An Analysis of The Fredriksen Formula' To Enacting Entrepreneurship (v2)

Hvalbye Capital Markets
An Analysis of the Fredriksen Formula to Enacting Entrepreneurship

by
Are Rodahl Hvalbye
2014
Table of contents:
Table of contents: ..................................................................................... 2 Introduction: ............................................................................................ 3 Background: ............................................................................................. 3
Biography: ................................................................................................. 4 Financial wealth:........................................................................................ 4 Company portfolio: .................................................................................... 5
Theory: ..................................................................................................... 9
Classfying an entrepreneur: ....................................................................... 9 Entrepreneurial role: ................................................................................ 11 Personal(ity) characterization: ................................................................ 12
The Fredriksen Formula: ....................................................................... 14

Strategy and takeover targets: ................................................................ 14 Mergers and acquisitions: ........................................................................ 15 Corporate governance:............................................................................. 15 Lean organizations: ................................................................................. 16 Responsible ownership: ........................................................................... 17 Bailout capability: .................................................................................... 17 Mutual exposure/value maximizing: ........................................................ 18 Dividend focus: ........................................................................................ 18 Financial leverage: ................................................................................... 19 Financial engineering: .............................................................................. 20 Risk willingness: ...................................................................................... 20
A Fredriksen premium? ........................................................................... 21 Conclusion: ............................................................................................. 22 Appendices: ............................................................................................ 23 References:............................................................................................. 24
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Introduction:
This project paper revolves around a case study of John Fredriksen, his group of companies, business practices, entrepreneurship methodology and financial management style. The objective is to define what type of entrepreneur Fredriksen is, and get an understanding of his financial success through examining his entrepreneurial methodology. I find it necessary to emphasize that the intention is not to analyze how successful he is, but rather how he is successful. However, in order to identify the latter one needs an understanding of the first. Hence the reason I devote a portion of the paper to cover this aspect. Theoretically, Fredriksens wealth could be ascribed to pure luck; however, my hypothesis contends that it is attributed to a specific methodology of practicing entrepreneurship. The theory aspect receives attention starting page 5, but is also partly intertwined with the empirical research throughout. Theory is based on curriculum, Bissant and Tidd, the works of Wickham as well as any other authors cited in the reference list and in parenthesis. I have chosen this topic because I find the ventures and success of Mr. Fredriksen to be fascinating, and I believe his entrepreneurial style is somewhat unrecognized. I also argue that Fredriksen has received undeservingly little attention in relevant academic research, as opposed to popular media spotlight. This analysis is largely based on an earlier paper written by myself and is cited in accordance with instructions given to me by examinators. The topic will be researched in light of Fredriksens historical and current business ventures and dispositions, and is based on available information from literature, news archives and company publications.
Background:
John Fredriksen is a widely acclaimed businessman and skilled shipping tycoon, known for his eccentric persona, pragmatic attitude and vast affluence. Fredriksen comes from a humble uprising at the east side of Oslo and is an entirely self-made billionaire that rose to fame through an almost clich-like rags to riches storyline (as depicted in appendix A). Fredriksen is the architect of several world-leading contemporary corporations, in which he holds large ownership stakes that make up the majority of his entrepreneurial-based wealth. Adopting an insensate great person view of Fredriksen on the back of his success is not particularly useful, as it may self-justify ones perception. Therefore, I have assumed a critical view of Fredriksens undertakings and refrained from any type of aggrandizement. Reading an unauthorized biography - written by editor, social commentator and proclaimed anti-capitalist Gunnar Stavrum - where Fredriksens actions is scrutinized and receive criticism, has been influential in the analysis. I still ascertain that Stavrums publication needs to be considered in light of a certain bias. One observation of mine is that John Fredriksen has been the subject of a high degree of Law of Jante thinking through pervasive press coverage,
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forging a somewhat unflattering public image of his persona and thereby undermining his entrepreneurial abilities.
Biography:
For a summarized biography emphasizing the relevant events and highlights of John Fredriksens life, based on the works of Stavrum and information from the Great Norwegian Encyclopedia, see appendix A.
Financial wealth:
Fredriksens wealth, with its remarkable size and growth, is partially the trigger for researching the topic as it stimulates the curiousity of how it was attained. Fredriksens personal fortune has received attention and scrutiny from several parties (such as media and tax authorities), and is convenient to estimate due to a large portion of ownership in publically listed companies. Forbes estimated Fredriksens net wealth at $11.5 billion for their 2012 global billionaire ranking (Forbes, 2013), Norwegian business journal Kapital place him atop their annual ranking of Norways richest people suggesting 15bn. (Hegnar Online, 2013), whereas Fredriksen currently ranks 55th place with $15.6bn. in Bloombergs real -time Billionaire Index (Bloomberg, 2013). My personal estimations arrive at similar levels (appendix B), suggesting a total net worth of $15.9bn when including real estate and cash deposits. Although no longer officially a Norwegian national after applying for Cypriot citizenship, Fredriksen is undisputedly Norways richest person. He has almost threefold the wealth of the second person on the list - Olav Thon, an old, eccentric, self-made property tycoon. Shipping has been Fredriksens main wealth catalyst and field of interest, and continues to be his preferred time occupation (Trim, 2011). Shipping companies are historically where Fredriksen has had most of his capital, however as of lately, Seadrills strong stock price performance has caused offshore drilling rigs to surpass shipping. As illustrated in the pie chart below (a snapshot from 18.04.13), showcasing the different sectorial focuses, Fredriksens involvement in the rig sector (through Seadrill, Northern Offshore and North Atlantic Drilling) now constitutes almost half of his equity wealth (~ $4.7bn.).
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The crude oil tanker segment is where Fredriksen gained most of his wealth as well as public exposure - earning him the nickname Tanker King (Stavrum, 2006). Earnings from these vessels has since found its way into investments in other maritime sectors, such as dry bulk, offshore supply, LPG carriers, chemical tankers, LNG tankers and containerships. My personal mapping of Fredriksens wide-slung network of ship controlling entities, estimates that Fredriksen owns and/or controls a fleet of 232 vessels with a combined tonnage of 31.4 million deadweight tons (see appendix C). Of these, 139 are believed to be sailing and actively trading, while the remainder are newbuilding projects under (planned) construction (appendix C). To put these numbers in perspective, Fredriksens total fleet is almost twice the size (in terms of tonnage) to that of all Norway-flagged vessels - effectively making him the equivalent to the 12th largest shipowning nation in the world (UNCTAD, 2011). Correspondingly, it is equivalent to almost 2.2% of the world commercial fleet. Albeit, these estimations imply that one considers the various shipowning entities that Fredriksen partly and/or indirectly own as one establishment. Certainly, this fleet has substantial debts attached to it, but still gives a clear indication of Fredriksens sizeable real assets. Conclusively, Fredriksen is an extraordinarily affluent person that - perhaps more exceptionally - has built his companies from scratch using a trademark entrepreneurial approach that is the topic of this paper.
Company portfolio:
The sphere of Fredriksen companies, collectively referred to as the Fredriksen Group, Seatankers Group or the Greenwich Group, is comprised of 18 staple companies that are exchange listed with a collective market valuation of about 50 billion dollars (appendix B). To put this in perspective, it is equivalent to about a quarter of the national budget of Norway. The core companies, where Fredriksen retains between 18% and 58% ownership, include Seadrill, Marine Harvest (delisted), Frontline, Golar LNG, Deep Sea Supply, Golden Ocean Group, Archer (formerly Seawell), Ship Finance International, North Atlantic Drilling (NADL),
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Northern Offshore, Frontline 2012, Golar LNG Partners and Independent Tankers Corporation (most of whose logos can be seen below).
A selection of these companies - specifically Seadrill, Marine Harvest, Golar LNG, Ship Finance and Frontline (2012) - are considered world-leading entities within their respective sectors, when considering market share, operational performance and profitability. Other known (non-core) holdings include equity stakes in TUI AG and TUI Travel two affiliated companies that make up one of the worlds largest tourism operators as well as Fred Olsen Production, Calpine Corporation and Knightsbridge Tankers (see appendix B). The common factor among these investments is that they were made on the premise of distressed or understated valuation. In a report by composed by Menon Business Economics, it was calculated that the groups Norwegian based companies comprise 8.5% of Oslo Sto ck Exchanges value and 2.6% of total Norwegian trade and business. Additionally, it stated that the groups total borrowings constitute almost 10% of the cumulative loan portfolio to business customers in Norway (Bgh Holmen et al., 2012). Below I will take a closer look at the four most prominent companies considered to be/have been the core of the group. This historical review is vital in order to comprehend Fredriksens way of enacting entrepreneurship through a methodology that will be explicated further along.
Marine Harvest:
Fredriksen entered the salmon industry in 2005, through his holding company Geveran Tradings purchase of Nordeas creditor-in-possession stake in Pan Fish. Pan Fish traces its roots back to 1992, but was turned over to its creditors due to financial distress caused by low salmon prices (Bgh Holmen et al., 2012). Marine Harvest ASA was formed as a result of a merger between Pan Fish ASA, Fjord Seafood ASA and Marine Harvest NV in 2006. The new enterprise kept the name of Marine Harvest, logo of Pan Fish and the slogan of Fjord Seafood. The triple merger was an upshot of a widespread consolidation within the fish-farming and seafood industry instigated by Fredriksen (Bgh
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Holmen et al., 2012). Most recently, Marine Harvest acquired its Oslo-listed peer, the processor/packager Morpol ASA. Today the company is the worlds largest processor of salmon wherein it operates in 22 different countries and employs over 10,200 people (including Morpol). Revenue has historically lied between 13.5 and 16 billion NOK the last five years, but profitability and (thus) market value have been subject to volatile salmon prices. Accordingly, the reasoning for the purchase of Morpol has been to create a more horizontally integrated company that is less exposed to the spot price of salmon (Marine Harvest, 2013).
Seadrill:
Seadrill is the worlds second largest owner and operator of offshore drilling rigs, with in excess of 60 rigs and 7,000 employees (Seadrill, 2013). The company was originally headquartered in Stavanger, but recently moved to London. Seadrill has since its establishment in 2005, been the case of unprecedented growth organically and through a series of acquisitions (Marine Money, 2010). The foundation of the company was Fredriksens controversial takeover of Smedvig ASA in a bidding war Noble Drilling in 2006. Fredriksen surprisingly managed to snap up the company in front of Nobles eyes despite the fact that Noble already had purchased over 40% of the companys stock (Starr and O lsen, 2006). The same year Mosvold Drilling and Odfjell Drilling was absorbed, followed by Eastern Drilling and then Scorpion Offshore in 2007 and 2010 respectively. The latest acquisition sparked a bidding war with British rig operator Ensco, where Fredriksen once again was victorious. In 2007, the drilling and well service operations of the company was divested in a separate entity dubbed Seawell, which proceeded to go on a buying-spree acquiring another six related companies and finally merging with Allis Chalmers Energy, incorporated the name Archer (Bgh Holmen et al., 2012). Another divestiture took place in 2011, when North Atlantic Drilling was created as a pure-play ultra-deepwater entity by acquiring Seadrills modern rigs operating in the North Atlantic region. Seadrill is currently the fourth largest company in market capitalization among the hundredsomething companies listed on the Oslo Stock Exchange, exceeding that of Norwegian staple blue-chip companies such as Yara and Hydro - outfits with roots going hundred years back.
Frontline:
Frontline has largely been Fredriksens pet project and main wealth facilitator before Seadrill, therefore being the company that most people associate with John (Stavrum, 2006). Frontline AB was founded in 1985 and was listed on the Stockholm Stock Exchange from 1989 to 1997. Hemen Holding became the largest shareholder of the company in 1996 through a $55 million bulk stock purchase. A year later Fredriksen trumped through a decision to change the companys domicile from Sweden to Bermuda, list the shares on the Oslo Stock Exchange and sell off a part of the fleet (SNL, 2013). Since this restructuring, Frontline has been actively involved in a consolidation of the tanker industry and has carried out a series of corporate
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acquisitions. These include London & Overseas Freighters (1997), Cambridge Partners (1998), Swedish company ICB Shipping (1999) and Golden Ocean Group in 2000 (Bgh Holmen et al., 2013). The takeover of ICB turned into a two-year hostile takeover battle, whereupon Fredriksen utilized tactics such as ads in the Swedish press and intimidating letters to the board of directors. The commotion that arose from the takeover cemented Fredriksens image as a no nonsense hardball negotiator. The CEO and largest shareholder of ICB at the time, a Swedish aristocrat, benchmarked the sentiment when saying, "he's a tough cookie, but he knows the shipping business" (Gorham, 2001). The entry into Canada-based Golden Ocean, which went bankrupt after the 1997 Asian downturn, was an interesting endeavor. Fredriksen had amassed the companys heavily distressed debt, becoming the largest creditor and effectively taking control of 17 collateralized tankers for a mere $65 million outlay. Golden Oceans fleet of n on-oil tankers was divested and placed into a new entity, appropriately named Golden Ocean, which was listed on the Oslo Stock Exchange and its shares distributed to Frontline shareholders (SNL, 2013). After the acquisitions, Frontline had 43 tankers with a combined tonnage of eight million deadweight tons (dwt) and was officially the worlds largest. At the peak, Frontline operated a partially owned and chartered fleet of 70 oil tankers with a combined weight of about 15 million deadweight tons (Nightingdale, 2010). This is equivalent to a combined carrying capacity of about 135 million barrels of crude oil, or about a week worth of United Statess oil demand (EIA, 2013). In recent terms, the supertanker market has experienced yet another major slump caused by the excess supply of ships. The company has been amassing losses finally leading to a breach in the covenants of the bonds, likely heading towards defaulting and bankruptcy. However, Fredriksen stepped up and bailed out the company by injecting capital and creating a new company that absorbed most of the liabilities (see below).
Frontline 2012:
This new company was created as a measure to bail out Frontline through a 300 million dollar equity injection, whereby two thirds of the proceeds was used to purchase the original Frontlines newbuilding contracts along with seven sailing ships and the associated bank debt. Frontline 2012 is listed on the Norwegian OTC list and is considered Fredriksens main investment vehicle for growth in the shipping sector. Thus far, the company is rumored/partly confirmed to own shipbuilding contracts for 80 something vessels, divided between bulk carriers, chemical tankers, LPG tankers and crude carriers (Ang, 2013). My research, based on scarcely available information, suggest that Fredriksen thus far has ordered ships with a collective value of between 6-7 billion dollars (Haavaldesen, 2013). The orders are said to have occupied the best slots at the most prominent shipyards at prices that are ~ 40% lower than 45 years ago and at 30-year lows when adjusted for inflation (Stenshagen, 2012). Almost two years ago, Fredriksen was quoted saying that the oil tanker market will "() collapse in a year or two and that "we'll wait until the market collapses and then we'll buy up
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what's there" (Wright, 2011). Sometime later last year he exclaimed "when the market goes to hell, it's more of an opportunity than a problem () (Koranyi, 2011). These citations illustrate the ambitious undertaking of the new firm, which according to some analysts is believed to order up to 150 new ships by the end of this year.
Theory:
John Fredriksen has to my knowledge not received any attention in published academic literature, there are however numerous theoretical aspects that are relevant to discussing him and his methodology. The intention of explaining the source of Fredriksens wealth and success can be debated in light of different theories and academic perspectives. I intend to look at the classification schemes, the different role(s) and characterizing the personality of entrepreneurs (I do not intend to discourse much about psychology). Some of the discussion also pertains to business strategy, managing resources and finances, and success factors of entrepreneurship. Wickham (2006, pg. 225) point out that the success of an entrepreneurial venture is contingent on four factors: (1) the entrepreneur, (2) the opportunity, (3) the organization, (4) the resources, and maybe more importantly, the symbiosis between these aspects. The interaction between these factors is defined as the actiual entrepreneurial process, upon where all factors need to be present (Wickham, 2006). Consequently, it is the level of proficiency that the entrepreneur is able to display towards synchronizing the organization for opportunities and resources, which determines the success of the venture. Additionally, Wickham (2006, pg. 264) discusses entrepreneurial success in light of resource use. He raises the point that (first-time) entrepreneurs and their success appear somewhat paradoxical. This is because, he claims, they lack the same level of resources as established competitors, in that they are short internal success factors, and secondly, that resources are more expensive due to higher risk premiums. Wickham claim that the reason entrepreneurs succeed despite these intrinsic disadvantages, is that entrepreneurs work their resources harder than more established businesses.
Classfying an entrepreneur:
Classifying the entrepreneur is important, as it provides insights to researchers, investors, customers and policymakers that are crucial to their respective decision-making. Although comprehensive classification schemes exist, one should be somewhat wary of pigeonholing entrepreneurs due to their ever-changing state and dynamic context. Wickham (2006, pg. 34), contends that there are two main approaches - either to classify the entrepreneurs themselves or their individual ventures. One major distinction lies in being a growth-oriented and independence-oriented entrepreneur, whereas the later is typically small-scale craftsmen with a craving to become autonomous. Landau (1982) has developed a classification system based on risk bearing (vertical column) and level of innovation (horizontal column), where both factors are dependent on eachother (see table below).
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An individual with high risk-taking and low innovativeness is considered a gambler. The premise of the gambler is to be able to deliver value better than exsisting players in the marketplace, whereas a consolidator takes on less risk and provides a marginal improvement. This designation system is particularly interesting in light of Fredriksen, as he would probably be defined as a hybrid gambler/consolidator, yet likely rank closer to the former. Some of the academic discussion revolving around the classification of entrepreneurs pertains to whether one has an adaptor or an innovator mindset. Michael Kirton made this distinction in his 2003 Adaption-Innovation theory, which is a psychometric approach to assessing creativity, that claims that an individual's preferred approach to problem solving can be placed on a band ranging from high adaptation to high innovation. Adaptors use what resources they are given to solve problems by time-honoured techniques, while innovators look beyond what is available to solve problems with the aid of innovative technologies. Kirton suggests that while adaptors prefer to do well within a given paradigm, innovators would rather do differently by going beyond existing paradigms (Kirton, 2003). Fredriksen is primarily an adaptor (there is little innovative about owning ships), typically improving existing solutions and systems in order to be an early-mover and exploit new products/technologies and market opportunities. An example is Seadrills procurement of topspec, high-end ultra-deepwater semi-submersible drilling rigs from Samsung Heavy Industries before most others, that benefitted handsomely in the aftermath of the Gulf of Mexico Macondo well blowout, due to stricter regulations and increased demand for more modern/safer rigs. Narrowing down on the attempt to classify Fredriksen, Wickham (2006, pg. 38) names a special breed of entrepreneurs, called serial entrepreneurs or habitual entrepreneurs, which are motivated by the rewards of establishing and building businesses more than anything. The serial entrepreneur is able to effectively exploit his/her technique and replicate successful business ventures and projects on the same premises. Some observers, such as Gartner (1985), actually suggest that when the building stage of the venture ends, so does true entrepreneurship. As per Wickhams methodology, serial entrepreneurs are sub-categorized into sequential entrepreneurs and portfolio entrepreneurs (2006, pg. 39). The first category pertains to people whom start new business ventures in sequence, preferring to focus on one at a time,
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while entrepreneurs who establish and operate several businesses simultaneously characterize the latter. Wright M., Robbie K. and Ennew C. (1997) have expanded on the definition of serial entrepreneurs, with three detailed distinctions: (1) defensive serial entrepreneurs, (2) opportunist serial entrepreneurs and (3) group-creating serial entrepreneurs. The category of group-creating entrepreneurs is somewhat self-explanatory, and evolves around the idea that creating an array of businesses or different entities is essential to the strategy of the entrepreneur. E.g. owning a distribution network of fuel trucks is complimentary to operating a chain of gas stations. An opportunistic entrepreneur undertakes new ventures because he or she perceives a short-term possibility of financial gain. Fredriksen would fall somewhere betweem the two, and I would argue that there is room for a fourth category consisiting of opportunistic group-creators. My interpretation is that Fredriksens business empire has gone through a gradual expansion and branched out into different sectors, primarily due to the following reasons: 1. 2. 3. 4. 5. Presence of lucrative/interesting opportunities (e.g. the acquisition of Marine Harvest) Necessity to diversify income sources (e.g. the acquisition of Aktiv Kapital) Need to conserve wealth/park cash Commercially founded expansion (market power, synergies, economics of scale, etc.) Leveraging group-wide synergies attainable in an integrated industrial conglomerate (e.g. the establishment of Arcadia Petroleum)
Undoubtedly, the more successful businesses an entrepreneur has developed in the past, the lower the threshold becomes for the next venture to become successful. A key reason for this is financing, but the cause is two-fold. First, previous ventures will likely have generated retained earnings and/or sales proceeds (from an exit) that can be allocated towards new projects. Secondly, the access and cost of external funding is more beneficial with entrepreneurs abilities having become a more attractive proposition for investors. Access to capital is essential in entrepreneurial development, with studies (Birley and Westhead, 1994) concluding that start-ups with easy funding access are associated with higher relative growth and rate of success. Another obvious reason for improved success rate is the ability to transfer competitive advantages to subsequent business ventures, as well as leveraging on past knowledge and experience.
Entrepreneurial role:
Entrepreneurship and entrepreneurs have been defined differently through times, the most pragmatic definition is a person who founds, organizes and operates (a) business(es) (Wikipedia, 2013). Other definitions extend beyond this boundary and include aspects such as risk, opportunity, innovation and management styles. Wickham considers at entrepreneurship through two dimensions - personal and social (2006, pg. 222). Whereas the personal dimension is largely based on motivation, and will receive more
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attention below, the social factor is a wide-flung one that concerns the wider society. Entrepreneurs provide the the public with new/cheaper products and services, jobs, increased competition, tax income and all the trickle-down effects essential to the well-being of the general economy. Some commentators suggest that the primary role of an entrepreneur is to maximize return to the shareholders (Wickham, pg. 11), however the role of an entrepreneur is undisputedly more diverse because he or she has to consider a wide range of stakeholders. Most academics clearly distinguish between owners/investors and managers when it comes to entrepreneurs. As per this distinction, first made by French economist J.B. Say (Wickham, pg. 6), an entrepreneur who owns a substantial part of the business while also undertaking managerial tasks, is consequently assuming two roles. What complicates the picture in the case of Fredriksen, is that he frequently entertains more than one of these stakeholder roles. At times, he can even be his own customer (as is the case with Frontline and Ship Finance). Accordingly, interests largely seem to be aligned across most roles. Wickham (2006, pg. 8) suggests that the provision of leaderships and being a good leader is increasingly recognized as a critical part of enrtrepreneurial success. The role of supporting and directing is elementary in making all the members of the team pull in the right direction, be focused and have motivation for the task at hand. Being able to perform all these tasks effectively requires strong leadership. For the same reason that it is impractical to precisely define an entrepreneur, it is challenging to delineate an entrepreneurs role(s). Because of the vibrant environment and dynamic state of an entrepreneur, he or she often holds and changes between several roles. Fredriksens role however, is often portrayed as solely being an owner. This is not an entirely correct characterization, because it undermines the leadership and managing responsibilities that are assumed through his various directorships.
Personal(ity) characterization:
Surveys suggest that entrepreneurs have special and/or distinctive personalities (Wickham, 2006), and ultimately it is a claim that has been empirically proven. For instance, a psychologically validated study (King, 1985) showed that there are significant differences in personal traits between successful entrepreneurs, normal employees and non -successful entrepreneurs. Some researchers also note that the background of successful entrepreneurs oftentimes is characterized by privation and hardship, and that they often are social misfits that are unable to fit into existing situations. Several studies (Geroiski, Mata and Portugal, 2010) indicate that start-up ventures backed by people with university degrees have a higher probability of surviving the first years. Similar research (Harding, 2007) note that there is a high correlation between education level (human capital) and venture success rate, and that people with higher degrees actually are twice as likely to achieve success as non-educated.
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Different researchers (Mueller and Thomas, 2001) have focused on other aspects and pinpointed three themes that shape creative personalities: cognitive abilities, biographical and behavioral events. Bessant and Tidd (2011, pg. 157) have also defined three overlapping themes - personality, thinking process and environmental factors - that together interact to encourage entrepreneurship and innovation. Personal characterization traits that are deemed representative of successful entrepreneurs, include being passionate, competitive, disciplined, committed, creative, focused, exploitive, hard-working, adaptive, energetic and motivated (Bessant and Tidd, 2011). These qualities are strikingly similar to the impression I have formed of John Fredriksen through reading relevant literature and watching interviews. Moreover, Fredriksens many failed attempts and business struggles at the beginning of his career (appendix A) are solid indications of a high degree of resilience, commitment, competiveness and drive. Wickham stresses that entrepreneurs are often driven by a desire for self-sufficiency, prestige and sense of achievement, even more so than the desire to make money. He asserts that it is not the final destination of the venture that matters, but rather the journey and the process itself (2006, pg. 222). This perspective underpins the mentality of a serial entrepreneur and their impetus to continue to create new businesses. Motivation is an curious aspect in the discussion of Fredriksen, whom for the last five years has claimed that he will work until he drops (Lansdale, 2008) and that he no longer is in it for the money, claiming that he has more than enough already (Koranyi, 2012). Fredriksen has also directly decreed that he is motivated by the rush of doing business and making deals (Trim, 2011). Accordingly, it is easy to draw the conlusion that Fredriksen is part of a breed of entrepreneurs that are driven by the sense of achievement. This is defined as a pull factor, meaning that one becomes an entrepreneur on the virtue of attractiveness, cf. Wickham (2006, pg. 102). As far as hard-working, there is little doubt. Fredriksen has been cited saying that his responsibilities constitutes a 24/7 job and that he is a workaholic whom works seven days a week (Wright, 2012). An interview confirming this view made by his main business companion, Tor Olav Trim, stated that He runs himself incredibly hard. He is extremely competitively minded and never satisfied with his success. I remember that John's wife once said to him: Life is not a punishment. (Christensen, 2013). Without elaborate insight and specifics of John Fredriksens childhood, any such profiling is hard to determine. However knowing that his middle/lower class family came from a rural area (appendix A), conditions were likely not the greatest. I refrain from doing any psychological profiling beyond this, but will point to his lack of higher education and humble uprising. With this backdrop, it is easier to argue that he may hold strong cognitive abilities resulting from genetics. Personalities with similar entrepreneurial attributes to Fredriksen (but higher education), include renowned businessmen such as Elon Musk (founder of PayPal and Tesla Motors), Richard Branson (founder/owner of the Virgin Group) and Steve Jobs (deceased founder of Pixar Studios and ex-CEO of Apple). These characters are all more household type names than that of John Fredriksen, even though Fredriksens personal wealth, economic impact and business empire exceed them all (on an individual basis).
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The Fredriksen Formula:

This part of the assignment will focus on the characteristics of Fredriksens approach to founding, investing in, managing and operating companies - in other words, enacting entrepreneurship. Fredriksens methodology is remarkably distinct, but has its roots in surprisingly simple and commonsensical thinking. Thus, I have coined the term Fredriksen Formula in order to illuminate his approach. Critics might argue that Fredriksen suffers from a case of so-called megalomania, a state that oftentimes leads to value destruction caused by excessive egos of the respective owners/managers. However, Fredriksen has repeatedly proven that is not the case, basing expansive acquisitions and investments on conservative long-term economic research and sound assumptions. A PowerPoint presentation highlighting Seadrills success, sourced from Marine Moneys website, has a slide dubbed Some reflections working with an active owner (Hemen), wherein a series of arguments are made to illustrate the advantage of being part of the Fredriksen system (Seadrill, 2010). My own findings are largely similar and includes factors such as focus on growth, operational efficiency, business development, dividend emphasis, organizational agility, industrial network and reputation. The different components of the formula will be discussed, exemplified and analyzed in the light of the theory in mention. I have chosen to define the factors as listed in the table of contents, however some of the distinctions may appear to partially overlap eachother. They are not sorted with any kind of prioritization, but are discussed in a coherent order.
Strategy and takeover targets:

According to Bessant and Tidd (2011, pg. 164-165), the ability to recognize opportunities is a key task of a successful entrepreneur. New opportunities exist all the time, but do not necessarily present themselves if they are not actively sought out. Fredriksen has proved highly effective in spotting these opportunities and acting aptly upon them. Fredriksens strategy has largely evolved around taking control over and consolidating companies within dispersed and undermanaged industries. This was the case for Frontline, Seadrill and Marine Harvest - along with all the affiliated subsidiaries that were absorbed through the years. These were companies that belonged to industries plagued by dispersed ownership, oversupply, price war conditions, together with other typical characteristics of mature markets dynamics. Not accidentally, another common denominator among these companies is that they all belong within staple Norwegian industries that John Fredriksen know well and relates to. Fredriksen (and his team) is actively screening for eligible candidates in sectors that are familiar to him. When an appropriate target is found, the entry strategy has traditionally been to attain majority ownership (normally between 15-45%), and leverage the position through installing board members and dictating management. As such, Fredriksen gains operational control of a company with a limited investment outlay and is practically able to run it like it was a private outfit, all while retaining the benefits of a public listing.
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Mergers and acquisitions:

Mergers and acquisitions (M&A) is an aspect of corporate finance and strategy that deals with purchasing, selling, dividing and combining different companies with the aim to generate growth. Having pigeonholed Fredriksen as an opportunist/group-making serial entrepreneur, some researchers (Wright et al., 1997) further differentiate based on how the group is created. Businesses are either created through (1) organic growth and gradually expanding sales and customers, (2) acquisitions, mergers and expansion founded deal making, or (3) a combination of the two. Fredriksen has largely favoured deals and M&A for expansion, and accordingly become a driving force behind the consolidation of several industries. This means he has acquired several smaller and isolated entities and absorbed them into his own larger companies, and thereby harvesting the benefits of cross-company synergies, economies of scale and market power. A key value proposition for Fredriksen has been to acquire small, illiquid public shipowning companies that have stocks that are trading at levels that value the firm at a discount to net asset value (NAV), i.e. market value of assets net of debt. This has been a favored method of adding bolt-on fleet capacity to his existing operating organizations. A rough mapping of the groups corporate transactions the past 10 years, points to in excess of 20 acquisitions and mergers followed by seven spin-offs/divestitures (Golar LNG Partners, Seabras, NADL, Seawell and Seadrill Partners, to mention some), with a collective value in the $25-35 billion range. Fredriksen has demonstrated a high degree of discipline in regards to the the use of capital at his disposal. This, and being wary of asset valuation, is the reasons he rarely overpays for an enterprise or an asset (Trim, 2011). When pursuing a publically listed takeover target, Fredriksens team seems to have shaped a strategy whereupon a bid is presented during a time of suppressed stock valuation (either due to company specific factors or the macroeconomic environment in general). This makes the (comparatively lower) price premium offered appear more appealing and thus facilitates the acquiring of companies below their fair-value. Fredriksens approach to M&A has supported the case for numerous acquisitions (and divestitures) that in hindsight has proved to be incrementally value-adding to the takeover companies.
Corporate governance:
Corporate governance refers to the system by which corporations are controlled, and specifies the distribution of rights and responsibilities among stakeholders, such as the board of directors, managers, shareholders, creditors, auditors and regulators. It covers issues pertaining to transparency, integrity, accountability and ethical behavior. Although not strictly mandatory or legislated, there is a common understanding among stakeholders that corporations should adhere to principles of sound corporate governance (Cadbery Report, Sarbanes-Oxley, etc.). In Norway, these principles are stipulated in the Norwegian Code of Practice for Corporate Governance.
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Although Fredriksens companies violate a number of these norms, specifically adhering to the principles concerning nomination committees for board elections and independent board members, it is rarely something that receives much attention. The investor community has likely learned to look past these on-paper flaws, and accept the various firms attention to equal shareholder treatment compensates for any non-adherence. Fredriksen showed unprecedented awareness for fair and equal treatment of shareholders when he, during the early 2000s, was privately offered an off-the-table sum from an institutional investor for his shares in a rig company. Instead of accepting the premium and doing the transaction outside the stock exchange, Fredriksen instigated a process in which the company announced a dispersal sale where all shareholders could participate and sell their shares (Stavrum, 2006). This behavior contrasts Fredriksens hardball appearance and many unscrupulous corporate raids, and instead points to the benefits of being in the same boat as him. Fredriksens wide-spanning network of companies, assumed to be in the hundreds, is frequently engaged in transactions with each other. This creates a situation of potential conflicting interest between the related parties, which is another central part in the code of practice for corporate governance. In this regard, Fredriksen has demonstrated a great deal of ethical fortitude and refrained from doing murky or suspicious deals. Frequently, Fredriksen places orders on new vessels and rigs through his privately fully-owned holding companies, and then transfer the ownership of said vessels (the title/contract) at no cost to his publically listed entities. In these events, it is important to point out that Fredriksen easily - and absolutely legally - could have demanded a price premium and/or an administration fee for the service. To the best of my knowledge, this has never been the case.
Lean organizations:
Fredriksen is almost unanimously employed as chairman of the board of directors in his larger companies. This directorship, coupled with being the largest shareholder, gives him the power to handpick managers, dictates company strategy and have oversight responsibility. Fredriksens boardrooms are small and efficient, and consist purely of people with core financial and/or industrial knowledge. Accordingly, they are not burdened by employee representatives and people with skewed incentives that are not in line with maximizing shareholder return. This concept is extended into the corporate organization chart as well, with most organizations being stripped of heavy corporate overhead, bureaucratic hierarchies and where many administrative services are outsourced to third parties (especially in the case of ship management). Vocal Norwegian capitalist and investor, ystein Stray Spetalen, once exclaimed that comparing the financial competencies of the boards of Cermaq and Marine Harvest is like comparing the team lineup of Vlerenga and Barcelona. (Eikeland, 2013). In the same interview, Spetalen examplifies the advantage by citing Fredriksen's acquisition of Marine Harvest in 2006. Cermaq had sniffed at the company for a while, but needed to go through a
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several week long decision and approval process before they could act, whereas Fredriksen and Trim only needed a weekend to decide. Thats the difference. (Eikeland, 2013). The same capacity was demonstrated during Seadrills 2006 purchase of Smedvig, when Fredriksen and Trim outsmarted a much bigger American rival through their swiftness. With Fredriksens vast cash reserve, they can commit to purchase quicker and at different scales than others, without having to go through "troublesome" board approvals and general meetings reconciling. In this business you have to work fast, because that is what the competitors does , said one stock analyst in the wake of the acquisition (Bjrndal, 2006). Overall, Fredriksens small-sized and flexible organizations, with their centrally controlled design, allows for quick decision-making and ability to rapidly adjust in a business environment where first-mover advantages are elementary. This unique organizational structure - rare amongst public corporations of the same size - is one of the most fundamental reasons for the groups success through this comparative advantage.
Responsible ownership:
The Fredriksen Group has been effective in communicating its intention as a strategic owner. The trademark has been the premise of being a responsible and long-term stakeholder with a strong financial backbone. A policy of predictability and transparency is unanimously employed throughout the groups companies, and has become a valued feature of the companies business activities. These characteristics are highly valued in the financial markets and have forged favorable relations with banking institutions, investors, creditors, suppliers, as well as customers. Fredriksen once proclaimed that () were long-term players in the shipping market, of course I was thinking about reputation (Wright, 2012), when asked why he took personal risk during the rescue operation in Frontline. This quote highlights Fredriksens perspective and summarizes the groups stand on enacting ownership.
Bailout capability:
The principle of responsible and active ownership extends into the idea of having the financial capability - and more importantly, willingness - to bail out and back up ones companies during financial distress. This has been proven recurrently, as Fredriksen famously did with both Golden Ocean Group in 2009 and Frontline last year. These companies had been making losses for longer periods, had negative equity, were on the verge of insolvency and had creditors knocking on the door. Fredriksen came to the rescue by absorbing liabilities, injecting new capital and renegotiating chartering terms with related close parties (in this case, Ship Finance International). In the case of Frontline, Fredriksen spent almost half a billion of his private cash to rescue the company through a swift restructuring operation. I dont like to be part of a bankruptcy () (Wright, 2012), is how Fredriksen explained why he acted like he did.
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This type of mindset is a sought after amenity that is mostly visible among privatedly owned family companies, but rarely seen in public corporations - even those with renowned dominating majority shareholders.
Mutual exposure/value maximizing:

With many complimentary roles, it is easy to argue that interests are aligned within the Fredriksen system. Because of the fact that Fredriksen on average retains ownership of about 34% in his companies (appendix B), there is a prominent source of mutual exposure. This simple notion means that Fredriksen is the largest beneficiary of good news and performance, as well as recipient of bad news, and therefore has the incentive to operate his companies as efficient as possible to maximize shareholders return. The concept of common exposure is explanatory of the favorable dividend policies, low-cost overhead, governance and equal shareholder treatment that is employed throughout the group. This further underpins the incentive to maximize returns for investors (which hence includes himself), through maximizing efficiency on economic metrics, such as operating margins, tax rate, working capital and cost of capital. The investor community seems largely to concur with this notion. Investor and corporate raider ystein Stray Spetalen having said that Fredriksen appreciate shareholder value. Therein lies the key (Eikeland, 2013), and fellow shipping entrepreneur Niels Stolt-Nielsen exclaiming, People are interested in investing with Fredriksen because he has been very fair and very good to his shareholders (Tradewinds, 2013). This mentality was affirmed in an interview with Fredriksens right-hand man, Tor Olav Trim, where he postulated, you have to share with others and treat them fair, () its like investing with Warren Buffett (Helman, 2012). The idea that being on the same team as Fredriksen is lucrative, is thus easy to advocate. Fredriksens standing in the financial markets, strong performance and track -record has undoubtedly forged favorable relations with banking institutions, investors, creditors, customers and stakeholders across the board.
Dividend focus:
A hugely favorable characteristic of Fredriksens financial management is the strong focus on cash dividend distribution to its shareholders. This has largely become a trademark of the Fredriksen group and has made the companies desirable among institutional investors that are seeking consistent yield disbursements. The recipe has been to maintain a high payout-ratio, oftentimes in the 70-90% range of net income and sometimes even in excess of the free cash-flow. Fredriksens companies, most notably Seadrill, are able to do this through financing capital expenditures (e.g. investing in new drilling rigs) with external capital, such as bank loans and bond issues. Therefore, the companies are able to maintain high dividends, after operating expenses and debt interest are covered, through constantly re-levering the company while expanding the asset base and (as such) future income generation capability.
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The chart below illustrates the development - and obvious growth trend - in dividends (dollars per share) paid out from Seadrill since 2008 (annually and quarterly, respectively).
Dividends provide a strong signaling effect of profitability and financial well-being, while also commanding the companys commitment to long-term sustainability and growth. An investigation of Cypriotic business records by Dagens Nringsliv, where three of Fredriksens holdings companies are domiciled, showed that he collected a total of 47 billion kroners (~ 8.2bn USD) in dividends from his companies in the course of an eight year period (Sundnes and Ster, 2012).
Financial leverage:
Access to capital (both in the form of debt and equity) is critical for industrial development and has been an indispensable factor in the emergence of the modern industrialized society. Similarly, it is a widely cited founding condition for success in new entrepreneurial ventures, confirmed by studies which document that external capital access is associated with higher relative growth (Birley and Westhead, 1994). The use of debt is critical in capital intensive and asset heavy industries. Fredriksen has a tendency to leverage the equity of his companies by borrowing approximately 3-4 times more than that of his peers. Highly leveraged capital structures involve higher risk, but also implicate a relative increase in the return on equity. More important than the amount of debt, is the actual cost of the debt. The profitability and rate of return of any cash-generating project is determined by the cost of capital. A firm whose cost of capital is relatively lower than its competitors has a comparative advantage. Due to the groups favourable reputation and strong standing in the capital markets, its companies are able to attain favorable interest rates and flexible terms/covenants when raising money in the bond market and through bank funding. The groups massive footprint in the loan books of banks, is a factor that has further forged the debtor/creditor relationship and their mutual dependence (i.e. too big to fail). The demand for Fredriksens debt is easily be exemplified by looking at the latest bond issue by Seadrill, which generated much interest ascertained by a 40 percent over-subscription and an interest rate set at a modest ~ 5.50% (6M NIBOR + 3.75%).
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Fredriksen has been favoring the issuance of bonds, occasionally also participating in these issues or buying in the secondhand market. This offers a new level of flexibility by positioning Fredriksen on both sides of the table with the influence of being both an equity holder and creditor. When bonds issued by the groups companies are trading at distressed levels, Fredriksen has been known to accumulate the debt of his own company at levels far below par value (Conrad, 2012).
Financial engineering:
A good portion of the groups strong operational performance can likely be ascribed to disciplined balance sheet management and clever/timely use of financial markets and instruments. Fredriksen uses the stock market to raise equity (to pay for operating and capital expenditures) with frequent intervals. Seadrill is a prime example of this, as it has raised equity five times since its initial listing. Contrary to the norm, these equity issues were not executed with the typical price discount and did not lead to noteworthy stock price declines. When other industrial companies need to raise money, they often have to price the stock issue at a steep discount to the last quoted stock price in order to attract sufficient investor interest. This, and the resulting price decline that ensues to reflect the issue price, are factors that amplify the negative sentiment surrounding stock issues in general. However, this norm appear somewhat absent from Fredriksens companies, likely because proceeds are allocated to projects that repeatedly has proved to generate high returns. Fredriksen is also an avid user of the bond markets for raising capital. Illustrative of this, is Seadrill and Ship Finance specifically, which together have nine outstanding bonds with a nominal value of about 3.2 billion dollars (~ 19.2 billion NOK). The majority of these bonds are traditional unsecured issues, with a couple being callable (may be redeemed before maturity date) or convertible (may be converted into equity at a set stock price). Further clever financial engineering include the widespread use of stock options and different types of financial swaps. Total return swaps (TRS) are an example of this, and is a type of credit derivative that allows a party to gain exposure to a stock without having to hold the stock on the balance sheet. This method is popular with Fredriksen and other insiders to attain the benefits of stock exposure (price increase and dividend) with a minimal cash outlay.
Risk willingness:
Risk is the potential that an activity will lead to a loss or undesirable outcome. Bessant and Tidd (2011, pg. 185) define risk-taking as a tolerance towards uncertainty and ambiguity. Some economists and theorists (such as Brinckerhoff, Shapiro and McClelland) suggest that the most prominent function of the entrepreneur is to accept risk on behalf of others. People are risk averse by nature and therefore willing to pay somebody to take it away, according to Wickham (2006, pg. 10). Wickham also distinguish between personal and eceonomic risk (2006, pg. 11), whereupon the latter is incurred when the entrepreneur makes an investment and consequently is exposed to economic failure.
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The typical entrepreneur only accept a limited amount of personal financial risk through their minority (if anything) holdings of equity in the firm they are inviolved in. Typically when the venture reaches a certain maturity, dedicated professional investors (venture capital funds, private equity, institutional owners) step in to pursue the owner role. Fredriksen is different in this regard in that he commits substantial private funds in order to maintain a significant equity stake (calculated to be 34% on average) throughout the growth cycle of his ventures. Another indication of the the high degree of risk acceptance within the Fredriksen system, is the companies aggressive growth strategies and strategy execution. A prime example, is how Seadrill ordered semi-sub drilling rigs (a ~ $600 million per unit investment) on spec, meaning that the units are not secured future employment. The same manifestation is now taking place in Frontline 2012, which has an orderbook of newbuildings estimated by some analysts to reach 150-200 ships, without any certainty of the state of the markets that these vessels will be trade in, 2-3 years from now. The majority of all industrial companies does not undertake hundred million dollar investments in equipment without the ability to predict and lock in future cashflow with a high level of certainty. Transocean, the worlds largest owner of drilling rigs and Seadrills numb er one competitor, has traditionally always secures long-term contracts with oil companies before contracting yards to build new rigs. Admittedly the shipping industry is a high-risk business by nature, yet Fredriksen is known to raise stakes higher through generous debt use, ordering vessels when nobody else does, sailing uninsured ships in high-risk environments, operating in highly volatile spot freight markets and challenging the established market leaders through corporate raids and acquisition wars. For outsiders it may appear as belligerence, but in reality, it is meticulous risk management. Fredriksen studies events, weighs the outcomes and makes calculated decisions based on risk perception. He is also said to push his strategy considerations down to the micro operational level, by calculating the risks of details such as escalating maintenance costs and crew salaries (Konrad, 2012). Fredriksen has been quoted saying that long-term chartering is terribly boring and that its when you make ten million dollars in a week that shipping becomes fun (Stavrum, 2006). These statements are testaments to one Fredriksens foremost character trait as an entrepreneur, his willingness to take on - and even embrace - risk.
A Fredriksen premium?
All of the aforementioned aspects contribute to creating a favorable perception of Fredriksens companies among shareholders, creditors and customers. This has created a breeding ground for suggestions whether there is an intrinsic Fredriksen premium in the stock market. In other words, that companies within the Fredriksen sphere are priced comparatively higher compared to their peers. A master thesis worthy of note from the University of Stavanger, examines a similar hypothesis and concludes that the study has failed to reveal a specific person premium related to John Fredriksen (Voll and Huseby, 2011). The thesis nonetheless points to significantly higher historical returns for Frontline, Golden Ocean, Seadrill and Marine Harvest, when comparing
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these against five peer companies within each industry in the period 2006-2010. In the rig and fish-farming sectors, the differences were 46% and 55% higher accumulated returns respectively, while in dry bulk the return was 27% higher (Voll and Huseby, 2011). Because the profitability of the mentioned companies hardly justifies the outperformance in stock price returns, it is therefore pointed to the positive signal effect of paying dividends as being a facilitator of the deviance.
Conclusion:
It is apparent that it is through the application of the methodology that I have dissected in this paper, dubbed the Fredriksen Formula, that John Fredriksen has been able to achieve repeated and duplicable entrepreneurial success. A key factor in successfully executing business ventures is a smooth transition between the three stages - opportunity recognition, entrepreneurial commitment and venture credibility dubbed critical junctures by Bessant and Tidd (2011, pg. 171). Fredriksen appear to be able to pool these processes together in an implementation system comprised by trusted associates and related parties (directors, managers, financers, shipyards, etc.). His experience, aptitude, insight and ability to synthesize industrial knowledge, has given Fredriksen an image in which commitment (he is heavily invested) and credibility (he already has a solid track-record) have become less essential. Further to this point, it is said that serial entrepreneurs - with their special focus on the start-up phase of the venture - have unique decision-making abilities in the area of business development. Wickham (2006, pg. 38) argues that these skills include being able to spot opportunities, evaluate markets and deal with financial backers. Interestingly, the final slide of the aforementioned (pg. 13) PowerPoint presentation concludes similarily, with the author claiming that Seadrills success story is really a story of what owners, management and capital markets can achieve when working together (Marine Money, 2013). Exercising entrepreneurship is precisely this - the ability to bring people, money, resources and ideas together in order to act on business opportunities. Excelling in this capacity, together with an exceptional risk-willingness, fair-mindedness and a value maximizing mindset, is undoubtedly the foundation of Fredriksens unprecedented success. Fredriksens billions and the rapid growth of his fortune stands out as a testament to the success story. Fredriksens entrepreneurial framework has been the foundation of the creation of globally recognized investment vehicles within sectors that historically have been shunned by institutional investors due to the inherent risks and cyclicality. Shipowning and the maritime industry are highly volatile and cyclical industries, accordingly fortunes are erased as easily as they are created. Famous Norwegian shipowner Hilmar Reksten is a good example of this. Reksten had the worlds largest supertanker fleet and ranked among the worlds richest during the oil tanker boom years of the 1970s. Approximately five years later, he was personally bankrupt and wound up passing with a net debt load (supposedly) in excess of 100 million (Tenold, 2002).
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The lesson learned from this, is that the capability to conserve wealth is key. This is likely the main motive behind Fredriksens aggressive dividend disbursements that has facilitated cash accumulation and diversification into non-shipping sectors, such as fish-farming (Marine Harvest), debt collection (Aktiv Kapital) and oil trading (Arcadia Petroleum). This has proved a sound strategy as it has given the group more legs to stand on while certain sectors experience a downturn. Equally important, it enables the group to store cash that can be invested at any moment in any cycle and during times of suppressed asset pricing. Fredriksens continued success going forward, will be persistent ability to create shareholder value by identifying embedded value and having the resources to quickly extract such value and put it to work in an existing and well-functioning entrepreneurial framework.
Appendices:
Appendix A: John Fredriksens biography (text) Appendix B: Company portfolio ownership overview (spreadsheet) Appendix C: Aggregated ship fleet overview (spreadsheet)
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References:
Regina Asariotis, Hassiba Benamara, Hannes Finkenbrink, Jan Hoffmann, et.al.; (2011); Review of Maritime Transport 2011; United Nations Conference on Trade And Development (UNCTAD); Geneva Are Rodahl Hvalbye; (2013); John Fredriksen Norways Greatest Entrepreneur?; Handelshyskolen BI; Oslo Rasmus Bgh Holmen, Christian Melbye, Leo Grnfeld; (2012); Norsk verdiskaping p havet: The Seatankers Group og John Fredriksens bidrag til verdiskaping i norsk konomi ; Menon Business Economics; Oslo Gunnar Stavrum, Odd Harald Hauge; (2006); Storeulv - en uautorisert selvbiografi om John Fredriksen; Gyldendal; Oslo; Christer Voll, Tom-Andr Huseby; (2011); Verdsettelse av Seadrill Limited - Finnes det en John Fredriksen premie i aksjemarkedet?; Universitetet i Stavanger (UiS); Stavanger Philip A. Wickham; (2006); Strategic Entrepreneurship Fourth Edition; Pearson Education; Essex Richard Blundel, Nigel Lockett; (2011); Exploring Entrepreneurship Practices and Perspectives; Oxford University Press John Bessant, Joe Tidd; (2011); Innovation and Entrepreneurship Second Edition ; John Wiley & Sons; West Sussex J. Chris Leach, Ronald W. Melicher; (2012); Entrepreneurial Finance 4th Edition; South-Western Cengage Learning; Colorado Bonn; Marco Caliendo, Alexander S. Kritikos; (2007); Is Entrepreneurial Success Predictable? An Ex-Ante Analysis of the Character-Based Approach; Institute for the Study of Labor (IZA) Ole G. Stenshagen; (2012); Frontline 2012: One for the connoisseur; SEB Enskilda; Oslo
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Christopher Helman; How Shipping King John Fredriksen Found A Port In The Storm ; Forbes Magazine; April 9, 2012 Erik Haavaldsen, Jonas Advocaat Kraft; (2013); Frontline 2012: Research report: Follow the tycoon-track; Pareto Securities; Oslo Birley Sue, Paul Westhead; (1994); A Taxonomy of Business Start-Up Reasons and Their Impact on Firm Growth and Size, Journal of Business Venturing; Amsterdam Robert Wright; Fredriksen seizes new chance with enthusiasm; Financial Times; February 12, 2012 Stig Tenold; (2002); The Harder They Come Hilmar Reksten from Boom to Bankruptcy; The Northern Mariner, rgang 11 John Gorham; Viking Raider; Forbes Inc.; February 30, 2001 Michael Kirton; (2003); "Adaptation and innovation in the context of diversity and change "; Routledge; London Alaric Nightingale; "Frontline, World's Biggest Supertanker Operator, Sees `Huge' China Imports; Bloomberg News; November 12, 2010 Irene Ang; Expanding Frontline 2012 behind Cosco LR2 tanker deal; TradeWinds News; July 10, 2013 Balazs Koranyi; Tycoon Fredriksen on ship buying spree; Reuters News; May 8, 2012 Bente Bjrndal; SeaDrill/Smedvig blir strste riggselskap utenfor USA; Offshore.no; April 3, 2006 Edward Robinson, Michelle Wiese Bockmann; Shipper Uses Gut in $11 Billion Bet Worst Since 70s Ending; Bloomberg BusinessWeek; September 10, 2012 Wright M., Robbie K., Ennew C.; (1997); Venture capitalists and serial entrepreneurs; Journal of Business Venturing, Vol. 12; Philadelphia Spencer Starr, Willy Olsen; Fredriksens Seadrill enters battle for Smedvig; Platts OilGram News; January 5, 2006 John Conrad; From Broke To Billions Risk Management, Efficiency And The Secret To Success; gCaptain.com; June 12, 2012 Trond Sundnes, Kjetil Ster; Her fant Dagens Nringsliv 47 milliarder; Dagens Nringsliv; November 8, 2012 Ole Eikeland; - Han slipper alt tyset andre m gjennom; Nringslivsavisen NA24.no; May 23, 2013 Bibi Christensen; Globalt portrt: Norges Onassis; Berlingske Tidende; August 31, 2013 Marine Harvest ASA; Morpol - A milestone for the Marine Harvest Group; press release; October 1, 2013
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John C. Conti, Paul D. Holtberg, Joseph A. Beamon, et.al.; (2013); Annual Energy Outlook 2013; U.S. Energy Information Administration, Washington DC Seadrill ASA; The Seadrill Success Story; company presentation; June 24, 2010; retrieved from: http://www.marinemoney.com/sites/all/themes/marinemoney/forums/MMWeek10/Th ursday%20Marine%20Money/Seadrill_Marine_Money.pdf Andrew Lansdale; Empire builder; Fairplay, The International Shipping Weekly, Vol. 362; March 13, 2008; London Amy S. King; (1985); Self-analysis and assessment of entrepreneurial potential; Simulation & Games Vol. 16; Sage Publication; New York Tor Olav Trim; Next Generation Shipping; opening conference speech; Nor -Shipping 2011; Lillestrm; Thon Hotel Arena; May 24, 2011 Geroski, P.A., Mata, J. & Portugal, P.; (2010); Founding conditions and the survival of new firms; Strategic Management Journal; Chicago TradeWinds; Bloomberg.com; DN.no; Reuters.com; Newsweb.no; Wikipedia.org; et cetera.
Appendix A:
John Fredriksen (68) - with monikers Big John, Big Wolf, Tanker King, Last Viking, et cetera - was born on the 11th of May 1944 in the small municipality of Eidsvoll by parents Gunnar Fredriksen and Herdis Johanne rbk. The family moved to the working class area of Oslo, Vlerenga, when John was three years old and at which point his parents were employed as a welder and canteen manager, respectively. Barely 17 years old, John dropped out of high school and started working as courier for the shipbroking firm, Blehr & Tenvig. Five years later Fredriksen started as a shipbroker for a different brokerage firm specializing in oil tankers. This marked the start of his shipping career, where he climbed the ranks to become chief of Wallem & Co in Singapore, until British interests acquired the firm in 1969. John returned to Oslo starting as a broker again for Anco Tanker Service, where he became renowned for his efficient work style characterized by fast decisions and quick gains. Fredriksen attained a wide-stretching network of industry contacts through his various job positions. Observing how he was making his shipowning clients rich through lucrative chartering contracts, he realized there was more money to be made on the other side of the table. As such, 28 years old, he started his first business venture becoming a shipowner in a partnership with colleagues. The single-ship outfit, dubbed Dominion Shipping, evolved around a WW2-era Liberty cargo ship that was contracted to carry cement to Nigeria. However, issues pertaining to unloading permits and bribes drove the company into bankruptcy shortly after its inception. On a sidenote, it is quite interesting to note that many other famous shipping entrepreneurs, such as Aristotle Onassis, Stavros Niarchos and several other Greek shipowners also started their careers with the plentifully available post-war Liberty ships.
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Fredriksens second entrepreneurial attempt, Scanbulk, was a partnership that operated a container ship in the Caribbean. This company was also ill-fated due to costly mechanical issues with the ship. The next business venture was World Shipping, where Fredriksen and his partners were trading in bunker oil (ship fuel). This outfit was Fredriksens first personal business success, however the profits were reinvested in shipping stocks just before a major equity market crash wiped out the gains. The aforementioned endeavors took place simultaneously with a successful career at Anco where he was active fixing attractive contracts in the Mediterranean and Persian Gulf during a politically instable period. Fredriksen was not held back by the several failed business attempts, and having experienced the advantage of sharing risk during distress, he quite adversely decided to start up a new outfit entirely by himself. As such, the two Liberia-based companies, Northern Tankers Inc. and Ocean Tanker Co. Inc., were brought to life in 1971. As chief of the tank department of Joachim Grieg & Co., Fredriksen witnessed an unprecedented bull market in the oil tanker freight rates followed by a total collapse sparked by the oil crisis and embargo of 1973. During this down period, Fredriksen saw an opportunity to establish yet another company, and thus Northern Shipping was born. This was a brokering firm, in which Fredriksen leveraged on his Arab contacts (from previous employers) in need of tonnage through coupling them with Ocean Tanker Co. - Fredriksens own shipowning outfit, which in turn sub-chartered oil tankers at all-time low rates. In 1981, the company purchased its own ships, two chemical tankers and an oil tanker, but struggled to make money in a period of volatile freight rates. Yet another newly formed entity, Marine Management, acted as operator and manager for the fleet. Again Fredriksen illustrated his risk willingness and in the eyes of some - cold and unscrupulous behavior, through operating his ships in politically delicate areas such as Apartheid South-Africa, Iran during the Iran-Iraq War, Syria during the Yom Kippur War and Lebanon. Some ascribed Fredriksens involvement with Iran as effectively being the lifeline of the Ayatollah during the eight-year long war. The involvement in the Arab Gulf was extremely risky for ships as well as personnel, yet the extreme rate-levels attainable more than compensated for the risks. Nine of Fredriksens un -insured tankers were hit by Iraqi anti-ship missiles that in turn killed three and wounded five crewmembers. During this period, Fredriksen was also framed for embezzling crude oil from his customers cargo in order to blend with bunker fuel in a highly explosive mix with the purpose to save on fuel costs. This is a widely disputed chapter in Fredriksens life that got him jailed for a fourmonth period, charged with cargo theft and insurance fraud. This in turn led to sour relations with banks and financers whom forced the sales of vessels and ultimately liquidation of his company. These series of events left John with great distaste towards Norwegian authorities, and are attributed to later having shaped decisions such as changing citizenship and flagging out ships and companies. However, John Fredriksen once again rose from the ashes, achieving great success through socalled asset play, whereupon he timed purchases of used vessels and contracting of newbuilds that was quickly followed by resale. This activity steered Fredriksen into oil drilling rigs and the
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oil service industry, which later resulted in the creation of Seadrill. In 1996, he started purchasing shares in the Swedish-listed shipowner Frontline, which Fredriksen categorically grew into what became the worlds largest owner of oil tankers through a series of acquisitions, mergers and divestitures. Three years later, Frontline had 43 tankers with a combined tonnage of eight million deadweight tons (dwt). After absorbing ICB and Golden Ocean, Fredriksen was officially the worlds largest tanker owner in 2000. Fredriksen has been widowed ever since his wife, Inger Katharina Astrup (56), died from cancer in 2007. They had been together since 1973 and were parents of twin daughters, 28-years old Cecilie and Kathrine. Fredriksen renounced his Norwegian citizenship in 2006 and has official address in Cyprus, but maintains real estate in London, Marbella, Cyprus and Nttery. John Fredriksen has always been publicity shy and secretive, but is irrespectively frequently portrayed in the media due to his vocal business decisions and wide stretching business empire. Not seldomly, Fredriksen is portrayed with an undeserved unsympathetic approach. During his activity in buying up Swedish shipowners during the 1990s, journalists were characterizing him as a full-fledged gangster with hard hands, philistine way of life and a generally unpleasant person (SNL, 2013). More recent press coverage have been increasingly favorable, with Fredriksen being named in Bloomberg Markets' esteemed 50 Most Influential People and attaining 1st place in shipping journal TradeWinds Power List 100, that ranks the most significant people in the shipping industry.
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Appendix B:
Company Seadrill Golar LNG North Atlantic Drilling Marine Harvest Frontline 2012 Arcadia Petroleum Ship Finance International TUI AG TUI Travel plc. Aktiv Kapital Golar LNG Partners Golden Ocean Group Archer/Seawell Northern Offshore Deep Sea Supply Frontline Fred Olsen Production Knightsbridge Tankers
Sector Rig owner Shipowner Rig owner Fishfarming Shipowner Oil trading Shipowner Travelling Travelling Debt collection Shipowner Shipowner Oil service Rig owner Shipowner Shipowner Shipowner Shipowner
Est. Listing
HQ
Employees Market cap 6 650 $21 524 450 000 536 1 194 7 025 1 100 7 $3 184 000 000 $2 320 000 000 $4 178 540 000 $1 491 000 000 $1 600 000 000 $1 582 010 000 $2 674 242 270 $5 282 192 000 485 175 220 8 498 585 1 897 $1 838 700 000 $675 117 660 $554 521 865 $291 201 870 $216 142 320 $164 280 000 $153 101 600 $179 610 000 $1 272 027
Ownership Holding value 24,00 % 47,00 % 19,50 % 25,00 % 58,00 % 49,00 % 41,00 % 15,00 % 5,37 % 31,98 % 41,00 % 23,32 % 34,00 % 40,00 % 35,00 % 9,80 % 4,70 % 39,00 % 33,82 %
Holding entity
2005 NYSE/OSE Norway 2000 NASDAQ Bermuda 2011 OTC 2005 OSE 2012 OTC 1988 Private 2003 NYSE 2002 FWB 2007 LSE Bermuda Norway Bermuda London Bermuda Germany England
$5 165 868 000 Hemen Holdings $1 496 480 000 World Shipholding $452 400 000 Seadrill $1 044 635 000 Geveran Trading Co. $864 780 000 Hemen Holdings $784 000 000 Farahead Holdings $648 624 100 Hemen Holdings $401 136 341 Monteray Enterprises $283 653 710 Monteray Enterprises $241 800 470 Geveran Trading Co. $588 016 260 Golar LNG $276 798 241 Hemen Holdings $129 314 499 Seadrill/Hemen Holdings $99 008 636 Geveran Trading Co. $86 456 928 Hemen Holdings $57 498 000 Hemen Holdings $15 003 957 Geveran Trading Co. $8 441 670 Frontline $496 091 Frontline
1997 Delisted Norway 2011 NASDAQ Bermuda 2004 OSE 2008 OSE 2000 OSE 2005 OSE 1994 OSE 2008 OTC Bermuda Houston Bermuda Cyprus Norway Bermuda
$241 800 470 100,00 %
1996 NYSE/OSE Bermuda 1996 NASDAQ Bermuda
Independent Tankers Corp. Shipowner Total market capitalization: $48 152 182 082 Total equity wealth: Core companies: Non-core: Gulfstream G550 The Old Rectory stre Movik Farm Cash deposits Total estimated wealth: $12 644 411 902 $12 286 173 944 $358 237 958 $63 500 000 $245 000 000 $11 600 000 $2 950 000 000 $15 914 511 902
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Appendix C:
2014
Type Suezmax Capesize LNGC Capesize VLCC VLCC VLCC Panamax Panamax Panamax Panamax LNGC Capesize Capesize LNGC ULCV ULCV Suezmax VLCC FSRU Suezmax Suezmax VLCC Suezmax VLCC VLCC VLCC VLCC OBO VLCC VLCC VLCC VLCC VLCC VLCC OBO VLCC VLCC VLCC VLCC VLCC VLCC VLCC Suezmax OBO VLCC VLCC Suezmax Suezmax Suezmax VLCC VLCC VLCC OBO VLCC VLCC VLCC Suezmax VLCC Suezmax VLCC VLCC OBO LNGC LNGC LNGC Suezmax Car carrier Car carrier LNGC LNGC LNGC LNGC LNGC LNGC LNGC LNGC Capesize Panamax Panamax Kamsarmax Kamsarmax Kamsarmax Kamsarmax Kamsarmax Capesize Capesize Capesize Panamax Panamax Panamax Capesize Panamax Panamax VLCC Capesize Capesize Capesize Feeder VLCC Feeder LNGC Suezmax Suezmax LNGC FSRU LNGC VLCC VLCC LNGC Suezmax VLCC Suezmax VLCC MR MR MR MR MR MR MR Aframax LR2 Aframax LR2 Aframax LR2 VLCC Aframax LR2 Aframax LR2 Aframax LR2 VLGC VLGC VLGC VLGC VLGC VLGC VLGC VLCC VLGC Capesize Capesize Capesize Capesize Capesize Capesize Capesize Capesize Capesize MR Capesize Capesize Capesize Capesize Capesize Capesize Capesize Capesize Capesize Capesize MR Capesize Capesize Capesize Capesize Capesize Capesize MR MR MR MR Suezmax LNGC LNGC VLCC VLCC Suezmax PSV AHTS PSV AHTS PSV AHTS AHTS AHTS PSV Capesize AHTS AHTS AHTS AHTS Capesize AHTS AHTS PSV PSV AHTS AHTS PSV PSV AHTS AHTS PSV LNGC Feeder Feeder Feeder Feeder Feeder Handymax Handymax Feeder Handymax Handysize Handysize Handymax Handysize Feeder Handysize Handymax Suezmax LNGC VLCC LNGC VLCC Handysize Handysize Handysize LNGC Supramax Supramax Total/average:
Vessel name Altair Voyager Battersea Bear Belgravia British Pride British Progress British Purpose Cap Salinas Cap Saray Cap Serrat Cap Sorell Celsius Channel Alliance Channel Navigator Clacier CMA CGM Corte Real CMA CGM Magellan Cygnus Voyager DHT Eagle Eskimo Everbright Front Ardenne Front Ariake Front Brabant Front Cecilie Front Century Front Champion Front Circassia Front Climber Front Comanche Front Commerce Front Commodore Front Destiny (J0025) Front Dragon (J0026) Front Dream (J106) Front Driver
Shipowner Independent Tankers Corp. Knightsbridge Tankers Golar LNG Knightsbridge Tankers Independent Tankers Corp. Independent Tankers Corp. Independent Tankers Corp. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Golar LNG Golden Ocean Group Golden Ocean Group Golar LNG Ship Finance Int. Ship Finance Int. Independent Tankers Corp. Golar LNG Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Frontline 2012 Ship Finance Int. Ship Finance Int. Ship Finance Int. Frontline Ship Finance Int. Ship Finance Int. Frontline Frontline 2012 Frontline 2012 Frontline 2012 Frontline
Manager
Flag state Bahamas Marshall Islands Marshall Islands Isles of Man Isles of Man Isles of Man
Year builtHull 1993 DH 2009 2014 2009 2000 2000 2000 2013 2013 2013 2014 2013 DH DH DH DH DH
DWT 135 829 170 500
Capacity
Status Sailing Sailing On order Sailing Sailing Sailing Sailing Sailing Sailing Sailing On order On order
Order value
Shipyard Ishibras Daehan Samsung Heavy Ind. Daehan Samsung Heavy Ind. Samsung Heavy Ind. Samsung Heavy Ind.
95 000 160,000 m3 170 500 307 000 307 000 307 000 70 000 4,800 TEU 70 000 4,800 TEU 70 000 4,800 TEU 70 000 4,800 TEU 95 000 160,000 m3 171 978 172 058 95 000 160,000 m3 156 898 13,800 TEU 157 254 13,800 TEU DH DH DH DH DH DH DH DH DH DH SH DH DH DH DH DH DH SH DH DH DH DH DH DH DH DH SH DH DH DH DH DH DH DH DH SH DH DH DH DH DH DH DH DH SH 156 836 309 064 95 000 160,000 m3 156 000 149 999 298 530 149 999 297 000 311 189 311 286 306 009 169 178 300 133 300 144 298 620 320 000 320 000 320 000 169 177 320 000 320 000 321 300 321 300 305 318 308 875 305 422 149 834 169 146 298 465 297 000 149 995 156 000 156 000 302 193 299 164 297 000 169 177 302 561 299 152 297 000 149 745 299 152 149 995 298 824 300 058 169 381 95 000 160,000 m3 66 999 126,000 m3 73 867 125,000 m3 DH 156 000 18 881 6,500 CEU 17 709 6,500 CEU 72 199 140,000 m3 71 620 126,000 m3 84 894 145,700 m3 84 823 145,700 m3 76 210 135,000 m3 80 239 129,000 m3 79 950 140,000 m3 80 810 138,000 m3 176 000 75 500 75 000 79 463 79 463 79 454 79 474 79 463 169 232 DH 176 000 176 000 75 500 75 500 75 500 169 333 75 500 74 849 DH DH 300 155 176 000 176 000 175 835 23 579 1,700 TEU DH 298 000 23 395 1,700 TEU 72 703 125,000 m3 DH DH 156 000 156 000 95 000 160,000 m3 95 000 170,000 m3 95 000 160,000 m3 298 000 17 000 298 000 77 707 138,000 m3 149 999 300 155 156 000 320 000 50 000 50 000 50 000 50 000 50 000 50 000 50 000 115 000 115 000 115 000 320 000 115 000 115 000 115 000 50 000 84,000 m3 50 000 84,000 m3 50 000 84,000 m3 50 000 84,000 m3 50 000 50 000
V. Ships V. Ships
Hong Kong Hong Kong U.K. U.K. Bahamas Bahamas Marshall Islands
1996 1997 2014 2010 2010 1993 2002 2014 2010 1997 2001 1998 2010 1998 1998 1999 1991 1999 1999 2000 2012 2012 2013
Samsung Heavy Ind. NKK NKK Samsung Heavy Ind.
On order Sailing Sailing Sailing Sailing On order Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Decommissioned? Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Scrapped Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Scrapped? Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sold On order Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing $9 100 000
IHI Samsung Samsung Heavy Ind. Hyundai Hitachi Hyundai SWS Hyundai Hyundai MHI Hitachi Hitachi Hitachi Jinhaiwan Jinhaiwan Jinhaiwan Jinhaiwan Jinhaiwan Daewoo Daewoo Hyundai Samsung Hyundai Mitsui Hitachi SWS Sasebo Rongsheng Rongsheng KHI Hitatchi SWS KHI Hitatchi SWS Mitsui Hitatchi Sasebo KHI Hitachi Samsung Heavy Ind.
V.Ships NO Thome V.Ships NO ITM ITM V.Ships NO SeaTeam ITM V.Ships DE
Marshall Islands Isles of Man Liberia
Frontline Mngmt. AS Hong Kong Marshall Islands Bahamas Marshall Islands Singapore Isles of Man Isles of Man Liberia
Marshall Islands
1991 2012 2012
Front Dynamic (J0027) Frontline 2012 Front Dynasty (J0028) Frontline 2012 Front Eminence Front Endurance Front Energy Front Falcon Front Force Front Glory Front Guider Front Hakata Front Kathrine Front Melody Front Njord Front Odin Front Opalia Front Page Front Queen Front Rider Front Scilla Front Serenade Front Signe Front Splendour Front Stratus Front Symphony Front Tina Front Vanguard Front Viewer Frost Gandria Gimi Glorycrown Glovis Composer Glovis Conductor Golar Arctic Golar Freeze Golar Grand Golar Maria Golar Mazo Golar Spirit Golar Viking Golar Winter Golden Beijing Golden Brilliant Golden Bull Golden Eminence Golden Empress Golden Endeavour Golden Endurer Golden Enterprise Golden Feng Golden Future Golden Future Golden Ice Golden Opportunity Golden Saguenay Golden Shui Golden Strength Golden Suek Golden Victory Golden Zhejiang Golden Zhejiang Golden Zhoushan Green Ace Hampstead Heung-A Green Hilli Hull No 1161 Hull No 1162 Ice Igloo Kelvin Kensington Mayfair Methane Princess Mindanao MT Golden Victory Naticina Newbuild #1 Newbuild #10 Newbuild #11 Newbuild #12 Newbuild #13 Newbuild #14 Newbuild #15 Newbuild #16 Newbuild #17 Newbuild #18 Newbuild #19 Newbuild #2 Newbuild #20 Newbuild #21 Newbuild #22 Newbuild #23 Newbuild #24 Newbuild #25 Newbuild #26 Newbuild #27 Newbuild #28 Newbuild #29 Newbuild #3 Newbuild #30 Newbuild #31 Newbuild #32 Newbuild #33 Newbuild #34 Newbuild #35 Newbuild #36 Newbuild #37 Newbuild #38 Newbuild #39 Newbuild #4 Newbuild #40 Newbuild #41 Newbuild #42 Newbuild #43 Newbuild #44 Newbuild #45 Newbuild #46 Newbuild #47 Newbuild #48 Newbuild #49 Newbuild #5 Newbuild #50 Newbuild #51 Newbuild #52 Newbuild #53 Newbuild #54 Newbuild #55 Newbuild #6 Newbuild #7 Newbuild #8 Newbuild #9 Northia Penguin Phoenix Voyager Pioneer Golar LNG Golar LNG Golar LNG Ship Finance Int. Knightsbridge Tankers Golar LNG Partners Ship Finance Int. Ship Finance Int. Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Frontline 2012 Golar LNG Independent Tankers Corp. Independent Tankers Corp. Ship Finance Int. Deep Sea Supply Deep Sea Supply Deep Sea Supply Ship Finance Int. Deep Sea Supply Ship Finance Int. Deep Sea Supply Deep Sea Supply Ship Finance Int. Seatankers Deep Sea Supply Ship Finance Int. Ship Finance Int. Deep Sea Supply Seatankers Deep Sea Supply Deep Sea Supply Ship Finance Int. Deep Sea Supply Deep Sea Supply Deep Sea Supply Deep Sea Supply Deep Sea Supply Deep Sea Supply Deep Sea Supply Deep Sea Supply Golar LNG Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Independent Tankers Corp. Golar LNG Golar LNG Independent Tankers Corp. Ship Finance Int. Ship Finance Int. Ship Finance Int. Golar LNG Golden Ocean Group Golden Ocean Group Marshall Islands Marshall Islands Marshall Islands Marshall Islands Marshall Islands Hong Kong Hong Kong Marshall Islands Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Marshall Islands Hong Kong Hong Kong Bahamas Golden Ocean Group Cyprus Cyprus Cyprus Cyprus Cyprus Cyprus Norway Cyprus Cyprus Malaysia Cyprus Golden Ocean Group Cyprus Cyprus Cyprus Norway Frontline Mngmt. AS Marshall Islands Marshall Islands Bahamas Isles of Man Marshall Islands Panama Cyprus Cyprus Cyprus Cyprus Brazil Cyprus Malaysia Cyprus Cyprus Panama Frontline Mngmt. AS Marshall Islands Marshall Islands V.Ships NO Singapore Marshall Islands Golden Ocean Group Ship Finance Int. Ship Finance Int. Golar LNG Seateam Hong Kong Malta Malta Marshall Islands Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Knightsbridge Tankers Thome Thome Thome Thome Thome Thome V. Ships UK Hong Kong Hong Kong Hong Kong Marshall Islands Hong Kong Hong Kong Marshall Islands Hong Kong Frontline 2012 Frontline 2012 Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Ship Finance Int. Frontline 2012 Frontline Frontline 2012 Frontline 2012 Ship Finance Int. Ship Finance Int. Frontline 2012 Frontline Ship Finance Int. Ship Finance Int. Frontline 2012 Ship Finance Int. Ship Finance Int. Frontline Frontline Ship Finance Int. Ship Finance Int. Golar LNG Golar LNG Golar LNG Ship Finance Int. Ship Finance Int. Ship Finance Int. Golar LNG Golar LNG Partners Golar LNG Partners Golar LNG Partners Golar LNG Partners Golar LNG Partners Golar LNG Golar LNG Partners Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Golden Ocean Group Knightsbridge Tankers Bernhard Schulte Thome Thome Seateam Seateam Seateam Thome Seateam Thome Marshall Islands Marshall Islands Marshall Islands Hong Kong Panama Marshall Islands Marshall Islands Marshall Islands Marshall Islands Liberia Marshall Islands Marshall Islands Marshall Islands Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Marshall Islands Hong Kong ITM Thome SeaTeam V.Ships DE Frontline Mngmt. AS Marshall Islands Frontline Mngmt. AS Marshall Islands V.Ships NO Thome Thome V.Ships UK Cyprus Bahamas Cyprus Marshall Islands Singapore Isles of Man Liberia
2009 2009 2004 2002 2004 1995 1991 2002 2009 2001 2010 2010 1999 2002 2009 1992 2000 2002 2010 1995 2002 2001 2000 1998 1992 2014 1977 1976 2009 2005 2006 2003 1977 2006 2006 2000 1981 2005 2004 2010 2013 2012 2010 2010 2010 2011 2011 2009 2010 2010 2008 2008 2008 2009 2009 2011 1999 2010 2010 2011 2005 1996 2005 1975 2013 2013 2014 2013 2014 1995 2008 1995 2003 1998 1999 2010 2014 2014 2014 2014 2014 2014 2013 2014 2014 2014
Frontline Mngmt. AS Marshall Islands Frontline Mngmt. AS Hong Kong Frontline Mngmt. AS Marshall Islands Marshall Islands ITM Thome Liberia Frontline Mngmt. AS Marshall Islands Singapore Marshall Islands Liberia
Frontline Mngmt. AS Hong Kong Marshall Islands V.Ships UK ITM V.Ships DE V.Ships DE ITM Liberia Liberia Liberia Marshall Islands Singapore
HDW
Jinhaiwan Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing On order On order On order On order On order Sailing Sailing Sailing Sailing Sailing Sailing On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order On order Sailing Sailing On order Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Just finished Sailing Sailing Sailing Sailing Just finished Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing On order Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing Sailing On order On order Sailing Sailing On order Sailing On order Hyundai Samho $25 500 000 Japan Marine United $25 500 000 Japan Marine United $1 357 100 000 Ishibras Samsung Heavy Ind. Hyundai Samho Samsung Jaya Shipbuilding Jaya Shipbuilding ABG Shipyard Cochin $22 500 000 Xiamen Shipbuilding ABG Shipyard Jaya Shipbuilding Kvrner Kleven Kvrner Leirvik $22 500 000 Xiamen Shipbuilding Jaya Shipbuilding Kvrner Leirvik Cochin Karmsund Verft ABG Shipyard Kvrner Leirvik Cochin Cochin ABG Shipyard ABG Shipyard Promar Samsung Heavy Ind. Cochin ABG Shipyard Cochin Kvrner Kleven Samsung Heavy Ind. Samsung Samsung Rongsheng STX Offshore STX Offshore STX Offshore STX Offshore $63 500 000 Jiangnan Changxin $46 000 000 Shanghai Waigaoqiao (SWS) $46 000 000 Shanghai Waigaoqiao (SWS) $46 000 000 Shanghai Waigaoqiao (SWS) $46 000 000 Shanghai Waigaoqiao (SWS) $46 000 000 Shanghai Waigaoqiao (SWS) $46 000 000 Shanghai Waigaoqiao (SWS) $46 000 000 Shanghai Waigaoqiao (SWS) $46 000 000 Shanghai Waigaoqiao (SWS) $47 000 000 STX Dalian STX Offshore $47 000 000 STX Dalian $47 000 000 STX Dalian $47 000 000 STX Dalian $47 000 000 STX Dalian $47 000 000 STX Dalian $47 000 000 STX Dalian $47 000 000 STX Dalian $63 500 000 Jiangnan Changxin $63 500 000 Jiangnan Changxin $63 500 000 Jiangnan Changxin $63 500 000 Jiangnan Changxin $63 500 000 Jiangnan Changxin $63 500 000 Jiangnan Changxin $63 500 000 Jiangnan Changxin Guangzhou Longxue STX Dalian STX Dalian STX Dalian STX Dalian STX Dalian STX Dalian STX Offshore Guangzhou Longxue Guangzhou Longxue Guangzhou Longxue Rongsheng Daewoo Daewoo Rongsheng Rongsheng Samsung Heavy Ind. Samsung Heavy Ind. Samsung Heavy Ind. Pipavav Pipavav Jinhaiwan Jinhaiwan Jinhaiwan Jinhaiwan Jinhaiwan Daehan Jinhaiwan Rongsheng Rongsheng Rongsheng Daehan Rongsheng Pipavav Hitachi Jinhaiwan
DH DH DH DH DH DH DH DH DH DH DH DH DH DH DH DH DH DH DH DH
Chemical tanker Maria Victoria V
Frontline Mngmt. AS Marshall Islands
2015 DH 2015 2014 2014 2014 2014 2015 2015 2015 2015 2014 DH 2014 2014 2014 2015 2015 2015 2015
50 000 320 000 50 000 181 000 181 000 181 000 181 000 181 000 181 000 181 000 181 000 180 000 50 000 180 000 180 000 180 000 180 000 180 000 175 000 175 000 175 000 175 000 175 000 DH 50 000 175 000 175 000 175 000 175 000 175 000 175 000 DH DH DH 50 000 50 000 50 000 50 000 156 000 73 074 125,000 m3 95 000 160,000 m3 DH DH SH 308 500 307 000 149 686 17 000 3 250 1 575 6800 BHP 3 250 2 854 15 000 BHP 4 700 2 300 15 000 BHP 2 180 12000 BHP 1 905 6800 BHP 3 250 82 000 1 898 6800 BHP 2 273 15 000 BHP 2 900 15 000 BHP 2 900 15000 BHP 82 000 2 150 10880 BHP 2 900 15000 BHP 3 250 3 250 1 920 6800 BHP 2 800 15000 BHP 3 300 3 250 1 350 6800 BHP 1 575 6500 BHP 3 250 95 000 160,000 m3 23 232 1,700 TEU 39 276 2,824 TEU 22 900 1,700 TEU 39 420 2,824 TEU 39 418 2,824 TEU 57 000 57 000 39 266 2,824 TEU 57 000 34 000 34 000 57 000 34 000 39 266 2,824 TEU 34 000 DH DH DH 57 000 155 681 95 000 160,000 m3 298 000 95 000 162,000 m3 309 996 32 000 32 000 32 000 95 000 162,000 m3 60 000 60 000 30 772 143
2010 1977 2013 1999 1999 1993 2008 2007 2011 2008 1999 2012 2007 2009 2011 2007 2013 2011 2007 1998 1999 2013 2007 1999 2007 2008 2011 1998 2008 2008 2011 2009 2008 2013 2010 2007 2003 2007 2007 2009 2012 2006 2011 2012 2012 2011 2011 2006 2012 2010 1994 2014 1995
DH
Nusantara Regas Satu Golar LNG Partners
Pride Chemical tanker SC Guangzhou Sea Angler Sea Badger Sea Bass Sea Bear Sea Brasil Sea Cheetah Sea Eagle 1 Sea Fox Sea Halibut Sea Hermes Sea Jackal Sea Jaguar Sea Leopard Sea Lynx Sea Neptune Sea Ocelot Sea Panther Sea Pike Sea Pollock Sea Stoat Sea Tiger Sea Trout Sea Turbot Sea Vixen Sea Weasel Sea Witch Seal SFL Avon SFL Eagle SFL Europa SFL Falcon SFL Hawk SFL Hudson SFL Humber SFL Hunter SFL Kate SFL Kent SFL Medway SFL Sara SFL Spey SFL Tiger SFL Trent SFL Yukon Sirius Voyager Snow Titan Venus Tundra Ulriken Western Australia Western Copenhagen Western Houston
Seateam
Bahamas Hong Kong Hong Kong Hong Kong
2015 1998 2012 2013 2012 2014 2014 2006,32
2014

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