Arne Fredly’s Hunter Group is set to pocket the largest price for a VLCC resale in half a decade as the sector newcomer closes in on the first fruits of its asset play project.
It comes with tanker asset prices accelerating as momentum and expectation grow ahead of the arrival of IMO 2020 rules.
Fredly made his first direct shipowning play by contracting VLCC newbuildings at DSME in 2017 at trough prices and moved the ships into Oslo-listed Hunter in early 2018.
Hunter revealed yesterday it is close to the $98m per tanker sale of two VLCCs in an eight tanker series nearing completion in South Korea.
While the would-be buyer of the ships has not been disclosed, word in the market is of a cash-rich South Korean firm.
Negotiations on the pair are described as "advanced" but are yet to be concluded.
Fredly and his Hunter co-investors - including Arne Blystad, Torbjorn Kjos and the Sundt family - would be soundly in the money on a brace of ships contracted at below $83m each with an extra cost for scrubbers.
Tanker market sources say asset prices are rising at a time when strong sentiment around the impact of IMO 2020 is starting to be reflected in the time charter market.
The uptick has led to major public owners Euronav and DHT Holdings publicly declaring their buying interest over for the next stage of the cycle.
Nine-figure assets
VLCC resale prices have often climbed above $100m historically, with more than 70 tankers changing hands at this level or higher over time, according to VesselsValue.
However, should pen meet paper on the Hunter brace, it would mark the highest price paid for a VLCC resale since early 2015, when Peter Georgiopoulos' General Maritime merged with Navig8 Crude.
The South Korean-built ships in that deal were priced at in excess of $102m each, according to VesselsValue figures.
Prior to that, Scorpio Tankers flipped a series of seven VLCCs to Genmar in March 2014 at $105m each - closing one of the fastest and most profitable tanker asset-plays since the financial crisis.
Since then VLCC resale deals have been done at close to the Hunter level, but no big tankers have changed hands for a heftier fee.
Euronav, the largest investor in VLCC assets since the financial crisis, paid $96m for a series of four Metrostar ships at Hyundai Heavy Industries in the summer of 2015. However, it later passed on more expensive options
In early 2017, DHT Holdings, another successful VLCC asset player of the post Lehman Brothers era, paid $86.10m each for a pair of tankers under construction at DSME as part of a wider combination with BW Group’s crude fleet.
Since the financial crisis the highest VLCC resale deal recorded by VesselsValue was the $112m Minerva Marine paid in the summer of 2010 for a tanker nearing completion at DSME.
The all-time high belongs to South Korean owner SK Shipping, which paid a staggering $163m for a VLCC under construction at Hyundai.
That deal came in February 2008, just seven months before the global financial crisis hit, with the vessel continuing to trade in the SK fleet as the C Prosperity (built 2009).
Since the crash, Euronav has been the biggest spender on VLCCs – buying 26 of the tankers in deals with $1.9bn, according to VesselsValue.
Georgiopoulos, via Genmar, is next on the list with 12 at $1.2bn, ahead of Bahri’s $1.17bn spent on 17 VLCCs and DHT’s $804m on 16 of the tankers.
