A Trafigura executive has commented for the first time on the huge suezmax tanker deal worth up to $1bn that has given the trader a significant stake in Frontline.
The deal saw the John Fredriksen-backed shipowner buy up to 14 new scrubber-fitted suezmaxes with part payment in Frontline's New York and Oslo-listed shares. Trafigura now owns 8.48% of the Norway-based tanker owner.
“Overall, we are pleased to be exposed to the Frontline equity,” said Rasmus Bach Nielsen, director of wet freight at Trafigura.
'Rewarding shareholders'
“It is a share that trades historically well and Fredriksen is well known for rewarding shareholders in good times, such as in the period we are expecting ahead of us.”
The transaction involves 10 firm suezmaxes and four options.
TradeWinds understands that Frontline chief executive Robert Hvide Macleod has mainly handled negotiations on behalf of the Norwegian side for the last six months.
Nielsen said: “Personally, I have a close relationship with Macleod from our time together at Maersk Tankers ... more than 16 to 17 years ago. Robert is street smart, a strong negotiator and has a nose for business.”
Fredriksen offered Frontline a cash payment ahead of long-term bank financing for the purchase.
“The fact that Hemen [Fredriksen's holding company] is willing to back the transaction also shows the clear strength of the shareholder base, which again supports the valuation over history,” Nielsen said.
Trafigura is currently not a big player in shipowning. In addition to the suezmaxes, the Amsterdam-headquartered group owns two small tankers and two bunker tankers.
Shipowning interests
But the trader operates a sizeable fleet, from handysize tankers to VLCCs, although it has no immediate plans of owning additional vessels, Nielsen said.
He revealed that the company is engaged with leasing houses to leverage its shipping position.
“We have a strong belief in the market and are pleased with the overall current position,” he said.
“We enjoy very strong relationships with various leasing houses in Asia, whom we can only compliment for an extreme amount of professionalism and cooperation.”
