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Knightsbridge Shipping Limited Message Board

  • gator_fan1990 gator_fan1990 Sep 11, 2012 12:55 PM Flag

    What's the management play?

    I've followed VLCCF for about 10 years and I've noted their management are shrewd planners. I am trying to tease out the current plan. It seems too late for buy low/sell high on the tanker fleet unless one thinks the VLCC tanker market has a lot lower to go on tanker value. I'm not sure I buy into that premise that values go lower and they pick up VLCC's at a lower price.

    So what this looks like to me is a diversification play. Unload some VLCC's at current rates although depressed is still net cash positive (paper loss yes, but that's an accounting hit). Then use the cash and financing capacity for what? I was recently reading of a play by John Fredriksen to get into finished liquids transport of gas, LNG, etc with a "green" fleet of economical transport. I am leaning towards this being the play by VLCCF management and we could see an acquisition in that direction through either new construction or distressed asset from another.

    Curious as to other's thoughts.

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    • I am all for VLCCF adding LNG ships to their fleet but only if the balance sheet can stand it.

      I know that to grow you must take risk. However VLCCF does not have the deep pockets of Mr. Fredriksen with his personal wealth to make sure that the companies he owns are backed by him.
      He already bailed out FRO and is indeed betting on the recovery of the industry but he also is buying LNG ships.

      If and only if VLCCF can be sure they can pay the bills if the sector goes worse before better. For to grow you not have to take risk but you have to be in business to take them. Always make sure first you can survive a down turn and right now shippers are under a ton of attack.

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