Ardmore Shipping has raised its profit potential with the addition of six medium range (MR) products tankers from John Fredriksen in a deal that showed the door to the capital markets is not as tightly closed as many believed.

TradeWinds reported yesterday that Ardmore had snapped up the tankers from Fredriksen's Frontline, moving the seller out of MR ownership.

Anthony Gurnee, chief executive of Ardmore, said in a statement provided to TradeWinds: "The acquisition of these six ships increases Ardmore Shipping's fleet by almost one-third by tonnage and significantly strengthens our earnings power.

"They are modern, eco-design MR tankers that will further lower the average age of our fleet and reinforce our commitment to high quality, fuel efficient operations."

As reported previously by TradeWinds, Deutsche Bank analyst Amit Mehrotra was quick to sound his support for the transaction.

His is not a lone voice. Jonathan Chappell of Evercore ISI said the Frontline MR fleet was the "right deal at the right time" for Ardmore.

Noting the transaction would immediately raise earnings and cash flow, Chappell said: "The price of $28.75m per vessel is attractive in our view, coming in at a greater-than-9% discount to last-done comps."

Ben Nolan of Stifel said Ardmore had struck at a "golden opportunity".

He added: "With the completion of this deal, we believe Ardmore will be a much better product tanker pure-play alternative to other peers in the market."

Mike Webber of Wells Fargo raised his 2017 profit forecast for Ardmore from $0.80 to $0.94 per share, but described the associated equity issue as slightly dilutive and noted the owner had previously stated it would avoid selling shares at below net asset value to fund expansion.

Doug Mavrinac of Jefferies said in a note to clients: "The acquisition of the six secondhand eco-design MRs is expected to lower Ardmore's average fleet break-evens, reduce the average age of the fleet, and expand the company's overall presence in the products tanker market.

"The deal also makes sense for the seller at a time it is actively looking to grow its VLCC stable."

Erik Nikolai Stavseth of Arctic Securities suggests that should Frontline be confirmed as the seller, then it would release $53m to the balance sheet. Allied with 60% leverage, this gives Frontline the ability to add an additional VLCC resale, he argues.