Fredriksen vows to stay on to ‘see through’ shipping rescue

The world’s most influential shipowner, John Fredriksen, has vowed to spend at least another “three to five” years in business to supervise the restructuring of $8bn of his oil-drilling company’s debts, just days after an unexpected return to dealmaking.

Mr Fredriksen, 72, said he had to “see through” the rescue of Seadrill, which he said was the most complicated transaction he had seen in more than half a century in shipping.

Mr Fredriksen’s vow comes less than a week after Frontline, his listed tanker operator, launched a $475m offer for Double Hull Tankers, a smaller rival. The deal is intended to make Frontline once again the world’s biggest crude tanker operator by fleet size. On Sunday evening, DHT’s board rejected Frontline’s offer as “wholly inadequate and not in the best interests of DHT or its shareholders”.

However, Mr Fredriksen said Seadrill, which owns 64 rigs and drilling ships, and is one of the biggest companies of its kind, was consuming more of his attention.

Seadrill, like other rig operators, has been severely hit by the fall in oil prices and accompanying sharp downturn in offshore drilling activity. The company has also suffered from what Mr Fredriksen admitted was an excessive reliance on short-term bank finance.

“The capital structure was wrong. It was too short loans, too much guarantees, things like that,” said Mr Fredriksen, a Norwegian who is now a citizen of Cyprus.

The company has said it needs to amend and lengthen the terms of $8bn of its borrowings and raise at least another $1bn in capital.

But it faces a showdown with some bondholders who are blocking a deal. The company is considering multiple possible responses, including a “pre-packaged” Chapter 11 bankruptcy agreed with key creditors.

However, Seadrill looks most likely to become the latest of Mr Fredriksen’s listed vehicles to receive a bailout from Hemen Holding, which manages his holdings in the six listed companies he controls.

Hemen bailed out Frontline in 2012 during a prolonged slump in tanker rates and has had to put up funds for Golden Ocean, his dry bulk operator, twice — in 2009 and 2016. Some rivals’ companies in both sectors sought bankruptcy protection in the same period.

“I’ve never defaulted historically — not with banks, not with any loans,” Mr Fredriksen said.

Mr Fredriksen said 24 per cent of his wealth was tied up in shipping and offshore enterprises, but added: “Depending on the Seadrill situation, it may increase.”

The restructuring has already taken a year’s work and Mr Fredriksen vowed to remain in place while it was completed.

“I have to see this through and also a few other situations,” he said. “Retirement is not an option for me, at least for the next three to five years.”

On Frontline, Mr Fredriksen said the company was targeting Double Hull Tankers because Frontline’s fleet had declined in size in recent years and was growing old. The transaction would make Frontline again clearly the world’s largest operator by fleet size and help to make it more efficient.

“The synergies . . . will help in this instance DHT and us to reduce costs,” Mr Fredriksen said.