AmericasEuropeFinance and InsuranceTankers

Mystery surrounds this week’s big Frontline share play

US investment bank Goldman Sachs has emerged as a new major shareholder in John Fredriksen’s tanker firm Frontline.

In a filing made to the Oslo stock exchange on Wednesday, Frontline revealed that Goldman Sachs holds a 5.43% stake in the company.

The Frontline holding would make Goldman Sachs the second-largest investor, with Norwegian pension fund Folketrygdfondet and asset manager BlackRock trailing behind with 5.26% and 2.67% stakes, respectively.

According to the Frontline filing, the 4.27% stake refers to “security lending,” with sources speculating that one investor, perhaps Fredriksen, may have given the shares to Goldman Sachs as collateral for a loan to secure some liquidity.

A similar move took place with the French liner CMA CGM when it handed over shares of Global Ship Lease to Goldman Sachs to sell gradually in the market. Earlier this year, the investment banking giant also accumulated a considerable stake in the Oslo-listed boxship owner, MPC Container Ships, as a result of client trading activity and not a direct investment. Goldman Sachs has yet to reply to questions sent by Splash.

The Goldman Sachs play comes at a time when analysts are turning very positive on tanker prospects. Deutsche Bank’s Amit Mehrotra maintained Frontline with a hold and raised the price target from $7 to $12. The New York- and Oslo-listed company is currently trading around $13, up close to 20% in a month. Jefferies yesterday also raised targets across its tanker coverage, increasing its prices and switching to buy.

“Spot rates have held firm across most segments over the past six months and VLCCs have finally joined the fray. The Russia-Ukraine war has impacted trade flows and tanker routes, but it also brought to the forefront the underlying tightness of the oil market, inducing higher production and refinery runs, benefiting tankers. We see strong earnings this winter and throughout 2023 & 2024,” the New York-based investment bank said.

Adis Ajdin

Adis is an experienced news reporter with a background in finance, media and education. He has written across the spectrum of offshore energy and ocean industries for many years and is a member of International Federation of Journalists. Previously he had written for Navingo media group titles including Offshore Energy, Subsea World News and Marine Energy.
Back to top button