Ferd puts wind in the sails of Fjord Line
It was announced on 4 November 2015 that Ferd was investing NOK 200 million in Fjord Line. The investment was made through a private placement in which Ferd subscribed to 40 million shares in the company at NOK 5 per share. The transaction significantly increases Fjord Line’s financial strength and liquidity. The private placement gives Ferd an ownership interest of 21.6%.
“As Fjord Line is not stock exchange listed but privately owned, we have submitted a voluntary offer to all minority shareholders in the company. A number of these have been shareholders for a long time, and have not previously had the opportunity to sell their stake. We have received indications that a number of them will accept our offer”, comments Kristian Eikre, the Head of Ferd Special Investments, who estimates that Ferd’s ownership interest will be at least 30% by the start of next year.
Kristian Eikre and Senior Investment Manager Håkon Glimstad Kristiansen from Ferd Capital have together been in charge of sounding out Fjord Line and carrying out the negotiations. Amongst the reasons for Ferd’s investment in the company is its belief that the ferry industry will see further passenger growth.
Furthermore, Fjord Line has recently entered into a settlement with its strongest competitor, Color Line, following a long dispute concerning the ferry route between Sandefjord and Strømstad. The ferry company has, moreover, managed to solve the teething problems it had experienced with its two new, modern gas-powered ferries, the MS Stavangerfjord and the MS Bergensfjord, which entered operations in 2013 and 2014 respectively.
“We think the timing of this investment is good. The new ferries are now operating reliably and there are no longer any disputes weighing on the company. Furthermore, Fjord Line is able to point to good passenger growth in 2015, a trend we hope and believe will continue in 2016. We have also been very impressed by the company’s leadership team. We believe in what they have done and in what they are planning to do going forward”, comments Håkon Glimstad Kristiansen.
In Eastern Norway Fjord Line is probably best known for the route between Sandefjord and Strømstad, which it has operated since summer 2014. In Western Norway, in contrast, Fjord Line has a significant presence and is well-known, and is able to trace its roots all the way back to 1880. Peter Frølich, an attorney, became the Chairman of its Board of Directors in 1995, and has a good knowledge of its history.
“It is no secret that Color Line is our toughest competitor. Color Line is a professional company with good vessels, but we have fought some tough battles against them over the years. We have been something of a ‘little brother’ that has fought back at close quarters”, comments Peter Frølich.
Peter Frølich sees having Ferd on board as a strong endorsement and also as something that gives the company great opportunities for further growth in the future.
“Ferd’s business model, professionalism and strong capitalisation are of course important. In addition their business philosophy, particularly with regard to social entrepreneurship, makes Ferd an especially good match for us”, explains Peter Frølich.