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In the first quarter report, John Fredriksen's oil company revealed that it had signed an agreement for the purchase of a Suezmax under construction at Hyundai Heavy Industries in South Korea for $ 66 million. dollars, or $ 580 million, under a resale agreement. The delivery was announced in May 2020.
At a teleconference, an analyst asked him if the transaction was a "one-off" one-time event – or if there were similar opportunities, Frontline's director, Robert Hvide Macleod, responded as follows:
– Yes, it's obviously a "one off", but similar resellers are available.
On Wednesday night, the oil company announced it has reached a similar deal.
According to a message, the company has agreed to buy Hyundai Samho Heavy Industries a VLCC – Carrier crude oil very large for resale – with delivery in May 2020. In addition, the company has ordered two new LR2 tankers at SWS in China. , with delivery scheduled for January 2021 and March 2021, respectively.
– These transactions reflect Frontline's desire to increase our exposure to the tanker market and are also part of a continuing effort to renew and modernize the company's fleet. The latter has given us one of the most modern fleets in the industry with an average age of under 5 years, said Macleod in a comment.
LR2 tanks have a cost of $ 46.7 million. while the VLCC was bought for $ 92.5 million.
The total price is $ 185.9 million, or about $ 1.6 billion.
Good price
The price of VLCCs is significantly lower than that of the Arne Fredlys Hunter group, when they recently sold one of eight VLCCs under construction on the DSME shipyard.
The ship with delivery last October was sold at $ 98 million by a buyer from the Far East. In this case, it is certainly sooner to take advantage of the benefits of a tanker market that should be strong from several thirds this year.
Fredriksen is well known for his good salespeople, and Macleod points out that they are open to multiple transactions.
– As new opportunities emerge, we will pursue the growth strategy by positioning the company to generate significant long-term cash flow, he said.
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