Frontline Ltd. (“Frontline” or “Company”) has entered into an agreement to sell its 1994-built Suezmax tanker Front Fighter. Delivery to the new owner is expected to take place in October 2011. The sale will result in a net cash outflow of approximately $3.0 million, after repayment of bank debt, and the Company expects to record a loss of approximately $27.0 million.
Furthermore, the Company has agreed with Ship Finance International Limited (“Ship Finance”) to terminate the long term charter party for the OBO carrier Front Striver and Ship Finance has simultaneously sold the vessel. The charter party is expected to terminate in late October 2011. Frontline will make a compensation payment to Ship Finance of approximately $8.1 million for the early termination of the charter. The transaction will reduce the Company’s obligations under capital leases with approximately $10.7 million and the Company expects to record a loss of approximately $9.3 million.
October 20, 2011
The Board of Directors
Questions should be directed to:
Jens Martin Jensen, Chief Executive Officer, Frontline Management AS, +47 23 11 40 00
Inger M. Klemp, Chief Financial Officer, Frontline Management AS, +47 23 11 40 76
Forward Looking Statements
This press release contains 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 press release 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.