Fredriksen takes lion’s share in Euronav

Famatown Finance Limited, a company indirectly controlled by shipping billionaire John Fredriksen, has acquired an additional 964,000 shares in Belgian tanker owner Euronav, taking its total stake to 26.46 pct.

Illustration; Image credit euronav

The share increase of 5.90 percent was disclosed in an SC 13D/A form with the Securities and Exchange Commission (SEC), and it has led Fredriksen’s holding to become the largest shareholder in the company.

The stake raise comes on the back of a failed merger between Fredriksen’s Frontline and Euronav, with the latter seeking arbitration over Frontline’s recent decision to withdraw from the proposed combination agreement.

The merger dispute has resulted in demands for the dismissal of the company’s Supervisory Board from Euronav’s shareholder Compagnie Maritime Belge NV (CMB), while Fematown had its own proposal for the structure of the board. CMB NV and its affiliates jointly own 25% of the voting shares of Euronav.

At the recently held special shareholders’ meeting, Euronav managed to come up with a compromise solution, dismissing some of its members and appointing four new directors to the board: John Frederiksen and Cato H. Stonex, representing Famatown; and Marc Saverys and Patrick De Brabandere, representing CMB.

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“Recent corporate events have not affected the operational performance of the company as we remain focused and committed to maintaining our position of market leadership and have managed to rejuvenate the fleet at a critical time in the market cycle both in buying and ordering modern vessels at good prices as well as be patient and dispose of older assets when the value became interesting,” Euronav said in a report on final results for 2022.

The final result for the full year stood at $203.3 million, $0.4 million better than the preliminary results reported on 2 February 2023 of $ 202.9 million, and a massive recovery from a $338 million loss in 2021.

Moving forward, the company expects that the large crude tanker market will start a multi-year upcycle based on strong fundamentals and well-supported tanker market-specific catalysts:

  • Orderbooks at +25 years lows
  • Contracting of newbuilding constrained by high vessel prices, incoming regulations, and shipbuilding capacity limited until 2025/26 by LNG carrier/container contracts
  • The global fleet age average of large tanker segments is the highest seen in the last 20 years.

This sector positioning has been augmented by catalysts such as Russian crude/product dislocation, as the EU continues to replace the lost Russian barrels via the Middle East and Atlantic sourcing benefitting the Suezmax and the VLCC segment.

These displacements are expected to translate into structurally longer ton-miles. Furthermore, US crude exports recently hit a new record high of 5.1m bpd reflecting additional SPR (Strategic Petroleum Reserves) cargoes but also underlying strong US production growth.

Euronav believes that over time the CII will act as a speed limit on maritime transportation pressurizing further tanker capacity.

“The global crude tanker market positioning remains very favorable and so far without the support of any positive drivers from China,” Euronav said, suggesting that there are signs that China could be returning to previous levels of crude demand further adding to the positive outlook.

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