Trader and shipowner Trafigura has further reduced its holding in John Fredriksen's tanker company Frontline in another sell-off.
Frontline said in a stock exchange release that Trafigura subsidiary Urion Holdings (Malta) offloaded 395,701 shares on Monday.
Following the transaction, Trafigura and its subsidiaries hold 9.57m shares, equalling a 4.8% stake.
The deal would have been worth NOK 45m ($4.2m) based on a trading price in Oslo of NOK 113.90 each on Tuesday, up 9.5%.
Tanker stocks rose sharply last year, but have been dented by the coronavirus crisis. Values have been rallying as the oil price fell into negative territory on Monday.
Trafigura acquired the Frontline stock when it sold 10 suezmaxes to the owner as part of a $675m cash and shares deal last August.
At that point, it was awarded a holding of 8.48%.
Profit banked?
Trafigura has netted a profit of about $1m on Monday's deal, based on the $8 acquisition price in August.
Since the end of January, the trader appears to have been buying and selling opportunistically, however.
In February, it acquired 300,000 Frontline shares, giving it 5.04% at that time.
And shortly before that it sold around 229,000 shares.
It is not clear when the shareholding was cut from 8.48%.
The August deal saw Frontline acquire 10 scrubber-fitted tankers all built in 2019 at Korean shipyards with an option to buy four more, which it did not take up.
Trafigfura also made another similar move within weeks, taking a stake in Scorpio Tankers in exchange for 19 product carriers.
In February, Trafigura sold 1.2m shares in Scorpio Tankers, but retained 80% of its stock - a 7.9% holding.
This appeared to demonstrate both a nose for a quick profit and a long-term belief in the product tanker sector.
Strategic investor
Trafigura declined to comment, but it has been very active in tanker time charter markets of late and it is thought it remains committed to freight markets.
"This transaction is backed by our strong belief in tanker market fundamentals and reflects our ability to act swiftly and decisively with the support of our largest shareholder," Frontline CEO Robert Hvide Macleod said at the time of the deal last year.
"We welcome Trafigura as a strategic shareholder and believe the acquisition reflects the value Trafigura ascribes to our equity."
Rasmus Bach Nielsen, then global head of wet freight at Trafigura, said the deal marked the continuation of an approach that has “long been integral to Trafigura’s strategy, namely, investing in infrastructure assets in support of commodity flows”.
He said collaborating with a “market leader like Frontline” enabled it to maintain sufficient access to those assets for its trading business.
Trafigura also has a joint venture in bunkering, TFG Marine Fuels, set up with Frontline and another Fredriksen company, bulker owner Golden Ocean.
The two Fredriksen companies have stakes of 15% and 10% respectively.
