proposal; and

to approve the INSW adjournment proposal.
INSW Record Date and Quorum
You are entitled to receive notice of, and to vote at, the INSW special meeting if you are a record holder of shares of INSW common stock as of the close of business on June 11, 2021 the INSW record date. As of June 1, 2021, there were 28,087,011 shares of INSW common stock outstanding and entitled to vote. INSW stockholders will have one vote on all matters properly coming before the INSW special meeting for each share of INSW common stock owned by such stockholders on the INSW record date.
The INSW amended and restated by-laws provide that the holders of a majority of the shares of INSW common stock outstanding as of the INSW record date and entitled to vote, present in person (via the virtual meeting website) or by proxy, will constitute a quorum for the transaction of business at the INSW special meeting.
Vote Required
The INSW share issuance proposal requires the affirmative vote of the holders of a majority of the outstanding shares of INSW common stock present and entitled to vote at the INSW special meeting. If a INSW stockholder present virtually at the INSW special meeting abstains from voting, or responds by proxy with an “abstain” vote, it will have the same effect as a vote “AGAINST” such proposal. If a INSW stockholder is not present virtually at the INSW special meeting and does not respond by proxy or does not
 
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provide his, her or its bank, broker or other nominee with instructions, as applicable, it will have no effect on the vote count for such proposal.
The INSW adjournment proposal requires the affirmative vote of the holders of a majority of the outstanding shares of INSW common stock present and entitled to vote at the INSW special meeting. If a INSW stockholder present virtually at the INSW special meeting abstains from voting, or responds by proxy with an “abstain” vote, it will have the same effect as a vote “AGAINST” such proposal. If a INSW stockholder is not present virtually at the INSW special meeting and does not respond by proxy or does not provide his, her or its bank, broker or other nominee with instructions, as applicable, it will have no effect on the vote count for such proposal.
Proxies and Revocations
Any INSW record holder entitled to vote at the INSW special meeting may submit a proxy by telephone, over the Internet, by returning the enclosed INSW proxy card in the accompanying prepaid envelope or may vote in person by appearing virtually at the INSW special meeting. If your shares of INSW common stock are held in “street name” through a bank, broker or other nominee, you should instruct your bank, broker or other nominee on how to vote your shares of INSW common stock using the instructions provided by your bank, broker or other nominee.
Your proxy card or a legal proxy is not an admission ticket. To obtain an admission ticket, record owners should go to www.proxyvote.com or call 1-800-690-6903. You will need to enter your 16-digit control number, which can be found on your voting instruction form or proxy card. Our 16-digit control number will pre-register you for the special meeting. If you have questions about admission to the Diamond S special meeting or INSW special meeting, please call 1-800-690-6903.
If you are a record holder, you may change or revoke your vote before your proxy is voted at the INSW special meeting as described herein. You may do this in one of the following four ways: (1) by logging onto the Internet website specified on your INSW proxy card in the same manner you would to submit your proxy electronically; (2) by sending a notice of revocation to the corporate secretary of INSW; (3) by sending a completed INSW proxy card bearing a later date later than your original INSW proxy card; or (4) by attending the INSW special meeting virtually and voting. If you choose to revoke your proxy by phone or internet, you must take the described action no later than 11:59 p.m. on the day prior to the meeting. If you take any other method (other than attending the INSW special meeting virtually and voting), you must take the described action no later than the beginning of the INSW special meeting. A stockholder owning common stock in street name may revoke or change voting instructions by contacting the bank, brokerage firm, or other nominee holding the shares or by participating in and voting during the INSW special meeting.
Recommendation of the INSW Board and its Reasons for the Transaction (See page 57)
After careful consideration of various factors described in “The Merger — Recommendation of the INSW Board and its Reasons for the Transaction,” the INSW Board unanimously (1) declared that the merger agreement and consummation of the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of INSW and its stockholders, (2) approved the merger agreement and the transactions contemplated thereby, including the merger, (3) authorized the execution, delivery and performance of the merger agreement, (4) declared that the INSW share issuance proposal be submitted for consideration at the INSW special meeting, (5) recommended in favor of the INSW share issuance and (6) approved the inclusion of the recommendation in this joint proxy statement/ prospectus.
Accordingly, the INSW Board recommends that INSW stockholders vote:

FOR” the INSW share issuance proposal; and

FOR” the INSW adjournment proposal.
Opinion of INSW’s Financial Advisor (See page 61)
INSW retained Jefferies as its financial advisor in connection with a possible merger with Diamond S. In connection with this engagement, the INSW Board requested that Jefferies evaluate the fairness, from a
 
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financial point of view, of the base exchange ratio provided for in the merger pursuant to the merger agreement. At a meeting of the INSW Board held on March 30, 2021 to evaluate the merger, Jefferies rendered an oral opinion, confirmed by delivery of a written opinion dated March 30, 2021, to the INSW Board to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken as described in its opinion, the base exchange ratio provided for in the merger pursuant to the merger agreement was fair, from a financial point of view, to INSW.
The full text of Jefferies’ opinion, which describes various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Jefferies, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. Jefferies’ opinion was provided for the use and benefit of the INSW Board (in its capacity as such) in its consideration of the merger and did not address the relative merits of the transactions contemplated by the merger agreement as compared to any alternative transaction or opportunity that might be available to INSW, nor did it address the underlying business decision by INSW to engage in the merger or the terms of the merger agreement (other than the base exchange ratio to the extent expressly specified therein) or the documents referred to therein. The base exchange ratio is subject to adjustment pursuant to the merger agreement, as to which adjustment Jefferies expressed no opinion. Jefferies’ opinion did not constitute a recommendation as to how any holder of shares of INSW common stock should vote on the merger or any matter related thereto. See “The Merger — Opinion of INSW’s Financial Advisor.”
Interests of Certain INSW’s Directors and Executive Officers in the Merger (See page 87)
In considering the recommendations of the INSW Board that INSW stockholders vote “FOR” the INSW share issuance proposal, INSW stockholders should be aware that certain directors and executive officers of INSW have agreements or arrangements that provide them with interests in the merger that may be different from, or in addition to, the interests of the other stockholders of INSW. The INSW Board was aware of these interests when it approved the merger agreement and the transactions contemplated thereby and recommended that INSW’s stockholders vote “FOR” the INSW share issuance proposal. Such interests include the continued service of certain directors or executive officers of INSW as directors or executive officers of the combined company and are more fully summarized below.
The Diamond S Special Meeting (See page 128)
Time, Place and Purpose of the Diamond S Special Meeting
The Diamond S special meeting will be held solely as a virtual meeting via the Internet at www.virtualshareholdermeeting.com/DSSI2021SM, on July 13, 2021 at 10:00 a.m. Eastern Time.
At the Diamond S special meeting, the Diamond S shareholders will be asked to consider and vote upon (1) the Diamond S merger proposal, (2) the Diamond S advisory compensation proposal and (3) the Diamond S adjournment proposal.
Diamond S Record Date and Quorum
You are entitled to receive notice of, and to vote at, the Diamond S special meeting if you are an owner of record of shares of Diamond S common stock as of the close of business on June 11, 2021, the Diamond S record date. As of June 1, 2021, there were 40,612,811 shares of Diamond S common stock outstanding and entitled to vote. Diamond S shareholders will have one vote on all matters properly coming before the Diamond S special meeting for each share of Diamond S common stock owned by such Diamond S shareholders on the Diamond S record date.
The presence at the Diamond S special meeting of the holders of a majority of the shares issued and outstanding and entitled to vote at the Diamond S special meeting, present in person (via the virtual meeting website) or represented by proxy, will constitute a quorum for the transaction of business at the Diamond S special meeting.
 
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Vote Required
The Diamond S merger proposal requires the affirmative vote of holders of a majority of the outstanding shares of Diamond S common stock entitled to vote on the authorization of the merger agreement at the Diamond S special meeting in favor of such authorization. If a Diamond S shareholder present virtually at the Diamond S special meeting abstains from voting, responds by proxy with an “abstain” vote, is not present virtually at the Diamond S special meeting and does not respond by proxy or does not provide his, her or its bank, broker or other nominee with instructions, as applicable, it will have the effect of a vote cast “AGAINST” such proposal.
The Diamond S advisory compensation proposal requires the affirmative vote of holders of a majority of the shares of Diamond S common stock, represented in person (via the virtual meeting website) or by proxy at the Diamond S special meeting and entitled to vote at the Diamond S Special meeting, assuming a quorum is present. If a Diamond S shareholder present virtually at the Diamond S special meeting abstains from voting, or responds by proxy with an “abstain” vote, it will have the same effect as a vote cast “AGAINST” such proposal. If a Diamond S shareholder is not present virtually at the Diamond S special meeting and does not respond by proxy or does not provide his, her or its bank, broker or other nominee with instructions, as applicable, it will have no effect on the vote count for such proposal.
The Diamond S adjournment proposal requires the affirmative vote of a majority of the votes cast by holders of shares of Diamond S common stock represented in person (via the virtual meeting website) or by proxy at the Diamond S special meeting and entitled to vote at the Diamond S special meeting. If a Diamond S shareholder present virtually at the Diamond S special meeting abstains from voting, or responds by proxy with an “abstain” vote, it will have the same effect as a vote cast “AGAINST” such proposal. If a Diamond S shareholder is not present virtually at the Diamond S special meeting and does not respond by proxy or does not provide his, her or its bank, broker or other nominee with instructions, as applicable, it will have no effect on the vote count for such proposal.
Proxies and Revocations
Any Diamond S shareholder of record entitled to vote at the Diamond S special meeting may submit a proxy by telephone, over the Internet, by returning the enclosed Diamond S proxy card in the accompanying prepaid reply envelope or may vote in person by virtually attending the Diamond S special meeting. If your shares of Diamond S common stock are held in “street name” through a bank, broker or other nominee, you should instruct your bank, broker or other nominee on how to vote your shares of Diamond S common stock using the instructions provided by your bank, broker or other nominee.
Most Diamond S shareholders have a choice of voting over the Internet, by using a toll-free telephone number, or by returning a completed proxy card or voting instruction form. Please check your notice, proxy card or the information forwarded by your broker, bank, trust or other holder of record to understand which options are available to you. The Internet and telephone voting procedures have been designed to authenticate Diamond S shareholders, to allow you to vote your shares, and to confirm that your instructions have been properly recorded. The Internet and telephone voting facilities for Diamond S shareholders of record will close at 11:59 p.m. on July 12, 2021. If your shares are held through a broker, bank, trust or other holder of record and Internet or telephone facilities are made available to you, these facilities may close sooner than those for shareholders of record.
You can revoke your proxy at any time before it is exercised by delivering a properly executed, later-dated proxy (including an Internet or telephone vote) or by voting virtually at the Diamond S special meeting. Executing your proxy in advance will not limit your right to vote at the Diamond S special meeting if you decide to attend in person (via the virtual meeting website) by going to www.virtualshareholdermeeting.com/DSSI2021SM and using your 16-digit control number included on your proxy card, voting instruction form or notice you received. However, if your shares are held in the name of a broker, bank, trust or other holder of record, you cannot vote at the Diamond S special meeting unless you have a legal proxy, executed in your favor, from the holder of record.
All shares entitled to vote and represented by properly executed proxies received prior to the Diamond S special meeting and not revoked will be voted at the Diamond S special meeting in accordance with your
 
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instructions. If you sign and return your proxy but do not indicate how your shares should be voted on a proposal, the shares represented by your proxy will be voted as the Diamond S Board recommends for such proposal.
If you are a record holder, you may change or revoke your vote before your proxy is voted at the Diamond S special meeting as described herein. You may do this in one of the following four ways: (1) by logging onto the Internet website specified on your Diamond S proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your Diamond S proxy card, in each case, if you are eligible to do so; (2) by sending a notice of revocation to the Corporate Secretary of Diamond S; (3) by sending a completed Diamond S proxy card bearing a later date than your original Diamond S proxy card; or (4) by virtually attending the Diamond S special meeting in person and voting through the virtual meeting website during the Diamond S special meeting. Shareholders of record may vote shares held in their name by going to www.proxyvote.com and using your 16-digit control number included on your proxy card, voting instruction form or notice you received. If you choose any of the first three methods, you must take the described action no later than the beginning of the Diamond S special meeting.
Recommendation of the Diamond S Board and its Reasons for the Transaction (See page 70)
After careful consideration of various factors described in “The Merger — Recommendation of the Diamond S Board and its Reasons for the Transaction,” the Diamond S Board unanimously determined that the merger agreement and the transactions contemplated by the merger agreement (including the merger) are fair to and in the best interests of Diamond S and its shareholders, and the Diamond S Board unanimously recommended that holders of Diamond S common stock vote:
“FOR” the Diamond S Merger Proposal;
“FOR” the Diamond S Advisory Compensation Proposal; and
“FOR” the Diamond S Adjournment Proposal, if necessary to solicit additional proxies if there are not sufficient votes to authorize and approve the merger agreement at the time of the Diamond S special meeting or any adjournment thereof.
Opinion of Diamond S’ Financial Advisor (See page 73)
At the meeting of Diamond S’ board of directors on March 30, 2021 to evaluate and approve the merger, Moelis delivered an oral opinion, which was confirmed by delivery of a written opinion, dated March 30, 2021, addressed to Diamond S’ board of directors to the effect that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and other limitations set forth in the opinion, the base exchange ratio provided for in the merger pursuant to the merger agreement was fair, from a financial point of view, to the holders of Diamond S common stock, other than INSW and its affiliates.
The full text of Moelis’ written opinion dated March 30, 2021, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex C to this joint proxy statement/prospectus and is incorporated herein by reference. Moelis’ opinion was provided for the use and benefit of Diamond S’ board of directors (solely in its capacity as such) in its evaluation of the merger. Moelis’ opinion was limited solely to the fairness, from a financial point of view, to the holders of Diamond S common stock, other than INSW and its affiliates, of the base exchange ratio in the merger. Moelis’ opinion does not address Diamond S’ underlying business decision to effect the merger, or the relative merits of the merger as compared to any alternative business strategies or transactions that might be available with respect to Diamond S. Moelis’ opinion does not constitute a recommendation to any holder of securities as to how such holder should vote or act with respect to the merger or any other matter.
Interests of Diamond S’ Directors and Executive Officers in the Merger (See page 88)
In considering the recommendations of the Diamond S Board that Diamond S shareholders vote “FOR” the Diamond S merger proposal, Diamond S shareholders should be aware that certain directors and executive officers of Diamond S have agreements or arrangements that provide them with interests in the merger that may be different from, or in addition to, the interests of the other shareholders of Diamond S.
 
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The Diamond S Board was aware of these interests when it approved the merger agreement and the transactions contemplated thereby and recommended that Diamond S shareholders vote “FOR” the Diamond S merger proposal. Such interests include the following and are more fully summarized below:

Three directors of Diamond S, including Craig H. Stevenson, Jr., the current chief executive officer of Diamond S, will become directors of the combined company and Mr. Stevenson will serve as a special advisor to INSW’s chief executive officer for a six-month period following the completion of the merger for which he is expected to be paid $500,000;

Diamond S’ executive officers have entered into individual agreements that provide for certain severance protections upon a qualifying termination;

Diamond S’ executive officers have entered into individual equity award agreements that provide for acceleration of vesting upon a qualifying termination;

Diamond S’ directors have entered into individual equity award agreements that provide for acceleration of vesting upon a change in control;

Diamond S’ executive officers may enter into new arrangements prior to or following the closing; and

Diamond S’ directors and executive officers are entitled to continued indemnification and insurance coverage under the merger agreement.
Treatment of Diamond S’ Equity Awards (See page 97)
As of the effective time, each outstanding restricted stock unit (the “Diamond S RSUs”) under the Diamond S Shipping Inc. 2019 Equity and Incentive Plan, (the “Diamond S Equity Plan”) that is not then vested and does not vest at the effective time will be assumed by INSW and converted into a restricted stock unit award for capital stock of INSW (the “INSW RSUs”) with associated rights to the issuance of additional capital stock of INSW common stock. Each assumed and converted INSW RSU will vest in full (at the target level, with respect to any Diamond S RSUs subject to performance-based vesting criteria) on the holder’s termination of employment without “cause” or for “good reason” ​(as each such term is defined in the applicable award agreement) within twenty four (24) months following the closing date, and otherwise continue to have, and will be subject to, the same terms and conditions as applied to the applicable Diamond S RSUs immediately prior to the effective time of the merger (but taking into account any changes thereto, including any necessary changes to any issuance provisions, provided for or permitted in the Diamond S Equity Plan, in any applicable award agreement or in such Diamond S RSUs, by reason of the merger agreement or the consummation of the transactions contemplated thereby). To the extent any such Diamond S RSUs are subject to performance vesting or other performance conditions, following the effective time, such awards will be deemed to have achieved at least the target level of performance. As of the effective time, the number of shares of INSW common stock underlying each such INSW RSU as so assumed and converted (rounded (x) up to the nearest whole share if half a share or more or (y) down to the nearest whole share if less than half a share) will equal the product of (i) the number of shares of Diamond S common stock subject to such award, multiplied by (ii) the exchange ratio set forth in the merger agreement.
As of the effective time, INSW will assume and convert into restricted shares of INSW (“INSW Restricted Shares”) each outstanding share of restricted stock (collectively, the “Diamond S Restricted Shares”) granted under the Diamond S Equity Plan that is not then vested and does not vest at the effective time. Each assumed and converted INSW Restricted Share will continue to have, and will be subject to, the same terms and conditions as applied to the applicable Diamond S Restricted Shares immediately prior to the effective time (but taking into account any changes provided for in the Diamond S Equity Plan, in any applicable award agreement or in such Diamond S Restricted Shares, by reason of the merger agreement or the consummation of the transactions contemplated thereby). As of the effective time, the number of shares of INSW common stock underlying each such INSW Restricted Share as so assumed and converted (rounded (x) up to the nearest whole share if half a share or more or (y) down to the nearest whole share if less than half a share) will equal the product of (i) the number of shares of Diamond S common stock subject to such award, multiplied by (ii) the exchange ratio set forth in the merger agreement.
 
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Treatment of Indebtedness (See page 93)
It is expected that at the completion of the merger, Diamond S will have approximately $625.6 million plus an additional $30 million expected to be drawn down prior to the closing of indebtedness outstanding that INSW will maintain following completion of the merger. The lenders under Diamond S’ applicable credit agreements related to such indebtedness have agreed to waive any event of default that would arise as a result of the merger and waive certain past events of default. For more information see “Indebtedness Amendments.”
It is expected that INSW’s debt will also remain outstanding following completion of the merger.
Ownership of INSW after the Merger (See page 96)
As of the date of this joint proxy statement/prospectus, based on the base exchange ratio, the number of outstanding shares of Diamond S common stock (plus the number of shares underlying outstanding Diamond S equity awards) and the number of outstanding shares of INSW common stock, and assuming that INSW does not declare and pay the INSW FSO dividend, it is estimated that INSW stockholders will own approximately 55.75% and Diamond S shareholders will own approximately 44.25% of the issued and outstanding shares of INSW common stock on a fully diluted basis immediately following the effective time.
Governance of the Combined Company after the Merger (See page 93)
Directors
The merger agreement provides that following the effective time, that the combined company will have a board of directors consisting initially of ten directors comprised of (i) a chairman, designated by INSW, who is expected to be Douglas D. Wheat, (ii) six additional directors, designated by INSW that are reasonably acceptable to Diamond S, one of whom is expected to be Lois K. Zabrocky and the remainder of whom are expected to be current INSW directors, and (iii) three additional directors, designated by Diamond S that are reasonably acceptable to INSW, one of whom is expected to be Craig H. Stevenson, Jr., and the remainder of whom are expected to be current Diamond S directors. In connection with the merger, the Capital stockholders (as defined below) and the WL Ross stockholders (as defined below) agreed to terminate their existing director designation agreements with Diamond S. As a result, no stockholder of the combined company will have a contractual right to designate a director to the board of directors of the combined company.
Officers
The merger agreement provides that the officers of Merger Sub immediately prior to the effective time will become the officers of Diamond S following the effective time.
It is expected that the officers of INSW will remain in place following the effective time. Craig H. Stevenson, Jr., the current chief executive officer of Diamond S, will join the INSW Board and serve as a special advisor to INSW’s chief executive officer for a 6-month period following the completion of the merger. Mr. Stevenson is expected to be paid $500,000 for his role as special advisor.
Conditions to the Completion of the Merger (See page 111)
In addition to the approval of the INSW share issuance proposal by the INSW stockholders and of the Diamond S merger proposal by the Diamond S shareholders, completion of the merger is subject to the satisfaction or (to the extent permitted by law) waiver of a number of other conditions, including:

the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part and the absence of any stop order suspending the effectiveness of the Form S-4;

the absence of an adverse law or order or injunction prohibiting the merger or the transactions contemplated by the merger agreement, promulgated or issued by a governmental entity of competent jurisdiction;
 
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the expiration or termination of all applicable waiting periods relating to the merger under the HSR Act;

the approval of the listing on the NYSE of the shares of INSW common stock to be issued in the merger as merger consideration, subject to official notice of issuance;

the execution and delivery of the A&R debt agreements by the required lenders and the effectiveness of the A&R debt agreements and debt consents (including all amendments contemplated thereunder);

the accuracy of the representations and warranties of Diamond S and INSW, as applicable, made in the merger agreement (subject to the materiality standards set forth in the merger agreement);

the performance by Diamond S and INSW, as applicable, of its pre-closing covenants and obligations under the merger agreement in all material respects; and

the delivery to INSW or Diamond S, as applicable, of a certificate signed on behalf of Diamond S or INSW, as applicable by a duly authorized executive officer of Diamond S or INSW, as applicable, to such effect.
For a more complete description of the conditions to the merger, see “The Merger Agreement —  Conditions to the Completion of the Merger.”
Agreement Not to Solicit Other Offers (See page 107)
Diamond S and INSW have each agreed not to, and to cause their respective controlled affiliates and its and their respective officers, directors, employees and representatives not to, directly or indirectly:

solicit, initiate or knowingly encourage or knowingly facilitate any inquiry, proposal or offer, or the making, submission, modification or amendment or announcement of any inquiry, proposal or offer (including any inquiry, proposal or offer to its shareholders) which constitutes or would be reasonably expected to lead to a competing proposal;

participate in or engage in any negotiations or discussions (other than to state that they are not permitted to have discussions) regarding, or furnish to any person any nonpublic information relating to Diamond S, INSW or any of their respective subsidiaries in connection with, any inquiry, proposal or offer which constitutes or would be reasonably expected to lead to a competing proposal;

except in the event the Diamond S Board or INSW Board has determined in good faith after consultation with outside legal counsel that the failure to take such action would be reasonably likely to constitute a breach of the fiduciary duties of the members of the Diamond S Board or INSW Board under applicable Republic of the Marshall Islands law, waive, terminate, modify or release any person (other than Diamond S or INSW, Merger Sub or any of their respective subsidiaries) from any provision of, or grant any permission, waiver or request under, or fail to enforce, any “standstill” or similar agreement or obligation;

approve or recommend, propose publicly to approve or recommend, or fail to timely publicly and without qualification recommend against, any Diamond S or INSW competing proposal and reaffirm the Diamond S Board or INSW Board recommendation, in each case, within ten business days after the Diamond S or INSW competing proposal is made public (including upon request of the other party to do so) (or such fewer number of days as remains prior to the date that is two business days prior to the Diamond S special meeting or INSW special meeting);

fail to include the Diamond S Board or INSW Board recommendation in the joint proxy statement/prospectus;

withdraw, change, amend, modify or qualify, or otherwise propose publicly to withdraw, change, amend, modify or qualify, in a manner adverse to Diamond S or INSW, their respective board recommendation;

enter into any letter of intent or other document or agreement relating to, or any agreement or commitment providing for, any Diamond S or INSW competing proposal, other than a confidentiality agreement contemplated by the merger agreement; or
 
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resolve or agree to do any of the foregoing acts or failures to act described in bullet points four through seven (which is referred to as a board recommendation change).
Notwithstanding these limitations, the merger agreement provides that, if, at any time prior to obtaining the Diamond S shareholder approval or the INSW stockholder approval, Diamond S or INSW receives a proposal that the Diamond S Board or INSW Board, as applicable, determines in good faith (after consultation with its outside counsel and financial advisors) constitutes or would reasonably be expected to result in a “superior proposal” ​(as defined below) and which did not result from a breach of the non-solicitation obligations set forth in the merger agreement, then Diamond S or INSW, as applicable, may (a) furnish nonpublic information that was previously furnished to the other party to the person making such competing proposal, if, and only if, prior to so furnishing such information, Diamond S or INSW receives from such person an executed confidentiality agreement (and provides a copy of such confidentiality agreement to the other party) and (b) engage in discussions or negotiations with such person with respect to the Diamond S or INSW competing proposal.
The merger agreement also requires each party to (1) notify the other party promptly, and in any event within 24 hours of receipt, of any request for information or proposal relating to an alternative transaction, the material terms and conditions of such request or proposal (including any changes thereto) and the identity of the person making such request or proposal, (2) provide the other party, as soon as reasonably practicable, copies of all correspondence and other written materials exchanged with the person making such request or proposal or its representatives that describes or contains any such request or proposal and (3) keep the other party reasonably informed of the status and details (including amendments or proposed amendments) of any such request or proposal on a reasonably current basis.
For purposes of the merger agreement, a “superior proposal” means any bona fide, unsolicited written proposal (on its most recently amended or modified terms, if amended or modified) made by a third party to enter into an alternative transaction (with references to 20% and 80% being deemed to be replaced with references to 50%) that, taking into account all financial, regulatory, legal and other aspects of such proposal and whether the proposal is fully financed, as well as the identity of the person making the competing proposal, (1) is more favorable to the stockholders of Diamond S or INSW from a financial point of view than the merger, taking into account all relevant factors (including any adjustment to the terms and conditions proposed by Diamond S or INSW in response to such proposal), and (2) is reasonably capable of being completed as proposed on a timely basis.
Prior to Diamond S or INSW making a change of recommendation, Diamond S or INSW will provide the other with five business days’ prior written notice (it being understood and agreed that any material amendment to the applicable competing proposal will require a new notice and an additional two business day period) advising INSW or Diamond S that its board of directors intends to take such action and contemporaneously providing the other party with a copy of the superior proposal, a copy of any proposed agreements for such superior proposal (including any financing commitments related thereto) and indicating the identity of the person making such competing proposal (or, in each case, if not provided in writing, a written summary of the terms thereof), and during such initial five business day or subsequent two business day period, (a) Diamond S or INSW will negotiate, and cause its representatives to negotiate, with the other party and its representatives in good faith (to the extent that the other party wishes to negotiate) to enable the other party to determine whether to propose revisions to the terms of the merger agreement or any other agreement related to the transactions such that the competing proposal would no longer constitute a superior proposal and (b) Diamond S or INSW will consider in good faith any proposal by the other party to amend the terms and conditions of the merger agreement or any other agreement related to the transactions such that such competing proposal would no longer constitute a superior proposal.
For a more complete description of the limitations on the solicitation of transaction proposals from third parties, see “The Merger Agreement — Agreement Not to Solicit Other Offers.”
Termination of the Merger Agreement (See page 112)
The merger agreement may be terminated, and the merger and the other transactions may be abandoned, at any time prior to the completion of the merger under the following circumstances:

by mutual written consent of INSW and Diamond S;
 
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by either INSW or Diamond S:

if there has been a breach by Diamond S, on the one hand, or INSW or Merger Sub, on the other hand, of any representation, warranty, covenant or agreement set forth in the merger agreement, which breach would result in the contemplated merger conditions not being satisfied (and such breach is not curable prior to 5:00 p.m., Eastern Time, on November 1, 2021 (referred to as the “outside date”) or if curable prior to such date, has not been cured within the earlier of (a) 30 calendar days after the receipt of written notice thereof by the breaching party from the non-breaching party or (b) four business days before the outside date); provided, however, the merger agreement may not be terminated by any party if such party is then in material breach of any representation, warranty, covenant or agreement set forth in the merger agreement;

if the merger is not completed by the outside date; provided that the right to terminate the merger agreement is not available to any party whose material breach of any representation, warranty, covenant or agreement set forth in the merger agreement has been the cause of, or resulted in, the merger not being completed prior to the outside date;

if at any time prior to the receipt of the Diamond S shareholder approval or INSW stockholder approval or the Diamond S Board, INSW Board or committees thereof make a change of recommendation or the party willfully breaches the solicitation provisions of the merger agreement (referred to as a “triggering event”) (the party whose triggering event occurs has the right to terminate the agreement);

if a governmental entity of competent jurisdiction has issued a final, non-appealable (or no longer appealable) order, injunction, decree, ruling or law in each case permanently restraining, enjoining or otherwise prohibiting the consummation of the merger, provided that this right to terminate the merger is not be available to a party if any such order, injunction, decree, ruling or law was due to the material breach by such party of any representation, warranty, covenant or agreement set forth in the merger agreement; or

if the Diamond S shareholder approval or INSW stockholder approval has not been obtained at either of the special meetings or at any adjournment or postponement thereof, in each case at which a vote on such approval was taken;

by Diamond S, if prior to obtaining the INSW stockholder approval, the INSW Board effected a change of recommendation in order to accept a superior proposal, entered into a superior proposal acquisition agreement with respect to the superior proposal concurrently with the termination of the merger agreement and paid the termination fee to the other party, as described below; or

by INSW, if prior to obtaining the Diamond S shareholder approval, the Diamond S Board effected a change of recommendation in order to accept a superior proposal, entered into a superior proposal acquisition agreement with respect to the superior proposal concurrently with the termination of the merger agreement and paid the termination fee to the other party, as described below.
Generally, all fees and expenses incurred in connection with the merger, the merger agreement and the other transactions will be paid by the party incurring such expenses, whether or not the merger is consummated. However, upon a termination of the merger agreement, a party will become obligated to pay the other party a termination fee in the following circumstances:
Diamond S will be obligated to pay a termination fee of $17 million in cash to INSW if:

Diamond S terminates the merger agreement after the Diamond S Board effects a change of recommendation in order to accept a superior proposal and enters into a superior proposal acquisition agreement with respect to the superior proposal concurrently with the termination of the merger agreement;

The merger agreement is terminated for any of the reasons listed below and either (1) any Diamond S competing proposal is consummated within 12 months of such termination or (2) Diamond S enters into a definitive agreement providing for a Diamond S competing proposal within 12 months of such termination and such Diamond S competing proposal is subsequently consummated:
 
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by INSW as a result of a material breach by Diamond S of the merger agreement and a Diamond S competing proposal is made or a Diamond S inquiry is made prior to the time giving rise to such termination;

(i) by INSW or Diamond S because the merger is not completed by the outside date, (ii) a Diamond S competing proposal is made or a Diamond S inquiry is made prior to the outside date and (iii) either (A) Diamond S breaches the merger agreement following the date of the Diamond S competing proposal or inquiry in a manner that contributed in a material respect to the failure of the merger completion by the outside date or (B) the INSW stockholder approval was obtained but the Diamond S shareholder approval was not obtained; or

by INSW or Diamond S because the Diamond S shareholder approval is not obtained and a Diamond S competing proposal or inquiry is made and not publicly, irrevocably withdrawn at least five business days prior to the date of the Diamond S special meeting; or

The merger agreement is terminated by INSW after the Diamond S Board changes its recommendation or Diamond S willfully breaches the non-solicitation covenant.
INSW will be obligated to pay a termination fee of $19 million in cash to Diamond S if:

INSW terminates the merger agreement after the INSW Board effects a change of recommendation in order to accept a superior proposal and enters into a superior proposal acquisition agreement with respect to the superior proposal concurrently with the termination of the merger agreement;

The merger agreement is terminated for any of the reasons listed below and either (1) any INSW competing proposal is consummated within 12 months of such termination or (2) INSW enters into a definitive agreement providing for a INSW competing proposal within 12 months of such termination and such INSW competing proposal is subsequently consummated:

by Diamond S as a result of a material breach by INSW of the merger agreement and a INSW competing proposal is made or a INSW inquiry is made prior to the time giving rise to such termination;

(i) by INSW or Diamond S because the merger is not completed by the outside date, (ii) a INSW competing proposal is made or a INSW inquiry is made prior to the outside date and (iii) either (A) INSW breaches the merger agreement following the date of the Diamond S competing proposal or inquiry in a manner that contributed in a material respect to the failure of the merger completion by the outside date or (B) the Diamond S shareholder approval was obtained but the INSW stockholder approval was not obtained; or

by INSW or Diamond S because the INSW stockholder approval is not obtained and a Diamond S competing proposal or inquiry is made and not publicly, irrevocably withdrawn at least five business days prior to the date of the INSW special meeting; or

if the merger agreement is terminated by Diamond S after the INSW Board changes its recommendation or INSW willfully breaches the non-solicitation covenant.
For a more complete description of each party’s termination rights and the related termination fee obligations, see “The Merger Agreement — Termination of the Merger Agreement” and “The Merger Agreement — Expenses and Termination Fee.”
Accounting Treatment (See page 94)
INSW prepares its financial statements in accordance with GAAP. The merger is expected to be accounted for as an acquisition of Diamond S by INSW under the asset acquisition method of accounting in accordance with GAAP. INSW will be treated as the acquiror for accounting purposes.
Material U.S. Federal Income Tax Consequences of the Merger (See page 151)
It is intended that, for U.S. federal income tax purposes, the merger qualifies for the Intended Tax Treatment. If the merger so qualifies, U.S. Holders (as defined below in the section entitled “Material U.S.
 
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Federal Income Tax Consequences of the Merger”) of Diamond S common stock generally should not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of Diamond S common stock for INSW common stock. However, the completion of the merger is not conditioned upon the receipt of an opinion of counsel to the effect that the merger qualifies for the Intended Tax Treatment. In addition, neither Diamond S nor INSW intends to request a ruling from the IRS regarding the U.S. federal income tax consequences of the merger. Accordingly, no assurance can be given that the IRS will not challenge the Intended Tax Treatment or that a court would not sustain such a challenge. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” and consult your own tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
Fractional Shares (See page 97)
No fractional share of INSW common stock will be issued upon the surrender for exchange of certificates or book-entry shares, and such fractional share interests will not entitle the owner thereof to any INSW common stock or to vote or any other rights the rights of a INSW stockholder. Each holder of shares of Diamond S common stock converted pursuant to the merger who would otherwise have been entitled to receive a fraction of a INSW share will receive, in lieu thereof, cash (without interest). It is expected that Cede & Co., as nominee for the Depository Trust Company, will be treated as a single holder for purposes of paying cash in lieu of fractional shares.
Rights of Diamond S Shareholders Will Change as a Result of the Merger (See page 163)
Diamond S shareholders will have different rights once they become INSW stockholders due to differences between the organizational documents of INSW and Diamond S. These differences are described in more detail in the section entitled “Comparison of the Rights of Combined Company Stockholders and Diamond S Shareholders”.
Listing of INSW’s Common Stock; Delisting and Deregistration of Diamond S Common Stock (See page 93)
Under the merger agreement, INSW is required to take all action necessary to cause the shares of INSW common stock issued as merger consideration to be approved on the NYSE prior to the effective time, subject to official notice of issuance. This approval is a condition to the closing of the merger.
If the merger is completed, Diamond S common stock will cease to be listed on the NYSE and Diamond S common stock will be deregistered under the Exchange Act.
Regulatory Matters (See page 94)
Under the HSR Act and related rules, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the Antitrust Division and the U.S. Federal Trade Commission (“FTC”) and all statutory waiting period requirements have been satisfied. Completion of the merger is subject to the expiration or earlier termination of the applicable waiting period under the HSR Act. INSW and Diamond S each filed their respective HSR Act notification forms on April 21, 2021 and the waiting period under the HSR Act expired on May 21, 2021.
Emerging Growth Company Status
INSW qualifies as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. INSW does not intend to take advantage of the exemptions from various reporting requirements that are applicable to other public companies that are emerging growth companies. Such exemptions include, but are not limited to, scaled disclosure provisions with respect to financial information and executive compensation, compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the requirements to hold a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. Under the JOBS Act, INSW retains the ability to take advantage of these reporting exemptions until it is no longer considered an emerging growth company, which for INSW could be until December 31, 2021, which is the last day of the fiscal year in which the fifth anniversary of INSW's listing took place.
 
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In addition, Section 107 of the JOBS Act provides that an emerging growth company may take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards applicable to public companies. In other words, INSW may delay adopting new or revised accounting standards until such time as those standards apply to private companies. INSW has elected not to take advantage of this extended transition period, and our election is irrevocable pursuant to Section 107(b) of the JOBS Act.
Risk Factors (See page 26)
You should consider all the information contained in or incorporated by reference into this joint proxy statement/prospectus in deciding how to vote for the proposals presented in this joint proxy statement/prospectus. In particular, you should carefully consider the risks that are described in the section entitled “Risk Factors.”
Timing of the Transaction (See page 95)
The merger is expected to be completed in the third quarter of 2021 after the Diamond S special meeting and the INSW special meeting (assuming the Diamond S shareholder approval and the INSW stockholder approval are obtained at the respective special meetings). Neither Diamond S nor INSW can predict, however, the actual date on which the merger will be completed because it is subject to conditions beyond each company’s control, including obtaining necessary regulatory approvals. See “The Merger Agreement — Conditions to the Completion of the Merger.”
Support Agreements (See page 115, 116 and 116)
Cyrus Support Agreement
Contemporaneously with the execution of the merger agreement, Diamond S entered into the Cyrus Support Agreement (a copy of which is attached as Annex D to this joint proxy statement/prospectus) with certain INSW stockholders affiliated with Cyrus Capital Partners, L.P., pursuant to which the Cyrus stockholders (as defined below) agreed, among other things, subject to the terms and conditions thereof, to vote all of the shares of INSW common stock held by the Cyrus stockholders as of such date in favor of the INSW share issuance proposal at the INSW special meeting. The Cyrus stockholders beneficially owned approximately 14.3% of the outstanding shares of INSW common stock as of June 1, 2021. For more information, see “The Merger Agreement — Cyrus Support Agreement.”
WL Ross Support Agreement
Contemporaneously with the execution of the merger agreement, INSW entered into the WL Ross Support Agreement (a copy of which is attached as Annex E to this joint proxy statement/prospectus) with certain Diamond S shareholders affiliated with WL Ross & Co., LLC, pursuant to which the WL Ross shareholders (as defined below) agreed, among other things, subject to the terms and conditions thereof, to vote all of the shares of Diamond S common stock held by the WL Ross shareholders as of such date in favor of the Diamond S merger proposal and the approval of the transactions contemplated thereby, including the merger, at the Diamond S special meeting. The WL Ross shareholders beneficially owned 22% of the outstanding shares of Diamond S common stock as of June 1, 2021. For more information, please see “The Merger Agreement — WL Ross Support Agreement.”
Capital Support Agreement
Contemporaneously with the execution of the merger agreement, INSW entered into the Capital Support Agreement (a copy of which is attached as Annex F to this joint proxy statement/prospectus) with certain Diamond S shareholders affiliated with CMTC, pursuant to which the Capital shareholders (as defined below) agreed, among other things, subject to the terms and conditions thereof, to vote all of the shares of Diamond S common stock held by the Capital shareholders as of such date in favor of the Diamond S merger proposal and the approval of the transactions contemplated thereby, including the merger, at the Diamond
 
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S special meeting. The Capital shareholders beneficially owned 6.9% of the outstanding shares of Diamond S common stock as of June 1, 2021. For more information, please see “The Merger Agreement — Capital Support Agreement.”
Capital Termination Agreement (See page 117)
Concurrently with the execution and delivery of the merger agreement, Diamond S entered into a termination agreement with CSMC (the “Capital termination agreement”), dated as of March 30, 2021, whereby, upon the completion of certain events and obligations, including consummation of the merger, the following managerial agreements will be terminated: (i) commercial management agreement, dated as of March 27, 2019, by and between Diamond S and CSMC; (ii) management and services agreement, dated as of March 27, 2019, by and between Diamond S and CSMC; and (iii) each technical management agreement, dated as of March 27, 2019, by and between certain Diamond S vessel-owning subsidiaries and CSMC (also referred to as part II shipman 2009 standard ship management agreement).
Pursuant to the Capital termination agreement, at the effective time, Diamond S will (i) pay, or cause to be paid to CSMC, an amount equal to $30 million minus a certain specified termination fee adjustment amount and (ii) deliver, or cause to be delivered, an amount equal to $4 million minus a certain specified adjustment amount, to be held in escrow and distributed to CSMC on the first day on which certain vessels currently managed by CSMC have been transitioned.
The Capital termination agreement provides that, with respect to each vessel managed by CSMC that is on a time charter, the parties will jointly approach the time charterers to agree to a change in technical management as soon as reasonably practicable following the effective time. However, if an earlier transition cannot be agreed upon, then CSMC will provide technical management services to such vessel through the end of the time charter and, if necessary, for a period of time until a transition is reasonably practicable. In addition, CSMC has agreed to provide (i) commercial management services until each such vessel is transitioned and (ii) the certain additional services outlined in the Capital termination agreement. With respect to vessels not on a time charter, the parties to the Capital termination agreement have agreed to use their reasonable best efforts to (A) commence planning and coordination for the transition of commercial and technical management of such vessels that are not on a time charter from CSMC and/or its affiliates and (B) facilitate such transition on the earliest practical date after the effective time.
No Dissenters or Appraisal Rights (See page 95)
Holders of Diamond S common stock and holders of INSW common stock are not entitled to appraisal rights under the BCA with respect to the merger. For more information, see “The Merger — No Dissenters or Appraisal Rights.”
 
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RISK FACTORS
You should consider carefully the following risk factors, as well as the other information set forth in and incorporated by reference into this joint proxy statement/prospectus, before making a decision on the Diamond S merger proposal, the INSW share issuance proposal or the other proposals presented herein, as applicable. As a INSW stockholder following completion of the merger, Diamond S shareholders will be subject to all risks inherent in the pre-merger businesses of both INSW and Diamond S. The market value of the shares of INSW common stock to Diamond S shareholders will reflect the performance of the business relative to, among other things, that of the competitors of INSW and Diamond S and general economic, market and industry conditions. The value of your investment may increase or may decline and could result in a loss. You should carefully consider the following factors as well as the other information contained in and incorporated by reference into this joint proxy statement/prospectus. For information about the filings incorporated by reference in this joint proxy statement/prospectus, see the section entitled “Where You Can Find Additional Information.”
Risks Related to the Merger
Because the market value of shares of INSW common stock that Diamond S shareholders will receive in the merger may fluctuate, Diamond S shareholders cannot be sure of the market value of the merger consideration that they will receive in the merger.
Pursuant to the merger agreement, each share of Diamond S common stock will be cancelled in exchange for the right to receive 0.55375 shares of INSW common stock. Accordingly, the merger consideration that Diamond S shareholders will receive upon completion of the merger is a fixed number of shares of INSW common stock (except to the extent of any cash received in lieu of a fractional shares of INSW common stock and except if INSW sells any interests in the FSO Joint Ventures prior to the closing and pays a dividend from the proceeds), not a number of shares that will be determined based on a fixed market value. The market value of shares of INSW common stock and the market value of shares of Diamond S common stock at the effective time may vary significantly from their respective values on the date that the merger agreement was executed or at other dates, such as the date of this joint proxy statement/prospectus or the date of the Diamond S special meeting. Changes in share price may result from a variety of factors, including, among others, changes in INSW’s or Diamond S’ respective businesses, operations or prospects, regulatory considerations, governmental actions, legal proceedings, certain permitted dilutive share issuances and general business, market, industry or political or economic conditions. Market assessments of the benefits of the merger, the likelihood that the merger will be completed and general and industry-specific market and economic conditions may also have an effect on the market price of shares of INSW common stock and shares of Diamond S common stock. Many of these factors are beyond Diamond S’ or INSW’s control. The merger consideration will not be adjusted to reflect any changes in the market value of shares of INSW common stock or the market value of shares of Diamond S common stock or the number of shares of Diamond S common stock or number of shares of INSW common stock outstanding at the closing. Therefore, the aggregate market value of the shares of INSW common stock that a Diamond S shareholder is entitled to receive at the time that the merger is completed could vary significantly from the value of the equivalent shares of INSW common stock on the date of this joint proxy statement/prospectus or the date of the Diamond S special meeting and, at the time of the Diamond S special meeting, Diamond S shareholders will not know or be able to calculate the value of the merger consideration they would receive upon completion of the merger. Neither INSW nor Diamond S is permitted to terminate the merger agreement solely because of changes in the market prices of shares of Diamond S common stock or shares of INSW common stock. Shareholders are urged to obtain current market quotations for shares of INSW common stock and shares of Diamond S common stock. See the section entitled “Comparative Per Share Market Price and Dividend Information for additional information on the historical market values of shares of INSW common stock and shares of Diamond S common stock.
The completion of the merger is subject to a number of conditions and the merger agreement may be terminated in accordance with its terms. As a result, there is no assurance when or if the merger will be completed.
The completion of the merger is subject to the satisfaction or waiver of a number of conditions as set forth in the merger agreement. These include, among others, at or prior to the effective time, (a) the adoption of the merger agreement at the Diamond S special meeting by holders of a majority of the outstanding
 
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shares of Diamond S common stock; (b) the approval of the issuance of the merger consideration by a majority of the shares of INSW common stock present and entitled to vote at the INSW special meeting; (c) the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus is a part and the absence of an actual or threatened proceeding by the SEC to stop the effectiveness of the registration statement on Form S-4; (d) no governmental entity of competent jurisdiction having enacted any law, or having issued any injunction, prohibiting, making illegal or preventing the consummation of the merger; (e) the expiration or termination of all applicable waiting periods (and extensions thereof) under the HSR Act; (f) the approval for listing of the shares of INSW common stock issued as merger consideration on the NYSE, subject to official notice of issuance; (g) the entry into, and effectiveness of the A&R debt agreements and the debt consents (including the amendments contemplated thereunder); (h) the accuracy of the representations and warranties contained in the merger agreement (subject to specified materiality qualifiers); and (i) compliance with the pre-closing covenants and agreements in the merger agreement in all material respects. There can be no assurance as to when these conditions will be satisfied or waived, if at all, or that other events will not intervene to delay or result in the failure to close the merger.
In addition, if the merger is not completed by the outside date of November 1, 2021, either INSW or Diamond S may choose to terminate the merger agreement. However, this right to terminate the merger agreement will not be available to INSW or Diamond S if such party has materially breached the merger agreement and the breach is the cause of or resulted in the failure of the merger to be completed prior to the outside date. INSW or Diamond S may elect to terminate the merger agreement in certain other circumstances, and INSW and Diamond S can mutually decide to terminate the merger agreement at any time prior to the effective time, before or after the required approval by the INSW stockholders or the Diamond S shareholders. If the merger agreement is terminated, INSW and Diamond S may incur substantial fees in connection with the termination of the merger agreement and will not recognize the anticipated benefits of the merger. For more information, see the sections entitled “The Merger Agreement — Conditions to the Completion of the Merger” and “The Merger Agreement — Termination of the Merger Agreement.”
Delay or failure by Diamond S or INSW to satisfy the conditions under the A&R debt agreements may delay or prevent the closing of the merger.
A condition to the completion of the merger is that the required lenders under Diamond S’ existing $525 million credit facility and its $360 million credit facility must have executed and delivered amendment and restatements of such credit facilities that continue to be effective as of the closing of the merger. In addition, the required lenders under such credit facilities and the $66 million credit facility of the NT Suez joint venture waived events of default as a result of the merger and certain past events of default, which consents must remain in effect as a condition to completion of the merger. Although the required lenders have executed and delivered the A&R debt agreements, there are conditions precedent under the A&R debt agreements that will need to be satisfied prior to the amendments contemplated under the A&R debt agreement coming into effect. As a result, completion of the merger may be delayed or prevented. For more information, see the section entitled Indebtedness Amendments.”
The completion of the merger is subject to receipt of consents, orders and approvals from regulatory and governmental entities, which may delay, or result in conditions or restrictions on, the closing of the merger or prevent the closing of the merger entirely.
The completion of the merger is subject to the satisfaction or waiver of a number of conditions relating to the receipt of consents, order and approvals from regulatory and governmental entities under the HSR Act (the waiting period for which expired on May 21, 2021), as well as the absence of any injunctions prohibiting the merger. In addition, the Form S-4 must be declared effective by the SEC. As a result of these conditions, the merger may not be completed until notifications have been given and information furnished to the Antitrust Division of the FTC and all statutory waiting period requirements have been satisfied. Completion of the merger is subject to the expiration or earlier termination of the applicable waiting period under the HSR Act as described in the section “The Merger — Regulatory Matters.” INSW and Diamond S have made the required filings and submissions with governmental entities and the waiting period under the HSR Act expired on May 21, 2021. Even if all required consents, orders and approvals are obtained and all necessary conditions are satisfied, the consents, orders and approvals may include restrictive terms and conditions. Regulatory and governmental entities may impose conditions on the granting of
 
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consents, orders and approvals, and if regulatory and governmental entities seek to impose conditions, lengthy negotiations may ensue among the regulatory or governmental entities, INSW and Diamond S. These conditions and the process of obtaining these consents, orders and approvals could delay the completion of the merger and any such conditions may not be satisfied for an extended period of time following the Diamond S special meeting and INSW special meeting, if at all.
The conditions imposed by regulatory and governmental entities on the granting of consents, orders and approvals may also require divestitures relating to the divisions, operations or assets of INSW and Diamond S, may impose limitations or costs, and may place restrictions on the conduct of INSW’s or Diamond S’ business. Compliance with these conditions may reduce the anticipated benefits of the merger, which could also have an adverse effect on the combined company’s business, cash flows and results of operations, and neither INSW nor Diamond S can predict, what, if any, changes may be required by regulatory or governmental authorities whose consents, orders or approvals are required.
INSW or Diamond S may waive one or more of the closing conditions without re-soliciting stockholder approval.
INSW or Diamond S may determine to waive, in whole or in part, one or more of the conditions to its obligations to consummate the merger. INSW or Diamond S currently expect to evaluate the materiality of any waiver and its effect on INSW stockholders or Diamond S shareholders, as applicable, in light of the facts and circumstances at the time to determine whether any amendment of this joint proxy statement/prospectus or any re-solicitation of proxies or voting cards is required in light of such waiver. Any determination whether to waive any condition to the merger or as to re-soliciting shareholder approval or amending this joint proxy statement/prospectus as a result of a waiver will be made by INSW or Diamond S, as applicable, at the time of such waiver based on the facts and circumstances as they exist at that time.
The termination of the merger agreement could negatively impact Diamond S and/or INSW and could result in payment of a termination fee.
If the merger agreement is terminated in accordance with its terms and the merger is not consummated, the ongoing businesses of Diamond S or and INSW may be adversely affected by a variety of factors. Diamond S and INSW’s respective businesses may be adversely impacted by the failure to pursue other beneficial opportunities during the pendency of the merger, by the failure to obtain the anticipated benefits of completing the merger, by payment of certain costs relating to the merger, and by the focus of their respective managements on the merger for an extended period of time rather than on management opportunities or other issues. The market price of shares of Diamond S common stock or shares of INSW common stock may decline as a result of any such failures to the extent that the current market prices reflect a market assumption that the merger will be completed.
Diamond S may be required to pay INSW a termination fee of $17 million if the merger agreement is terminated under certain circumstances specified in the merger agreement relating to third party offers to acquire Diamond S or a third party acquisition of Diamond S or a breach of Diamond S’ obligation not to solicit third party offers or its obligations with respect to holding a meeting of its shareholders in connection with the merger. INSW may be required to pay Diamond S a termination fee of $19 million if the merger agreement is terminated under certain circumstances specified in the merger agreement relating to third party offers to acquire INSW or a third party acquisition of INSW or a breach of INSW’s obligation not to solicit third party offers or its obligations with respect to holding a meeting of its stockholders in connection with the merger. If the merger agreement is terminated and Diamond S or INSW determines to seek another business combination or strategic opportunity, Diamond S or INSW may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the merger. For more information, see the sections entitled “The Merger Agreement — Agreement Not to Solicit Other Offers” and “The Merger Agreement — Expenses and Termination Fee.”
The pendency of the merger could adversely affect INSW’s and Diamond S’ respective businesses, results of operations and financial condition.
Beginning at the time of the execution of the merger agreement and continuing until the merger closes or the merger agreement is terminated in accordance with its terms, the pendency of the merger could cause
 
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disruptions in and create uncertainty surrounding INSW’s and Diamond S’ businesses, including affecting INSW’s and Diamond S’ relationships with their existing and future customers, suppliers, partners in the business community and employees. This could have an adverse effect on INSW’s and Diamond S’ respective businesses, results of operations and financial condition, as well as the market prices of their shares, regardless of whether the merger is completed. In particular, INSW and Diamond S could potentially lose important personnel who decide to pursue other opportunities as a result of the merger. Any adverse effect could be exacerbated by a prolonged delay in closing the merger or if Diamond S and INSW are unable to decide quickly on the business direction or strategy of the combined company. INSW and Diamond S could also potentially lose customers or suppliers, existing customers or suppliers may seek to change their existing business relationships or renegotiate their contracts with INSW or Diamond S or defer decisions concerning INSW or Diamond S, and potential customers or suppliers could defer entering into contracts with INSW or Diamond S, each as a result of uncertainty relating to the merger. In addition, in an effort to complete the merger, INSW and Diamond S have expended, and will continue to expend, significant management resources, which are being diverted from INSW’s and Diamond S’ day-to-day operations, and significant demands are being, and will continue to be, placed on the managerial, operational and financial personnel and systems of INSW and Diamond S in connection with efforts to complete the merger.
The termination of the Capital relationship could adversely affect Diamond S, or following the closing of the merger, the combined company.
Twenty-three of Diamond S’ 64 vessels are currently managed by CSMC. In connection with the merger, CSMC’s management agreements with Diamond S will terminate and CSMC, Diamond S and INSW will transition management of such vessels to Diamond S or INSW or a new third party manager. In connection with the termination of CSMC’s management agreements, Diamond S will pay CSMC, or cause to be paid to CSMC, an amount equal to $30 million minus a certain specified termination fee adjustment amount and deliver, or cause to be delivered, an amount equal to $4 million minus a certain specified termination fee adjustment amount, to be held in escrow and distributed to CSMC on the first day on which certain vessels currently managed by CSMC have been transitioned. CSMC is also entitled to certain additional fees while it continues to manage the vessels and is entitled to reimbursement of its legal fees up to $200,000.
The termination of the CSMC management agreements may adversely affect Diamond S because it may be difficult to replace CSMC’s expertise and knowledge in managing such vessels. In addition, the process of transitioning management from CSMC may be time consuming for management of Diamond S and INSW and may involve the incurrence of one-time costs. The termination fee payable to CSMC to terminate the management agreements will reduce the cash on hand of the combined company. The majority of the termination fee is payable to CSMC at closing of the merger, prior to the completion of the transition of management of the relevant vessels. Post-closing of the merger, CSMC will have ongoing obligations related to management of the vessels and the transition after receiving the majority of the termination fee. The transition of management of these vessels will be more difficult during the COVID-19 pandemic. For more information, see the section entitled “The Merger Agreement — Capital Termination Agreement.”
Third parties may terminate, alter or decline to renew existing contracts or relationships with INSW or Diamond S.
Each of INSW and Diamond S has contracts with customers, suppliers, vendors, distributors, landlords, lenders, licensors, joint venture partners and other business partners and these contracts may require INSW or Diamond S, as applicable, to obtain consent from these other parties in connection with the merger. If these consents cannot be obtained, the counterparties to these contracts (and other third parties with which INSW and/or Diamond S currently have relationships, even if not contractual) may have the ability to terminate, reduce the scope of or otherwise materially adversely alter their relationships or terms of such contracts with either or both parties in anticipation of the merger, or with the combined company following the merger. In addition, counterparties to agreements that are near termination may determine not to renew such agreements as a result of the merger or seek amendments to terms of existing contracts. The pursuit of such termination rights or amendments, or a determination not to renew such agreements, may result in INSW, Diamond S or the combined company suffering a loss of potential future revenue, incurring
 
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liabilities in connection with breaches of agreements or losing rights that are material to its business. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the merger. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the merger or the termination of the merger agreement.
INSW and Diamond S will incur substantial transaction fees and costs in connection with the merger.
INSW and Diamond S have incurred and expect to continue to incur additional material expenses in connection with the merger and the completion of the transactions contemplated by the merger agreement, including costs relating to obtaining required INSW stockholder and Diamond S shareholder approvals and regulatory approvals, as well as costs related to the amendment and restatement of Diamond S’ existing debt agreements and payment of a termination fee to CSMC, as well as reimbursement of certain legal fees of CSMC. INSW and Diamond S have incurred significant legal, financial and other advisory services fees in connection with the process of negotiating and evaluating the terms of the merger and will continue to incur significant costs, such as legal, accounting, financial advisory, filing and printing fees, prior to and in connection with the completion of the merger. Additional significant unanticipated costs may be incurred in the course of integrating the businesses of INSW and Diamond S after completion of the merger. Irrespective of whether the merger is completed, INSW and Diamond S will need to pay certain costs relating to the merger incurred prior to the date the merger was abandoned, including legal, accounting, financial advisory, filing and printing fees. These costs may be significant and could have an adverse effect on the parties’ future results of operations, cash flows and financial condition.
Each party may not have discovered certain liabilities of the other party or other factors that may adversely affect the future financial performance of the relevant company.
In the course of the due diligence review of INSW that Diamond S conducted prior to the execution of the merger agreement, and the due diligence review of Diamond S that INSW conducted prior to the execution of the merger agreement, the party conducting due diligence may not have discovered, or may have been unable to quantify, certain liabilities of the other party or other factors that may have an adverse effect on the business, results of operations, financial condition and cash flows of the other party or the combined company after the consummation of the merger or on the value of the shares of INSW common stock or the shares Diamond S common stock after the consummation of the merger. Neither party’s existing stockholders will be indemnified or otherwise compensated for any of these liabilities or other adverse effects resulting from other factors.
While the merger agreement is in effect, INSW and Diamond S are subject to restrictions on their respective business activities. These provisions may discourage a potential competing transaction counterparty from making a favorable alternative transaction proposal.
Under the merger agreement, each of INSW and Diamond S, subject to certain exceptions, is subject to a range of restrictions on the conduct of its business and generally must operate its business in the ordinary course prior to completing the merger (unless INSW or Diamond S obtains the other’s consent, which is not to be unreasonably withheld, conditioned or delayed). In addition, consent of the other party (not to be unreasonably withheld, conditioned or delayed) is required to take a number of enumerated non-ordinary course actions. These restrictions may constrain INSW’s and Diamond S’ ability to pursue certain business strategies. The restrictions may also prevent INSW and Diamond S from pursuing otherwise attractive business opportunities, making acquisitions and investments or making other changes to their respective businesses prior to the completion of the merger or the termination of the merger agreement. Any such lost opportunities may reduce either or both companies’ competiveness or efficiency and could lead to an adverse effect on INSW’s and Diamond S’ business, financial results, financial condition or share prices. These interests are described in more detail in the section entitled “The Merger Agreement — Covenants and Agreements — Conduct of Business.”
In addition, the merger agreement prohibits INSW and Diamond S, subject to certain exceptions, from (a) soliciting, initiating or knowingly encouraging or knowingly facilitating any inquiry, proposal or offer, or the making, submission, modification or amendment or announcement of any inquiry, proposal or offer (including any inquiry, proposal or offer to their respective stockholders or shareholders, as applicable) which
 
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constitutes, or would be reasonably expected to lead to, a competing acquisition proposal; (b) participating in or engaging in any negotiations or discussions regarding, or furnishing to any person any nonpublic information in connection with any inquiry, proposal or offer which constitutes, or would be reasonably expected to lead to, a competing acquisition proposal; (c) waiving, terminating, modifying or releasing any person (other than Diamond S, INSW, Merger Sub and their respective affiliates, as applicable) from any provision of, or granting any permission, waiver or request under, or failing to enforce, any “standstill” or similar agreement or obligation; (d) approving or recommending, proposing publicly to approve or recommend, or failing to timely recommend against, any competing acquisition proposal; (e) withdrawing, changing, amending, modifying or qualifying, or otherwise proposing publicly to withdraw, change, amend, modify or qualify, in a manner adverse to INSW or Diamond S, as applicable, the Diamond S Board’s or INSW Board’s recommendation to their respective stockholders or shareholders, as applicable, to approve the INSW share issuance proposal or the Diamond S merger agreement proposal, as applicable; (f) entering into any letter of intent or other document or agreement relating to, or any agreement or commitment providing for, any competing acquisition proposal; or (g) resolving or agreeing to do any of the foregoing. In addition, following receipt by either party of a proposal that constitutes a “superior proposal,” the other party will have the ability to modify the terms of the merger agreement before the other party’s board may modify or qualify the terms of its recommendation. These provisions may limit Diamond S’ ability to pursue offers from third parties that could result in greater value to Diamond S shareholders than they would receive in the merger. The $17 million termination fee payable to INSW may also discourage third parties from pursuing an acquisition proposal with respect to Diamond S and the $19 million termination fee payable to Diamond S may also discourage third parties from pursuing an acquisition proposal with respect to INSW.
The merger agreement also limits each party’s ability to pay dividends. Diamond S is generally prohibited from paying dividends or effecting share repurchases. INSW may only make the INSW special dividend, its regular quarterly dividend of up to $0.06 per share and the INSW FSO dividend following the sale of any of INSW’s interest in, or the assets of, the FSO Joint Ventures. There is no guarantee that any dividends will be paid by INSW to its stockholders, including any such dividends that are permitted under the merger agreement.
If the merger does not qualify for the Intended Tax Treatment, holders of Diamond S common stock may be required to recognize gain for U.S. federal income tax purposes in the merger and may be required to pay substantial U.S. federal income taxes.
It is intended that, for U.S. federal income tax purposes, the merger qualifies for the Intended Tax Treatment. If the merger so qualifies, U.S. Holders (as defined below in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger”) of Diamond S common stock generally should not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of Diamond S common stock for INSW common stock. However, qualification of the merger for the Intended Tax Treatment depends on many factors, and neither INSW nor Diamond S is making any representation as to whether the merger qualifies for the Intended Tax Treatment. Moreover, the completion of the merger is not conditioned upon the receipt of an opinion of counsel to the effect that the merger qualifies for the Intended Tax Treatment, and neither Diamond S nor INSW intends to request a ruling from the IRS regarding the U.S. federal income tax consequences of the merger. Accordingly, no assurance can be given that the IRS will not challenge the Intended Tax Treatment or that a court would not sustain such a challenge. If the IRS or a court determines that the merger fails to qualify for the Intended Tax Treatment, upon the exchange of Diamond S common stock for INSW common stock pursuant to the merger, a holder of Diamond S common stock generally would recognize taxable gain or loss as if it sold its Diamond S common stock. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” and consult your own tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
In addition, although Diamond S does not believe it is currently a “passive foreign investment company” (a “PFIC”) within the meaning of Section 1297 of the Code for U.S. federal income tax purposes, if Diamond S is now or previously was for any year a PFIC, the merger may, in certain circumstances, be taxable to U.S. Holders of Diamond S common stock who owned equity interests in Diamond S while Diamond S
 
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was a PFIC even if the merger qualifies for the Intended Tax Treatment. U.S. Holders of Diamond S common stock who believe they may have held equity interests of Diamond S while it was a PFIC are urged to consult with their own tax advisors regarding the consequences to them of the merger.
Directors and executive officers of INSW and Diamond S may have interests in the merger that differ from, are in addition to, or conflict with, the interests of their respective stockholders or shareholders, as applicable, generally.
The directors and executive officers of INSW and Diamond S negotiated the terms of the merger agreement and the INSW Board and Diamond S Board recommended that their respective stockholders and shareholders vote in favor of the proposals set forth herein, including the INSW share issuance proposal and Diamond S merger proposal, as applicable. Some of these directors and executive officers may have interests in the merger that are different from, or in addition to those of INSW stockholders and Diamond S shareholders generally. Additional interests of directors or executive officers of INSW include the continued service of certain directors or executive officers of INSW as directors or executive officers of the combined company and are more fully summarized below. Additional interests of the directors and executive officers of Diamond S include the following and are more fully summarized below:

Three directors of Diamond S, including Mr. Stevenson, will become directors of the combined company and Mr. Stevenson will serve as a special advisor to the combined company’s chief executive officer for a six-month period following the closing of the merger for which he is expected to be paid $500,000;

Diamond S’ executive officers have entered into individual agreements that provide for certain severance protections upon a qualifying termination;

Diamond S’ executive officers have entered into individual equity award agreements that provide for acceleration of vesting upon a qualifying termination;

Diamond S’ directors have entered into individual equity award agreements that provide for acceleration of vesting upon a change in control;

Diamond S’ executive officers may enter into new arrangements prior to or following the closing; and

Diamond S’ directors and executive officers are entitled to continued indemnification and insurance coverage under the merger agreement.
INSW stockholders and Diamond S shareholders should be aware of these interests when they consider the recommendation of the INSW Board that the INSW stockholders vote in favor of the proposals set forth herein, including the INSW share issuance proposal, and the recommendation of the Diamond S Board that Diamond S shareholders vote in favor of the proposals set forth herein, including the Diamond S merger proposal. The INSW Board was aware of these interests when it determined that the merger agreement and the transactions contemplated thereby were advisable and fair to, and in the best interests of, the INSW stockholders and recommended that the INSW stockholders vote “FOR” the proposals set forth herein, including the INSW share issuance proposal, and the Diamond S Board was aware of these interests when it determined that the merger agreement and the transactions contemplated thereby were advisable and fair to, and in the best interests of, the Diamond S shareholders and recommended that the Diamond S shareholders vote “FOR” the proposals set forth herein, including the Diamond S merger proposal. These interests are described in more detail in the sections entitled “The Merger — Interests of Certain of INSW’s Directors and Executive Officers in the Merger” and “The Merger — Interests of Diamond S’ Directors and Executive Officers in the Merger.”
Uncertainties associated with the merger may cause a loss of management personnel and other key employees, which could adversely affect the future business and operations of the combined company following completion of the merger.
Each of Diamond S and INSW are dependent on the experience and industry knowledge of their officers and other key employees to execute their business plans. The combined company’s success after the completion of the merger will depend in part upon the ability of the combined company to retain certain key
 
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management personnel and employees of Diamond S and INSW. Although Craig H. Stevenson, Jr. will join the board of INSW and serve as a special advisor to the combined company’s chief executive officer for a six-month period following the closing of the merger to ensure a smooth transition, it is expected that other executive officers of Diamond S will not serve the combined company. Prior to the completion of the merger, current and prospective employees of Diamond S and INSW may experience uncertainty about their roles following the completion of the transactions, which may have an adverse effect on the ability of the combined company to attract or retain key management and other key personnel. In addition, no assurance can be given that the combined company, after the completion of the merger, will be able to attract or retain key management personnel and other key employees to the same extent that INSW and Diamond S have previously been able to attract or retain their own employees.
The unaudited pro forma combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and may not be reflective of the operating results and financial condition of the combined company following completion of the merger.
The unaudited pro forma combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the merger been completed on the dates indicated. The unaudited pro forma combined financial information is subject to a number of assumptions, and does not take into account any synergies related to the proposed transaction. Further, the combined company’s actual results and financial position after the merger may differ materially and adversely from the unaudited pro forma combined financial data that is included in this joint proxy statement/prospectus. The unaudited pro forma combined financial information has been prepared with the expectation, as of the date of this joint proxy statement/prospectus, that INSW will be identified as the acquiror under GAAP and reflects adjustments based upon preliminary estimates of the fair value of assets to be acquired and liabilities to be assumed. The final asset acquisition accounting will be based upon the actual purchase price and the fair value of the assets and liabilities of the party that is determined to be the acquiree under GAAP as of the date of the completion of the merger. Accordingly, the final acquisition accounting may differ materially from the unaudited pro forma combined financial information reflected in this joint proxy statement/prospectus. For further discussion, see “Unaudited Pro Forma Condensed Combined Financial Information.”
Diamond S shareholders and INSW stockholders will have a reduced ownership and voting interest after the merger and will have less influence over the management of the combined organization.
Diamond S shareholders currently have the right to vote in the election of the Diamond S Board and on certain other matters affecting Diamond S. Upon the completion of the merger on the terms set forth in the merger agreement, each holder of shares of Diamond S common stock that receives shares of INSW common stock will become a stockholder of INSW with a percentage ownership of the combined organization that is smaller than the holder’s current percentage ownership of Diamond S. Similarly, holders of shares of INSW common stock will be diluted as a result of the issuance of shares to Diamond S shareholders as the merger consideration. It is expected that the former shareholders of Diamond S, as a group, will receive shares in the merger constituting approximately 44.25% of the outstanding shares of INSW common stock immediately following the merger and former stockholders of INSW will retain approximately 55.75% of the outstanding shares of INSW common stock immediately following the merger. In addition, as of immediately following the merger, former directors of Diamond S will constitute three of the 10 members of the combined company’s board of directors. As a result, holders of shares of Diamond S common stock, as a group, will have significantly less influence on the management and policies of INSW than they now have on the management and policies of Diamond S.
INSW and Diamond S may be targets of shareholder class actions or derivative actions, which could result in substantial costs and may delay or prevent the merger from being completed.
Shareholder class action lawsuits or derivative lawsuits are often brought against companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the merger, then that injunction may delay or prevent the merger from being completed.
 
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One of the conditions to consummating the merger is that no governmental entity has enacted or promulgated any statute, rule, regulation or law that prohibits or makes illegal the consummation of the merger and that there is no order or injunction issued by any governmental entity in effect preventing the consummation of the merger. Consequently, if a claimant secures injunctive or other relief prohibiting, delaying or otherwise adversely affecting INSW’s or Diamond S’ ability to complete the merger on the terms contemplated by the merger agreement, then such law or injunctive or other relief may prevent consummation of the merger in a timely manner or at all.
Each of the Diamond S Board and the INSW Board has not requested, and does not anticipate requesting, an updated opinion from its respective financial advisor reflecting changes in circumstances that may occur between the signing of the merger agreement and the completion of the merger.
Consistent with market practice, the Diamond S Board has not obtained an updated opinion from its financial advisor, Moelis, as of the date of this joint proxy statement/prospectus, and does not expect to receive an updated, revised or reaffirmed opinion prior to the completion of the merger. Similarly, the INSW Board has not requested, and does not anticipate requesting, an updated opinion from its financial advisor, Jefferies, as of the date of this proxy statement/prospectus, and does not expect to receive an updated, revised or reaffirmed opinion prior to the completion of the merger. Changes in the operations and prospects of INSW and Diamond S, general market and economic conditions and other factors that may be beyond the control of INSW and Diamond S, and on which each company’s respective financial advisor’s opinion was based, may significantly alter the value of INSW and Diamond S or the market price of shares of INSW common stock and shares of Diamond S common stock by the time the merger is completed. Each of Diamond S’ financial advisor’s or INSW’s financial advisor’s respective opinions do not speak as of the time the merger will be completed or as of any date other than the date of such opinions. The Diamond S Board’s recommendation that Diamond S shareholders vote “FOR” the Diamond S merger proposal, and the INSW Board’s recommendation that INSW stockholders vote “FOR” the INSW share issuance proposal, however, is made as of the date of this joint proxy statement/prospectus. For a description of the opinions that the INSW Board and Diamond S Board received from their respective financial advisors, see the sections entitled “The Merger — Opinion of Diamond S’ Financial Advisor” and “The Merger — Opinion of INSW’s Financial Advisor.”
INSW stockholders and Diamond S shareholders will not be entitled to appraisal rights under Marshall Islands law in connection with the merger.
Appraisal rights are statutory rights that, if applicable under law, enable stockholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. Under the BCA, stockholders of a Marshall Islands corporation do not have appraisal rights if the common stock they hold, as of the record date for determining the stockholders entitled to vote at a meeting of stockholders to act upon a merger, is listed on a national securities exchange. Since shares of Diamond S common stock are listed on the NYSE, a national securities exchange, on the record date for the Diamond S special meeting, Diamond S shareholders will not be entitled to appraisal rights in connection with the merger.
Because INSW is not a constituent company in the merger, its stockholders will not be entitled to appraisal rights in connection with the merger.
Risks Related to Diamond S’ Business
You should read and consider the risk factors specific to Diamond S’ business that will also affect the combined company after completion of the merger. These risks are described in “Part I. Item 1A. Risk Factors” of Diamond S’ Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which are incorporated by reference into this joint proxy statement/prospectus, and in other documents that are incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find Additional Information” for the location of information incorporated by reference into this joint proxy statement/prospectus.
 
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Risks Related to INSW’s Business
You should read and consider the risk factors specific to INSW’s business that will also affect the combined company after completion of the merger. These risks are described in “Part I. Item 1A. Risk Factors” of INSW’s Annual Report on Form 10 K for the fiscal year ended December 31, 2020, which are incorporated by reference into this proxy statement/prospectus, and in other documents that are incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find Additional Information” for the location of information incorporated by reference into this proxy statement/prospectus.
Risks Related to the Combined Company
The combined company may not realize all of the anticipated benefits of the merger or those benefits may take longer to realize than expected. The combined company may also encounter significant difficulties in integrating the two businesses.
INSW anticipates that the merger will generate estimated annual cost synergies in excess of $23 million and revenue synergies of $9 million, which are expected to be fully realizable within 2022. However, there is a risk that some or all of the expected benefits of the merger may fail to materialize, or may not occur within the time periods anticipated by INSW and Diamond S. The realization of the anticipated benefits may be affected by a number of factors, many of which will be beyond the control of INSW. The challenge of combining previously independent businesses makes evaluating the business and future financial prospects of INSW following the merger difficult. INSW and Diamond S have operated and, until the completion of the merger, will continue to operate, independently. The past financial performance of each of INSW and Diamond S may not be indicative of the future financial performance of the combined company. Realization of the anticipated benefits in the merger will depend, in part, on the ability of INSW and Diamond S to successfully integrate their operations in an efficient and timely manner and without adversely affecting current revenues and investments in future growth.
The combined company will be required to devote significant management attention and resources to integrating its business practices and support functions, including aligning policies and internal controls of the two companies. The diversion of management’s attention and any delays or difficulties encountered in connection with the merger and the subsequent coordination of the two companies’ operations could have an adverse effect on the business, financial results, financial condition or the share price of the combined company following the merger. The coordination process may also result in additional and unforeseen expenses.
The forecasts considered by Diamond S and INSW may not be realized, which may adversely affect the market price of shares of the combined company’s common stock.
In connection with their respective evaluations of the merger, the Diamond S Board and INSW Board each relied on, among other things, internal stand-alone forecasts prepared by Diamond S and INSW management, respectively (for more information see the section entitled “Certain Unaudited Forecasted Financial Information of INSW” and “Certain Unaudited Forecasted Financial Information of Diamond S”). These forecasts were not prepared with a view towards public disclosure or compliance with the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. These projections are inherently based on estimates and assumptions that are subject to the judgment of those preparing them. These projections are also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of INSW and Diamond S. INSW’s or Diamond S’ financial condition or results of operations may not be consistent with those set forth in the forecasts, which could have a material impact on the market price of shares of the combined company’s common stock following the merger.
Disruption in the financial markets could affect the combined company’s ability to refinance existing obligations on favorable terms, or at all.
INSW and Diamond S both have existing debt obligations (and Diamond S’ debt for borrowed money will remain outstanding following the merger), some of which the combined company may in the future
 
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wish to repay or refinance on an opportunistic basis. However, disruptions in the credit markets or uncertainty in the United States or elsewhere, including as a result of the COVID-19 pandemic, could result in a tightening of financial markets. As a result of financial market turmoil, the combined company may not be able to obtain the necessary funding to refinance its existing debt obligations on favorable terms (or at all). If the combined company is unable to successfully refinance its obligations at reasonable terms and conditions (including, but not limited to, pricing and other fee payments), this could result in additional costs to the combined company.
Following the consummation of the merger, the combined company’s substantial leverage and debt service obligations could adversely affect its business.
Following the completion of the merger, the combined company will have a significant amount of indebtedness outstanding. On a pro forma basis, the consolidated indebtedness of the combined company would have been approximately $1.3 billion as of December 31, 2020 (see “Unaudited Pro Forma Condensed Combined Financial Statements,” including the notes thereto). The combined company’s future net consolidated borrowing costs, which cannot be predicted at this time, will depend on rates in effect from time to time, the structure of the indebtedness, taxes and other factors.
This substantial level of indebtedness could have important consequences to the combined company’s business, including, but not limited to:

limiting the combined company’s ability to borrow additional funds and increasing the cost of any borrowing;

increasing the combined company’s vulnerability to, and reducing its flexibility to respond to, general adverse economic and industry conditions;

limiting the combined company’s flexibility in planning for, or reacting to, changes in its business and the industry in which it operates;

placing the combined company at a competitive disadvantage as compared to its competitors, to the extent that they are not as highly leveraged; and

restricting the combined company from pursuing potential business opportunities.
The combined company’s future results will suffer if it does not effectively manage its expanded operations following the merger.
Following the merger, the size of the business of the combined company will be significantly larger than the current size of either Diamond S or INSW’s current businesses. The combined company’s future success depends, in part, upon its ability to manage this expanded business, which may pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. There can be no assurance that the combined company will be successful or that it will realize the expected operating efficiencies, cost savings, revenue enhancements and other benefits currently anticipated from the mergers.
The combined company may be unable to make desirable acquisitions or to integrate successfully any businesses it acquires.
The future success of the combined company may depend in part on mergers or acquisitions or vessel acquisitions intended to complement, enhance or expand the combined company’s business or that might otherwise offer growth opportunities. The combined company’s ability to complete transactions in the future may be hindered by a number of factors, including potential difficulties in obtaining financing or in issuing the combined company’s own securities as payment in acquisitions or obtaining regulatory approvals.
Any future merger or acquisition that the combined company undertakes may pose risks related to the integration of the new business with the combined company’s business. The combined company may not achieve the benefits it expects from a particular merger, acquisition or investment, and furthermore, mergers, acquisitions or investments may also expose the combined company to various unanticipated liabilities. Mergers and acquisitions may also strain the combined company’s managerial and operational resources, as
 
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the challenge of managing new operations may divert its staff from monitoring and improving operations in its existing operations. If the combined company fails to coordinate its resources effectively to manage both its existing operations and any businesses the combined company acquires or with which it merges, this could have a material adverse effect on the combined company’s business, results of operations or financial condition.
The market price of shares of the combined company’s common stock may decline as a result of the merger, including as a result of some Diamond S and/or INSW stockholders adjusting their portfolios.
INSW expects that it will issue or reserve for issuance approximately 22,683,532 shares of INSW common stock in order to deliver the merger consideration to Diamond S shareholders at the effective time in connection with the merger and to assume Diamond S equity awards at the completion of the merger. The issuance of the shares of INSW common stock and the sale of additional shares that may become eligible for sale in the public market from time to time could have the effect of depressing the market value for shares of INSW common stock. The increase in the number of shares of INSW common stock may lead to sales of INSW common stock or the perception that sales may occur, either of which may adversely affect the market for, and the market value of, shares of INSW common stock.
In addition, the market price of shares of the combined company’s common stock may decline as a result of the merger if, among other things, the operational cost savings estimates in connection with the integration of Diamond S and INSW’s respective businesses are not realized or if the transaction costs related to the merger are greater than expected. The market price also may decline if the combined company does not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts or if the effect of the transactions on the combined company’s financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about the combined company’s business, the price and/or trading volume of shares of the combined company’s common stock could decline.
The trading market for shares of the combined company’s common stock will depend, in part, on the research and reports that securities or industry analysts publish about the combined company and its business. If too few analysts commence and maintain coverage of the combined company, the trading price for its shares might be adversely affected. Similarly, if one or more of the analysts currently covering Diamond S cease coverage of the combined company or fail to publish reports on it regularly, demand for shares of the combined company’s common stock could decrease, which might cause the price of shares of the combined company’s common stock and trading volume to decline. In addition, if analysts publish inaccurate or unfavorable research about the combined company’s business, the price and/or trading volume of shares of the combined company’s common stock could decline.
Future offerings of debt or equity securities by the combined company may materially adversely affect the share price, and future capitalization measures could lead to substantial dilution of existing stockholders’ interests in the combined company.
The combined company may seek to raise additional equity through the issuance of new shares or convertible or exchangeable bonds to finance future organic growth or acquisitions. Increasing the number of issued shares would dilute the ownership interests of existing stockholders. Stockholders’ ownership interests could also be diluted if other companies or equity interests in companies are acquired in exchange for new shares of the combined company’s common stock to be issued and if shares are issued to employees under future option plans.
INSW and Diamond S have different historical policies with respect to the payment of dividends and other distributions. The payment of future dividends and other distributions will depend on the combined company’s business, cash flows, financial condition and results of operations, and in the future stockholders may not receive dividends or other distributions regularly or at all.
INSW’s dividend distribution policy and Diamond S’ dividend policy have been different in the past. Diamond S has not paid dividends while INSW has paid a quarterly dividend. While the parties anticipate
 
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that, going forward, the board of directors of the combined company will declare and pay a quarterly dividend, there can be no guarantee that the combined company’s stockholders will receive or be entitled to dividends or other distributions commensurate with previous dividends or other distributions of INSW, and the amount of dividends or other distributions, if any, that are declared or paid to the combined company’s stockholders cannot yet be determined. Moreover, the INSW Board may also change its policy on the payment of dividends or other distributions at any time.
The decision whether to pay future dividends or make other distributions will be made by the combined company’s board of directors and will be dependent on the circumstances at the time and a number of other factors, including the combined company’s results of operations, financial and investment needs, the availability of distributable profits and reserves, the availability of sufficient funds or financing, the market price of shares of the combined company’s common stock, vessel divestitures, compliance with the combined company’s cash reserve policy, the combined company’s access to capital markets, as well as industry practice, the requirements of Marshall Islands law with respect to dividends or other distributions and other relevant factors. These factors may restrict the combined company’s ability to make dividends or other distributions and may cause the combined company to deviate from INSW’s currently existing dividend policies and guidance. The combined company may declare either no dividends or other distributions, or dividends or other distributions that are small relative to those paid or made by competitors. The combined company’s ability to pay dividends or make other distributions may also depend on whether profits from its operating subsidiaries are distributed to the combined company and whether this is possible may depend on the laws of the jurisdictions in which the subsidiaries are organized.
Should the combined company not pay regular dividends or make other distributions in the foreseeable future, former Diamond S shareholders who become stockholders of the combined company would have to rely on increases, if any, in the trading price of shares of the combined company’s common stock for any returns on their investment.
Each of Diamond S and INSW expects to incur substantial expenses related to the completion of the merger and the integration of Diamond S and INSW’s respective businesses.
Each of Diamond S and INSW will incur substantial expenses in connection with the completion of the merger (including payment of termination fees to CSMC) to integrate a large number of processes, policies, procedures, operations, technologies and systems of Diamond S and INSW in connection with the merger. The substantial majority of these costs will be non-recurring expenses related to the transactions and facilities and systems consolidation costs. The combined company may incur additional costs or suffer loss of business under third-party contracts that are terminated or that contain change in control or other provisions that may be triggered by the completion of the transactions, and/or losses of, or decreases in orders by, customers, and may also incur costs to retain certain key management personnel and employees. Diamond S and INSW will also incur transaction fees and costs related to formulating integration plans for the combined business, and the execution of these plans may lead to additional unanticipated costs and time delays. These incremental transaction-related costs may exceed the savings the combined company expects to achieve from the elimination of duplicative costs and the realization of other efficiencies related to the integration of the businesses, particularly in the near term and in the event there are material unanticipated costs. Factors beyond the parties’ control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately.
 
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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE INFORMATION
The following tables present INSW’s and Diamond S’ historical and pro forma per share data as of and for the year ended December 31, 2020 and as of and for the quarter ended March 31, 2021. The pro forma share data for the year ended December 31, 2020 and for the quarter ended March 31, 2021 is presented as if the merger had been completed on January 1, 2020. Except for the historical information for the year ended December 31, 2020 and the quarter ended March 31, 2021 used to prepare the table below, the information provided in the tables below is unaudited. This information should be read together with the historical consolidated financial statements and related notes of INSW and Diamond S, which is incorporated by reference in this joint proxy statement/prospectus, and with the unaudited pro forma combined financial statements included in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
The unaudited pro forma combined per share data is presented for illustrative purposes only and is not necessarily indicative of actual or future financial position or results of operations that would have been realized if the transaction had been completed as of the date indicated or will be realized upon the completion of the merger. The summary pro forma information is preliminary, based on initial estimates of the fair value of assets acquired (including intangible assets) and liabilities assumed, and is subject to change as more information regarding the fair values are obtained, which changes could be materially different than the initial estimates.
As of and for the
Year Ended
December 31, 2020
As of and for the
Three Months Ended
March 31, 2021
INSW Historical
Basic net earnings (loss) from operations per share
$ (0.20) $ (0.48)
Diluted net earnings (loss) from operations per share
(0.20) (0.48)
Cash dividends declared per share
0.24 0.06
Net book value per share
34.70 34.49
Diamond S Historical
Basic net earnings (loss) from operations per share
0.58 (0.84)
Diluted net earnings (loss) from operations per share
0.58 (0.84)
Cash dividends declared per share
Net book value per share
29.94 29.97
Pro Forma Combined
Basic net earnings (loss) from operations per share
0.51 (0.55)
Diluted net earnings (loss) from operations per share
0.51 (0.55)
Cash dividends declared per share
0.24 0.06
Net book value per share
27.43 27.35
Equivalent Diamond S(1)
Basic net earnings (loss) from operations per share
0.28 (0.31)
Diluted net earnings (loss) from operations per share
0.28 (0.31)
Cash dividends declared per share
0.13 0.03
Net book value per share
15.19 15.14
(1)
Determined using the pro forma combined per share data multiplied by the base exchange ratio of 0.55375.
 
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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION
The following table sets forth the closing sale prices per share of INSW common stock and Diamond S common stock on the NYSE on March 30, 2021, the last trading day prior to the public announcement of the merger agreement, and on June 1, 2021, the last practicable trading day prior to the mailing of this joint proxy statement/prospectus. INSW common stock is traded on the NYSE under the symbol “INSW” and Diamond S common stock is traded on the NYSE under the symbol “DSSI.” The high and low trading prices for the INSW common stock on March 30, 2021, the last trading day immediately prior to the public announcement of the merger, were $18.77 and $17.90, respectively. The high and low trading prices for the Diamond S common stock on March 30, 2021, the last trading day immediately prior to the public announcement of the merger agreement, were $9.63 and $9.07, respectively. The table also shows the estimated implied value of the merger consideration proposed for each share of Diamond S common stock as of the same two dates. The implied value for share consideration was calculated by multiplying the closing sales price of a share of INSW common stock on the relevant date by the base exchange ratio of 0.55375 shares of INSW common stock for each share of Diamond S common stock.
INSW
Common Stock
Diamond S
Common Stock
Implied Share
Value of Share
Consideration
March 30, 2021
$ 18.36 $ 9.60 $ 10.17
June 1, 2021
20.28 10.67 11.23
The market prices of INSW common stock and Diamond S common stock have fluctuated since the date of the announcement of the merger agreement and will continue to fluctuate prior to the completion of the merger. For example, the value of INSW common stock may decrease following payment of the INSW special dividend or INSW FSO dividend, in each case if and when paid. No assurance can be given concerning the market prices of INSW common stock or Diamond S common stock before completion of the merger or of INSW common stock after the completion of the merger. Because the exchange ratio, which determines the merger consideration, will not be adjusted for changes in the market prices of either INSW common stock or Diamond S common stock, the market price of INSW common stock (and, therefore, the value of the merger consideration) when received by the Diamond S shareholders after the merger is completed could be greater than, less than or the same as shown in the table above. Accordingly, these comparisons may not provide meaningful information to stockholders in determining how to vote with respect to the proposals described in this joint proxy statement/prospectus. We urge you to obtain current market quotations for INSW common stock and Diamond S common stock and to review carefully the other information contained in this joint proxy statement/prospectus. Please see “Risk Factors — Risks Related to the Merger.” Because the market value of shares of INSW common stock that Diamond S shareholders will receive in the merger may fluctuate, Diamond S shareholders cannot be sure of the market value of the merger consideration that they will receive in the merger.”
For more information on the market for INSW’s or Diamond S’ common equity, related stockholder matters and issuer purchases of equity securities, see Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of INSW’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, or Diamond S’ Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which are each incorporated by reference into this joint proxy statement/prospectus.
Dividend Information
The table below summarizes the dividends paid on INSW’s common stock:
Amounts
Rate Per Share
($ in millions, except per share amounts)
Year Ended 2020:
First Quarter
$ 1.7 $ 0.06
Second Quarter
1.7 0.06
Third Quarter
1.7 0.06
Fourth Quarter
1.7 0.06
Total in 2020
6.8
 
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On February 23, 2021, the INSW’s Board declared a regular quarterly dividend of $0.06 per share of INSW common stock to record holders as of March 11, 2021. The terms of the merger agreement limit the ability of INSW to declare or pay additional dividends during the pendency of the merger without Diamond S consent, other than the INSW special dividend, INSW’s regular quarterly dividend of up to $0.06 per share of INSW common stock and the INSW FSO dividend. It is expected that INSW will declare and pay the INSW special dividend prior to the closing of the merger, with a record date on or after the date of the INSW special meeting.
Diamond S has not paid any cash dividends since its inception. The terms of the merger agreement limit the ability of Diamond S to declare or pay dividends prior to the completion of the merger. In addition, certain of Diamond S’ debt instruments place restrictions on its ability to pay cash dividends.
 
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements and information in this joint proxy statement/prospectus may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. INSW and Diamond S have identified some of these forward-looking statements with words like “believe,” “may,” “could,” “would,” “possible,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “estimate,” “potential,” “outlook,” “attempt,” “forecast,” “continue,” “project,” “projection,” “goal,” “target,” or “objective”, the negative of these words, other terms of similar meaning or the use of future dates. These forward-looking statements are based on INSW’s and Diamond S’ current expectations and beliefs concerning future developments and their potential effect on their respective businesses.
The forward-looking statements contained in this joint proxy statement/prospectus are largely based on INSW’s and Diamond S’ expectations for the future, which reflect certain estimates and assumptions made by their respective managements. These estimates and assumptions reflect INSW’s and Diamond S’ best judgment based on currently known market conditions, operating trends and other factors. Although INSW and Diamond S believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond INSW’s and Diamond S’ control. As such, managements’ assumptions about future events may prove to be inaccurate. For a more detailed description of the risks and uncertainties involved, see “Risk Factors” in this joint proxy statement/ prospectus and in INSW’s and Diamond S’ most recently filed Annual Reports on Form 10-K, Current Reports on Form 8-K and other SEC filings. INSW and Diamond S do not intend to publicly update or revise any forward-looking statements as a result of new information, future events, changes in circumstances or otherwise.
These cautionary statements qualify all forward-looking statements attributable to INSW or Diamond S, or persons acting on either’s behalf. INSW management and Diamond S management caution you that the forward-looking statements contained in this joint proxy statement/prospectus are not guarantees of future performance, and neither INSW nor Diamond S can assure you that such statements will be realized or that the events and circumstances they describe will occur. Factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements herein include, but are not limited to:

uncertainties as to the timing of the contemplated transactions;

the ability of the parties to receive the required regulatory approvals for the merger (and the risks that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) and approval of INSW’s stockholders and Diamond S’ shareholders required on connection with the contemplated transactions;

the occurrence of events that may give rise to a right of one or both parties to terminate the merger agreement;

risks relating to the value of the shares of INSW common stock to be issued in the merger;

the possibility that a competing proposal will be made;

the possibility that costs or difficulties related to the integration of INSW’s and Diamond S’ operations will be greater than expected

the effects of disruption by the announcement of the contemplated transactions making it more difficult to maintain relationships with employees, customers, vendors and other business partners;

the risk that stockholder litigation in connection with the contemplated transactions may affect the timing or occurrence of the contemplated transaction or result in significant costs of defense, indemnification and liability;

the risk that the anticipated tax treatment of the proposed transaction is not obtained;

other business effects, including effects of the industry, economic or political conditions outside of the control of the parties to the contemplated transaction;

transaction costs;
 
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future availability of credit and factors that may affect such availability, including credit market conditions and capital structure;

new business and investment opportunities

actual or contingent liabilities;

the ability to hire and retain key personnel; and

natural disasters and epidemics.
All subsequent written and oral forward-looking statements concerning INSW, Diamond S, the merger, the combined company or other matters attributable to INSW or Diamond S or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Neither INSW nor Diamond S undertake any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law.
 
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PARTIES TO THE MERGER
Information about International Seaways, Inc.
INSW and its wholly owned subsidiaries own and operate a fleet of oceangoing vessels engaged primarily in the transportation of crude oil and petroleum products in the International Flag trade. INSW’s vessel operations are organized into two segments: Crude Tankers and Product Carriers. On December 31, 2020, INSW owned or operated an International Flag fleet of 36 vessels (totaling an aggregate of 6.1 million dwt), consisting of VLCC, Suezmax, Aframax, Panamax crude tankers, as well as LR1, LR2 and MR product carriers, and through joint ventures and ownership interests in two FSO service vessels. The Marshall Islands is the principal flag of registry of INSW’s vessels.
INSW’s ultimate customers, including those of the commercial pools in which INSW participates, include major independent and state-owned oil companies, oil traders, refinery operators and international government entities. INSW generally charters its vessels to customers either for specific voyages at spot rates through the services of pool in which INSW operates, or for specific periods of time at fixed daily rates though time charters or bareboat charters. Spot market rates are highly volatile, while time charter and bareboat charter rates provide more predictable streams of TCE revenues because they are fixed for specific periods of time.
INSW’s principal executive offices are located at 600 Third Avenue, 39th Floor, New York, New York 10016, and its telephone number is (212) 578-1600. INSW’s website address is www.intlseas.com. Information contained on INSW’s website does not constitute part of this joint proxy statement/prospectus. INSW’s stock is publicly traded on the NYSE, under the ticker symbol “INSW.” Additional information about INSW is included in documents incorporated by reference in this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information.”
Information about Diamond S Shipping Inc.
Diamond S, together with its subsidiaries, is one of the largest publicly listed owners and operators of crude and product tankers in the world. Diamond S provides seaborne transportation of crude oil, refined petroleum and other products in the international shipping markets. As of June 1, 2021, Diamond S’ operating fleet consisted of 64 vessels with an aggregate carrying capacity of approximately 4.6 million “dwt”. Diamond S’ vessel operations are composed of two segments: crude tankers, which consists of 13 Suezmax vessels and one Aframax vessel, and product tankers, which consists of 50 medium range vessels.
Diamond S’ principal executive offices are located at Diamond S Shipping Inc., 33 Benedict Place, Greenwich, Connecticut 06830, and its telephone number is (212) 517-0810. Diamond S’ website address is www.diamondsshipping.com. Information contained on Diamond S’ website does not constitute part of this joint proxy statement/prospectus. Diamond S’ stock is publicly traded on the NYSE, under the ticker symbol “DSSI.” Additional information about Diamond S is included in the documents incorporated by reference in this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information.”
Information about Dispatch Transaction Sub, Inc.
Dispatch Transaction Sub, Inc., a wholly owned subsidiary of INSW, is a Republic of the Marshall Islands corporation incorporated on March 26, 2021 for the purpose of effecting the merger. Dispatch Transaction Sub, Inc. has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement. The principal executive offices of Dispatch Transaction Sub, Inc. are located at 600 Third Avenue, 39th Floor, New York, New York 10016, and its telephone number is (212) 578-1600.
 
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THE MERGER
Terms of the Merger
The Closing
At the effective time, Merger Sub will be merged with and into Diamond S, with Diamond S surviving the merger as a wholly-owned subsidiary of INSW. Immediately following the merger, it is expected that INSW will contribute Diamond S to International Seaways Operating Company, a direct wholly-owned subsidiary of INSW. As a result, among other things, INSW will become the ultimate parent of Diamond S and all of its subsidiaries.
The closing of the merger will take place on the third business day after satisfaction or, to the extent permitted by applicable law, waiver of the conditions to the consummation of the merger set forth in the merger agreement (except for conditions that by their nature are to be satisfied at the closing) subject to the satisfaction or, to the extent permitted by applicable, waiver of all the conditions to the consummation of the merger set forth in the merger agreement at the closing, unless another date or place is agreed to in writing by Diamond S and INSW.
The Merger Consideration
Subject to the terms and conditions set forth in the merger agreement, at the effective time, Diamond S shareholders will have the right to receive, with respect to each share of Diamond S common stock they hold at the effective time, 0.55375 validly issued, fully paid and non-assessable shares of INSW common stock, with cash paid in lieu of fractional shares of INSW common stock. The base exchange ratio will result in INSW stockholders owning approximately 55.75% of the outstanding shares of INSW common stock following the effective time of the merger and the pre-effective time Diamond S shareholders owning approximately 44.25% of the outstanding shares of INSW common stock following the effective time.
There is one instance in which the base exchange ratio would be altered. The base exchange ratio is subject to an upward adjustment to the extent that INSW sells any of its interest in or the assets of the FSO Joint Ventures prior to the effective time and pays a special dividend to INSW stockholders from the proceeds of any such sale (up to a maximum of $25 million). In that instance, the base exchange ratio will be increased in accordance with the terms of the merger agreement so as to cause Diamond S shareholders to hold up to an additional 0.67% of the outstanding shares of INSW common stock based on the amount of the dividend. For example, the full $25 million dividend from the proceeds of a sale of the FSO Joint Ventures would increase Diamond S shareholders’ pro forma ownership by 0.67% and a $12.5 million dividend will increase Diamond S shareholders’ pro forma ownership by 0.33%. If INSW sells any of its interest in or the assets of the FSO Joint Ventures prior to the effective time and pays a further special dividend to INSW stockholders from the proceeds of any such sale of $25 million prior to the effective time, INSW stockholders will own approximately 55.08% of the outstanding shares of INSW common stock following the effective time of the merger and the pre-effective time Diamond S shareholders will own approximately 44.92% of the outstanding shares of INSW common stock following the effective time.
The merger agreement does not contain any provision that would adjust the exchange ratio based on fluctuations in the market value of either company’s common stock. Because of this, the implied value of the stock consideration to Diamond S shareholders will fluctuate between now and the completion of the merger and will depend on the market value of INSW common stock at the time the merger is completed.
At the effective time, all shares of Diamond S common stock that are owned by INSW, Diamond S, Merger Sub or any of their respective direct or indirect wholly owned subsidiaries will be cancelled and will cease to exist and no consideration will be delivered in exchange for those shares.
Fractional shares will not be issued in accordance with the merger. Any Diamond S shareholders that would have received a fractional INSW share based on the exchange ratio above, will instead receive an amount in cash equal to the product of such fractional part, multiplied by the volume-weighted average trading price of INSW shares for the ten trading days preceding the date of the completion of the merger.
 
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Director and Officer Indemnification
Under the merger agreement, certain indemnification and insurance rights exist in favor of Diamond S’ current and former directors and officers. See “The Merger Agreement — Covenants and Agreements” and “The Merger Agreement — Indemnification; Exculpation and Insurance” for information about these rights.
Background of the Merger
The terms of the merger are the result of arm’s length negotiations between INSW and Diamond S. The following is a summary of the events leading up to the agreement to merge and the key meetings, negotiations, discussions and actions by and between INSW and Diamond S and their respective advisors that preceded the public announcement of the merger.
The management and boards of directors of INSW and Diamond S each regularly review its company’s respective results of operations and competitive positions in the industries in which it operates as well as the strategic options of its businesses in light of economic and regulatory conditions, among other things, including whether the continued execution of its strategies as a stand-alone company or the possible sale to, or a combination with, a third party offers the best avenue to enhance shareholder value. INSW and Diamond S, and their respective predecessors, have from time to time engaged in discussions about a potential strategic transaction involving the parties.
In October 2019, representatives of Jefferies engaged in informal discussions with Jeffrey Pribor, INSW’s Chief Financial Officer, regarding industry conditions and strategic options, including potential strategic transactions between Diamond S and INSW. Thereafter, in October 2019, and at the request of INSW management, representatives of Jefferies engaged in informal discussions with certain members of the Diamond S Board, regarding Diamond S’ interest in engaging in discussions regarding a potential transaction with INSW.
On November 4, 2019, the Diamond S Board was updated regarding such informal discussions regarding a potential strategic transaction between Diamond S and INSW.
Beginning in November 2019, Craig H. Stevenson, Jr., Diamond S’ President and Chief Executive Officer and member of the Diamond S Board, Kevin Kilcullen, Diamond S’ Chief Financial Officer, Lois Zabrocky, INSW’s President and Chief Executive Officer and member of the INSW’s board, and Mr. Pribor engaged in informal discussions regarding a potential strategic transaction between Diamond S and INSW. In late December 2019, Moelis reviewed certain financial information with Diamond S management to support them regarding these informal discussions.
In January 2020, Mr. Stevenson and Ms. Zabrocky agreed that there was sufficient interest from both companies to pursue exploring a potential strategic transaction between Diamond S and INSW and decided that the parties should enter into a confidentiality agreement, which Diamond S and INSW executed on February 4, 2020, to facilitate the sharing of information between the parties.
On February 25, 2020, Mr. Nadim Z. Qureshi, Diamond S’ Chairman of the Board, and Mr. Stevenson updated the Diamond S Board on the progress of discussions regarding a potential strategic transaction between Diamond S and INSW and Moelis’ proposed formal engagement as its financial advisor due to Moelis’ qualifications, industry experience and reputation.
On March 9, 2020, the INSW Board held a telephonic meeting at which INSW management updated the INSW Board on the progress of discussions regarding a potential strategic transaction between Diamond S and INSW.
On March 11, 2020, Diamond S confirmed its engagement of Moelis as its financial advisor since December 21, 2019 in connection with the potential strategic transaction between Diamond S and INSW and other strategic alternatives.
On June 10, 2020, the INSW Board held a telephonic meeting at which INSW management outlined key terms of a potential proposal to Diamond S, including relative ownership interests of the stockholders of the two companies, post-closing company governance and termination of the CSMC’s management of
 
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certain Diamond S vessels. The INSW Board determined to engage in exploratory discussions regarding a potential transaction on that basis.
On June 17, 2020, INSW delivered a preliminary, non-binding indicative proposal to Diamond S (the “June Proposal Letter”). The June Proposal Letter detailed INSW’s proposed terms for a potential strategic transaction with Diamond S, including INSW’s proposal that (i) such a transaction be structured as a stock-for-stock merger, (ii) a pro forma ownership split that would result in INSW stockholders owning 60% of the combined company and Diamond S shareholders owning the remaining 40% equity interest, with an exchange ratio of approximately 0.464 common shares of INSW for each common share of Diamond S held by Diamond S shareholders at the time of the merger, (iii) a post-closing board with two Diamond S designees and (iv) consummation of the merger to be conditioned on the termination of commercial and technical management services provided by CSMC on terms that are satisfactory to INSW. The June Proposal Letter also addressed certain governance matters, support and lockup agreements to be entered into concurrently with the execution of the definitive documentation and a proposal that the parties enter into a mutual exclusivity agreement to facilitate further discussions of the proposed merger.
On June 26, 2020, following receipt of the June Proposal Letter, the Diamond S Board held a meeting by video conference at which members of Diamond S management and representatives of Moelis were also present to provide an update as to the status of the preliminary discussions with INSW and their advisors and discuss the terms of the June Proposal Letter. In particular, the Diamond S Board discussed INSW’s proposed requirement that Diamond S terminate all commercial and technical management services provided by CSMC as a condition to the merger, procedurally how the Diamond S Board should consider further exploring a potential merger with INSW and the next steps. Each of the Diamond S directors disclosed to the Diamond S Board any interests and other material relationships that they may have in INSW or its affiliates.
On July 2, 2020, the Diamond S Board held a meeting by video conference at which members of Diamond S management and representatives of Moelis were also present to continue discussions regarding the status of the preliminary discussions with INSW and their advisors and the terms of the June Proposal Letter. Mr. Gerasimos G. Kalogiratos, a member of the Diamond S Board, offered to negotiate for and on behalf of CSMC if the Diamond S Board determined to negotiate an agreement for the early termination of the commercial and technical management services provided by CSMC. At the conclusion of the meeting, the Diamond S Board directed representatives of Moelis to discuss the material terms of the June Proposal Letter with representatives of Jefferies, including the proposed conditions to closing, the relative contributions of Diamond S and INSW, governance considerations and the management of the combined fleet.
In early July 2020, INSW management discussed with representatives of Jefferies the terms of the June Proposal Letter, and indicated to representatives of Jefferies that INSW may have flexibility on some material terms of the proposal, such as pro forma ownership splits for the companies’ respective shareholders and governance considerations, but that INSW would require that CSMC cease to provide commercial and technical management services as a condition to the proposed merger and that both parties negotiate exclusively with one another. Following this discussion, INSW management instructed representatives of Jefferies to convey such information regarding the June Proposal Letter to representatives of Moelis. Representatives of Jefferies subsequently discussed the terms of the June Proposal Letter and the information it had reviewed with INSW management with representatives of Moelis.
On July 17, 2020, the Diamond S Board held a meeting by video conference at which members of Diamond S management and representatives of White & Case LLP (“White & Case”) and Moelis were also present. White & Case had been serving as counsel to the Conflicts Committee of the Diamond S Board since its formation in March of 2020 and was present at the meeting in light of INSW’s requirement that there be a termination of CSMC’s commercial and technical management services as part of any merger. The Diamond S Board discussed the June Proposal Letter and the discussions between representatives of Moelis and Jefferies as to its terms. Upon further discussion, the Diamond S Board determined to further explore a potential merger with INSW. A representative of White & Case then provided an overview of the fiduciary duties of the Diamond S Board generally as well as in the context of exploring, evaluating, negotiating and approving a strategic transaction between Diamond S and INSW. White & Case and the Diamond S Board discussed the role of Mr. Kalogiratos and George Cambanis as Capital nominees to the Diamond S Board
 
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in light of INSW’s requirement that CSMC cease to provide commercial and technical management services as a condition to the proposed merger. The Diamond S Board discussed procedural matters in connection with a potential combination and requested that White & Case and Sullivan & Cromwell LLP (“S&C”), acting as counsel for CSMC, discuss the appropriate procedural approach to a potential combination and the role of Messrs. Kalogiratos and Cambanis in such decisions.
Following the July 17, 2020 meeting of the Diamond S Board, representatives of White & Case and S&C discussed the appropriate process for a potential merger between Diamond S and INSW as instructed. The Diamond S Board then held a meeting by video conference on July 20, 2020 at which members of Diamond S management and representatives of White & Case and Moelis were present. White & Case confirmed any interests the directors may have in the proposed merger. Following discussion of any such interests, the Diamond S Board resolved to form the Transaction Committee to be composed of Diamond S directors Messrs. Hal Malone and Nadim Qureshi, and Ms. Alexandra Kate Blankenship and to which the Diamond S Board delegated the power and authority to, among other things, propose, review and negotiate the terms of a possible transaction with INSW, including any alternative transaction and the terms and condition of the potential termination of the commercial relationships between Diamond S and CSMC, and to make recommendations to the Diamond S Board with respect to the possible transaction and such termination. The Transaction Committee formally engaged White & Case as legal counsel to Diamond S and the Transaction Committee and Moelis as its financial advisor in connection with the potential merger on July 21, 2020.
The Transaction Committee thereafter met regularly by video conference together with members of Diamond S management and representatives of White & Case and Moelis to discuss the status of negotiations, terms of the proposed merger and the termination of the commercial and technical management services provided by CSMC. On multiple occasions, the Transaction Committee directed representatives of Moelis to discuss certain terms of the proposed termination of the CSMC services with Mr. Kalogiratos, who represented CSMC in such negotiations. Representatives of Moelis and Mr. Kalogiratos discussed, in particular, various financial aspects relating to the remaining commercial and technical management services to be provided by CSMC to Diamond S pursuant to existing contractual arrangements and ways in which the parties could transition the management of vessels from CSMC to Diamond S upon the successful consummation of a potential merger with INSW. The Transaction Committee also directed representatives of Moelis to engage with representatives of Jefferies to plan logistics and key exchanges of information.
On August 4, 2020, the INSW Board held a telephonic meeting at which management updated the INSW Board on the status of a potential transaction with Diamond S, including that, although INSW had not received any formal response to the June Proposal Letter, a number of discussions had taken place between representatives of Moelis and Jefferies. Representatives of Jefferies also provided an update on its discussions to date with representatives of Moelis.
On August 17, 2020, Diamond S, CSMC and CMTC executed a mutual confidentiality and standstill agreement.
On September 11, 2020, the Transaction Committee sent a term sheet to CSMC setting forth proposed material terms and conditions upon which the commercial and technical management services provided by CSMC would be terminated (the “Term Sheet”), which included a proposal to pay a termination fee in connection with the transition the management of the Diamond S vessels to the combined company.
On September 14, 2020, Diamond S and INSW entered into an exclusivity agreement (the “Exclusivity Agreement”) pursuant to which both parties agreed to negotiate the proposed merger for a 30-day period.
On September 23, 2020, CSMC sent a revised Term Sheet to Moelis reflecting CSMC’s position on key issues, including changes to the size and payment terms of the proposed termination fee and the terms of the transition of the management of the Diamond S vessels to the combined company.
The Transaction Committee thereafter met several times by video conference together with members of Diamond S management and representatives of White & Case and Moelis to discuss CSMC’s revised Term Sheet. On September 29, 2020, the Transaction Committee sent a revised Term Sheet to CSMC reflecting the Transaction Committee’s positions on key issues.
 
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Subsequently, on multiple occasions, Mr. Malone, on behalf of and with the approval of the Transaction Committee, discussed certain terms of the proposed termination of commercial and technical management services provided by CSMC with Mr. Kalogiratos in order to better understand CSMC’s positions and to be able to progress the negotiations with CSMC. The Transaction Committee also directed representatives of Moelis to discuss the proposed response to CSMC with representatives of Jefferies on several occasions. The Transaction Committee met several times by video conference together with members of Diamond S management and representatives of White & Case and Moelis to discuss CSMC and the Transaction Committee’s respective positions on key issues. During this period, representatives of Jefferies provided updates to INSW management regarding Jefferies’ discussions with representatives of Moelis, and the status of negotiations between Diamond S and CSMC.
On October 14, 2020, Diamond S and INSW agreed to extend the Exclusivity Agreement for a 30-day period.
On October 15, 2020, the Transaction Committee sent a revised Term Sheet to CSMC reflecting the Transaction Committee’s positions on key issues, including an outside date, governance matters and the terms of the transition of the management of the Diamond S vessels from CSMC to the combined company. The Transaction Committee continued to meet regularly by video conference thereafter together with management and representatives of White & Case and Moelis to discuss ongoing conversations between representatives of Moelis and Jefferies regarding the terms of the proposed merger and negotiations with CSMC.
On October 16, 2020, INSW formally engaged Jefferies as its financial advisor in connection with a possible transaction involving INSW and Diamond S.
On October 28, 2020, the INSW Board held a telephonic meeting at which INSW management and representatives of Jefferies provided an update on the status of discussions with Moelis regarding a potential transaction with Diamond S.
On November 3, 2020, Mr. Kalogiratos sent an email to the Transaction Committee in which Mr. Kalogiratos conveyed CSMC’s position on several issues raised by the last draft of the Term Sheet, including the timing of transitioning commercial and technical management services provided by CSMC, the payment of related expenses and the proposed termination fee. On November 4, 2020, Mr. Kalogiratos provided revisions to the Term Sheet reflecting CSMC’s latest positions. The Transaction Committee directed Moelis to share the latest draft of the Term Sheet with representatives of Jefferies.
On November 10, 2020, the INSW Board held a telephonic conference with INSW management and representatives of Jefferies in attendance. Management described INSW’s work on a potential transaction with Diamond S, including discussions with Diamond S to date. The INSW Board discussed the relative valuations of the two companies, and requested that representatives of Jefferies provide preliminary financial analyses of INSW and Diamond S, which were subsequently provided to INSW management.
The Transaction Committee thereafter held several meetings by video conference with members of Diamond S management and representatives of White & Case and Moelis to discuss the ongoing dialogue between representatives of Moelis and Jefferies with respect to various financial matters relating to INSW and Diamond S and the potential equity ownership split of the combined company, the next steps and anticipated timing of the transaction process. Following such discussions, on November 19, 2020, the Transaction Committee delivered a letter to INSW setting forth material terms of a proposed merger, including a proposed revised pro forma ownership splits that would result in INSW stockholders owning 52.0% of the combined company and Diamond S shareholders owning the remaining 48.0% equity interest (which did not account for any potential impact from the planned termination of arrangements with CSMC) and requesting that Diamond S and INSW begin to draft definitive agreements and extend exclusivity through December 15, 2020. On November 20, 2020, INSW management had a telephonic conference with representatives of Jefferies to discuss the letter received the previous day from the Transaction Committee, in preparation for the subsequent meeting of the INSW Board.
On November 23, 2020, the INSW Board held a telephonic meeting to discuss the letter received from Diamond S. INSW management, with the assistance of representatives of Jefferies, reviewed with the INSW Board additional financial analyses regarding the potential transaction, including the potential financial
 
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benefits, including earnings per share and synergy benefits. The INSW Board discussed the potential transaction with Diamond S as compared to other strategic alternatives. The INSW Board directed INSW management to continue to engage in discussions regarding a potential transaction with Diamond S.
On December 3, 2020, the INSW Board held a meeting by video conference at which INSW management further discussed the potential benefits of a potential transaction with Diamond S. Management and the INSW Board discussed net asset values, potential synergies, due diligence requirements, potential vessel divestitures and the leverage of the combined company. The INSW Board determined that it was interested in continuing discussions regarding a potential transaction on acceptable terms.
On December 7, 2020, Messrs. Kilcullen and Pribor held a call in which Mr. Pribor conveyed INSW’s enthusiasm for the proposed merger, but noted that representatives of Jefferies were preparing its preliminary financial analyses of both companies at the request of the INSW Board. Mr. Pribor requested that the parties delay conducting further due diligence until both parties had come to an agreement on the relative valuations of Diamond S and INSW.
On December 15, 2020, the INSW Board held a telephonic meeting at which INSW management discussed the strategic rational of the proposed transaction and introduced a revised proposal for the INSW Board’s approval. Following discussion, the INSW Board authorized INSW management to submit a revised proposal to Diamond S. Management then discussed with representatives of Jefferies proposing transaction terms to Moelis the following day.
On December 16, 2020, at the direction of INSW, representatives of Jefferies called representatives of Moelis and communicated a revised proposal for the Diamond S Board’s consideration, which included a revised pro forma ownership split that would result in INSW stockholders owning 54.0% of the combined company and Diamond S shareholders owning the remaining 46.0% equity interest following the payment of a dividend of $75 million to INSW stockholders prior to the closing of the proposed merger and addressed other aspects of the proposed merger, including flexibility for INSW to sell its interest in the FSO Joint Ventures prior to the closing of the proposed merger and pay a further dividend from the proceeds of such sale of up to $25 million (the “Potential FSO Dividend”) to INSW stockholders prior to the closing of the proposed merger, the timing of payment of the proposed termination fee payable to CSMC in connection with the termination of their commercial and technical management services and board composition.
The Transaction Committee thereafter held several meetings by video conference together with members of Diamond S management and representatives of White & Case and Moelis at which representatives of Moelis updated the Transaction Committee on discussions between representatives of Moelis and Jefferies regarding a possible combination involving Diamond S and INSW and reviewed certain financial aspects regarding INSW’s most recent proposal, including financial information regarding both companies based on current financial data. The Transaction Committee discussed the impact of potential vessel sales, the payment of dividends to INSW stockholders prior to the closing of the proposed merger on the pro forma ownership split of the combined company, the status of negotiations with CSMC and the feedback received from INSW regarding the latest draft of the Term Sheet.
On December 28, 2020, Mr. Qureshi, on behalf of the Transaction Committee, sent a letter to the INSW Board conveying a revised proposal, including a revised pro forma ownership split that would result in INSW stockholders owning 52.5% of the combined company and Diamond S shareholders owning the remaining 47.5% equity interest following the payment of a special dividend of $75 million to INSW stockholders prior to the closing of the proposed merger and which addressed other aspects of the proposed merger, including an equal allocation of the termination fee payable to CSMC and a combined company board of directors of nine directors, with six designated by INSW and three designated by DSSI. Diamond S further proposed to initiate due diligence, including vessel inspections.
On each of December 29, 2020 and December 30, 2020, INSW management held telephonic conferences with representatives of Jefferies. During these conferences, INSW and representatives of Jefferies discussed terms of a potential revised proposal to be delivered by INSW in response to Diamond S’ proposal of December 28, 2020.
On December 30, 2020, representatives of Jefferies and representatives of Moelis had a telephonic conference during which representatives of Moelis responded to questions to clarify the December 28, 2020 letter from the Transaction Committee to the INSW Board.
 
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On December 31, 2020, INSW sent a revised proposal to Diamond S, which included a revised pro forma ownership split that would result in INSW stockholders owning 53.75% of the combined company and Diamond S shareholders owning the remaining 46.25% equity interest following the payment of a dividend of $75 million to INSW stockholders prior to the closing of the proposed merger and addressed other aspects of the proposed merger, including INSW’s ability to make the Potential FSO Dividend prior to the closing of the proposed merger, the allocation of the termination fee payable to CSMC and governance matters.
The Transaction Committee subsequently met on several occasions by video conference together with members of Diamond S management and representatives of White & Case and Moelis to discuss the INSW proposal and how to progress discussions with CSMC.
On January 6, 2021, the INSW Board held a meeting by video conference to discuss the terms of the revised proposal, including the termination fee payable to CSMC, and the status of negotiations with Diamond S.
On January 8, 2021, Diamond S and INSW agreed to extend the Exclusivity Agreement to February 13, 2021. As an exhibit to the extension, Diamond S and INSW referenced certain proposed terms, including a pro forma ownership split that would result in INSW stockholders owning 53.25% of the combined company and Diamond S shareholders owning the remaining 46.75% equity interest following the payment of a dividend of $75 million to INSW stockholders prior to the closing of the proposed merger and addressed other aspects of the proposed merger, including INSW’s ability to make the Potential FSO Dividend with a reduction in a pro forma ownership split to INSW stockholders of 0.67% and certain governance matters.
On January 12, 2021, members of Diamond S management and representatives of White & Case and Moelis discussed with the Diamond S Board an overview of progress made on the proposed merger, the strategic rationale for the transaction and selected preliminary financial information relating to a possible transaction.
On January 19, 2021, representatives of White & Case and Cleary Gottlieb Steen & Hamilton LLP (“Cleary Gottlieb”), as counsel to INSW, had an introductory call in which they discussed procedural matters regarding the potential merger, including with respect to the preparation of transaction documents and due diligence. Following such call, White & Case and Cleary Gottlieb exchanged due diligence request lists and both parties began preparing virtual data rooms, exchanging diligence information and initiating vessel inspections shortly thereafter.
On January 20, 2021, the Transaction Committee held a meeting by video conference together with management and representatives of Moelis to discuss the next steps and follow-up information to be provided to the Diamond S Board.
On January 22, 2021, members of Diamond S management and representatives of White & Case and Moelis reviewed and discussed with the Diamond S Board further financial information regarding the transaction with INSW. The Transaction Committee subsequently met on several occasions by video conference together with members of Diamond S management and representatives of White & Case and Moelis to discuss the next steps and report on progress of the proposed merger.
On January 24, 2021, Messrs. Qureshi and Douglas D. Wheat, Chairman of the INSW Board, discussed both companies’ interest in progressing due diligence and in working together to negotiate with CSMC.
On January 26, 2021, Mr. Kalogiratos sent a revised Term Sheet to the Transaction Committee that was subsequently shared with INSW, which conveyed CSMC’s position on key terms, including with respect to the fee payable upon the termination of the commercial and technical management services provided by CSMC.
On January 27, 2021, INSW management discussed with representatives of Jefferies the Term Sheet received the prior day and INSW management conveyed to representatives of Jefferies its view on the proposed revised transaction terms. Following that discussion, later in the day on January 27, 2021, INSW
 
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management directed representatives of Jefferies to propose to Moelis an equity split of 53.55% for INSW stockholders and 46.45% for Diamond S shareholders.
On January 27, 2021, at the direction of INSW management, representatives of Jefferies relayed certain comments to the Term Sheet to representatives of Moelis and also conveyed a revised merger proposal that adjusted the pro forma ownership split and would result in INSW stockholders owning 53.55% of the combined company and Diamond S shareholders owning the remaining 46.45% equity interest.
The Transaction Committee subsequently held several meetings by video conference together with members of Diamond S management and representatives of White & Case and Moelis to discuss the Term Sheet, how to respond to CSMC and the input INSW had provided on the Term Sheet and INSW’s revised merger proposal. Following such discussions, on January 28, 2021, the Transaction Committee sent a revised Term Sheet to CSMC, which Diamond S, INSW and CSMC subsequently negotiated together with their advisors and exchanged several further drafts.
On February 5, 2021, the management teams of Diamond S and INSW and each of their respective legal and financial advisors participated in a video conference to discuss procedural matters in order to progress due diligence and legal documentation.
On February 8, 2021, Diamond S and CSMC executed the Term Sheet, which remained subject to the negotiation and execution of a definitive termination agreement and was conditioned on Diamond S and INSW executing a definitive merger agreement by March 31, 2021.
On February 9, 2021, Diamond S and INSW agreed to extend the Exclusivity Agreement to March 15, 2021.
On February 11, 2021, members of Diamond S management and representatives of White & Case and Moelis provided and discussed with the Diamond S Board a situation update and reviewed selected preliminary financial information regarding a possible transaction.
On February 18, 2021, White & Case sent a draft of the termination agreement with CSMC to Cleary Gottlieb based on the Term Sheet and following which Diamond S, INSW and CSMC and their respective counsels negotiated the termination agreement in parallel with all other transaction documentation.
On February 23, 2021, the INSW Board held a meeting by video conference at which INSW Board determined to propose to Diamond S a potential decrease to the size of the special dividend in exchange for increasing the relative pro forma ownership interest of INSW stockholders in the combined company.
On February 24, 2021, White & Case and Cleary Gottlieb discussed the CSMC termination agreement and White & Case provided background on discussions with CSMC that had occurred at the time of negotiation of the Term Sheet. The following day, on February 25, 2021, Cleary Gottlieb sent White & Case comments on the CSMC termination agreement.
On February 26, 2021, Cleary Gottlieb sent White & Case an initial draft of the merger agreement, which was structured as a merger of equals transaction as discussed between the parties in which both parties generally provide mutual representations and warranties, covenants and other obligations customary for a merger of equals.
On February 27, 2021, Mr. Wheat called Mr. Qureshi to discuss proposed changes to the transaction terms, including a reduction in the size of the pre-closing dividend to be paid to INSW stockholders to $28 million and changes in the relative valuations of the fleets of Diamond S and INSW as a result of which Mr. Wheat conveyed that the INSW Board proposed to revise the pro forma equity split such that INSW stockholders would own 56.25% of the equity of the combined company following the merger and Diamond S shareholders would own the remaining 43.75% equity interest in the combined company. On February 27, 2021, representatives of Jefferies also informed representatives of Moelis of INSW’s revised proposal, which had been separately conveyed by INSW management to representatives of Jefferies.
The Transaction Committee subsequently held several meetings by video conference together with members of Diamond S management and representatives of White & Case and Moelis to discuss the proposal conveyed by Mr. Wheat and representatives of Jefferies. Representatives of Moelis reviewed certain
 
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financial aspects regarding INSW’s proposal, including a discussion of certain financial information relating to Diamond S and INSW. Thereafter, the Transaction Committee directed Moelis to call representatives of Jefferies and Mr. Qureshi to call Mr. Wheat to discuss a revised pro forma ownership split of the combined company.
On March 2, 2021, Mr. Qureshi called Mr. Wheat and representatives of Moelis called representatives of Jefferies to discuss the relative contributions of Diamond S and INSW and communicated that while the Transaction Committee was open to revisiting the parties’ pro forma ownership split in the combined company given the passage of time and based on the reduced value of the pre-closing dividend that INSW proposed to pay to its stockholders, the Transaction Committee’s position was that the appropriate relative ownership interests in the combined company following the merger would result in INSW stockholders owning 55.5% of the combined company and Diamond S shareholders owning the remaining 44.5% equity interest, which represented the midpoint between the previously agreed pro forma ownership split and INSW’s new proposal.
On March 2, 2021, Mr. Wheat called Mr. Qureshi and conveyed that the INSW Board was prepared to agree to a revised pro forma ownership split that would result in INSW stockholders owning 56.0% of the combined company and Diamond S shareholders owning the remaining 44.0% equity interest.
On March 3, 2021, the INSW Board held a meeting by video conference, at which Mr. Wheat recounted the conversations of March 2, 2021 with Mr. Qureshi. The INSW Board determined to pursue a pro forma ownership split that would result in INSW stockholders owning 55.75% of the combined company and Diamond S shareholders owning the remaining 44.25% of the combined company, so long as INSW would be permitted to make a special pre-closing dividend of $31.5 million. INSW management also discussed the status of discussions with CSMC and the status of due diligence on Diamond S.
On March 3, 2021, the Transaction Committee held a meeting by video conference at which members of Diamond S management and representatives of White & Case and Moelis were present. At such meeting, representatives of Moelis reviewed certain financial information regarding Diamond S and INSW, the various proposals exchanged between Diamond S and INSW with respect to the pro forma ownership split of the combined company and the premium implied by each such proposal. The Transaction Committee discussed Moelis’ analysis and the latest terms proposed by INSW. White & Case provided an overview of Cleary Gottlieb’s initial draft of the merger agreement. Following the Transaction Committee meeting, Mr. Qureshi called Mr. Wheat and they agreed to a pro forma ownership split that would result in INSW stockholders owning 55.75% of the combined company and Diamond S shareholders owning the remaining 44.25% equity interest. In addition, they agreed that INSW would be permitted to make a pre-closing dividend of $31.5 million to INSW’s stockholders.
On March 8, 2021, management teams from Diamond S and INSW and their respective legal and financial advisors met by video conference to discuss the confirmatory due diligence and legal and financing documentation needed in order to sign the merger agreement and related ancillary documents and agreed to regular video conferences to discuss the proposed merger and the parties’ progress. The Transaction Committee further began convening regularly by video conference with Diamond S’ management and representatives of White & Case and Moelis in order to be updated regularly.
On March 10, 2021, Diamond S and INSW further extended the Exclusivity Agreement until March 31, 2021.
On March 11, 2021, representatives of Cleary Gottlieb and White & Case discussed a proposal to cause CSMC to agree to terminate its registration rights agreement with Diamond S. In addition, on March 11, 2021, S&C sent White & Case a revised draft of the CSMC termination agreement.
On March 12, 2021, the Transaction Committee held a meeting by video conference at which members of Diamond S management, representatives of White & Case and Moelis were present. At such meeting, the Transaction Committee discussed, among other items, progress made in discussions among INSW and Diamond S’ respective management teams regarding anticipated synergies in connection with the merger, voting and support agreements proposed to be delivered in connection with the merger, and certain outstanding issues in the merger agreement, including governance matters and termination rights and related fees.
 
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On March 12, 2021, White & Case sent comments on the initial draft of the merger agreement to Cleary Gottlieb.
On March 13, 2021, the Transaction Committee held a meeting by video conference at which members of Diamond S management, representatives of White & Case and Moelis were present. At such meeting, White & Case provided an update on the current status of the termination agreement with CSMC, and the Transaction Committee discussed material issues raised by a draft of the termination agreement provided by CSMC on March 11, 2021, including with respect to the timing of the transition of management services, CSMC’s ability to enter into new time charters and certain fees payable to CSMC in connection with the transition of management services.
On March 14, 2021, the respective general counsels of Diamond S and INSW, as well as S&C, White & Case and Cleary Gottlieb discussed open issues in the CSMC termination agreement. The parties agreed that S&C would discuss the open issues raised by the call with CSMC. On March 16, 2021, White & Case sent a revised draft of the CSMC termination agreement to S&C, which draft, among other things, limited the period of time in which CSMC could commit vessels to new time charters.
On March 18, 2021, the Diamond S Board held a meeting by video conference attended by Diamond S management and representatives of White & Case and Moelis to discuss the Transaction. Representatives of Moelis provided an update on negotiations with INSW and reviewed certain financial information regarding the transaction terms, including the changes to the pro forma ownership interest of the combined company and the pre-closing dividend INSW would be permitted to make to its stockholders that had been negotiated with INSW since the last meeting of the Diamond S Board. The Diamond S Board asked Moelis questions regarding its discussion and certain outstanding issues requiring resolution in order to sign the merger agreement.
On March 19, 2021, S&C sent a revised draft of the CSMC termination agreement to White & Case and Cleary Gottlieb.
On March 21, 2021, Cleary Gottlieb sent White & Case comments to the merger agreement. On March 22, 2021, the Transaction Committee held a meeting by video conference that was attended by Diamond S management and representatives of White & Case and Moelis to discuss the material open issues raised by Cleary Gottlieb’s comments to the merger agreement. Specifically, the Transaction Committee discussed the proposed adjustment to the exchange ratio in the event INSW sells its interest in the FSO Joint Venture prior to the closing of the proposed merger and pays the potential FSO Dividend, whether both parties would be required to hold shareholder meetings irrespective of any change in the recommendation by their respective boards of directors, restrictions on both parties’ businesses between the date on which the merger agreement is signed and the closing of the merger, compensation and benefits available to any Diamond S employees that continue to be employed by the combined company, whether both parties should be required to pay one another’s expenses in the event such party’s shareholders do not approve the merger in the absence of a competing offer and the amount of the termination fees that would become payable upon termination of the merger agreement under certain circumstances.
On March 24, 2021, Mr. Kalogiratos on behalf of CSMC and Mr. Malone on behalf of Diamond S negotiated open points in the CSMC termination agreement via email. Also on March 24, 2021, White & Case and Cleary Gottlieb sent S&C a revised draft of the CSMC termination agreement.
On March 25, 2021, the Diamond S Board held a meeting by video conference attended by Diamond S management and representatives of White & Case and Moelis to discuss the Transaction. Representatives of White & Case provided an overview of the terms of the merger agreement and noted that discussions remain ongoing with respect to the exchange ratio and certain other legal terms described to the Diamond S Board. The Diamond S Board members asked for clarification on several aspects of the merger agreement, including with respect to the anticipated timing of closing and closing conditions. Representatives of Moelis then provided an overview of certain financial aspects regarding the merger, including a discussion of financial information relating to Diamond S and INSW, the synergy opportunities that both parties’ respective management teams anticipate will be realizable as a result of the merger and certain pro forma effects of the merger on the combined company. The Diamond S Board members asked questions about certain of the information reviewed by Moelis.
 
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On March 25, 2021, White & Case sent Cleary Gottlieb comments to the merger agreement reflecting Diamond S’ position on key issues, including whether both parties would be required to hold shareholder meetings irrespective of any change in the recommendation by their respective boards of directors, restrictions on both parties’ businesses between the date on which the merger agreement is signed and the closing of the merger, compensation and benefits available to any Diamond S employees that continue to be employed by the combined company and the amount of the termination fees that would become payable upon termination of the merger agreement under certain circumstances.
On March 27, 2021, the INSW Board met via video conference, including with members of INSW management, representatives of Cleary Gottlieb and representatives of Jefferies. Management provided the INSW Board with an update on the transaction and Cleary Gottlieb presented to the INSW Board an overview of its fiduciary duties and a detailed summary of the terms of the merger agreement and ancillary agreements, including open points.
On March 27, 2021, representatives of White & Case and Cleary Gottlieb held a call to discuss open items in the merger agreement. Following this discussion, Cleary Gottlieb sent comments to the merger agreement to White & Case.
On March 27, 2021, representatives of White & Case and Cleary Gottlieb held a call to discuss open items on the merger agreement, including with respect to certain representations, the inclusion of a closing condition requiring delivery of certain A&R debt agreements, the amount of the termination fees that would become payable upon termination of the merger agreement under certain circumstances and restrictions on both parties’ businesses between the date on which the merger agreement is signed and the closing of the merger.
On March 29, 2021, representatives of White & Case and Cleary Gottlieb held a call to discuss outstanding issues in the merger agreement following which Cleary Gottlieb sent a revised draft of the merger agreement to White & Case, which included changes to, among other things, the compensation and benefits that would be made available to any Diamond S employees that continue to be employed by the combined company and proposed an exchange ratio that would entitle Diamond S shareholders to 0.5525 shares of INSW common stock for each share of Diamond S common stock they hold at the closing of the merger.
On March 30, 2021, the Transaction Committee discussed with Ms. Zabrocky and Mr. Pribor certain matters, including the proposed exchange ratio pursuant to which they agreed to a base exchange ratio that would entitle Diamond S shareholders to 0.55375 shares of INSW common stock for each share of Diamond S common stock they hold at the closing of the merger.
Following such discussions, the Transaction Committee held a meeting by video conference on March 30, 2021, which members of Diamond S management and representatives of White & Case and Moelis attended, to discuss the outcome of the discussions between the Transaction Committee and INSW management and the most recent drafts of the merger agreement and termination agreement with CSMC, and agreed upon consultation with their legal advisors that such documents were substantially final and in a form upon which the Transaction Committee could recommend that the full Diamond S Board should approve. Representatives of Moelis discussed with the Transaction Committee their financial analysis with respect to the merger and following this discussion, indicated that Moelis was prepared to render to the Diamond S Board its opinion, as of the date of such opinion, and subject to the assumptions made, procedures followed, matters considered and other limitations set forth in its written opinion, as to the fairness from a financial point of view to the holders of Diamond S common stock, other than INSW and its affiliates of the base exchange ratio provided for in the merger.
Immediately following the Transaction Committee meeting, the Diamond S Board held a meeting by video conference attended by members of Diamond S management and representatives of White & Case, Seward & Kissel LLP, serving as counsel to Diamond S, and Moelis to discuss the Transaction, including the proposed final terms of the merger agreement. Representatives of White & Case provided an overview of the directors’ fiduciary duties in evaluating and approving the proposed merger. They also provided the Diamond S Board with a detailed summary of the terms of the merger agreement that had changed since the March 25, 2021 meeting of the Diamond S Board, including with respect to the inclusion of a closing
 
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condition requiring delivery of certain A&R debt agreements, various employee matters, the outside date by which the merger is required to be consummated and the amount of the termination fees that would become payable upon termination of the merger agreement under certain circumstances. Moelis then reviewed and discussed its financial analyses with respect to Diamond S, INSW and the proposed merger provided for in the merger agreement. At the request of the Diamond S Board, Moelis rendered its oral opinion, as of March 30, 2021, to the Diamond S Board (which was subsequently confirmed in writing by delivery of Moelis’ written opinion addressed to the Diamond S Board dated the same date) as to, and subject to, the assumptions made, procedures followed, matters considered and other limitations set forth in the opinion, the fairness, from a financial point of view, to the holders of Diamond S common stock, other than INSW and its affiliates, of the base exchange ratio in the merger pursuant to the merger agreement. The Moelis opinion is more fully described under the section “The Merger — Opinion of Diamond S’ Financial Advisor.” Following a discussion of the foregoing, the Diamond S Board unanimously resolved, amongst other matters, to (i) determine that the terms of the merger agreement and the consummation of the proposed merger and the other transactions contemplated by the merger agreement are advisable and are fair to, and in the best interests of, Diamond S and its shareholders, (ii) approve the execution, delivery, and performance of the merger agreement, the CSMC termination agreement and other ancillary agreements and the consummation of the transactions contemplated by the merger agreement, (iii) direct that a proposal for the approval of the merger agreement be submitted to the Diamond S shareholders for adoption, and (iv) recommend that the Diamond S shareholders approve the merger agreement. The reasons that supported the Diamond S Board’s decision to enter into the merger agreement and consummate the merger and the other transactions contemplated thereby, and a variety of risks and other countervailing factors that the Diamond S Board considered, are summarized in the section titled “The Merger — Recommendation of the Diamond S Board and its Reasons for the Transaction.”
On March 30, 2021, the INSW Board met via video conference to discuss the proposed transaction, including the proposed final terms of the merger agreement with representatives of Cleary Gottlieb and Jefferies also in attendance. Representatives of Jefferies reviewed with the INSW Board Jefferies’ financial analysis of the proposed base exchange ratio. Following discussion among members of the INSW Board and representatives of Jefferies, Jefferies rendered to the INSW Board its oral opinion, which was subsequently confirmed by delivery of a written opinion dated March 30, 2021, that, as of the date of such opinion, and subject to the assumptions made, procedures followed, matters considered and other limitations set forth in its written opinion, the base exchange ratio provided for in the merger pursuant to the merger agreement was fair, from a financial point of view, to INSW. The Jefferies opinion is more fully described under the section “The Merger — Opinion of INSW’s Financial Advisor.” Representatives of Cleary Gottlieb then described changes to the transaction terms since the March 27, 2021 meeting of the INSW Board, including the finalized base exchange ratio, the amount of the termination fees payable by each party in certain circumstances and closing conditions related to the entry into the A&R debt agreements and the accuracy of the representation and warranty related to the absence of any financial restatement of prior SEC filings. Following a discussion of the foregoing, the INSW Board unanimously, amongst other matters, (i) declared that the merger agreement and consummation of the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of INSW and its stockholders, (ii) approved the merger agreement and the transactions contemplated thereby, including the merger, (iii) authorized the execution, delivery and performance of the merger agreement and the other ancillary agreements, (iv) declared that the INSW share issuance proposal be submitted for consideration at the INSW special meeting, (v) recommended in favor of the INSW share issuance and (vi) approved the inclusion of the recommendation in this joint proxy statement/ prospectus. The reasons that supported the INSW Board’s decision to enter into the merger agreement and consummate the merger and the other transactions contemplated thereby, and a variety of risks and other countervailing factors that the INSW Board considered, are summarized in the section titled “The Merger — Recommendation of the INSW Board and its Reasons for the Transaction.”
That evening, representatives of White & Case and Cleary Gottlieb finalized the merger agreement, disclosure schedules and ancillary documents, following which Diamond S, INSW and the Merger Sub executed and delivered the merger agreement effective as of March 30, 2021. In addition, Diamond S and CSMC executed and delivered the termination agreement contemplated by the merger agreement.
Prior to the opening of U.S. stock markets on March 31, 2021, Diamond S and INSW publicly announced the merger by issuing a joint news release and by hosting a joint conference call for the investment community to discuss the proposed merger.
 
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Recommendation of the INSW Board and its Reasons for the Transaction
At its meeting on March 30, 2021, the INSW board of directors unanimously (1) declared that the merger agreement and consummation of the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of INSW and its stockholders, (2) approved the merger agreement and the transactions contemplated thereby, including the merger, (3) authorized the execution, delivery and performance of the merger agreement, (4) declared that the INSW share issuance proposal be submitted for consideration at the INSW special meeting, (5) recommended in favor of the INSW share issuance and (6) approved the inclusion of the recommendation in this joint proxy statement/ prospectus.
In evaluating the merger agreement, the INSW board of directors consulted with and received the advice of INSW’s senior management and its legal and financial advisor, following an extensive due diligence process. In reaching its decision, the INSW board of directors considered a number of factors, including, but not limited to, the factors set forth below, which the INSW board of directors viewed as generally supporting its decision to approve the merger agreement and the transactions contemplated thereby and recommend that the INSW stockholders approve the INSW share issuance proposal (which are not necessarily listed in order of importance).

Scale and Fleet.   The merger will enhance INSW’s capabilities in both the crude and product markets. With a fleet of 100 vessels, the combined company will be a diversified tanker company, with capability in each of VLCC, Suezmax, LR1/ Panamax and the MR markets. The merger will create the second largest U.S.-listed tanker company by vessel count and the third largest U.S.-listed tanker company by deadweight, with 100 vessels in the combined fleet. The combined company has enhanced ability to increase exposure to favorable markets such as the crude oil, refined petroleum and other products in the international shipping markets.

Synergies.   INSW expects to realize estimated annual cost synergies in excess of $23 million and revenue synergies of $9 million, which are expected to be fully realizable during 2022. This includes cost synergies in each of cash salaries and benefits, office and administrative expenses, external management fees, professional fees and public company costs and non-cash compensation.

New Vessel Management.   In connection with the transaction, Diamond S will terminate its vessel management arrangements with CSMC. This will give INSW greater control of Diamond S’ fleet following completion of the merger than Diamond S has had as an independent company.

Strong Financial Position.   The combined company will have greater scale and financial resources. The transaction is expected to be accretive to INSW’s earnings and cash flow per share, even excluding potential revenue synergies and the increased size of the vessel fleet is expected to generate strong cash flows and can act as a reserve of saleable assets should INSW require cash in the future. Moreover, the combined company is expected to have a combined pro forma net leverage ratio of 42% as of December 31, 2020, which would be one of the lowest among peers in the tanker sector.
Other Factors Considered by the INSW Board.   In addition to considering the strategic factors described above, the INSW Board considered the following additional factors, all of which it viewed as supporting its decision to approve the merger agreement:

the fact that no adjustment will be made in the merger consideration to be received by Diamond S’ shareholders in the merger as a result of possible increases or decreases in the trading price of shares of INSW common stock or shares of Diamond S common stock following the announcement of the merger;

INSW’s knowledge of Diamond S’ business, operations, financial condition, earnings and prospects, taking into account the results of INSW’s due diligence review of Diamond S and the fact that INSW and Diamond S operate in the same industry;

the current and prospective business climate in the shipping industry; the alternatives reasonably available to INSW, including remaining a standalone entity, the lack of other strategic alternatives, and the INSW Board’s belief that the merger with Diamond S would create the best reasonably available opportunity to maximize value for the INSW stockholders given the potential risks, rewards and uncertainties associated with each strategic alternative and without limiting strategic alternatives
 
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that INSW could pursue in the future, including other strategic transactions, joint ventures and vessel acquisitions and divestitures;

the projected financial results of INSW as a standalone company and the fit of the transaction with INSW’s previously established strategic goals;

the complementary cultures of INSW and Diamond S, including their long-term customer relationships and similar focus on safety and environmental, social and governance matters;

the recommendation of INSW’s senior management in favor of the merger;

the resulting percentage ownership interest that current INSW stockholders would have in the combined company following the merger;

the ability of INSW to continue to pay its regular quarterly dividends to its stockholders under the terms of the merger agreement during the pendency of the merger and INSW’s ability to make a special dividend of $31.5 million prior to the completion of the merger;

the fact that seven of the ten member board of the combined company will comprise members of the INSW Board as of immediately prior to the effective time, including the chairman;

the fact that senior management of the combined company will be comprised of senior management of INSW;

the fact that a group of shareholders, representing approximately 14% and 29% of the issued and outstanding shares of INSW and Diamond S, respectively, has committed to vote in favor of the merger, subject to the terms and conditions contained in voting and support agreements as more fully described in the sections entitled “The Merger Agreement — Cyrus Support Agreement”, “The Merger Agreement — Capital Support Agreement” and “The Merger Agreement — WL Ross Support Agreement”, and the resulting likelihood that the merger would be consummated;

the fact that INSW, as well as Diamond S, has agreed to use its reasonable best efforts to obtain the necessary approvals and clearances required under applicable antitrust laws to effect the merger, as more fully described in the section entitled “The Merger Agreement — Other Covenants and Agreements,” and the INSW’s board’s view, after consultation with its legal counsel, concerning the likelihood that regulatory approvals and clearances necessary to consummate the mergers would be obtained;

the fact that (1) Diamond S’ debt will remain outstanding following completion of the merger, (2) the terms of Diamond S’ debt will be amended to permit dividends and otherwise to more closely mirror the terms of INSW’s existing indebtedness, (3) there exists a large amount of overlap between Diamond S’ lenders and INSW’s lenders and (4) the fact that INSW’s debt will also remain outstanding following completion of the merger;

the expected tax-efficient treatment of the merger for U.S. federal income tax purposes, as more fully described below under the section entitled “Material U.S. Federal Income Tax Consequences of the Merger”;

the anticipated customer, supplier and stakeholder reaction to the merger;

the fact that the counterparties to both of Diamond S’ joint ventures consented to the merger prior to entering into the merger agreement, permitting the joint ventures to remain intact following completion of the merger;

the fact that Diamond S is obligated to pay INSW a termination fee of $17 million in certain circumstances;

the INSW Board’s right to withhold, withdraw or change its recommendation to the INSW stockholders to vote “FOR” the INSW share issuance proposal if a superior proposal is available has occurred or not to hold the INSW stockholder meeting, subject to INSW being obligated to pay Diamond S a termination fee of $19 million in the event INSW terminates the merger agreement prior to the INSW’s stockholders’ vote on the INSW share issuance proposal or in certain other
 
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circumstances in which INSW enters into definitive agreement with respect to a competing proposal within 12 months after the termination of the merger agreement, which competing proposal is subsequently consummated;

the ability of INSW’s stockholders to vote “FOR” or “AGAINST” the INSW share issuance proposal, with generally no termination fee being payable by INSW to Diamond S if the INSW stockholders do not approve the merger proposal and the INSW Board has not changed its recommendation to INSW stockholders to vote “FOR” the merger proposal, INSW has not breached certain provisions of the merger agreement and no competing proposal has been publicly made prior to the INSW special meeting;

the INSW Board’s conclusion, after consultation with INSW’s legal advisors, that the provisions of the merger agreement providing for the INSW Board’s ability to respond to alternative transaction proposals and change its recommendation to INSW stockholders to vote in favor of the adoption of the merger agreement are customary and reasonable for transactions of this type;

the outside date under the merger agreement, which is expected to allow for sufficient time to complete the merger;

the ability of Diamond S to seek specific performance of INSW’s obligations under the merger agreement; and

the financial analyses reviewed by Jefferies with the INSW Board as well as the opinion of Jefferies delivered to the INSW Board on March 30, 2021 as to the fairness, from a financial point of view, of the base exchange ratio provided for in the merger pursuant to the merger agreement. See “The Merger — Opinion of INSW’s Financial Advisor.”
Countervailing Factors.   The INSW Board weighed these advantages and opportunities against a number of other risks and potential negative factors concerning the merger agreement and the merger, including:

the challenges inherent in the merger of two businesses of the size and scope of INSW and Diamond S, each of whose assets are scattered all of the world, and the size of the companies relative to each other, including the risk that integration costs may be greater than anticipated and the possible diversion of management attention for an extended period of time;

the difficulties of combining the businesses and workforces of INSW and Diamond S and the need to align Diamond S policies and internal controls to INSW policies and internal controls;

the substantial costs to be incurred in connection with the merger, including the costs of integrating the businesses of INSW and Diamond S, and the transaction expenses arising from the merger, including advisor fees;

Diamond S’ right, subject to certain conditions, to respond to and negotiate with respect to certain acquisition proposals from third parties made prior to the time the Diamond S shareholders approve the merger agreement and the right of the Diamond S Board to change its recommendation to the Diamond S shareholders to vote “FOR” the Diamond S merger agreement proposal in certain instances;

the restrictions in the merger agreement on the conduct of each of INSW’s and Diamond S’ respective business during the period between execution of the merger agreement and the consummation of the merger;

the risk of litigation, injunctions or other legal proceedings related to the transactions contemplated by the merger agreement;

the risk that the merger may not be completed despite the parties’ efforts, even if the requisite approvals are obtained from INSW stockholders and Diamond S shareholders, including the possibility that certain conditions to the merger may not be satisfied;

the risk that INSW stockholders or Diamond S shareholders may object to and challenge the merger and take actions that may prevent or delay the consummation of the merger, including to vote down the proposals at the INSW special meeting or Diamond S special meeting;
 
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the need to find a new technical manager for Diamond S vessels previously managed by CSMC and the possibility that transitioning the management of certain Diamond S vessels from CSMC to new management arrangements pursuant to the Capital Termination Agreement may present challenges or uncertainty and may not occur as seamlessly or as promptly as expected;

the risk that regulatory agencies may object to and challenge the merger or may impose terms and conditions in order to resolve those objections that adversely affect the financial results of INSW following the closing; see the section entitled “The Merger Agreement — Other Covenants and Agreements”;

the risk that the pendency of the merger for an extended period of time following the announcement of the execution of the merger agreement could have an adverse impact on INSW or Diamond S and that the merger could be pending for over seven months if the conditions to the merger relating to the receipt of the required regulatory approvals and clearances are not satisfied by November 1, 2021;

the potential for diversion of management and employee attention during the period prior to completion of the merger, and the potential negative effects on Diamond S’ and INSW’s respective businesses;

the risk of not capturing all the anticipated cost savings and revenue synergies between INSW and Diamond S and the risk that other anticipated benefits might not be realized;

the possibility that either INSW or Diamond S may not achieve its projected financial results;

the potential that the exchange ratio under the merger agreement could result in INSW delivering greater value to the Diamond S shareholders than had been anticipated by INSW should the value of the shares of INSW common stock increase disproportionately relative to the value of shares of Diamond S common stock from the date of the execution of the merger agreement;

the fact that the merger agreement prohibits each of INSW and Diamond S from soliciting or engaging in discussions regarding acquisition proposals during the pendency of the mergers, subject to limited exceptions;

the requirement that INSW pay Diamond S a $19 million termination fee if the merger agreement is terminated under certain circumstances, and the risks that such termination fee may discourage third parties that might otherwise have an interest in a business combination with, or acquisition of, INSW from making alternative proposals;

the possibility that the $17 million termination fee payable by Diamond S to INSW in specified circumstances may not fully compensate INSW for the harm it would suffer if the merger agreement is terminated and the merger does not occur;

the difficulty of transitioning management of Diamond S vessels from CSMC, particularly during the COVID-19 pandemic; and

the risks of the type and nature described under “Risk Factors” and the matters described under “Cautionary Statement Regarding Forward-Looking Statements.”
The foregoing discussion of the factors considered by the INSW Board is not intended to be exhaustive, but rather includes the principal factors considered by the INSW Board. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the INSW Board did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger agreement and to make its recommendations to INSW stockholders. Rather, the INSW Board viewed its decisions as being based on the totality of the information presented to it and the factors it considered, including its discussions with, and questioning of, members of INSW’s management and INSW’s legal and financial advisors, as well as the directors’ individual experiences and expertise. In addition, individual members of the INSW Board may have assigned different weights to different factors.
In considering the recommendation of the INSW Board to approve the INSW share issuance proposal, INSW stockholders should be aware that INSW’s directors may have interests in the merger that are different
 
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from, or in addition to, those of INSW stockholders generally. For additional information, see the section entitled “The Merger — Interests of Certain of INSW’s Directors and Executive Officers in the Merger.”
The explanation of the reasoning of the INSW Board and certain information presented in this section are forward-looking in nature and, therefore, the information should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward- Looking Statements.”
The INSW Board unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the INSW share issuance, are advisable and fair to, and in the best interests of INSW and its stockholders and the INSW Board unanimously recommends that INSW stockholders “FOR” the INSW share issuance proposal and “FOR” the INSW adjournment proposal.
Consummation of the merger is conditioned on approval by the INSW stockholders of the INSW share issuance proposal, but is not conditioned on approval of the INSW adjournment proposal.
Opinion of INSW’s Financial Advisor
INSW retained Jefferies as its financial advisor in connection with a possible merger with Diamond S. In connection with this engagement, the INSW Board requested that Jefferies evaluate the fairness, from a financial point of view, of the base exchange ratio provided for in the merger pursuant to the merger agreement. At a meeting of the INSW Board held on March 30, 2021 to evaluate the merger, Jefferies rendered an oral opinion, confirmed by delivery of a written opinion dated March 30, 2021, to the INSW Board to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken as described in its opinion, the base exchange ratio provided for in the merger pursuant to the merger agreement was fair, from a financial point of view, to INSW.
The full text of Jefferies’ opinion, which describes various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Jefferies, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. Jefferies’ opinion was provided for the use and benefit of the INSW Board (in its capacity as such) in its consideration of the merger and did not address the relative merits of the transactions contemplated by the merger agreement as compared to any alternative transaction or opportunity that might be available to INSW, nor did it address the underlying business decision by INSW to engage in the merger or the terms of the merger agreement (other than the base exchange ratio to the extent expressly specified therein) or the documents referred to therein. The base exchange ratio is subject to adjustment pursuant to the merger agreement, as to which adjustment Jefferies expressed no opinion. Jefferies’ opinion did not constitute a recommendation as to how any holder of shares of INSW common stock should vote on the merger or any matter related thereto. The following summary is qualified in its entirety by reference to the full text of Jefferies’ opinion.
In arriving at its opinion, Jefferies, among other things:

reviewed a draft dated March 30, 2021 of the merger agreement;

reviewed certain publicly available financial and other information about Diamond S and INSW;

reviewed certain information furnished to Jefferies by Diamond S’ management, including financial forecasts and analyses relating to the business, operations and prospects of Diamond S (the “Diamond S forecasts”);

reviewed certain information furnished to Jefferies by INSW’s management, including (a) an alternative version of the Diamond S forecasts incorporating certain adjustments thereto made and approved for Jefferies’ use by the senior management of INSW (the “adjusted Diamond S forecasts”), and (b) financial forecasts and analyses relating to the business, operations and prospects of INSW (the “INSW forecasts”);

held discussions with members of senior management of Diamond S concerning the matters described in the second and third bullet points above and with members of senior management of INSW concerning the matters described in the second through fourth bullet points above;
 
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reviewed certain third party appraisals and valuation estimates relating to certain assets of Diamond S and INSW, in each case as approved for Jefferies’ use by the senior management of INSW (collectively, the “appraisals and valuation estimates”);

reviewed the share trading price history and valuation multiples for the Diamond S common stock and the INSW common stock and compared them with those of certain publicly traded companies that Jefferies deemed relevant;

compared the proposed financial terms of the merger with the financial terms of certain other transactions that Jefferies deemed relevant; and

conducted such other financial studies, analyses and investigations as Jefferies deemed appropriate.
In its review and analyses and in rendering its opinion, Jefferies assumed and relied upon, but did not assume any responsibility to independently investigate or verify, the accuracy and completeness of all financial and other information that was supplied or otherwise made available by Diamond S or INSW or that was publicly available to Jefferies (including, without limitation, the appraisals and valuation estimates and the other information described above), or that was otherwise reviewed by Jefferies. With regard to the appraisals and valuation estimates, Jefferies assumed, with the consent of the INSW Board, that they provide an appropriate basis for evaluating Diamond S and INSW, as applicable, and Jefferies relied upon such appraisals and valuation estimates in its review and analyses and in rendering its opinion. Jefferies relied on assurances of the managements of Diamond S and INSW that they were not aware of any facts or circumstances that would make any of the foregoing information inaccurate or misleading. In its review, Jefferies did not obtain any independent evaluation or appraisal of any of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise), nor did Jefferies conduct a physical inspection of any of the properties or facilities, of Diamond S or INSW, and Jefferies was not furnished with (in each case, other than the appraisals and valuation estimates), and assumed no responsibility to obtain, any such evaluations, appraisals or physical inspections. Jefferies did not evaluate the solvency or fair value of Diamond S, INSW or any other entity under any laws relating to bankruptcy, insolvency or similar matters.
With respect to the financial forecasts and estimates provided to and reviewed by Jefferies, Jefferies noted that projecting future results of any company is inherently subject to uncertainty. However, Jefferies was advised, and Jefferies assumed, that the Diamond S forecasts were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of Diamond S as to the future financial performance of Diamond S and the other matters covered thereby, and the adjusted Diamond S forecasts and the INSW forecasts were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of INSW as to the future financial performance of Diamond S and INSW, respectively, and the other matters covered thereby. With regard to the financial forecasts and estimates relating to Diamond S, at the direction of the INSW Board, Jefferies relied upon the adjusted Diamond S forecasts in its review and analyses and in rendering its opinion. Jefferies expressed no opinion as to such financial forecasts or estimates or the assumptions on which they were based.
Jefferies’ opinion was based on economic, monetary, regulatory, market and other conditions existing and which could be evaluated as of the date of Jefferies’ opinion. Jefferies expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting its opinion of which Jefferies became aware after the date of its opinion.
Jefferies made no independent investigation of, and Jefferies expressed no view or opinion as to, any legal, regulatory, accounting or tax matters affecting or relating to Diamond S, INSW or the merger, and Jefferies assumed the correctness in all respects material to its analyses and opinion of all legal, regulatory, accounting and tax advice given to INSW and/or the INSW Board, including, without limitation, with respect to changes in, or the impact of, accounting standards or tax and other laws, regulations and governmental and legislative policies affecting Diamond S, INSW or the merger and legal, regulatory, accounting and tax consequences to INSW of the terms of, and transactions contemplated by, the merger agreement and related documents. Jefferies was advised that the merger would qualify as a tax free reorganization for federal income tax purposes. Jefferies assumed that the merger would be consummated in accordance with the terms of the merger agreement without waiver, modification or amendment of any material term, condition
 
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or agreement and in compliance with all applicable laws, documents and other requirements and that the final form of the merger agreement would be substantially similar to the last draft reviewed by Jefferies. Jefferies also assumed that in the course of obtaining the necessary governmental, regulatory or third-party approvals, consents, waivers and releases for the merger or otherwise, including with respect to any divestitures or other requirements, no delay, limitation, restriction or condition would be imposed or occur that would have an adverse effect on Diamond S, INSW or the contemplated benefits of the merger or that otherwise would be material in any respect to Jefferies’ analyses or opinion.
Jefferies’ opinion did not address the relative merits of the transactions contemplated by the merger agreement as compared to any alternative transaction or opportunity that might be available to INSW, nor did it address the underlying business decision by INSW to engage in the merger or the terms of the merger agreement or the documents referred to therein, including the form or structure of the merger or any term, aspect or implication of any voting agreements, derivatives arrangements or other agreements, arrangements or understandings entered into in connection with, or contemplated by or resulting from, the merger or otherwise. Jefferies was not asked to address, and Jefferies’ opinion did not address, the fairness to, or any other consideration of, the holders of any class of securities, creditors or other constituencies of INSW or any other party. Jefferies expressed no view or opinion as to the prices at which the INSW common stock may trade or otherwise be transferrable at any time. Furthermore, Jefferies did not express any view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation or other consideration payable to or to be received by any officers, directors or employees, or any class of such persons, in connection with the merger relative to the base exchange ratio or otherwise. The issuance of Jefferies’ opinion was authorized by the fairness committee of Jefferies.
In connection with rendering its opinion to the INSW Board, Jefferies performed certain financial and comparative analyses, including those described below. The following summary is not a complete description of all analyses performed and factors considered by Jefferies in connection with its opinion. The preparation of a financial opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description.
Jefferies believes that its analyses and the summary below must be considered as a whole and in context and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Jefferies’ analyses and opinion. Jefferies did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion, but rather arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole.
The estimates of the future performance of INSW and Diamond S in or underlying Jefferies’ analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than those estimates. In performing its analyses, Jefferies considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of INSW and Diamond S. Estimates of the financial value of companies or businesses do not purport to be appraisals or necessarily reflect the prices at which companies, businesses or securities actually may be sold or acquired. Accordingly, the estimates used in, and the implied reference ranges resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as Jefferies’ view of the actual value of INSW or Diamond S or their respective businesses or securities.
The terms of the merger were determined through negotiations between the INSW Board and Diamond S, and the decision by the INSW Board to authorize the merger agreement was solely that of the INSW Board. Jefferies’ opinion and financial analyses were only one of many factors considered by the INSW Board and should not be viewed as determinative of the views of the INSW Board with respect to the merger or the base exchange ratio provided for in the merger.
Financial Analyses
The following is a summary of the material financial analyses reviewed with the INSW Board and performed by Jefferies in connection with its opinion. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the
 
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analyses, could create a misleading or incomplete view of Jefferies’ financial analyses. The order in which the financial analyses summarized below appear does not necessarily reflect the relative importance or weight given to such analyses.
Implied Value of Merger Consideration
Based on the closing price per share of INSW common stock of $18.26 as of March 29, 2021 and the approximately 28.5 million shares of INSW common stock that were outstanding of as March 8, 2021 on a fully diluted basis, Jefferies noted that the implied value of the INSW common stock as of March 29, 2021, after giving effect to the INSW special dividend in the amount of $31.5 million, was $17.15 per share (the “implied INSW ex-dividend value”).
Based upon the approximately 40.9 million shares of Diamond S common stock that were outstanding as of March 12, 2021 on a fully diluted basis, the implied INSW ex-dividend value of $17.15 per share, and the base exchange ratio of 0.55375, Jefferies noted that the implied value of the merger consideration pursuant to the merger agreement as of March 29, 2021 was approximately $9.50 per share of Diamond S common stock (the “implied merger consideration value”).
Net Asset Value Analysis
INSW
Jefferies performed a net asset value, or NAV, analysis for INSW on a standalone basis based on the fleet appraisals and estimates in the appraisals and valuation estimates for the vessels comprising INSW’s fleet. Jefferies estimated the NAV of INSW by taking the total of the vessel values of INSW’s fleet, based on the fleet appraisals and estimates in the appraisals and valuation estimates, which ranged from approximately $949.9 million to $1.057 billion, adding the value of INSW’s interest in certain joint ventures and its lightering business as provided by INSW management, subtracting the amount of INSW’s net debt, and adjusting for changes in working capital and certain other items (including net other assets, net capital expenditures adjustment, charter and purchase option agreements, and the pre-transaction INSW special dividend). This analysis resulted in a range of total NAVs for INSW of approximately $775.4 million to $882.5 million. Jefferies then divided the range of total NAVs of INSW by the number of fully diluted shares outstanding as of March 29, 2021 to derive a NAV per share value for INSW common stock. This analysis indicated a range of per share values of approximately $27.25 to $31.02 per share of INSW common stock, as compared to the implied INSW ex-dividend value of $17.15 per share.
Diamond S
Jefferies performed a net asset value, or NAV, analysis for Diamond S on a standalone basis based on the fleet appraisals and estimates in the appraisals and valuation estimates for the vessels comprising Diamond S’ fleet. Jefferies estimated the NAV of Diamond S by taking the total of the vessel values of Diamond S’ fleet based on the fleet appraisals and estimates in the appraisals and valuation estimates, which ranged from approximately $1.1692 billion to $1.409 billion, subtracting the amount of Diamond S’ net debt, and adjusting for the value of Diamond S’ interest in certain joint ventures, changes in working capital and certain other items (including net other assets pro forma for two asset sales completed in January 2021 and a CSMC termination fee of $34 million, net capital expenditures adjustments and charter and purchase option agreements). This analysis resulted in a range of total NAVs for Diamond S of approximately $566.8 million to $798.5 million. Jefferies then divided the range of total NAVs of Diamond S by the number of fully diluted shares outstanding as of March 29, 2021 to derive a NAV per share value for Diamond S common stock. This analysis indicated a range of per share values of approximately $13.84 to $19.50 per share of Diamond S common stock, as compared to the implied merger consideration value of $9.50 per share.
Implied Exchange Ratio Analysis
Jefferies calculated a range of implied exchange ratios, based on the net asset value analyses described above, by using the range of implied per share values for INSW of $27.25 to $31.02 and the range of implied per share values for Diamond S of $13.84 to $19.50. Jefferies calculated the range of implied exchange
 
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ratios by (i) dividing the low end of the range of per share values for Diamond S by the high end of the range of per share values for INSW, and (ii) dividing the high end of the range of per share values for Diamond S by the low end of the range of per share values for INSW. This analysis indicated a range of implied exchange ratios of 0.4463 to 0.7156, as compared to the base exchange ratio provided for in the merger of 0.55375.
Jefferies also calculated a range of implied exchange ratios by (a) dividing the low end of the range of per share values for Diamond S by the low end of the range of per share values for INSW, and (b) dividing the high end of the range of per share values for Diamond S by the high end of the range of per share values for INSW. This analysis indicated a range of implied exchange ratios of 0.5079 to 0.6288, as compared to the base exchange ratio provided for in the merger of 0.55375.
Selected Public Companies Analysis
Jefferies reviewed publicly available financial, stock market and operating information of INSW, Diamond S and selected publicly traded companies in the crude oil and products tanker sector of the seaborne transportation industry that Jefferies considered generally relevant for purposes of its analysis.
Jefferies reviewed, among other information and to the extent publicly available, the equity value per share of the selected public companies, calculated as fully diluted equity values based on closing stock prices on March 29, 2021, as a percentage of NAV. Financial data and NAVs of the selected public companies were based on estimated values from the Clarksons Shipping Intelligence Network database as of March 26, 2021, as adjusted for vessel age and profile, subtracting the amount of net debt and adjusting for changes in working capital based on public filings and other publicly available information, including, as applicable, charter adjustment value where rates and terms were disclosed and corresponding market rate estimates were available from the Clarksons Shipping Intelligence Network database as of March 26, 2021. Financial data of INSW was based on the INSW forecasts, financial data of Diamond S was based on the adjusted Diamond S forecasts, and the average fleet NAV for INSW and Diamond S, respectively, was based on the appraisals and valuation estimates.
The selected public companies and the financial data reviewed included the following:
Selected Public Companies Analysis
Selected Public Companies
Price / NAV
Pure-Play Crude
DHT Holdings, Inc.
102.3%
Euronav NV
77.6%
Nordic American Tankers Limited
149.7%
Pure-Play Product
Ardmore Shipping Corporation
79.4%
Scorpio Tankers Inc.
109.2%
Mixed Tanker Fleets
Frontline Ltd.
130.4%
Navios Maritime Acquisition Corporation
52.8%
Teekay Tankers Ltd.
66.3%
Tsakos Energy Navigation Limited
48.8%
 
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The low, high, mean and median price to NAV percentages for the selected public companies were as follows:
Selected Public Companies — Price / NAV
Sector
Low
High
Mean
Median
Pure-Play Crude
77.6% 149.7% 109.9% 102.3%
Pure-Play Product
79.4% 109.2% 94.3% 94.3%
Mixed Tanker Fleets
48.8% 130.4% 74.6% 59.6%
All Selected Companies (excluding INSW)
48.8% 149.7% 87.4% 78.5%
All Selected Companies (excluding Diamond S)
48.8% 149.7% 87.9% 78.5%
Jefferies applied selected ranges of price to NAV percentages of 60% to 90% to the average NAV per share of INSW of $29.17, and the average NAV per share of Diamond S of $16.49, each based on the appraisals and valuation estimates, to determine a range of implied per share equity values for INSW common stock and Diamond S common stock, respectively. This analysis indicated a range of implied equity values per share of INSW common stock and Diamond S common stock set forth in the table below, as compared to the implied INSW ex-dividend value of $17.15 per share, and the implied merger consideration value of $9.50 per share.
Selected Public Companies Analysis
Metric
Implied Value Per Share
INSW Price / NAV
$ 17.50 – $26.25
Diamond S Price / NAV
$ 9.89 – $14.84
No company utilized in the selected public company analysis is identical to INSW or Diamond S. In evaluating the selected public companies, Jefferies made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond INSW’s, Diamond S’ and Jefferies’ control.
Implied Exchange Ratio Analysis
Jefferies calculated a range of implied exchange ratios, based on the selected public companies analyses described above, by using the range of implied per share values for INSW of $17.50 to $26.25 and the range of implied per share values for Diamond S of $9.89 to $14.84. Jefferies calculated the range of implied exchange ratios by (i) dividing the low end of the range of per share values for Diamond S by the high end of the range of per share values for INSW, and (ii) dividing the high end of the range of per share values for Diamond S by the low end of the range of per share values for INSW. This analysis indicated a range of implied exchange ratios of 0.3768 to 0.8479, as compared to the base exchange ratio provided for in the merger of 0.55375.
Jefferies also calculated a range of implied exchange ratios by (a) dividing the low end of the range of per share values for Diamond S by the low end of the range of per share values for INSW, and (b) dividing the high end of the range of per share values for Diamond S by the high end of the range of per share values for INSW. This analysis indicated an implied exchange ratio of 0.5652, as compared to the base exchange ratio provided for in the merger of 0.55375.
Selected Transactions Analysis
Using publicly available information, Jefferies examined 14 transactions, announced since January 2008, involving companies in the crude oil and products tanker, containership, dry bulk, and gas sectors of the seaborne transportation industry that have financial and operating characteristics that Jefferies, in its professional judgment, considered to be similar to INSW and Diamond S.
Using publicly available estimates and other information for each of these transactions, Jefferies reviewed the implied equity value or per share equity value, as applicable, based on the estimated purchase price, as a percentage of the target company’s NAV as of the announcement date of such transaction.
 
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The selected transactions and the financial data reviewed included the following:
Selected Transactions Analysis
Announcement Date
Target
Acquiror
Estimated Price / NAV
April 2019
Epic Gas Limited BW Group Limited
42%
December 2018
Capital Product Partners L.P. Diamond S Shipping Inc.
111%
December 2018
Hafnia Tankers Ltd. BW Tankers Limited
100%
October 2018
Poseidon Containers Holdings LLC
Global Ship Lease, Inc.
86%
May 2017
Navig8 Product Tankers Inc. Scorpio Tankers Inc.
98%
March 2017
BW Group Limited VLCC fleet DHT Holdings, Inc.
100%
December 2017
Gener8 Maritime, Inc. Euronav NV
104%
September 2016
Aurora LPG Holding ASA BW LPG Holding Limited
26%
February 2015
Navig8 Crude Tankers Inc. General Maritime Corporation
104%
June 2014
Oceanbulk Shipping LLC Star Bulk Carriers Corp
98%
May 2011
Crude Carriers Corp. Capital Product Partners L.P.
103%
June 2010
Bourbon SA Genco Shipping and Trading Ltd.
95%
August 2008
Arlington Tankers Ltd. General Maritime Corporation
100%
January 2008
Quintana Maritime Limited Excel Maritime Carriers Ltd.
101%
The low, high, mean and median price to NAV percentages for the selected transactions were as follows:
Selected Transactions — Estimated Price / NAV
Metric
Low
High
Mean
Median
Estimated Price / NAV
86% 111% 100% 100%
Note: Figures from selected transactions involving Epic Gas / BW Group and Aurora LPG / BW LPG were excluded from the calculation of the mean and median because the estimated price / NAV figures for such transactions were determined to be not meaningful.
Jefferies applied selected ranges of estimated price to NAV percentages of 97.5% to 102.5% to the average NAV per share of INSW of $29.17, and the average NAV per share of Diamond S of $16.49, each based on the appraisals and valuation estimates, to determine a range of implied per share equity values for INSW common stock and Diamond S common stock, respectively. This analysis indicated a range of implied equity values per share of INSW common stock and Diamond S common stock set forth in the table below, as compared to the implied INSW ex-dividend value of $17.15 per share, and the implied merger consideration value of $9.50 per share.
Selected Transactions Analysis
Metric
Implied Value Per Share
INSW Price / NAV
$ 28.44 – $29.89
Diamond S Price / NAV
$ 16.07 – $16.90
No transaction utilized as a comparison in the selected transactions analysis is identical to the merger. In evaluating the merger, Jefferies made numerous judgments and assumptions with regard to industry performance, general business, economic, market, and financial conditions and other matters, many of which are beyond INSW’s, Diamond S’ and Jefferies’ control.
Implied Exchange Ratio Analysis
Jefferies calculated a range of implied exchange ratios, based on the selected transactions analyses described above, by using the range of implied per share values for INSW of $28.44 to $29.89 and the range
 
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of implied per share values for Diamond S of $16.07 to $16.90. Jefferies calculated the range of implied exchange ratios by (i) dividing the low end of the range of per share values for Diamond S by the high end of the range of per share values for INSW, and (ii) dividing the high end of the range of per share values for Diamond S by the low end of the range of per share values for INSW. This analysis indicated a range of implied exchange ratios of 0.5377 to 0.5942, as compared to the base exchange ratio provided for in the merger of 0.55375.
Jefferies also calculated a range of implied exchange ratios by (a) dividing the low end of the range of per share values for Diamond S by the low end of the range of per share values for INSW, and (b) dividing the high end of the range of per share values for Diamond S by the high end of the range of per share values for INSW. This analysis indicated an implied exchange ratio of 0.5652, as compared to the base exchange ratio provided for in the merger of 0.55375.
Discounted Cash Flow Analysis
INSW
Jefferies performed a discounted cash flow analysis of INSW by calculating the estimated present value of the stand-alone unlevered, after-tax free cash flows (excluding FSO Income and Lightering Income) that INSW was forecasted to generate during the second half of the calendar year 2021 and the calendar years ending December 31, 2022 through December 31, 2025, and the present value of the terminal value of INSW, using the INSW forecasts provided by INSW management. The implied terminal value of INSW was derived by applying a selected range of terminal multiples of 7.0x to 8.0x to INSW’s estimated calendar year 2025 Adjusted EBITDA (excluding FSO Income and Lightering Income). The present values (as of June 30, 2021) of the cash flows and terminal values were then calculated using a selected discount rate range of 5.4% to 6.4%, which was based on INSW’s estimated weighted average cost of capital, to derive a range of implied enterprise values for INSW. Jefferies then subtracted from that range of implied enterprise values the amount of INSW’s total debt, added INSW’s cash and cash equivalents (including restricted cash and pro forma for the $31.5 million special dividend), and added the value of INSW’s interest in certain joint ventures and its lightering business, as provided by INSW management, and divided the result by the number of fully diluted shares of INSW common stock, each as provided or based upon information furnished to Jefferies by INSW management, to derive a range of implied equity values per share of INSW common stock. This analysis indicated a range of implied equity values per share of INSW common stock of approximately $33.63 to $39.38, as compared to the implied INSW ex-dividend value of $17.15 per share.
Diamond S
Jefferies performed a discounted cash flow analysis of Diamond S by calculating the estimated present value of the stand-alone unlevered, after-tax free cash flows that Diamond S was forecasted to generate during the second half of the calendar year 2021 and the calendar years ending December 31, 2022 through December 31, 2025, and the present value of the terminal value of Diamond S, using the adjusted Diamond S forecasts provided by INSW management. The implied terminal value of Diamond S was derived by applying a selected range of terminal multiples of 7.0x to 8.0x to Diamond S’ estimated calendar year 2025 Adjusted EBITDA. The present values (as of June 30, 2021) of the cash flows and terminal values were then calculated using a selected discount rate range of 5.7% to 6.7%, which was based on Diamond S’ estimated weighted average cost of capital, to derive a range of implied enterprise values for Diamond S. Jefferies then subtracted from that range of implied enterprise values the amount of Diamond S’ total debt, and added Diamond S’ cash and cash equivalents (pro forma for Diamond S’ two asset sales completed in January 2021), and divided the result by the number of fully diluted shares of Diamond S common stock, each as provided or based upon information furnished to Jefferies by INSW management, to derive a range of implied equity values per share of Diamond S common stock. This analysis indicated a range of implied equity values per share of Diamond S common stock of approximately $12.60 to $15.81, as compared to the implied merger consideration value of $9.50 per share.
Jefferies also performed a discounted cash flow analysis of Diamond S, taking into account the projected synergies from the merger as provided by INSW management, using the methodology described
 
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above. This analysis indicated a range of implied equity values per share of Diamond S common stock of approximately $17.26 to $21.07, as compared to the implied merger consideration value of $9.50 per share.
Implied Exchange Ratio Analysis
Jefferies calculated a range of implied exchange ratios, based on the discounted cash flow analyses described above, by using the range of implied per share values for INSW of $33.63 to $39.38 and the range of implied per share values for Diamond S of $12.60 to $15.81 (without taking into account the projected synergies) and $17.26 to $21.07 (taking into account the projected synergies from the merger as provided by INSW management). Jefferies calculated the range of implied exchange ratios by (i) dividing the low end of the range of per share values for Diamond S by the high end of the range of per share values for INSW, and (ii) dividing the high end of the range of per share values for Diamond S by the low end of the range of per share values for INSW. This analysis indicated a range of implied exchange ratios of 0.3199 to 0.4702 (without taking into account the projected synergies) and of 0.4383 to 0.6266 (taking into account the projected synergies from the merger as provided by INSW management), as compared to the base exchange ratio provided for in the merger of 0.55375.
Jefferies also calculated a range of implied exchange ratios by (a) dividing the low end of the range of per share values for Diamond S by the low end of the range of per share values for INSW, and (b) dividing the high end of the range of per share values for Diamond S by the high end of the range of per share values for INSW. This analysis indicated a range of implied exchange ratios of 0.3746 to 0.4016 (without taking into account the projected synergies), as compared to the base exchange ratio provided for in the merger of 0.55375.
Other Factors
Implied Historical Exchange Ratio Analysis
Jefferies also calculated, for reference purposes only, the implied historical exchange ratio for Diamond S common stock and INSW common stock, based on the daily closing price per share as of March 29, 2021 and for the various time periods set forth in the table below ending on that date. Jefferies calculated the implied historical exchange ratios by dividing the daily closing price per share of Diamond S common stock by the daily closing price per share of INSW common stock. This analysis indicated the following implied historical exchange ratios, compared, in each case, to the base exchange ratio provided for in the merger of 0.55375.
Implied Historical Exchange Ratio
3 months
6 months
9 months
Since Diamond S Public
Listing
(March 2019)
Average Implied Exchange Ratio
0.4331 0.4263 0.4562 0.5308
Miscellaneous
INSW has agreed to pay Jefferies for its financial advisory services in connection with the merger an aggregate fee of $6.5 million, of which $2.0 million become payable upon delivery of Jefferies’ opinion to the INSW Board and the remainder of which is payable contingent upon the closing of the merger. INSW may also pay Jefferies an additional amount, to be determined in INSW’s sole discretion, of up to $1.0 million. In addition, INSW agreed to reimburse Jefferies for expenses, including fees and expenses of counsel, incurred in connection with Jefferies’ engagement and to indemnify Jefferies and related parties against liabilities, including liabilities under federal securities laws, arising out of or in connection with the services rendered and to be rendered by Jefferies under its engagement.
During the two years prior to the date of its opinion, Jefferies did not receive any fees from INSW or Diamond S for financial advisory or financing services. Jefferies may seek to, in the future, provide financial advisory and financing services to INSW, Diamond S or entities that are affiliated with INSW or Diamond S, for which Jefferies would expect to receive compensation. In addition, in the ordinary course of business, Jefferies and its affiliates may trade or hold securities or financial instruments (including loans
 
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and other obligations) of Diamond S, INSW and/or their respective affiliates for their own account and for the accounts of their customers and, accordingly, may at any time hold long or short positions or otherwise effect transactions in those securities.
Jefferies was selected as the financial advisor to INSW in connection with the merger because of its familiarity with INSW and because Jefferies is an internationally recognized investment banking firm with substantial experience in merger and acquisition transactions. Jefferies is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities and private placements.
Recommendation of the Diamond S Board and its Reasons for the Transaction
In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Diamond S Board consulted with Diamond S’ management and legal and financial advisors and, in reaching its decision to approve the merger agreement and to recommend that Diamond S’ shareholders vote “FOR” the Diamond S merger proposal, the Diamond S Board considered a variety of factors, including the following (which are not necessarily in order of their relative importance):

The Diamond S’ Board’s knowledge of Diamond S’ business, operations, financial condition, earnings and prospects and of INSW’s business, operations, financial condition, earnings and prospects, taking into account the results of Diamond S’ due diligence review of INSW;

The fact that the merger will unite two companies with long-term customer relationships, similar cultures, and complementary positions in key tanker sectors;

The merger will enhance capabilities and scale in both the crude and product markets;

The merger will create the second largest U.S.-listed tanker company by vessel count and the third largest U.S.-listed tanker company by deadweight, with 100 vessels in the combined fleet;