File photo. Credit: BW Group
By Ole Petter Skonnord
OSLO, March 23 (Reuters) – Privately-owned shipping firm BW Group became the top shareholder in tanker firm DHT Holdings on Thursday, in a surprise move that will probably end Frontline’s ambitions to take full control of DHT.
BW Group, led by shipping tycoon Andreas Sohmen Pao, sold 11 very large crude carriers (VLCCs) valued at $538 million on Thursday to DHT, which will issue approximately $256 million in new shares to BW Group as part of the settlement.
The deal brings BW Group’s ownership in DHT to 33.5 percent, surpassing rival Frontline as DHT’s top shareholder. The DHT CEOs denied the deal was prompted by Frontline’s attempt at full control.
Asked whether Frontline’s offer, an all-share offer raised to 0.80 Frontline shares from an initial 0.725, was still low, Harfjeld and Moxnes said: “For sure.”
Frontline, which is controlled by billionaire tycoon John Fredriksen and was until Thursday the biggest owner in DHT with 16.4 percent, had twice offered in recent weeks to take full control of DHT. Both offers were unanimously rejected by the DHT’s board.
“We have known BW Group for a long time and had discussions with them and several others over the past 2-3 years,” DHT’s co-CEOs, Svein Moxnes Harfjeld and Trygve P. Munthe, told Reuters in a joint interview.
DHT shares were trading down 5.6 percent in New York due to the share issue while Frontline shares closed down 0.7 percent in Oslo.
“We think we are again in a cycle where it is appropriate to expand, and we have expressed the desire to grow our fleet for a long time,” said the CEOs.
Daily rates for a VLCC are currently weak at around $20,000, as an oversupply of new ships comes onto the market when demand is restricted by production cuts by the Organisation of the Petroleum Exporting Countries (OPEC).
“We think that this is a short-term phenomenon,” the CEOs said. “The order book is rapidly falling and underlying oil demand is robust. On a little longer horizon, if we say over the next two to three quarters, it looks good.”
After the acquisition, DHT will have a fleet of 30 VLCCs, including four newbuildings for delivery in 2018 and two Aframaxes. The fleet’s age will be young, with an average of 6.9 years, putting it at a competitive advantage over rivals.
The deal will also make DHT the third-biggest independent VLCC owner after Greek shipowner John Angelicoussis and Euronav .
Frontline and BW Group did not immediately reply to requests for comment. (Editing by Gwladys Fouche/Ruth Pitchford)
(c) Copyright Thomson Reuters 2017.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 110,090 members that receive our newsletter.
Have a news tip? Let us know.
Sweden’s Navy completed a survey of the seabed near one of the damaged data cables in the Baltic Sea as the Nordic country investigates potential sabotage against the underwater infrastructure.
A Russian Navy frigate equipped with new generation hypersonic cruise missiles has conducted drills in the English Channel and is carrying out tasks in the Atlantic Ocean, Russian news agencies reported on Tuesday.
(Bloomberg) — Chinese lawmakers got a head start on the US election this week as they gathered to vote on the largest fiscal package since the pandemic. But now that...
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign Up
Maritime and offshore news trusted by our 110,090 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
