290 million US dollars! Norwegian Ship King Sells Five Oldest VLCCs from Fleet
Recently, Frontline, an oil tanker company under Norwegian ship king John Fredriksen, completed the sale of five of the oldest VLCCs.
Frontline stated in a statement that the company has signed an agreement to sell five VLCCs built in 2009 and 2010, with a total net selling price of $290 million. These ships are expected to be delivered to the new shipowner in the first quarter of 2024.
It is reported that Frontline's transaction is expected to generate approximately $207 million in net cash income after repaying the existing debt of the vessel, and will record approximately $68 million to $76 million in revenue in the first quarter of 2024, depending on the delivery date of each vessel to the new shipowner.
Frontline stated that according to industry standards, this sale must meet certain transaction conditions.
A ship broker revealed that the buyers behind these five VLCCs are the South Korean Singor Merchant Marine, which has been frequently operating in the VLCC market in recent years. The company purchased two "Front Sign" and "Front Cecile" ships built in 2010, as well as three "Front Queen", "Front Katharine", and "Front Endurance" ships built in 2009, from Frontline for prices ranging from $50 to slightly over $60 million per ship.
Frontline CEO Lars H. Barstad said, "We are very satisfied with this transaction and have secured a firm price for vessels aged 14-15 years. During 2023, the company's position in the VLCC field has significantly improved, and the divestment of the remaining non environmentally friendly VLCC aligns with the strategy of operating the most modern and fuel efficient fleet in the market."
After this transaction and the delivery of all 24 VLCCs acquired from Euronav, the Frontline fleet will consist of 84 vessels, including 41 VLCCs, 25 Suezmax tankers, and 18 LR2/Aframax tankers, with a total capacity of approximately 18.2 million deadweight tons and an average age of only 5.9 years.
In October last year, John Fredriksen reached a "ship for share" agreement with the Salvies family regarding the disposal of control of Euronav. While resolving the strategic and structural deadlock of Euronav, they achieved a "win-win" situation by taking what they needed, creating the world's largest publicly listed pure oil tanker owner.