DHT Holdings set to sell oldest VLCC

Fleet renewal move will leave New York-listed owner with only post-2000-built tankers on the water.

DHT Holdings is set to continue its fleet renewal efforts with the sale of its oldest tanker.

New York-listed DHT is in the process of selling the 307,100-dwt DHT Phoenix (built 1999), the last vessel in its fleet built before the turn of the millennium.

Market sources place a figure of $19m on a transaction which remains on subjects.

Multiple shipbroking sources point to energy trader Mercuria as the buyer.

DHT, which has this year rejected a takeover offer from Frontline, is selling the ship as it comes to the end of a time charter worth $45,000 per day.

A sale would leave DHT with 18 VLCCs on the water and two on order at Hyundai Heavy Industries.

Six of its trading VLCCs have been delivered during the past two years.

It also has a smaller presence in the aframax market with two trading tankers, both of which are on time charter.

DHT has bought 16 VLCCs since the third quarter of 2013 and has voiced an appetite for further investments.

'Inquisitive buyer'

Svein Moxnes Harfjeld, co-chief executive of DHT, said in the company’s fourth quarter earnings call:  “We expect 2017 to present compelling opportunities to grow and renew our fleet.”

Stifel analyst Ben Nolan suggested tanker asset prices have found a bottom and labeled DHT an inquisitive buyer of modern high quality tonnage with resources to add two or three ships with existing liquidity.

'Meaningful premium' needed

Frontline’s $475m paper bid for DHT priced the company at a little over $5 per share.

In a research note today, Sifel analyst Ben Nolan said an offer at a “meaningful premium” to DHT’s own valuation of $5.70 per share would be required to bring about a deal.

“Thus, despite Frontline already owning 16% of DHT, we believe the offer would have to be higher than $6 per share, which is probably unlikely in our view,” he wrote.

“We believe there is now nothing but time standing between DHT and a higher share price,” Nolan said.

“Valuation is not expensive, OPEC headwinds and new ship deliveries are fully anticipated, and the balance sheet is strong.”



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31 Jan 14:59 GMT