FRO – Purchase of VLCC Newbuildings
Frontline Ltd. (“Frontline”) has entered into a contract with Zhoushan Jinhaiwan Shipyard Co.,Ltd. in China for delivery of four 320,000 dwt VLCC newbuildings. The vessels will be delivered from June 2011 until December 2011. Frontline has also secured options for further two similar VLCC newbuildings at a fixed price.
The ordering of the tonnage has been done as a function of a positive market outlook, attractive contract price and payment terms, and is supported by the wish to continuously renew the fleet. Frontline’s affiliated company Golden Ocean Group Limited has very good experience with the quality and deliverability of Jinhaiwan shipyard. It has been of vital importance for the Board that the deal can be executed and financed without significantly reducing Frontline’s dividend capacity in the short to medium term. The ordering confirms Frontline’s position as a leading operator of quality VLCC tonnage.
April 27, 2008
The Board of Directors
Questions should be directed to:
Bjørn Sjaastad: 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
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Frontline management’s examination of historical operating trends. Although Frontline believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Frontline cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in this presentation include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC’s petroleum production levels and world wide oil consumption and storage, changes in the Company’s operating expenses including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission.