Page 4 of 8 – SEC Filing
| CUSIP No. Y2065G121 | SCHEDULE 13D | Page 4 of 8 |
| Exchange”). Upon conversion of the Preferred Stock into 15,700,000 shares of Common Stock, and giving pro forma effect to the issuance of the equity consideration to BWG, BWG will beneficially own approximately 33.5% of the shares of Common Stock outstanding. | |
| Pursuant to the Vessel Acquisition Agreement, the Issuer and BWG agreed to enter into an Investor Rights Agreement (the “Investor Rights Agreement”), in the form attached as Annex II to the Vessel Acquisition Agreement, at the time of delivery of the first VLCC under the Vessel Acquisition Agreement (the “Initial Closing”). The Investor Rights Agreement generally provides BWG with the right, subject in each case to certain conditions and limitations, to, among other things, designate two individuals to serve as members of the board of directors of the Issuer (the “Board”). BWG’s first designee, Carsten Mortensen or another non-U.S. individual, is expected to be added to the Board upon the Initial Closing and BWG’s second designee is expected to be added to the Board by January 2, 2018. BWG’s right to designate two directors to the Board is subject to it (together with its controlled affiliates) continuing to hold at least 75% of the shares (on an as-converted basis) of Common Stock and Preferred Stock to be acquired under the Vessel Acquisition Agreement. BWG’s right to designate one director to the Board is subject to it (together with its controlled affiliates) continuing to hold at least 40% of the shares (on an as-converted basis) of Common Stock and Preferred Stock to be acquired under the Vessel Acquisition Agreement (and, in each case, at least 10% of the voting capital stock of the Issuer). BWG also has the right to designate a third member of the Board if the Articles Amendment (as defined below) is not obtained by October 31, 2017; such Board member will serve until the Articles Amendment is obtained. | |
| The Investor Rights Agreement affords BWG certain registration rights, including piggyback registration rights. The Investor Rights Agreement also contains customary standstill restrictions on BWG. BWG (together with its controlled affiliates) is restricted from acquiring more than 45% of the voting capital stock of the Issuer, unless a majority of the independent directors of the Board consents to an exception. The standstill restrictions fall away when BWG’s ownership (together with its controlled affiliates) ceases to be at least 25% of the voting capital stock of the Issuer. The Investor Rights Agreement provides that BWG and its controlled affiliates shall, only with respect to any proposal related to the election or removal of directors of the Issuer’s Board, vote their shares (other than any Excess Shares, as defined in the Investor Rights Agreement) of voting capital stock in favor of nominees selected by the Board in accordance with the Investor Rights Agreement. | |
| The Investor Rights Agreement provides that the Company shall amend its Amended and Restated Articles of Incorporation to increase the total authorized number of shares of Common Stock, in order to facilitate the conversion of the Preferred Stock issued to BWG into Common Stock (the “Articles Amendment”). | |
| The closing of the sale and transfer of, and payment for, each of the nine existing VLCCs is expected to occur following the completion of each such VLCC’s current or next voyage. The novation and transfer of, and payment for, each of the two newbuild contracts is expected to occur as soon as reasonably practical. There exists an outstanding option to acquire one of BWG’s 2001 built VLCCs, and the Issuer will assume BWG’s obligations under the option. To the extent the option is exercised, the Issuer will pay to BWG the |
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