New Awilco LNG shareholder Navig8 may be keeping its takeover powder dry for now, but other investor interest in the company is growing.
As TradeWinds has reported, the tanker group's private investment company Navig8 Topco Holdings built its stake in the Oslo-listed owner of two LNG carriers to 19.6% at the end of May, becoming the second biggest shareholder.
On Tuesday, UK-based Barclays revealed it had moved into third place with 13.8%, behind Navig8 and major shareholder Awilco AS on 38.6%.
The bank added 10.2m shares to its 6.1% holding in another "re-hypothecation" deal, which saw it acquire shares pledged as collateral.
Barclays had added 2.2m shares last week as well.
Navig8 has declined to comment on its stake.
The group has been developing interest in the LNG sector for some time and it now looks as if it has finally decided to put some money to work in a countercyclical play, market sources said.
It is not thought to have made any proposals to management and its stake is viewed as passive for the time being, allowing it to learn about the sector.
Navig8 first bought into the company on 22 May, acquiring a 6.2% holding, before building this to 13.9%.
Bolt from the blue
The move is believed to have come out of the blue to Awilco LNG.
The company has not commented publicly.
But Awilco LNG chief executive Jon Skule Storheill told TradeWinds: "We have noted Navig8’s announcements. We are very happy that a large and experienced shipping company has faith in Awilco LNG and a belief in the LNG market, which we share."
With only two ships in its fleet, Awilco LNG has long been seen as a natural target for consolidation moves within the LNG sector.
But those two tri-fuel diesel-electric vessels, while only seven years old, now rank as slightly smaller and less efficient than the larger 174,000-cbm, two-stroke gas-injection LNG newbuildings being delivered today and may prove of less interest to buyers wanting to break into the LNG trading arena.
We have noted Navig8’s announcements. We are very happy that a large and experienced shipping company has faith in Awilco LNG and a belief in the LNG market, which we share.
Awilco LNG chief executive Jon Skule Storheill
Last year, Awilco LNG was on the brink of pooling its LNG pair with vessels of a similar size and vintage from Golar LNG and TMS Cardiff Gas. But in late 2019 one partner fell away, the market firmed and plans collapsed.
At the time Awilco LNG said it remained "open to grow the business, either on its own or as part of a consolidation with other owners".
Navig8 is not the only company buying up LNG stock.
Established gas ship owner BW LNG went on a share buying spree this year which saw it become the fourth largest shareholder in Tor Olav Troim-led Golar LNG and the third biggest stakeholder in John Fredriksen’s Flex LNG.
The interest in Awilco LNG has continued to drive up the share price, with the stock having risen from NOK 1.25 ($0.13) on Thursday to NOK 1.36 on Tuesday morning.
Its fifth biggest shareholder, Norwegian shipbroker and financial player Astrup Fearnley, sold all its 8.69m shares on Thursday. It had previously owned 6.56%.
On Wednesday, the third biggest investor, Strawberry Capital, with 8.56%, also sold out, offloading 11.21m shares.
Last August, Navig8 Topco Holdings, registered in the Marshall Islands, posted net profit of $6.9m in the quarter to 30 June, against $2.2m in the same period of 2018.
The fleet of 20 owned or partially owned LR1s, LR2s, MRs, bunker tankers and a VLCC brought in revenue of $774m, compared to $699m in 2018.
The Navig8 group owns 57 tankers and offshore vessels, with many more operated by its pools.
