Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Shipping Billionaire Fredriksen Revises Chinese Vessel Orders

Don't Miss Out —
Follow us on:

Sept. 17 (Bloomberg) -- Shipping companies led by Norway-born billionaire John Fredriksen renegotiated the terms of orders for oil tankers and coal and iron ore carriers due to be built by a Chinese shipyard.

Frontline Ltd., the world’s largest supertanker operator, and Golden Ocean Group Ltd. increased the number of vessels they are having built at Zhoushan Jinhaiwan Shipyard Co. and secured lower prices, according to statements from both companies today. Fredriksen is chairman of the two shipping lines.

“It’s partly because it’s Fredriksen” that they have been able to get better prices, Anders Karlsen, an analyst at Nordea Securities in Oslo, said by phone. The two companies have a “high proportion” of the orders at Jinhaiwan, contracting from the yard before it became “mainstream”, he said.

A decision to place additional orders may indicate Fredriksen’s longer-term confidence in tanker and dry-bulk freight markets. There “won’t be much money to earn” in shipping for the next two to three years after owners placed orders for too many new carriers, he said Sept. 1.

Golden Ocean, a dry-bulk shipper based in Hamilton, Bermuda, re-jigged its orders at Jinhaiwan to comprise four ice-class panamaxes, four kamsarmaxes, and a capesize, its statement showed. The terms of the renegotiation “significantly” increases the net asset value of Golden Ocean’s shares compared with the previous order for six kamsarmaxes and a capesize, according to the statement.

Frontline exercised options to build two very large crude carriers, or VLCCs, and placed an order for a third. It also secured better prices for two existing orders and now has a total contract price of $525 million for all five supertankers.

Hemen Holding Ltd., indirectly controlled by trusts created by Fredriksen for his family, owns 33.8 percent of Frontline and 32.1 percent of Golden Ocean, according to Securities and Exchange Commission filings.

The Golden Ocean deal is “very attractive, below market rates, and requires minimal equity investment” Martin Korsvold, an analyst with Pareto Securities AS, said in an e-mailed note.

To contact the reporter on this story: Alaric Nightingale in London at anightingal1@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.