John Fredriksen-controlled Flex LNG cares about its shareholders’ rights.

That is what chief executive Oystein Kalleklev told analysts on Wednesday as he took a swipe at International Seaways’ efforts to block investment by an arm of Fredriksen’s Seatankers Group in the New York-listed tanker owner.

Kalleklev used a first-quarter results briefing and the publication of Flex’s 2021 environmental, social and governance (ESG) report to stress the “G” in ESG in what then morphed into a thinly veiled swipe at International Seaways.

He described shipping as a fiercely competitive international industry where free enterprise and entrepreneurship take centre stage.

But he added: “There are still listed shipping companies that are eager to participate in the shipping competition but want to opt out of the competition for corporate control.

“Typically you see insiders which have captured corporate control through lawyers and bylaws rather than skin in the game,” Kalleklev said.

“It is not uncommon to see friendly boards pay generously and where appointment is for a long period with staggered elections to limit shareholder democracy. Additionally, these companies might use unfair business practices like poison pills and other procedural tactics in order to insulate management from shareholder influence.”

Flex LNG has none of these measures, the CEO continued.

“Every shareholder is treated fair and equal, everyone matters. There are no staggered boards, no voting limitations, no poison pills and every shareholder can raise an issue at the AGM or EGM as we care deeply about shareholder rights,” he said.

Kalleklev, who later clarified that he was giving his own opinions, went on to big up Flex’s main shareholder Fredriksen, who is also engaged in a takeover battle with Compagnie Maritime Belge (CMB) over tanker owner Euronav.

John Fredriksen has "the best track record in the industry" for the treatment of shareholders, Flex LNG chief executive Oystein Kalleklev says. Photo: DN

“Yes, we do have a large shareholder in our company with about 46% ownership, but Mr Fredriksen has the best track record in the industry, not only in relation to shareholder returns but also in relation to fair and equal treatment of all shareholders.”

But the ever-upbeat CEO said Fredriksen keeps staff “on their edge” and has “an excellent track record in changing out management teams that are not delivering satisfactory results for shareholders.”

During the call Kalleklev gave his customary deep dive into the LNG markets

He said the LNG market grew by 5% in the first quarter with imports to Europe up by 13 million tonnes compared to the same period of last year.

By the end of April US, LNG exports were up 21% on the figure for 2021 with this trend set to continue as two new liquefaction projects ramp up.

He said Europe has taken a 73% market share of US exports so far this year and as a result average sailing distance has dropped to 4,200 nautical miles in the first quarter.

But he said Flex expects sailing distances to gradually increase during the year and the market to become tighter, particularly as there are few open modern vessels available for charter.

Kalleklev said the LNG sector could also see an increase in floating storage in Europe during 2022, which will positively affect ton time and push freight demand higher.