Fredrikson to Create Largest U.S.-Listed Capesize Company with 34 Eco-Ships

by Ship & Bunker News Team
Friday April 25, 2014

Knightsbridge Tankers Ltd. [Nasdaq: VLCCF] (Knightsbridge) says it will combine Frontline 2012's fleet of 25 vessels with its own fleet, creating the largest U.S.-listed capesize company with 39 vessels.

The deal will increase the share of Knightsbridge owned by John Fredriksen's Frontline 2012, to 70 percent.

Fredriksen said the acquisition is part of Frontline 2012's "strategic plan of creating pure plays in different shipping segments through consolidation, divestments and spin offs."

The deal is expected to close in two stages, in September 2014 and March 2015.

Knightsbridge CEO Ola Lorentzon said 34 out of the combined fleet's 39 vessels will be "eco-design" ships, which are capable of earning higher time charter rates than current vessels and capable of breaking even at rates below $15,000 per day.

"We are setting the groundwork to be in a unique position to benefit from an expected dry bulk market recovery," he said.

"As the market recovers we expect this transaction to be highly accretive to our cash flow per share and give us the ability to pay high dividend to our shareholders."

Dayrates for capsize vessels averaged $14,000 last year, which was nearly double the number for 2012, and analysts expect them to rise to $18,000 this year and $27,500 next, Reuters reports.

Frontline 2012 recently made a similar deal with Avance Gas Holdings, selling carriers in exchange for a stake in the company, also as part of Fredriksen's focus on pure plays.

Ship & Bunker News Team
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