Frontline, owned by John Fredriksen, has announced the acquisition of 24 Very Large Crude Carriers (VLCCs) from Euronav, solidifying its position as the largest listed pure-play tanker company. The acquisition comes as part of a resolution to Frontline’s year-long dispute with Compagnie Maritime Belge (CMB) over control of Euronav. Frontline will acquire the fleet of 24 ECO VLCCs for $2.35 billion, while selling its stake in Euronav to CMB. This marks a pivotal moment for Frontline after terminating a previous merger agreement with Euronav in January. The acquisition strengthens Frontline’s position in the tanker industry.
Frontline’s fleet will increase to 89 vessels, making it the largest listed pure-play tanker owner. The acquisition is expected to enhance the company’s free cash flow, earnings per share potential, and dividend capacity. The VLCCs acquired are all currently in operation and are equipped with scrubbers. Frontline highlighted the favorable timing of the deal, as sourcing new tanker capacity has long lead times. Completion of the sale and acquisition is subject to approvals, with the process expected to conclude in Q4 2023.
Lars H. Barstad, CEO of Frontline Management AS, emphasized the company’s ability to play a decisive role in large-scale fleet transactions with the support of shareholders and primary banks. The acquisition will be financed through the sale of Frontline’s shares in Euronav, cash on hand, existing credit facilities, and a new term loan facility. Additionally, all arbitration proceedings brought by Euronav against Frontline will be terminated as part of the agreement.