Fredriksen

"Shipbrokering is about information, and few managed to gather and remember as many details as Fredriksen. The many small pieces are what make the difference sooner or later when competing with a host of other brokers for a deal. Moreover, John Fredriksen had flair; he smelled money and opportunities."

""Is it time to discuss price?" Fredriksen's eyes became even narrower and more calculating. It seemed as if the alcohol had evaporated in seconds. "240 million dollars. That's my final price demand. I'm not playing shop." "They're not worth a penny more than 170 million," Dan Odfjell replied. "That would suggest we land on 200 million," Morten Mo mediated."

"The seven middle-aged gentlemen stumbled up the stairs to Barock on Universitetsgaten, where one of Fredriksen's regular tables was cleared. The court of young brokers and freeloaders quickly descended upon the place. Fredriksen waved away the maître d' and ordered two nine-liter bottles of Veuve Cliquot champagne. He was bubbling, also with delight."

"The end result was that Warpe, Bedell, and Fredriksen invested money in renting three German supertankers. The business went well, and the trio earned $86,000 abroad from the three ships. When Fredriksen later invited Warpe and Bedell to more collaboration, Warpe responded positively. He invested the profits from the three German ships, and they agreed to exchange Spanish land plots for shares in shipping. Warpe's contribution was 80 acres of land on the Canary Island of Fuerteventura, as well as ten acres at Benidorm, and some additional smaller plots."

"Fredriksen has always had a weakness for offshore, whether it's rigs or floating production. At times, it has also gone well, the operation with Northern Offshore yielded one and a half billion in profit, but many sour investors. It is the knack for timing in buying and selling that is again Fredriksen's trademark. Therefore, it should have been a signal to everyone when he bought four old, jack-up Russian rigs in the spring of 2004. The purchase price was a whole billion. Two that were in lay-up were sold on with a nice profit after a short time, the two that had assignments were kept. Later in the year, he took over two small, floating production ships, another of Fredriksen’s favorites. Even for the hard-pressed investors in the fiasco Northern Offshore there were glimmers of hope. Finally, the market started to notice the drill ships again, and thus the fear of bankruptcy was much reduced. The bond loan, which had been trading at a quarter of its face value on the stock exchange, doubled in two months, there was hope of recouping the money for those who hadn't long since dumped shares and bonds in despair. There was life in the dead cat."

""We only play with boys with big balls," is a well-known Fredriksen saying."

"When a Fredriksen company raises a billion in new equity, there’s still 30-40 million left in the brokerage firm, no matter how good a negotiator Tor Olav Trøim is. Additional commissions come from regular stock trading, where Frontline is one of the most traded stocks on the exchange every day."

"His private core company, Greenwich Holding, had recorded values of several billion before the turn of the millennium, which are unlikely to have disappeared while everything else has increased. And in the valuations, no one counts the mysterious Knightsbridge and the billions of values that have accumulated there. This is probably a mistake. It may be a good starting point to listen to what the main character himself has said. He has used expressions like "you will be surprised", and that "half of the fortune is in shipping". His shipping interests are over 20 billion, and based on the Fredriksen formula, the fortune would be over 40 billion kroner."

"Eventually, the brokers' suggestions also come outside of shipping; everyone knows that Big Wolf and Little Wolf are fast, non-bureaucratic, and liquid. And hungry. Sometimes this leads to surprising results, like the raid on Pan Fish. Admittedly, Fredriksen is an avid salmon fisher, but it's not obvious that he should dream of creating new structures in the salmon industry. However, Trøim insists that the investment in Pan Fish was their own idea, something they had thought about for a long time. Since Nordea held a controlling share (48 percent), they could approach Fredriksen's old friend in the bank, Calle Steen, and present the proposal. It undoubtedly helped the bank's decision-making that they made almost 800 million from the sale. The purchase in Pan Fish had an immediate Fredriksen effect throughout the industry. Share prices rose, and everyone became richer on paper. Fredriksen, who quickly had a paper profit of several hundred million kroner. Then followed a massive investment in Fjord Seafood of 25 percent, and new shakes in the industry. Everyone believes there will be a major merger between Pan, Fjord, and Cermaq, and if so, it would have been high odds that it was John Fredriksen who would force this. Everything Fredriksen has touched in recent years has yielded gains. Gradually, his fortune is spread across multiple industries and not as susceptible to extreme fluctuations. It is not certain he will be on the brink several more times."

"Essentially, Fredriksen and Trøim agreed on the recommendations from their most important brokerage connection. The race was on, and Pareto would hold their hands throughout. In May, just three months later, the investor market was introduced to SeaDrill, Fredriksen's new major venture. In addition to three worn drill rigs, the company comprised the two floating production ships "Crystal Sea" and "Crystal Ocean". It was only mentioned in a footnote in the first prospectus that SeaDrill did not own, but had the option to purchase the ships. The owner was Fredriksen-controlled Active Capital, the debt collection agency that benefitted from the enormous tax deductions associated with the ships when they were picked up from the failed Brøvig company Crystal Productions. Now, the ships were ready for a new round in the Fredriksen family of companies. Half of Norway wanted to subscribe for shares, and Trøim had to diligently cross off names on the subscription list. Just days after the allotment, the price had almost doubled. No one wanted to miss out on a new Frontline. The information was scarce; the brokers had some blurry photos of rigs with Russian names, there were two production ships and a couple of construction contracts. Based on this, ambitious financial projections were made for the coming years."

"It is not necessary to own everything to control everything. Fredriksen is not the first to discover this, but rarely has anyone known to use it to such an extent. Since Fredriksen raided Swedish Frontline back in 1996, he has made countless transactions with himself on both sides of the table. It started with the sale of large parts of the private fleet to Frontline in exchange for shares, which gave Fredriksen complete control of the company, and has been a steady stream since."

"In addition to buying and selling ships, construction contracts, options, and loans from himself, there are many lesser touchpoints between Fredriksen and the stock companies he controls. Frontline leases services to the other listed companies and to Fredriksen's private enterprises, and all of them rent premises at Aker Brygge. By Fredriksen privately. No one asks about anything."

"However, Fredriksen was encouraged by his surroundings. The court brokers at Pareto did their utmost to get the world's most decisive shipping man out of his mental moorings and fully into the rig market. At a meeting in Amsterdam on February 9, Fredriksen, Trøim, and brokers from Pareto discussed the entire situation for the group. In a summarizing email the day after, Stein Schie wrote to Fredriksen that he was not where things were happening at the time; "this is the market that is set to boom, and you are not in it." He admitted that Fredriksen had indeed made a couple of hundred million dollars on Northern Offshore, and that the Russian rigs were a steal, but it was too insignificant. Particularly because they missed the opportunity to take over the rig company TODCO. Schie recommended a much more aggressive strategy. Fredriksen should buy into the American giant Pride, as one of the main shareholders, First Reserve, was about to sell out. Once inside, it opened up many opportunities. The other important recommendation was to order four new jack-up rigs in Singapore. Financing was no problem, Schie had seen in a private email that the FELS-yard in Singapore offered full financing to Danish Maersk. Fredriksen should receive the same."

"But the need for control is not limited to open transactions. Shipping has a hidden world of return commissions. It's common for the shipowner to receive a small reward from brokers, shipyards, or other counterparts when a deal is made. By small it means small in percentage, but the amounts can become significant when ships or rigs worth several hundred million dollars are ordered. This is so obvious that a shipbroker would not even think about whether it might be wrong. In the transactions mentioned in the official papers of the listed companies, there are no such kick-backs. Naturally, since this is one of the industry's gray areas. In many contexts, it's a Fredriksen-company that makes the contract, before it moves on to the listed companies. If there were a small discount in the form of return commissions, it would accrue to Fredriksen. Perhaps such a commission would be fair and reasonable, considering that it is a job that needs to be done. But the commissions can also go the other way. In an email from the small Greek shipbroking firm Sea Quest Shipbroking on February 10, 2005, to the chartering department at Frontline, it states that the broker can get Frontline a three-year contract on a supertanker with the Turkish refinery company Turpas. The terms, strictly private and confidential, are that one must meet the top manager face to face in Istanbul, and pay a commission of 7 percent to the management at Turpas. Such a contract would reasonably have a freight rate of 35,000-40,000 dollars a day. 7 percent of this is 20,000 Norwegian kroner. Every day for three years. Roughly estimated, that's 20 million kroner in the manager's account. The offer was a proposal in secret. At other times, it came to the surface, through coincidences. In June 2004, a piece of news made brokers at most brokerage desks around the world widen their eyes: Frontline was able to purchase two brand-new 260,000-tonners from the Indonesian state oil company Pertamina. The price was stated to be 184 million dollars, or 92 million dollars for each of the two sister ships."

"This is how Fredriksen entered into Active Capital. He was willing to guarantee for the money Active Capital borrowed from the bank, and charged handsomely with one percent interest per month. Moreover, he secured the right to buy some shares. Eventually, there were more and more shares in Fredriksen’s hands. Fredriksen paid up, well encouraged by Tor Olav Trøim, Spetalen's best friend. It was to be a golden moment, which probably wouldn't have happened had Fredriksen not attended a football match one autumn evening in 1996."

"When Frontline bought Independent Tankers in May 1998, with ten tankers, from Bjørn Q. Aaserød, they acquired as much debt as steel. Quite precise, actually. The leverage was so high that Fredriksen gained control of the ten ships for only 9.5 million dollars in equity, while the value of all assets in ITC was one billion dollars. The problem for Frontline was that the debt ratio in the shipping company would become dangerously high if the fleet was taken into the balance sheet. With the miserable shipping market at the time, it could lead to problems with banks and loan agreements. A month later, the fleet is sold on to Fredriksen personally, through Hemen Holding, for the same price. In the report to the SEC for 1999, it states that Frontline got a five-year option to buy back the fleet. But Frontline does not use the option, instead, it is extended, and in the report submitted to the SEC in July 2005, it states that on July 1, 2003, Frontline bought an option from Hemen Holding to take over the Independent fleet. The price of the option and the shares was 14 million dollars, which Frontline utilized the following year."

"In December 2003, Ship Finance was established as a subsidiary of Frontline. It placed a bond issue of $580 million, approximately 4 billion kroner, in the American market, with an interest rate of 8.5 percent. These funds, along with the takeover of existing mortgage loans in the fleet amounting to one billion dollars, were used to purchase 47 tankers from Frontline. At the same time, Frontline entered into an agreement to lease back the ships at a fixed price for the remainder of their estimated lifetime. For the supertankers, the guaranteed price was $25,575, lower than the average over the last 14 years. If Frontline earns more in the market than the guaranteed price in the future, Ship Finance will receive 20 percent of the profit. The real feat here was getting investors to buy the bond issue. They have little opportunity for gain, just a fixed interest rate. For Fredriksen and the other shareholders in Frontline, however, there were only opportunities. From the first day, Frontline distributed 25 percent of the shares in Ship Finance to its shareholders, and applied for a listing on the New York Stock Exchange. By 2004, the rest of the shares were either to be distributed to Frontline shareholders or sold in the market by Frontline – to the delight of the shareholders. As soon as the money from the sale of the 47 ships was in the account, Fredriksen turned around and distributed 2.3 billion in dividends to the shareholders, about 30 kroner per share. And everyone knew there was more to come, as Frontline was not supposed to keep more money in cash than the company was required. Thus, one of the smartest and most creative operations in international shipping was ever completed. The cake was eaten. And it was still on the table."

"Frontline ships are more often seen in the East than in the West because single-hull ships are more acceptable in Asia. Still, there are not many charterers who reward new ships, the price of transportation only constitutes 1-2 percent of the value of the cargo, and the oil companies are satisfied as long as it arrives. According to international rules, it's the end for single-hull ships from 2010. But the registries with flags of convenience have announced that they will approve this type of ship all the way until 2015. Fredriksen's oldest ships are all registered in these shipping paradises, and other shipping companies can do the same. In practice, it is up to each country whether they will accept that single-hull ships dock at the country's ports after 2010. In Frontline, there is also a plan B for the oldest ships. It is planned to convert them into floating production vessels as 2010 approaches. Floating production ships are a field where Fredriksen has been a pioneer ever since he gambled on the Blystad idea Tentech in the late '80s."

"In Golar, one could fine-tune operations and be creative with financing, but the main figures were set when tied up in contracts over two decades. It's almost like a banking business. Neither Fredriksen nor Trøim are suited for that. Something needs to happen all the time, and Golar is after all in a market that is expected to grow significantly for a long time. World gas production is increasing strongly, we know this not least in Norway, and with high oil prices, gas is very competitive. Everyone expects the USA to cover a larger part of its energy needs with natural gas, Japan will replace nuclear power with natural gas, and in Asia generally, the energy need seems insatiable. Someone has to transport all the gas from the production fields to the market. The conclusion was clear for Fredriksen: ordering more ships."

"All outsiders will wonder how a deal made between friends in a bar after a round of golf could develop into a bitter quarrel over more than ten years. Originally, the case was about three million and eventually cost 16 million, 9 million on Fredriksen, 7 on Skjevesland. Gradually, no attempt was even made at a settlement, even though Skjevesland in 2001 sent a fax to Fredriksen offering a million kroner to settle the case. When he called to get an answer, it was Inger Fredriksen who answered the phone. – Just pay the full amount, she replied. Fredriksen can have a ruthless tongue when it comes to talking about past relationships and friends, but in Skjevesland he has met more than his match. Skjevesland consistently refers to Fredriksen as "the fat one" or "The Lazarus from Etterstad". – I taught him to eat with knife and fork, I taught him hunting, I got him to dress like people – not with pants and jackets fifteen centimeters too short. Nevertheless, he remains a lazarus, no matter how many billions he acquires."

"Greek shipping and steel magnate Theodoros Angelopolous, the owner of the shipping group Metrostar. They had attended several board meetings together, and in connection with one of them, Fredriksen was invited home to the Greek's house at 56 Old Church Street in Chelsea, London. Fredriksen was well-off, but this took the breath away from even the greatest son of Etterstad. In the middle of the most luxurious district in the metropolis, there was a house of 2700 square meters and twelve acres of land. Behind thick walls and remote-controlled gates, the Greek could plan his shipping ventures. The neighbors didn't see much of him. Normally, Angelopolous' driver would call the concierge as they approached, and as the owner’s black Bentley glided down the street towards the house, the gate would open, and the car would go in. The scene lasted only a few seconds, and it was not possible to see through the car's tinted windows."

"In early summer, an agreement was made with the state-owned Shipping Corporation of India on a package price of 140 million dollars for the four ships. Even when deducting the "commissions" to key people in the Indian bureaucracy at an incredible 3.4 million dollars per ship, it was a very good sale for Fredriksen. The newbuilds were almost unencumbered, and the sale released over half a billion kroner in equity. Along with the money earned from operating the rest of the fleet, they should be able to handle most of the newbuilds in Asia. But it wouldn’t be that easy. Even an Indian state shipping company must wait 60 days for an import license, which gives them a welcome pause to assess market developments."

"In his second homeland, Spain, Fredriksen saw opportunities in a crisis-stricken shipping industry. Through cheap acquisitions of a number of small shipping companies, Fredriksen became the largest private shipowner in Spain during a hectic period. Economically, it was no gold mine, and when the crew of the bulk carrier "Resmar Dos" went on a strike lasting several months during unloading at Hydro Aluminium in Karmøy, Fredriksen sued Haugesunds Avis for their portrayal of him."

"When the police on June 5, 1986, emptied the premises of Marine Management of documents, important and unimportant, they dug their own grave. The police's seizure of documents filled an entire room from floor to ceiling. By not returning all documents that were irrelevant, they jumped into the grave themselves. Truls Dramer and Sture Eriksen had the pleasure of filling it back in. The idea came by sheer coincidence. The two lawyers were on the phone discussing the case when Dramer stumbled over some technical terms. "Hey, you’re not qualified to defend in this case. You don’t know the facts well enough," joked Sture Eriksen. "I have a basic degree in English, but I’m not used to using these English terms. We should have had them translated," Dramer replied. Suddenly, a brilliant idea dawned on both of them. "All documents should have been translated, absolutely all. We must demand it for the sake of correct legal procedure," Sture Eriksen beamed. The district court could hardly do anything but accept the request, while the police were seething with rage. It was going to get worse later on. The case was initially scheduled for March 1988, but on January 15th, news came that the case was to be postponed for the third time, now due to "partially severe translation errors." It is rare for defenders to get free passes for an open goal, but here the Fredriksen side was served the ball on a silver platter. The police chose an unauthorized translator, and the defense was eventually able to demonstrate some astonishing misunderstandings. The common word "gearing," which means debt ratio, was translated as "transmission," as if it concerned a vehicle with gears. The translator obviously had no knowledge of shipping or economics, and several of the documents appeared as complete gibberish. The defenders rejoiced, the police despaired – and then came the next trump card from the defense."

"Fredriksen sank deeper into a quagmire of legal obligations until he got cold feet and wanted to get out. At the beginning of autumn 1987, he saw no other way than to ask Johan Warpe for help to save the remnants. If Carboni was a seasoned real estate dealer, Warpe was not far behind. He knew most of the tricks after 15 years in the industry on the Costa Blanca in Spain. Warpe went to Rome and met Carboni. He immediately understood that the project was not as lucrative as promised. Moreover, he reacted to the fact that there was no progress, but he was smart enough not to outright say that Fredriksen wanted to get away. In the discussions, Warpe simply reminded Carboni that he had previously promised that Aga Khan was also interested in the area. "Let us sell part of the area to Aga Khan to make progress in the project," Warpe suggested, before adding that in the meantime, the Fredriksen group would be content with investing three million dollars. Faced with his own promises, Carboni could do nothing but smile and nod, although he was probably boiling inside."

"When the police on June 5, 1986, emptied the premises of Marine Management of documents, important and unimportant, they dug their own grave. The police's seizure of documents filled an entire room from floor to ceiling. By not returning all documents that were irrelevant, they jumped into the grave themselves. Truls Dramer and Sture Eriksen had the pleasure of filling it back in. The idea came by sheer coincidence. The two lawyers were on the phone discussing the case when Dramer stumbled over some technical terms. "Hey, you’re not qualified to defend in this case. You don’t know the facts well enough," joked Sture Eriksen. "I have a basic degree in English, but I’m not used to using these English terms. We should have had them translated," Dramer replied. Suddenly, a brilliant idea dawned on both of them. "All documents should have been translated, absolutely all. We must demand it for the sake of correct legal procedure," Sture Eriksen beamed. The district court could hardly do anything but accept the request, while the police were seething with rage. It was going to get worse later on. The case was initially scheduled for March 1988, but on January 15th, news came that the case was to be postponed for the third time, now due to "partially severe translation errors." It is rare for defenders to get free passes for an open goal, but here the Fredriksen side was served the ball on a silver platter. The police chose an unauthorized translator, and the defense was eventually able to demonstrate some astonishing misunderstandings. The common word "gearing," which means debt ratio, was translated as "transmission," as if it concerned a vehicle with gears. The translator obviously had no knowledge of shipping or economics, and several of the documents appeared as complete gibberish. The defenders rejoiced, the police despaired – and then came the next trump card from the defense."

"In the winter of 2000, a new opportunity arose to acquire a shipping company in serious trouble, the Canadian company misleadingly named Golden Ocean. It had sailed from a golden sea to a sea of defaulted loans, and on January 14, 2000, they threw in the towel and asked the United States bankruptcy court in Delaware for protection from creditors. Thus, the wrecked shipping company was given 135 days to sort out its enormous debt. And as is usual in such situations, the bleeding victim immediately attracted the attention of the financial sharks. Fredriksen had been following Golden Ocean for a long time because he considered it a candidate for acquisition. Bergesen also followed the death struggle with interest, but what John Fredriksen didn't know was that the shipping management at Bergehus was loaded with billions, ready to buy the Frontline fleet at a bargain if the company went under. The danger was not yet over, according to Bergesen, and therefore, they chose to let Golden Ocean pass without making a bid. But John Fredriksen was not alone in setting his sights on Golden Ocean. Again, he faced competition from a small firm that specialized in buying debt to leverage such situations. This time it was little Bentley International. The first clash in the battle between Fredriksen and Bentley came in March 2000. Then, Fredriksen bought one-sixth of Golden Ocean's debt, amounting to just over three billion kroner. The price tag was only 40 million kroner, but the status as a creditor gave the Norwegian shipowner a say in the fate of Golden Ocean, which controlled 17 large tankers (VLCC) and a fleet of 11 modern bulk carriers. The battle for Golden Ocean was tailor-made for Tor Olav Trøim and Tom Jebsen. This was their home ground, unlike usual shipping deals where the two shipowners on each side are the main men. Because when Golden Ocean went to bankruptcy court, the owners lost their power. Now, it was a multi-headed troll of creditors and lenders on Wall Street who decided the fate of the shipping company. For Trøim, this meant a series of meetings with bankers in New York. The effort was crowned with success at the end of May, when Trøim managed to persuade the other creditors to approve a plan to save the shipping company. Frontline was willing to enter with 33 million dollars in cash – or Frontline shares for 48 million dollars – to take over. At the same time, Frontline bought the VLCC "Tina" for 74 million dollars from Golden Ocean, thus gaining steering speed through the heavy seas. As a financial maneuver, Golden Ocean was by the book. Frontline issued three million new shares, and placed them with new owners through Fearnley Fonds and Enskilda. This way, the shipping company brought in the 33 million dollars that the deal cost. Among the new major owners was Fidelity – the world's leading asset management company. It would be the beginning of an adventure for both parties and meant a breakthrough for Trøim's work to make shipping palatable to the financial environment in New York."

"The old feuds with former drinking buddies and friends were history, a new court was in place. At the forefront was none other than Little Wolf, Tor Olav Trøim, who was never far away. Just as loyal, and apparently always in the shipowner's favor, was Nordea's Calle Steen, the man who had conjured up a loan of one and a half billion during the banking crisis ten years earlier. Among brokers, many would like to be in the inner circle of the court, but undoubtedly, one finds the brokerage firm Platou there. They were the world's leading ship brokerage firm in the early 70s along with British Clarkson but fell to mediocrity in Norway. The contact with Fredriksen brought the firm back towards old heights and record results, thanks to the socially intelligent chief Peter Anker and the experienced broker Wilhelm Holst. In stocks, Fearnley and their Harald Moræus Hansen are never far away. They have been good at finding undervalued shipping stocks worldwide, especially in Asia. With the great interest in offshore, eventually Pareto entered the innermost circle, their Stein Schie being for many years John Fredriksen's court broker on the offshore sector when he worked at the company Normarine Offshore, and he brought the client into Pareto. Fredriksen still has some of his old friends, such as Petter Olsen and Petter Thorendal. But with limited time in Norway, it can only be sporadic contact; business and family take all the time. And after all, it has been twenty-five years since he moved from the country. Both geographical distance and tens of billions in economic distance tend to create distance."

"Fredriksen believed in an upturn, and had the courage to invest 20.5 million dollars per ship. He put up over half a billion kroner in his largest poker game to date. Like most shipowners, he immediately started investigating the possibilities for subsidies. He found the most favorable offer in the Netherlands. The generous Dutch government gave 12.5 percent support if the ships were under the Dutch flag. And why not? Fredriksen readily hoisted the red, white, and blue striped flag when the Dutch put $2.5 million on the table per ship. Four flags for 70 million kroner was certainly not an everyday occurrence!"

"In old days, people became rich through their own work. Then, they became wealthy through the work of others. The modern version is to make money by managing one's own money, as Fredriksen had done with varying success. With Trøim, the final phase came; namely, to get rich on other people's money. With Frontline, the partners got the perfect instrument to procure such money."

"Fredriksen did not succumb to the overpowering force. From his hiding place, he had several lengthy conversations with Morten Kristiansen, who, in addition to Warpe and Fredriksen's wife Inger, was among the very few who knew the location. The shipowner and his friends made plans. The order to Kristiansen was clear; the fleet was to be sold off as quickly as possible at proper prices. No one was trusted with the ability to manage the ships in Fredriksen's absence. In the discussions, no one used the word prison. They planned as if Fredriksen was facing a six-month long vacation. Kristiansen also got the job of securing new insurance. No fewer than 27 boats sailed without insurance. As if this little revenge was not enough, Gard had also seized the money Marine Management had in the bank. The newly appointed boss faced problems far beyond his white collar. Normally, Gard’s taunts would be a financially lethal dose. Reporting, suing, cancellation of insurance, and freezing of accounts at the same time are tough to handle for any shipping company. As an outsider, one was even worse off. Kristiansen solved the insurance problem simply and effectively. He approached Gard’s main competitor. The management of Skuld, the country's other important mutual insurance association, was in doubt. They contacted chairman Steen Olsen and asked for advice. Olsen's advice was to say yes for three reasons. The justification was cynical: "Firstly: If they have done something wrong, you can be sure that they will not do it again. Secondly, they are skilled people. And thirdly, money does not smell." Skuld welcomed its new member with open arms, and eventually the financing also fell into place. The head of Bankers Trust's shipping department, John Sawyer, flew in from London. He was informed about the desperate situation and chose to support the client. Sawyer did not hesitate long to make available the money the major client needed to weather the storm. Against all odds, Kristiansen had managed to steer the damaged ship into calm waters. But for how long?"

"The most interesting area was medium-sized chemical ships. Here, Norwegian shipowners like Odfjell, Stolt-Nielsen, and Westfal-Larsen are the largest in the world. The outsider attacked the industry leaders, and he was smart enough to secure one of the competitor’s heavyweights, namely Stolt-Nielsen director Ivar Gram, who was set to market Fredriksen's ships from an office just north of New York."

"In the summer of 1984, Fredriksen and Sejersted Bødtker's ships made frequent trips in the Persian Gulf. They got increasingly better rates, but the pace was far from golden-edged – at least not in SSB's accounts, especially after the fuel was paid. While the ships were powered by free fuel, Marine Management sent invoices as if nothing had happened to SSB. Sejersted Bødtker kept receiving invoices for bunker purchases for "Cougar", "Alta", and "Torill". Over a little more than a year, there were at least eight invoices totaling 2.3 million dollars."

"Fredriksen did not succumb to the overpowering force. From his hiding place, he had several lengthy conversations with Morten Kristiansen, who, in addition to Warpe and Fredriksen's wife Inger, was among the very few who knew the location. The shipowner and his friends made plans. The order to Kristiansen was clear; the fleet was to be sold off as quickly as possible at proper prices. No one was trusted with the ability to manage the ships in Fredriksen's absence. In the discussions, no one used the word prison. They planned as if Fredriksen was facing a six-month long vacation. Kristiansen also got the job of securing new insurance. No fewer than 27 boats sailed without insurance. As if this little revenge was not enough, Gard had also seized the money Marine Management had in the bank. The newly appointed boss faced problems far beyond his white collar. Normally, Gard’s taunts would be a financially lethal dose. Reporting, suing, cancellation of insurance, and freezing of accounts at the same time are tough to handle for any shipping company. As an outsider, one was even worse off. Kristiansen solved the insurance problem simply and effectively. He approached Gard’s main competitor. The management of Skuld, the country's other important mutual insurance association, was in doubt. They contacted chairman Steen Olsen and asked for advice. Olsen's advice was to say yes for three reasons. The justification was cynical: "Firstly: If they have done something wrong, you can be sure that they will not do it again. Secondly, they are skilled people. And thirdly, money does not smell." Skuld welcomed its new member with open arms, and eventually the financing also fell into place. The head of Bankers Trust's shipping department, John Sawyer, flew in from London. He was informed about the desperate situation and chose to support the client. Sawyer did not hesitate long to make available the money the major client needed to weather the storm. Against all odds, Kristiansen had managed to steer the damaged ship into calm waters. But"

"Sensibly, Fredriksen and Trøim had three offshore units that they had bought for around 85 million dollars just a few months earlier, which – except for the rig – were in lay-up. But prudence disappears like dew in the sun in good times, and both brokers and investors saw gold. According to Trøim, people were almost generous. The clever shipping man told the newspapers that they had received offers from anonymous American brokerage houses to bring in a total of 575 million dollars for the two drillships and the one rig in a public offering in the USA. Instead, they chose to accept a price tag of "only" 400 million dollars in Oslo, Trøim said. And both the press and the investors bit. Led by the court brokers Pareto Fonds and Fearnley Fonds, the shares in the newly started Northern Offshore ASA were put on the market. In one day, the shares were snapped up, more than 200 investors stood in line. That the emission in practice meant that the bellwether was selling, bothered no one significantly. Thus Fredriksen got rid of both drillships and production rig – and could pocket a profit of an incredible 240 million dollars on just a few months’ paperwork. Fredriksen celebrated the sale by guaranteeing that "Northern Producer" would have good rates for the first year. During that period, the rig was leased out on a lucrative charterparty to Texaco."

"Where Fredriksen had a knack for shipping and the courage to invest money, Trøim was the cool finance brain who spread risk across several companies and attracted risk-willing co-investors. Separately, they could cause quite a stir. Together, they were dynamite. Especially now that they had control over a publicly-traded company. – Even though there is solid substance in the Fredriksen group, the ability to raise equity for new projects will be much greater through having a stock market instrument, said an anonymous analyst to Dagens Næringsliv."

"The other big coup was a surprise package sold by the oil company Amoco. The oil giant had a subsidiary, Canadian Marine Drilling Ltd. (Canmar), in the Olympic city of Calgary. Now nearly ten years since the Olympic games, the city did not have the same pressure, and it was even longer since the oil boom marked the Canadian interior. Canmar was sitting with two drillships, a couple of drilling platforms, a handful of supply ships, and various other equipment. Normally, not many buyers want such a mixed bag, but the oil giant Amoco did not want the hassle of lengthy negotiations for one ship at a time. All or nothing, was the offer. And Fredriksen's rig broker, Stein H. Schie at Normarine Offshore, got the job. He played hard on Amoco's desire to get rid of the whole of Canmar and managed to get the price down to just over 100 million dollars. Then Schie did the job Amoco should have done: One by one, the assets were sold off. The supply ships and a dock brought in 50 million dollars. Thus, John Fredriksen had gotten back half of his money, and was left with the two drillships "Northern Explorer II" and "Northern Explorer III" for just 50 million dollars."

"Two years earlier, Fredriksen had predicted a very strong tank market. He had been thoroughly wrong, but he was not taken out of play. Now, the belief was returning, all market indicators pointed upwards. And for Fredriksen, buying and selling ships and rigs, what shipping language calls "asset play," was "working." There, he had made the biggest gains previously, not through operating a shipping company."

"Svein Steimler had built up an operational organization in his eight years, and now both the organization and Steimler were gone. Fredriksen was not in a hurry to replace him, maybe he could manage without anyone in the director’s chair. But in the winter of 1995, he found that it was still necessary to have a right-hand man. A man who dislikes signing a paper or appearing publicly needs to push someone in front of him."

"Fredriksen wanted to sell everything, new and old, but it was the sales of new builds that mattered in the grand scheme. But who would buy large tank ships when the entire Persian Gulf could explode at any moment?"

"For months, trades were made at rates in the range of 104-108 dollar/yen, then the rate fell all the way down to 80. A twenty percent drop in rates causes gigantic losses when you have billions in the market. Before Fredriksen managed to close all his books and lick his wounds, the currency losses had reached a staggering 200 million kroner."

"When Trøim studied at NTH, the dismantling of Swedish shipyards was part of the curriculum. Fredriksen's right-hand man had firsthand knowledge of how industrial companies grow – and fall. In the 60s, Sweden was the world's leading shipbuilder. From the slips at shipyards like Eriksberg, Kockums, Uddevalla, and Götaverken, rows of supertankers emerged which in later years would make Norwegian and Greek shipowners alternately filthy rich and scraped – in line with the merciless cycles of shipping."

"Absolutely terrible, just have to find a pattern again," he told. And the pressure began to be noticeable. – "I don’t sleep when it’s like this. Just can’t give up," he said to Haga. The day after, they had a long conversation about the way forward. Fredriksen did not want to do anything rash, he would reflect on it. It was important to maintain the credit limits with the currency brokers, so that he could win back what was lost. And the banks had to be kept at bay."

"Fredriksen proposed a speculation in Italian lira against Japanese yen. He had 55 million dollars in his account, and if these were maximally loaned through various interest rate instruments, he could bet 700 million dollars, about five billion kroner. With such stakes at the gaming table, it doesn't take many percentage movements in the exchange rates before there are large profits. "We can earn everything we need if it goes well," Fredriksen said to Haga. He did not carry out his kamikaze plan, but the independent shipowner increased his wild speculation, also in Italian lire. Fredriksen had over two billion kroner in the currency market. Unfortunately, his luck ran out. After a short time, the unrealized loss was 6-7 million dollars, as large as the total gain from earlier trading. But Fredriksen did not want to accept the loss, he remained seated. He has always hated taking losses, a dangerous trait in such markets. The situation was suddenly reversed; he risked draining his faltering shipping business further to cover currency losses. "What shall we do? Have to sell another boat," Fredriksen said to Haga in the middle of February. Haga noted that Fred"

"Fredriksen was still not an expert on this type of event, but the newly wealthy shipowner learned quickly and would eventually become completely invisible. Never own shares, never sit on the board, never sign the company. Those are the rules of the game. And Fredriksen would play the game for many years to come."

"Yet, it was luxury compared to two months later. Then, a pressured Fredriksen had to sell the plane "Northern Falcon," a Canadair Challenger 600, the symbol of his billionaire status. It found a new owner in the USA, and the sale for nearly 9 million dollars helped with liquidity. But Fredriksen had to start taking scheduled flights, a dreadful experience. It was so burdensome that he rarely flew without a carousing companion to shorten the journey. To Marbella, he flew via London, and at least he could rejoice that Heathrow was central. With his private jet, Fredriksen insisted on landing at the airstrip Biggin Hill, which had its heyday during the Battle of Britain in 1940. There, landing fees were minimal, but it was two hours outside London. Such peculiar fits of stinginess are a characteristic part of Fredriksen's personality."

"It was by no means necessary to own in order to make big money. Fredriksen's companies rented ships on a 12-month fixed price, and the shipowner was to pay the fuel expenses. In late summer 1979, a new oil price shock occurred, sending the price of a barrel of oil up to $30. In shipping, fuel expenses matter a lot, it requires power to push tens of thousands of tons of steel through the water at 20 knots speed. The high oil price resulted in massively increased freight rates. Fredriksen's fleet of leased ships was not tied up in long freight contracts, and could fully benefit from the entire rise."

"Norbekk had more tasks for Fredriksen than just piloting the aircraft; he was the shipowner’s butler and bag carrier. Fredriksen's entire archives were kept in three pilot bags that Kjell Norbekk guarded like the crown jewels. They were always with them, and they were not left at the office overnight. After having been subjected to police raids twice, once in London and once in the Oslo offices, the SeaTeams premises at Aker Brygge were not considered safe. At night, the pilot bags slept in a locked cabinet in Fredriksen's house on Ulvøya, driven there by Norbekk."

"In his second homeland, Spain, Fredriksen saw opportunities in a crisis-stricken shipping industry. Through cheap acquisitions of a number of small shipping companies, Fredriksen became the largest private shipowner in Spain during a hectic period. Economically, it was no gold mine, and when the crew of the bulk carrier "Resmar Dos" went on a strike lasting several months during unloading at Hydro Aluminium in Karmøy, Fredriksen sued Haugesunds Avis for their portrayal of him."

"Combined with the shipping contracts with the shipowners, Fredriksen often managed to get the right (option) to purchase some of the ships at a fixed agreed price. When freight revenues increased dramatically, the values of the ships also increased far above the option price. Fredriksen exercised his right to purchase and immediately resold the ships at a large profit. The right to purchase, and thus the profit, belonged to companies outside England, most often with the address 80, Broad Street, Monrovia, Liberia."

"The time that followed was hard. At Northern Shipping, they kept receiving threatening calls from Peter Siemer, some of which were recorded. Finally, the three former partners played their best card: Fredriksen's dealings with the Norwegian tax authorities. Fredriksen was faced with an ultimatum: Either settle all accounts, or they would tip off the tax office about certain accounts in Jersey and other places. Shortly thereafter, John Fredriksen moved from Norway. On Monday, October 2, 1978, the unknown company Pantera Services Ltd. bought the three-story house at 23, Shawfield Street near King’s Road in Chelsea, London."

"Initially, Fredriksen and his auditor friend did not have enough money to buy the boat. They managed to get shipowner Fredrik Odfjell to let them sail in the million they were missing."

"The end result was that Warpe, Bedell, and Fredriksen invested money in renting three German supertankers. The business went well, and the trio earned $86,000 abroad from the three ships. When Fredriksen later invited Warpe and Bedell to more collaboration, Warpe responded positively. He invested the profits from the three German ships, and they agreed to exchange Spanish land plots for shares in shipping. Warpe's contribution was 80 acres of land on the Canary Island of Fuerteventura, as well as ten acres at Benidorm, and some additional smaller plots."

"After two failed attempts to pour from the nine-liter bottles with one hand, the great test of manhood among those who can afford such things, things completely overflowed for Fredriksen. He dashed onto the floor and cleared space with flailing arms. There he stood, legs apart, looking like a highwayman disguised in a silk suit, while the spotlights relentlessly exposed his blood alcohol level. He shouted so loudly that it echoed in the disco. – Peasants! Today, I've made the best deal of my life. Half a billion! I've damn made half a billion!"