John Fredriksen’s Frontline says that it has elected not to exercise an option with Trafigura subsidiary Trafigura Maritime Logistics (TML) to acquired pair of Chinese-built suezmax tankers.
The options are part of a deal reached between the two companies last month which saw Frontline agreed to acquire 10 new Korean-built suezmax tankers.
Frontline had a further two options, each for two additional Chinese-built suezmaxes, and as a result of not taking the first option the second option has also been terminated.
The initial 10-vessel deal is being paid in a mix of cash plus shares and will see Trafigura will own a stake of around 8.48% of Frontline.
Robert Hvide Macleod, chief executive officer of Frontline Management, commented: “We added significant scale through our acquisition of 10 suezmax tankers from Trafigura, and we are satisfied with our exposure to this asset class. We are pleased to see that the tanker market is tightening and earnings increasing in all our segments. Our market view remains positive and supports further fleet growth, but our main focus will be on VLCCs, where we will seek to add exposure.”