Fredriksen raises $310m for shipping push

Frontline 2012, controlled by billionaire shipowner John Fredriksen, has raised $310m in a private placement as it pushes ahead with its plan to buy dozens of new ships and become the world’s biggest operator of tankers.

The move by Mr Fredriksen, the most high-profile shipowner in the world, defies the gloom in much of the shipping industry as tanker owners go bankrupt and numerous ships are scrapped.

The Norwegian shipowner founded Frontline 2012 about 12 months ago and owns half of the company, which owns six very large crude carriers (VLCC) and four other ships and has orders for more than 16 new ships.

The money raised on Friday will be used for those existing orders – including for four very large gas carriers and four Capesize carriers for dry-bulk commodities such as iron ore – as well as “leav[ing] capacity for significant further contracts”, the Oslo-based company said.

Jens Martin Jensen, chief executive of Frontline Management, part of Mr Frederiksen’s empire, told the Financial Times: “We obviously see the markets potentially recovering at the end of 2014 and in 2015. We believe it is a good time to invest now.”

He contrasted the willingness of Mr Fredriksen to invest in the industry with the retrenchment of many shipping banks even against the backdrop of “quite an old fleet profile”.

Mr Fredriksen is known for taking bold bets on the direction of the shipping industry based on his “gut feelings”. But Frontline 2012 marks a change for him as his companies have previously stuck to specific shipping areas while the new company will own carriers for oil, gas and dry bulk.

Overseas Shipping Group, which at the time was the biggest US-listed oil tanker operator, declared itself bankrupt in November after the market suffered its worst slump in a quarter of a century because of a glut of new ships and a drop in rates.