Frontline increases 1.6 billion for three new oil tankers



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In the first quarter report, John Fredriksen's oil company said it had signed an agreement to buy a Suezmax under construction at Hyundai Heavy Industries in South Korea for $ 66 million, equivalent to $ 580 million, through a resale agreement . Delivery was declared in May 2020.

When asked by an analyst during a teleconference whether the transaction was a one off event – or if there were similar opportunities, Frontline manager Robert Hvide Macleod responded as follows:

– Yes, this is obviously a "one off", but similar dealerships are available.

Wednesday night, the oil company says it has found and made use of a similar deal.

According to a message, the company agreed to purchase a reseller equipped with VLCC's Very Large Crude Carrier from Hyundai Samho Heavy Industries with delivery in May 2020. In addition, the company ordered two new SWR LR2 vessels in China with delivery scheduled in January 2021 and March 2021, respectively.

– These transactions reflect Frontline's focus on increasing our exposure to the tanker market and are also part of a continuing effort to renew and modernize the company's fleet. The latter gave us one of the most modern fleets in the industry, with an average age of less than 5 years, Macleod said in a comment.

The LR2 tanks have a cost price of $ 46.7 million. while the VLCC was purchased for $ 92.5 million.

The total price is therefore $ 185.9 million, or about $ 1.6 billion.

Good price

The price for VLCC is otherwise considerably lower than that of Arne Fredlys Hunter Group when they recently sold one of eight VLCCs that are under construction at the DSME yard.

The ship with delivery in October this year went to a buyer in the Far East for $ 98 million. In that case, it is admittedly earlier ready to reap the benefits of a tanker market, which should be strong from several third parties this year.

Fredriksen is known for making good dealers, and Macleod points out that they are open to various transactions.

– As new opportunities emerge, we will continue to execute the growth strategy as we position the company to generate significant cash flows in the long run, he says.

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