Fredriksen to Spend $3 Billion From Seadrill Stake on Ships, Arctic Says

Billionaire John Fredriksen will use the proceeds from selling shares of oil-rig operator Seadrill Ltd. (SDRL) to buy new ships worth as much as $3 billion, Arctic Securities ASA said.

Fredriksen plans to sell as many as 24 million shares in Seadrill through his stake in Hemen Holding Ltd., raising about 5.6 billion kroner ($1 billion), according to a statement yesterday. That will free up money to “increase firepower for shipping acquisitions,” Oslo-based investment bank Arctic said in an e-mailed note today.

The billionaire may make his largest shipping investments in more than 12 years, said Arctic, which drew parallels to his purchase of 80 vessels worth $4.6 billion between 1996 and 2001. Fredriksen is probably aiming to enter new shipping areas, particularly oil-product tankers, according to Arctic.

“This could effectively turn into $3 billion of investments,” analyst Erik Nikolai Stavseth said in the note. “This is where Fredriksen will employ his Seadrill money.”

Norway-born Fredriksen, now a Cypriot citizen, is ranked by Forbes magazine as the world’s 72nd-richest person with a net worth of $10.7 billion. He has public and private shipping interests spanning container vessels, dry-bulk carriers, oil tankers and offshore drilling rigs and has revealed orders for vessels worth at least $1.1 billion this year.

14-Year Low

The billionaire is chairman of Frontline Ltd., which he split in two in December after a plunge in returns to the lowest level in more than 14 years left the oil-tanker company at risk of running out of cash. Frontline 2012, the new company created by the separation, bought 10 new tankers and contracts for five under construction from Frontline, paying $1.21 billion.

Arctic placed $285 million as one of the arrangers in the December transaction.

Fredriksen ordered six medium-range oil-product tankers last month. He briefly owned a fleet of the vessels in 2001, inherited in a takeover of Osprey Maritime, and sold them within months of the transaction. The ships haul refined products such as jet fuel and gasoline.

To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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