FRO - Restructuring of VLCC newbuilding contracts
(Thomson Reuters ONE) -
Frontline Ltd. (the "Company" or "Frontline") is pleased to announce that we
have agreed with Zhoushan Jinhaiwan Shipyard Co., Ltd. ("Jinhaiwan") to
re-structure our VLCC newbuilding program at the yard.
In April and May 2008, Frontline ordered six VLCC newbuildings at Jinhaiwan. In
May 2009, two of these newbuilding orders were cancelled and the installments
paid-in were transferred to two of the retained newbuildings and the two
remaining VLCC newbuildings orders were changed into options.
As a result of the re-structuring Frontline has agreed to maintain the two
options and has ordered one additional VLCC newbuilding and is committed to take
delivery of five 320,000 dwt VLCC newbuildings, with a total contract price of
$525 million. The delivery dates for the vessels have been deferred by three
months from the original contractual dates, with the first vessel to be
delivered in January 2012 and the last in February 2013. Furthermore, payment
terms of the previously ordered vessels have been improved
As of September 17, 2010, Frontlines newbuilding program comprises two Suezmax
tankers and five VLCCs, which constitute a contractual cost of $650 million, and
in addition two Suezmax newbuilding options. Installments of $162 million have
been made on the newbuildings and the remaining installments to be paid amount
to $488 million, with expected payments of approximately $64 million in 2010,
$95 million in 2011, $185 million in 2012 and $144 million in 2013.
The Company has not yet secured financing for these newbuildings. However, based
on recently secured financing for Front Eminence and Front Endurance and
indications from banks, we assume 70 percent financing of market value for these
newbuildings. The net required equity investment in the remaining installments
is approximately $29 million. The equity investment is fully covered through the
recent completion of the $225 million convertible bond offering.
Frontline is pleased with the agreement reached with the yard, which reduces the
contract price on the VLCC newbuildings to competitive levels, lowers the total
capital expenditures on the previously ordered vessels going forward, improves
the payment terms and adds one VLCC to its newbuilding program at a competitive
contract price. Furthermore, it has been of vital importance for the Board that
the newbuilding orders can be executed and financed without impacting
Frontline's dividend capacity.
September 17, 2010
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
Questions should be directed to:
Jens Martin Jensen: Chief Executive Officer, Frontline Management AS
+47 23 11 40 99
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 76
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
[HUG#1445008]
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originality of the information contained therein.
Source: Frontline Ltd. via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 17.09.2010 - 08:48 Uhr
Sprache: Deutsch
News-ID 42788
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contact information:
Town:
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Kategorie:
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