BW Group has boosted its stake in John Fredriksen-backed Flex LNG to become the LNG carrier owner's third largest shareholder.
BW, which is chaired by Andreas Sohmen-Pao, now has 1.45m shares in the company, which gives it a 2.68% stake.
The diversified shipowner's position in Oslo-listed and New York-listed Flex LNG is only smaller than that of Fredriksen’s company Gevaran Trading and the fund Skagen Invest. Gevaran holds 44.5% of the shares.
TradeWinds could not obtain comments from the BW Group before press time.
Ivar Larsen, head of sales at investment bank Arctic Securities, told Finansavisen that BW is investing in a sector in which it has significant knowledge.
However, he said Fredriksen and Sohmen Pao “are not exactly the world’s best friends, so regardless the BW Group will not achieve anything in Flex”.
The share price for Flex LNG has dropped from $11.50 in the middle of December last year to $6.50 this week.
Rivals
Singapore-headquartered BW and the Fredriksen group are competitors in many shipping niches, including the LNG business. BW LNG, for example, has a fleet of 23 LNG carriers, including four newbuildings.
Oystein Kalleklev-led Flex LNG has 13 ships, including seven newbuildings that are set for delivery this year and in 2021. None of the newbuildings have been fixed out on time charter.
BW's stake in Flex LNG is not its first investment in a rival.
As of January, it held 4.8% of VLGC owner Dorian LPG, according to a US Securities and Exchange filing.
That represented a significant reduction in its stake after controlling 14.2% of the New York-listed company that it once tried to takeover.
BW was more successful in 2017 when it secured a combination with DHT Holdings by selling its 11 VLCCs to the company, giving it the largest stake in a tanker owner that Fredriksen's Frontline had sought to acquire.
Eric Martin contributed to this article
