Agreement - capital adjustments
 Press
release from Frontline Ltd. - 29.10.1999 |
- Frontline acquires one Suezmax from the Mosvold Farsund Group for USD 45.5 million including owner specific extras.
- Frontline issues 1,910,000 shares at NOK 37.00 per share as part payment.
- Frontline receives one-year claw-back option for 430,000 of the issued shares at NOK 37.00 per share as part payment.
Frontline acquires one Suezmax from the Mosvold Farsund Group.
The Board of Frontline is pleased to announce that Frontline today has entered into a transaction with the Mosvold Farsund Group under which Frontline will acquire one Suezmax newbuilding (the "Mosvold ship"). The ship, which is presently under construction at Hyundai in South Korea, is a sister vessel of the three Suezmaxes Frontline took delivery of in 1998. The new ship will be delivered in January 2000. Frontline is in addition to the Mosvold ship also scheduled to take delivery of another two Suezmaxes from Hyundai in January and April 2000.
The total purchase price for the Mosvold ship is set to USD 45.5 million, and includes a compensation for owner specified extras. The specification includes a controllable pitch propeller and a design, which is laid out for thruster arrangement so the ship easily can be converted to potential shuttle business. Mosvold Farsund's technical management will operate the ship after delivery.
As part payment for the purchase Frontline will issue 1,910,000 Frontline shares to the seller. The shares will be issued at NOK 37.00. Frontline will receive a one year American style call option to buy back 430,000 of these shares for NOK 37.00 per share plus 10 % p.a. interest compensation.
Frontline's partner in Alliance Chartering, OMI Corporation, has in another transaction
concluded the purchase of Mosvold Farsund's second Suezmax newbuilding which is
scheduled to be delivered in March 2000.
John Fredriksen, Chairman of Frontline Ltd., says in a comment to the deal:
"We are pleased to conclude the purchase of the Mosvold ship. The transaction, which follows Frontline's acquisition of the Seatanker fleet, London & Overseas Freighters and ICB Shipping, proves our seriousness as the major consolidator in the tanker industry.
"The Mosvold ship, which is a sister ship of some of our existing ships, fits perfectly into our fleet of totally 26 fully owned modern Suezmaxes/OBO vessels. Further, it strengthens Frontline's dominant position as the market leader in the Suezmax segment.
"The fact that our partner in Alliance Chartering, OMI Corporation, has concluded the purchase of Mosvold's other newbuilding shows the effectiveness of this partnership.
"In the financing of the transaction, which includes a substantial "claw-back" on the issued shares, special emphasis has been put on minimizing the dilution for our existing shareholders, and at the same time strengthen the overall balance sheet. As a result of the deal we are encouraged to see the Mosvold Farsund Group as a new major shareholder in Frontline.
"Totally we feel the transaction is another step forward for Frontline and Alliance Chartering. It is in line with our strategy, it strengthens our balance sheet, and further improves the service to our customers."
Bermuda
October 29, 1999
Contact person :
John Fredriksen, Tel 47 - 23 11 40 00
Tor Olav Trĝim, Tel 47 - 23 11 40 00
