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Frontline Ltd. (FRO)

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Monday 02 January, 2012

Frontline Ltd.

FRO - Frontline Ltd. Successfully Completes Restructuring

Frontline Ltd. ("Frontline" or the "Company") is pleased to announce that the
restructuring of Frontline has been successfully completed. The major part of
the restructuring consists of the following elements:

Frontline has completed the sale of five VLCC newbuilding contracts, six modern
VLCCs including one time charter agreement and four modern Suezmax tankers to
Frontline 2012 Ltd. ("Frontline 2012") at fair market value of $1,121 million.
In addition, Frontline 2012 has assumed $666 million in bank debt attached to
the vessels and newbuilding contracts and $325.5 million in remaining
newbuilding commitments. Further, Frontline will receive payment for working
capital related to the assets sold. The estimated book value of the assets sold,
including the remaining newbuilding commitments, at December 31, 2011 is $1,428
million. The assets have been sold at fair market values assessed by three
independent appraisals. The right to subscribe to shares in Frontline 2012 has
thereby no instant economical value, and no subscription rights have thereby
been given to Frontlines shareholders.

On December 16, 2011, Frontline 2012 completed a private placement of
100,000,000 new ordinary shares of $2.00 par value at a subscription price of
$2.85, raising $285 million in gross proceeds, subject to certain closing
conditions. These conditions have now been fulfilled and Frontline 2012 was
registered on the NOTC list in Oslo December 30, 2011. Frontline Ltd. was
allocated 8,771,000 shares at a subscription price of $2.85, representing
approximately 8.8 percent of the share capital of Frontline 2012. Frontline
2012 has used the proceeds from the private placement to acquire the assets from
Frontline, prepay bank debt with installments for 2012 and capitalize Frontline

Frontline has obtained the required consents from lenders whose loans are
transferred to Frontline 2012 and has further obtained agreements with its major
counterparts whereby the gross charter payment commitment under existing
chartering arrangements is reduced by approximately $320 million in the period
2012-2015. Frontline will compensate the counterparties with 100 percent of any
difference between the renegotiated rates and the actual market rate up to the
original contract rates. Some of the counterparties will receive some additional
compensation for earnings achieved above original contract rates.

As a consequence of the restructuring, the Company's sailing fleet, excluding
the non recourse subsidiary ITCL, is reduced from 50 units to 40 units. The
newbuilding commitments are reduced from $437.9 million to $112.4 million, which
relates to two Suezmax tanker newbuiding contracts, and bank debt is reduced
from $679 million to zero, following a prepayment of $13 million associated with
a vessel which is not part of the transaction with Frontline 2012. The cash
proceeds for Frontline following the completion of the transaction is
approximately $70 million.

The Board of Frontline wants to thank all the parties involved, including
counter parties and financiers who greatly have contributed to the solution.
Without the flexibility on terms and timing shown by them, a successful
restructuring would have been impossible.

Following the restructuring, Frontline should have significant strength to honor
its obligations and meet the challenges created by a very weak tanker market.
Through the sale of a limited number of the Company's assets, Frontline has
avoided a heavy dilutive new equity offering and will thereby keep significant
upside for the existing Frontline equity holders if the market recovers in the
years to come.

January 1, 2012

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 00

Inger M. Klemp:
Chief Financial Officer, Frontline Management AS, +47 23 11 40 00

Forward Looking Statements

Matters discussed in this document may constitute forward-looking statements.
 The Private Securities Litigation Reform Act of 1995 provides safe harbor
protections for forward-looking statements in order to encourage companies to
provide prospective information about their business.  Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events or performance, and underlying assumptions and other statements,
which are other than statements of historical facts.

Frontline desires to take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The words "believe,"
"anticipate," "intends," "estimate," "forecast," "project," "plan," "potential,"
"will," "may," "should," "expect" "pending" and similar expressions identify
forward-looking statements.

The forward-looking statements in this document are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management's examination of historical operating
trends, data contained in Frontline's records and other data available from
third parties.  Although Frontline believes that these assumptions were
reasonable when made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or impossible to
predict and are beyond Frontline's control, you cannot be assured that Frontline
will achieve or accomplish these expectations, beliefs or projections. Frontline
undertakes no duty to update any forward-looking statement to conform the
statement to actual results or changes in expectations.

Important factors that, in Frontline's view, could cause actual results to
differ materially from those discussed in the forward-looking statements
include, without limitation: the strength of world economies and currencies,
general market conditions, including fluctuations in charterhire rates and
vessel values, changes in demand in the tanker market, including but not limited
to changes in OPEC's petroleum production levels and world wide oil consumption
and storage, changes in Frontline's operating expenses, including bunker prices,
drydocking and insurance costs, the market for Frontline's vessels, availability
of financing and refinancing, ability to comply with covenants in such financing
arrangements, failure of counterparties to fully perform their contracts with
us, changes in governmental rules and regulations or actions taken by regulatory
authorities, potential liability from pending or future litigation, general
domestic and international political conditions, potential disruption of
shipping routes due to accidents or political events, vessel breakdowns,
instances of off-hire and other important factors.  For a more complete
discussion of these and other risks and uncertainties associated with
Frontline's business, please refer to Frontline's filings with the Securities
and Exchange Commission, including, but not limited to, its annual report on
Form 20-F.

This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.

This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
Source: Frontline Ltd. via Thomson Reuters ONE


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