Fredriksen’s Breakup With Adviser Troeim Hits Shares

Bloomberg
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September 22, 2014

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By Mikael Holter

Sept. 22 (Bloomberg) — Rig company Seadrill Ltd. and salmon farmer Marine Harvest ASA slumped in Oslo trading amid a fallout between their main owner, billionaire John Fredriksen, and his long-time adviser Tor Olav Troeim.

Seadrill fell as much as 3.9 percent in Oslo, adding to a 4 percent drop on Friday after Troeim’s surprise departure from the board of the world’s largest offshore driller by market value. Archer Ltd., an oilfield-services company owned 39.9 percent by Seadrill, dropped as much as 5.4 percent, while Marine Harvest, the biggest salmon producer, declined as much as 2.6 percent. Troeim withdrew his nomination for re-election at those companies over the weekend.

Troeim has been instrumental in helping Fredriksen expand his shipping empire to offshore drilling and salmon farming over the past two decades. When announcing in July that he would step down as Fredriksen’s main adviser, Troeim said he would focus on Seadrill and Golar LNG Ltd. and remain on the boards of several of the Norwegian-born Cypriot billionaire’s companies.

“It was in the air that he would be phased out of the Fredriksen system eventually, but few would have thought that it would happen so quickly,” Kjetil Soerum, an analyst at Handelsbanken Capital Markets, said by phone. “Troeim has been Seadrill’s financial entrepreneur. The timing for losing him isn’t ideal.”

‘More Speculative’

The relationship between Fredriksen and his former right- hand man worsened when the billionaire earlier this month sold more than 80 percent of his shares in liquefied natural-gas shipper Golar LNG, one of the companies where Troeim was to take a leading role, business daily Dagens Naeringsliv reported today, citing unidentified sources.

“The company chose a more speculative strategy that we disagreed with,” Fredriksen said, according to the newspaper. “We’d rather focus on Seadrill, which has a solid contract backlog and where we see big opportunities for the future.”

Troeim is Golar’s third-biggest owner with a 3.6 percent stake after Fredriksen sold him 3 million shares at an undisclosed price in July. The shares have jumped 22 percent since Fredriksen reduced his stake.

Seadrill, in which Fredriksen owns 22.9 percent and Troeim 0.5 percent, has fallen 12 out of the 13 last trading days because of a worsening rig market and on concern international sanctions against Russia will affect a $4.25 billion deal between its subsidiary North Atlantic Drilling Ltd. and OAO Rosneft. The shares have slumped 22 percent since Sept. 3.

“Seadrill has a few funding issues that will need to be solved over the coming years,” Soerum said. “A few new rigs aren’t financed, they have bonds coming to maturity and we’re already in a very tough rig market.”

Seadrill fell 1.6 percent to 180.9 kroner as of 12:06 p.m. in Oslo. Marine Harvest, of which Fredriksen owns 26 percent, dropped 0.8 percent to 88.9 kroner. Archer fell 2.7 percent to 8.8 kroner.

Copyright 2014 Bloomberg.

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