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Investment Analysis Clubs / Macro Economic Trends and Risks
|Subject: Re: Shipping tid-bits 4/21/13||Date: 4/21/2013 9:17 PM|
|Author: Hohum777||Number: 421147 of 513053|
Considering the number of shipping entities owned/controlled by John Fredriksen, is there a possibility that (in the event of a downturn) a "good firm"/"bad firm" scenario could take place? As they cross lease, costs could be transfered to a firm which would then "go down with the ship".
Certainly a possibility. SFL has vessel tie-ins with other Fredriksen backed entities.
The folks at Frontline (FRO) actually lease 22 of the SFL vessels, and manage the chartering
arrangements for a majority of the others. FRO's current problems have a lot to do with tanker
rates for the VLCC category, and the fact that the lease terms with SFL saddled them with a
low charge-back operating figure ($6500/vessel daily). To frame that in context, a VLCC operating
cost is probably $11k - $13K daily.
I think the reality of the dire situation was late 2011 when FRO management indicated
that FRO would likely have to restructure to survive. Since you were on vacation, you
likely missed my short Fredriksen tale from about six weeks back--
I have a FRO position only because I have no idea what Fredriksen is actually planning.
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