Tanker Giant Reborn – Billionaire Fredriksen Merges Tanker Companies Three Years After Split - Maritime and Salvage Wolrd News

By Jonas Cho Walsgard

(Bloomberg) — Billionaire John Fredriksen is merging the 2 oil tanker firms he cut up up greater than three years to create a market chief.

Frontline Ltd. will purchase Frontline 2012 Ltd. by issuing 584 million shares price virtually 12 billion kroner ($1.5 billion). Shareholders in Frontline 2012 will obtain 2.55 Frontline shares for every share. That implies a 31 % premium primarily based on Wednesdays closing costs.

“By merging Frontline and Frontline 2012 we will regain Frontline’s position as a leading tanker company,” John Fredriksen, chairman of each firms, stated in a press release. “The combined company will have a large fleet and a strong balance sheet which puts us in a position to gain further market share through acquisitions and consolidation opportunities.”

Fredriksen cut up Frontline in 2011 to resist falling tanker charges and keep away from default. Frontline 2012 was given management of newer vessels and excellent orders at ship yards. The mixed firm can have a fleet of about 90 vessels and a newbuilding program of about 22 vessels scheduled for supply from 2015 to 2017.

“With the current strong tanker market and attractive cash break even rates, we believe the combined company will generate significant free cash,” Fredriksen stated. “The intention is to pay out excess cash as dividends at the board’s discretion.”

The merger is predicted to shut as quickly as doable after particular common conferences to be held within the fourth quarter. After the transaction Fredriksen’s Hemen Holding and Ship Finance will personal 52 % and seven %, respectively of the mixed firm.