Norwegian tycoon John Fredriksen plans to invest hundreds of millions of dollars in new vessels, in defiance of market conditions that have forced many rivals into or close to bankruptcy, a British newspaper reported on Monday.

Although the shipping industry has struggled with weak demand and overcapacity, the Financial Times newspaper said Fredriksen plans to invest hundreds of millions of dollars in new ships.

The paper said Fredriksen's new venture Frontline 2012 -- a company that was created after the restructuring of Frontline, the largest independent global oil tanker operator -- is in the midst of placing its first order for 10 new medium-range tankers for oil products.

We're looking to build new VLCCs (very large crude carriers), Fredriksen told the Financial Times.

At today's bunker prices, we'll save $10,000 a day. We've been offered newbuildings down to $85 million, so the risk is at least at less cost.

The paper said Fredriksen's privately-owned Seatankers Group will purchase the vessels and then sell them on to Frontline 2012.

We think it's a good deal. They're very economical vessels, Fredriksen said, referring to the deal for 10 new ships.

When Frontline was restructured in January, Frontline 2012 took over six newbuilds, four Suezmax ships and bank debt associated with the newbuilds for $1.121 billion.

But analysts said Fredriksen, who is making a big gamble with Frontline 2012, stands to reap benefits once the slump, forecast to last into 2013, ends.

(Reporting By Drazen Jorgic; Editing by Sugita Katyal)