Fredriksen is Euronav’s Largest Shareholder Buying on Market Decline
Famed Norwegian shipping investor John Fredriksen is continuing to demonstrate his faith in the tanker market and Euronav, having increased his position to become the largest shareholder of the Belgium tanker company. According to a new filing made with the U.S. Securities Exchange Commission yesterday, the investment company Famatown Finance controlled by Fredriksen now holds nearly 26.5 percent of Euronav’s stock placing it ahead of the Saverys family which holds 25 percent through its Compagnie Maritime Belge.
The filing reveals that Fredriksen continued to be an active buyer of Euronav shares after his January 26, 2023 report which showed that he had nearly equaled the Saverys’ position with both holding approximately a quarter of the company. Fredriksen however continued to be a buyer to the beginning of February by which time he had increased his holdings to 52.4 million shares, making him the largest shareholder of Euronav.
Shareholders of the company ultimately at the March extraordinary shareholder meeting backed a power-sharing approach proposed by Euronav. Both Saverys and Fredriksen received two seats on the supervisory board while three independent directors including the current chairman retained their seats on the expanded board.
Fredriksen, according to the filing, resumed his buying on April 3. They are reporting acquiring an additional 964,000 shares of Euronav. Since late January, the filing shows Fredriksen has invested an additional $47 million in Euronav increasing his total position to 53.4 million shares. This equates to 26.46 percent of the shares outstanding and leaving analysts to speculate on the tactics.
Fredriksen backed away from the efforts to combine Frontline and Euronav in January 2023 after the Saverys made it clear that they would not permit a full combination. Frontline and Euronav are still in an arbitration process fighting over the terms of the agreement and if Frontline was legally permitted to walk away from the agreed deal.
The latest investment came as the price of the tanker companies’ stocks fell on Monday, April 3, in response to a surprise announcement that OPEC would reduce production levels starting in May 2023. The producer nation’s cartel said it planned to lower production by as much as one million barrels a day.
Analysts forecast a short-term negative impact on the tanker sector noting that nearly half of oil production is transported by tanker. Clarksons issued an analysis saying the production cuts could cause the tanker sector to see earnings slump by as much as a third in the coming months.
Fredriksen appears to have been a buyer on the decline in the share price reporting in the filing that yesterday’s purchase was made at an average price of $16. Euronav started the day at $16.66 and dropped to a low of $15.90 inter-day on Monday. Fredriksen has repeatedly said he believes the industry is at the beginning of a long-term upcycle. Euronav and Frontline both highlighted in previous reports the overall constraints in the tanker market with only a small amount of new tonnage expected in the near term.