The move of tanker giants Frontline to Cyprus is now official as the company’s shareholders have backed the decision of their CEO and founder John Fredriksen to re-domicile in Limassol next year.
The major ship-owning company registered in Bermuda and listed on the New York Stock Exchange had initiated the transfer of its activities to Cyprus. It was approved at the group’s AGM this week.
Frontline is the world’s fourth largest oil tanker company, based in Hamilton, Bermuda and controlled by Fredriksen, a naturalised Cypriot citizen.
Its primary business is transporting crude oil.
The company had one of the world’s largest tanker fleets consisting of VLCC, Suezmax and Suezmax OBO carriers (82 tankers total, with 18 more on order).
According to a Frontline announcement, Iris House at 8 John Kennedy Street in Limassol will serve as its new headquarters.
A document filed on behalf of the US authorities that supervise publicly traded companies noted: “Frontline believes that the transfer will provide legal, administrative, and other related advantages.
“As a well-established ship management centre, Cyprus is expected to offer many advantages to the company, including attracting experienced personnel commercially, administratively and managerially.”
In the same document, Frontline notes there will be benefits from the tax regime, which is approved by the European Union, while the geographical position of Cyprus will benefit the company.
Based in Limassol, Fredriksen will now be plotting out the moves to combine his company with rival Euronav, scheduled to happen within the next few months following a protracted battle for control of the Belgian tanker firm with the Saverys family.
Once the merger is completed, one of the largest oil transportation companies in the world will emerge.
The combined oil fleet will consist of 69 very large crude oil carriers, 57 medium to large tankers (Suezmax vessels), and 20 tankers with a deadweight capacity between 80,000 and 120,000 metric tonnes (LR2/Aframax).
John Fredriksen (born 10 May 1944) is a Norwegian-born Cypriot shipping billionaire businessman based in London.
He was one of the first foreign investors to obtain a Cypriot passport through his investments in 2006.
Fredriksen, 78, is top of the “Cyprus Rich List” with a net worth in 2009 estimated at €2.7 bln.
It is thought Fredriksen chose Cyprus because of the favourable laws on inheritance tax (0%).
Through his investment companies Hemen Holdings and Meisha, Fredriksen controls Frontline and Golar LNG from his luxury home in London.
Golar LNG, the parent of Golar Energy, unsuccessfully bid for Cyprus’ LNG supply contract, which was later rejected after the government decided to award the contract to public utility EAC.
The news had revitalised the shipping sector after authorities announced that approximately 20% of the oil tanker fleet registered in Cyprus had migrated to other registries since October when Brussels signalled its intention to cap the price of Russian seaborne oil.