Americas News
NAT to buy Fredriksen's Frontline Interest in Orion Tanker Pool
Nordic American Tankers Ltd (NAT) [NYSE:NAT] will acquire the remaining interest in the Orion Tanker Pool (Orion) from Frontline Ltd. (Frontline), according to a company statement.
Orion, which was established in the autumn of 2011 by NAT and Frontline with each firm currently holding 50% of the business, manages the chartering operations of the 20 NAT vessels and the nine Frontline suezmax vessels.
Frontline, who's principal shareholder is oil tanker and shipping tycoon John Fredriksen, has advised NAT that it wishes to be more flexible in the operation of its vessels so it has been agreed that Frontline's vessels will leave the pool later this year.
According to the statement, effective January 1, 2013 NAT will acquire Frontline's 50 percent shareholding in Orion at its nominal book value, and Orion will become a 100 percent subsidiary of NAT.
NAT Chairman & CEO, Herbjorn Hansson, commented: "I met John Fredriksen more than 30 years ago and count him as a personal friend. We have a wonderful relationship and expect to do business with companies in the Fredriksen Group in the future - as we have done in the past. We will acquire Frontline's 50 percent interest in Orion as mutually respected partners."
In August NAT said its earnings improvement was helped by better fleet utilisation and access to cargoes through establishment of Orion, maximising cash flows by employing all of its vessels in the spot market through the pool.
Following the acquisition of Frontline's stake in the business, NAT says Orion will continue to arrange charters of its fleet enabling NAT to focus on even deeper market penetration.
