The pieces in John Fredriksen's major puzzle centered around Frontline 2012 are falling into place. But the investment level remains intact, the carrier's CEO tells ShippingWatch.
BY TOMAS KRISTIANSEN
For the now-70 year old Norwegian-Cypriot oil and shipping billionaire John Fredriksen, the past two years have been very much focused on restructuring carriers.
First up was Frontline. Then Frontline 2012. And this year has seen the VLGC interests gathered in Norwegian Avance Gas in collaboration with Stolt-Nielsen and Sungas Holdings, while the major Capesize fleet has been placed under Knightsbridge, where it is operated by Golden Ocean, John Fredriksen's dry bulk carrier.
Frontline 2012, headed by CEO Jens Martin Jensen, now focuses mainly on the major supertankers, VLCCs, and the fleet of 18 product tankers (six MR and 12 LR2) set for delivery in the coming months.
As CEO of the main company, Frontline 2012, Jens Martin Jensen plays a key role when the management group - led by John Fredriksen at the head of the table - performs new investments. But even though the orderbook contains around 60 vessels in tanker and dry bulk, and the new structure for the carriers is becoming more clear, the investment strategy remains the same as before, Jens Martin Jensen tells ShippingWatch: Expansive!
"Our investment policy remains unchanged. We will look at every opportunity and continue to invest, and we have the necessary funds," says Jens Martin Jensen (photo).
Holding the right cards
Right now the Fredriksen group is holding cards that could make many competitors and other players in general envious. A Capesize fleet of a total 39 vessels, when the current newbuildings hit the water, in a market that analysts, including Danske Market and Platou, have great expectations for.
The price per day for one of the major bulk vessels is currently crossing USD 20,000, and only a few analysts believe that the development will stop here. Long-term contracts are traded at far higher prices. John Fredriksen was among the first - if not the first - to bet on Capesize in early 2013. And it looks like his well-known sense of timing was right this time as well. The fleet's break-even is USD 15,700 per day, so right now it looks like a very good business.
"We've been contracting at exactly the right time, which could have a crucial impact, and this also applies to the VLGCs that we ordered in early 2013 when the prices were at rock-bottom. We'll continue to look at the opportunities that come along. This could be newbuildings or second-hand, but it could also be companies within shipping. We're not ruling anything out," says Jens Martin Jensen.
With the acquisition of 39 Capesize vessels, Fredriksen will become one of the biggest players in the segment for major dry bulk ships. However, the world's biggest dry bulk carrier - German Oldendorff - has a somewhat bigger fleet, at 80 Capesize vessels, though these ships are on time-charter.
Frontline 2012 will publish its 2nd quarter results on Friday this week.