Written by
Joe Brady

02 Mar 2018

Georgiopoulos set to exit Gener8 with $8m payday

02 Mar 2018 • by Joe Brady

Peter Georgiopoulos is likely this spring to exit a public tanker company he has led in one form or ­another since 2001, but he is not departing empty-handed.

Georgiopoulos is nearing a payout of more than $8m when the acquisition of his Gener8 Maritime is closed by Belgium’s Euro­nav, probably in May or June.

Details of the package — which includes severance payment, bonuses and vesting of restricted shares — are included in a registration statement filed by Euronav with US ­securities regulators.

Gener8 is the successor company to General Maritime, which Georgiopoulos founded and took public in New York in 2001. He has led both companies as chairman and chief executive.

However, under terms of the all-share deal reached in December, Euronav will be the surviving tanker owner, retain its own management team and add only one Gener8 director to the board of the combined company.

As TradeWinds reported last week, Gener8 looked at a variety of merger-and-acquisition options over the past two years, including some in which it either would have been the survivor or contributed management and board to a merged company.

Best option

Ultimately, Euronav was able to convince Gener8’s key shareholders — private equity firms eager to exit their investment — that its plan would be their best option.

For his role in bringing the deal to fruition, Georgiopoulos is receiving a “transaction bonus” of $3.25m.While other details of the compensation are blurred by highly technical tax-related language, it appears that severance and other rewards bring his total payout to about $7m.

This does not include restricted shares held by Georgiopoulos that “vest” or become exercisable upon a change in control of the company — a fairly standard practice in such scenarios. If those 216,276 restricted shares were converted at the price agreed when Euro­nav’s deal was announced ($5.89), they would be worth a further $1.3m.

Also handsomely rewarded is chief financial officer Leonidas “Leo” Vrondissis, who worked hand in glove with Georgiopoulos in pursuing M&A opportunities and in bolstering the company’s balance sheet to see it through a weak crude tanker market.

Vrondissis is to see a payout of $3m, of which $2.5m comes in the form of a transaction bonus from the Euronav deal.

His 41,591 restricted shares could be worth a further $245,000 under the same terms mentioned in Georgiopoulos’ payout.

Among the rest of Gener8’s management team, veteran chief operating officer John Tavlarios gets the largest award, a $1.1m severance payment.

Georgiopoulos and Vrondissis are still being paid their base 2017 salaries on a pro-rata basis — $750,000 and $425,000, respectively. In addition, they are entitled to pro-rata shares of ­bonuses set at $1.13m and $575,000, respectively.

Another feature of the settlement terms is that Gener8 is entitled to waive any non-compete terms that otherwise would have restricted Georgiopoulos and Vrondissis from activities in the tanker sector in the near term.

A source in the Georgiopoulos camp told TradeWinds in December that he had been working on new projects and would not be out of shipping for long.

Speculation has included efforts to line up investment in the clean products sector.