New Contract
 Press
release from Frontline Ltd. - 09.12.1999 |
Frontline Ltd. has today completed an agreement with a German K/G arranged by Dr. Peters Gmbh. Frontline Ltd. will in accordance with the agreement sell the 1998-built Suezmax vessel “Front Warrior” to the K/G for USD 50.0 million. The vessel will be chartered back to Frontline on a long term basis. The agreement includes a right for Frontline to buy the vessel back at depreciated levels, as well as a right for the K/G to sell the vessel to Frontline for USD 9,5 million after a 12 year charter.
The charter arrangement will in accordance with US GAAP be treated as an off balance sheet transaction in Frontlines books. The transaction is scheduled to be completed and the vessel will be delivered to the new owner prior to December 31, 1999. The transaction will increase Frontline’s liquidity with approximately USD 17,4 million. Based on budgeted operating cost for year 2000, the charter arrangement equals a T/C rate of approximately USD 19,000 for the first two years. The rate will later increase with USD 900 per day for year 3 - 8 and with another USD 650 per day for year 8 -10.
Chairman of Frontline Ltd. John Fredriksen says in a comment to the deal: “ We are pleased to have completed our third vessel sale with Dr. Peters Gmbh. The USD 17,4 million liquidity effect created by the sale, combined with the competitive rate at which the ship is chartered back, makes this a good transaction for Frontline’s shareholders.”
Hamilton, Bermuda, December 9, 1999
Frontline Ltd.
Board of Directors
Contact person:
Martin Benny, tel. + 44 171 235 0500 / 44 100 90007
Tor Olav Trøim tel. + 47 23 11 40 00
