Gunvor’s Billionaire CEO Törnqvist to Quit in Staff Buyout
(Bloomberg) — Gunvor Group owner and co-founder Torbjörn Törnqvist will step down and sell his majority stake in the energy trader to senior staff, just weeks after the company was labeled a “puppet” of the Kremlin by the US government.
Gary Pedersen, the head of Americas who joined Gunvor in 2024 from Millennium Management LLC, has been appointed CEO, the company said in a statement.
The move represents the most dramatic fallout yet after the US Treasury Department announced abruptly that it would block a deal for Gunvor to buy the international assets of sanctioned oil major Lukoil PJSC, and alleged the connection to Russia’s government without providing evidence.
Gunvor abandoned the deal immediately, but the dramatic chain of events surrounding one of the biggest independent energy traders has shaken the commodity world and revived questions over the company’s historic ties to Moscow.
Read: Oil Trader’s Russian Ties Eased the Way for Big Sanctions Prize
Törnqvist, 72, will sell his 86% stake in Gunvor to a group of current employees who will wholly own the company going forward. The company didn’t provide details of the financial terms. Gunvor, which reported a total equity value of $6.6 billion at mid-year, said the deal was first floated in 2022.
“The buy-out has been advanced at this time to establish a definitive reset and path forward for a company for which misperceptions about its past have become an impossible distraction,” it said.
Gunvor said the deal was designed to allow the company to continue to grow in the US, as well as other core regions like Europe and Asia. Pedersen, a US citizen, is a 30-year veteran of energy trading, having begun his career at Koch Industries.
About 60 employees will buy the majority stake in a deal funded by a mix of equity from the partners and a vendor loan from Törnqvist, who will not have any security over Gunvor or its subsidiaries. Gunvor’s board and executive committee will no longer include any members of the Törnqvist family or its representatives, the company said.
“The time is right to ensure a new, clear path for Gunvor’s future,” Törnqvist said. “For a trading house of Gunvor’s size and complexity, a broad-based, inclusive partnership is the right model.”
Dispel Speculation
Törnqvist has been the main owner of Gunvor since 2014, when he acquired the 44% stake held by his co-founder Gennady Timchenko, in a deal that was announced just as the Russian oil trader was sanctioned by the US. The balance of the shares are held by about 200 employees.
Gunvor has spent years seeking to dispel speculation about its ties to Russia. Timchenko is a friend of Russian President Vladimir Putin, and when the US imposed sanctions on him it claimed that Putin had investments in Gunvor. The company denied the claim, which was presented without evidence.
Gunvor in its current form was founded in 2000 by Törnqvist and Timchenko. The company got its big break after the Russian government dismantled privately-owned Yukos Oil and threw its billionaire owner in jail, and Gunvor was one of the traders called on to market significant volumes of crude oil as Russia sought to keep the barrels flowing. Soon it was the biggest trader of Russian oil, at one point handling around 30% of the country’s seaborne exports.
Törnqvist’s dominant stake in Gunvor has also meant that he was one of the largest individual beneficiaries from the energy-trading boom that followed Russia’s full-scale invasion of Ukraine. While bigger rivals like Vitol Group and Trafigura Group have reaped larger profits, those companies have a far wider shareholder base.
Today it trades enough oil daily to meet demand from the UK and France combined, and has also built up a significant book trading liquefied natural gas. Like its rivals, Gunvor has poured some of its windfall profit from recent years into buying stakes in fixed assets such as a power station in Spain.
The company’s plan to buy Lukoil’s international assets represented a bold play by Törnqvist that would have transformed Gunvor’s business and catapulted it into the big leagues of oil production, in addition to adding a sprawling network of gas stations across the US, Europe and Turkey.
Gunvor was already in talks with Lukoil to buy certain assets when the sanctions were announced, and it evolved into a conversation about a larger deal, Törnqvist told Bloomberg last month. He emphasized at the time that the purchase would be “a clean break,” and that Lukoil would not have any option to buy back the assets it was selling.
Bloomberg reported in November that Spain’s Banco Santander SA pulled funding commitments from Gunvor after the US Treasury comments, but that its other lenders remained supportive.
The collapse of the Lukoil deal and the Treasury comments also fueled questions about succession planning at Gunvor, which shook up its senior management earlier this year. Törnqvist described the changes at the time as “a reset and setting the course for the future.”
The CEO has previously expressed a desire that his family retain control of the trading house, and in 2023 appointed his son to the board.
–With assistance from Ben Bartenstein.
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