FRO – Acquisition


Frontline Ltd. has today agreed to purchase 65.8% of the outstanding shares in Bergshav Holding AS and 21.9% of the outstanding shares in Bergshav Shipholding AS.
The sellers are members of the Bergshaven family and entities controlled by them.
The agreed purchase price for all of the shares is USD 50,000,000.
The shares represent, directly and indirectly, 60.2% of the outstanding shares in Bergshav Shipholding AS. The shares will, however, only entitle Frontline Ltd. to 21.9% of the votes in Bergshav Shipholding AS’ general meeting due to the voting restrictions in its articles of association.
The acquisition is conditional on the other shareholders in Bergshav Holding AS and Bergshav Shipholding AS not exercising their pre-emption rights as per these companies’ respective articles of association and the approval from the board of directors of both companies. A clarification of these matters is expected within four weeks from today.
Frontline intends, if the purchase is completed, to offer to purchase the remaining shares in Bergshav Shipholding AS at the same price.
Bergshav Shipholding AS, which is based in Grimstad, Norway, is a leading shipping company with activities in several market segments. Approximately 80% of the asset value is represented by investments in shuttle tankers and aframax tankers. Bergshav Shipholding AS is well managed.
Historically, Bergshav Shipholding AS has achieved stable and solid financial results. Its average annual net profit over the last six years has been approximately NOK 100 million or approximately USD 15 million.
Bergshav Shipholding AS has a strong balance sheet with good contract coverage. The company had a cash position as of 31 December 2004 of NOK 477 million.
The agreed purchase price reflects that Frontline’s investment in Bergshav Shipholding AS, if completed, will be achieved at a substantial discount to the real asset values of the company.
Hamilton, Bermuda
June 15, 2005