FRO – Frontline pays US$400 million “in kind” Dividend in Spin Off of a further 25% of Ship Finance


The Board of Frontline has in a meeting today decided to spin off almost half of Frontline’s remaining holding in Ship Finance Int. Ltd. The stake equal to 25% of the total shares in Ship Finance will represent a total dividend of approximately USD 400 million. Frontline shareholders will receive 1 share in Ship Finance for each 4 shares they have in Frontline Ltd. Ex date for the dividend is set to 3 February, record date 7 February while the shares will be distributed 18 February.
Frontline’s Chairman, John Fredriksen, says in a comment: “In line with our strategy we are pleased to announce that Frontline spins off further 25% of Ship Finance. The spin-off will hopefully lead to an increased liquidity, more independence, better coverage, higher interest and, hopefully, improved pricing of the Ship Finance shares. The difference in business strategy and dividend strategy makes the spin-off logical.”
In the current strong tanker market the reduction of employed capital is likely to lead to a higher direct annual yield to Frontline shareholders.
Frontline shareholders have, including this dividend, received USD 1 billion in cash dividend and USD 1,4 billion “in kind” dividend during the last twelve months. This equals a 68% annual yield return on today’s equity capitalisation or 119% annual yield return on the market capitalisation as of 1 January 2004.
January 28, 2005
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda