01/09 Frontline (FRO) announce a pair of related transactions.
Sale of 8 older VLCCs (built 2015-2016)
From Hemen (Fredriksen trust): Acquisition of 9 newbuild VLCCs
Did not see the first event of the two transaction coming. FRO usually hold onto VLCCs, unless the company receives a good offer. At this time, my suspicion is the eight VLCCs were part of the VLCC fleet acquired from Euronav. If correct, then it does make sense to trim said vessels. The vessels did not have scrubbers, and so were using the Very Low Sulphur Fuel Oil (VLSFO) - the more expensive fuel variety. I was aware that Fredriksen had VLCC newbuild orders in play. Just not the exact number. These are 9 orders, of which we are now aware. I would not be surprised if there are still additional VLCC orders (that JF trusts have not publicized)
Thinking more about the development, there is a bit of JF-left-hand, JF-right-hand. What I mean is - given the delivery schedule of the VLCC newbuilds, I think Hemen trusts (JF-left-hand) get a likely mark-up on the sale price i.e. $136M was not the price the trusts paid when the vessels were ordered from the shipyards a few years back. On the flip side, the trusts are a major shareholder of FRO (JF-right-hand). So JF trusts are impacted by paying the vessel value price via being a shareholder.
There appears to be some net value that FRO will realize via the sale i.e. $217.4M - $226.7M mentioned. My guess is, at least half those gains will flow through to FRO shareholders, as part of the Q1 dividend. Or, as a special dividend paid out around the same time as the Q1 div.
Perusing VLCC rate data, it appears the VLCC rates on the major routes - TD3, TD16 have slipped some from the Q4 2025 levels. That means there is another plus wrt the timing of the vessel sale. Each of the 8 vessels will either be completing a delivery operation at a higher spot rate than current, or heading to a loading port with a fixture rate lower than last done. If the latter, then that vessel is likely a transition candidate now. FWIW, gleamed elsewhere - the likely buyer is Sinokor, an recent active buyer of second hand tonnage.