Information  X 
Enter a valid email address

Frontline Ltd. (FRO)

  Print      Mail a friend

Friday 17 September, 2010

Frontline Ltd.

FRO - Restructuring of VLCC newbuilding contracts

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)


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


a d v e r t i s e m e n t