FRO – Special dividend of Independent Tankers Corporation Limited shares


With reference to the Preliminary Fourth Quarter and Financial Year 2007 Report, the Board advises that on February 20, 2008, the Board declared the distribution of a special dividend of 20% of the capital stock of the Company’s Bermuda subsidiary, Independent Tankers Corporation Limited (“ITC”), to Frontline’s shareholders. ITC will be traded in the over-the-counter market in Oslo (the “Oslo OTC Market”), and will maintain its share register through the Norwegian VPS (the Norwegian paperless securities depository system) (“VPS”) with all shareholders required to hold VPS accounts. All non-U.S. shareholders of Frontline, subject to certain exceptions as set out in the attached appendix, will receive one share in ITC for every five shares they have in Frontline, rounded down to the nearest whole share. The remaining fractional shares will be payable in cash at a price to be set subsequent to the registration of the spin-off shares on the OTC, expected to be at the end of March 2008. All U.S. shareholders who are Qualified Institutional Buyers (QIBs) in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended, and who hold 15,000 or more Frontline shares, will receive the aforementioned allotment of ITC shares. U.S. shareholders who are not QIBs, and U.S. shareholders who have fewer than 15,000 Frontline shares, whether or not they are QIBs, will not be entitled to ITC shares and, together with all other shareholders exempted from the share distribution (together the “Cash Recipients”), will receive a cash distribution based on the market value of the ITC shares on the Oslo OTC Market. ITC’s shares will not be listed for trading in the United States.
The record date for the distribution of this special dividend will be February 28, 2008 and the share distribution to non-US shareholders will take place on or about March 6, 2008 (the “Distribution Date”). The ITC shares are expected to be quoted in the Oslo OTC Market, with the first trading date expected to be as soon as practicable after the Distribution Date. On the Distribution Date, a number of shares equal to the estimated Cash Recipients’ allotment will be transferred to a Norwegian VPS account under Nordea Bank Norge ASA (“Nordea Bank”), a VPS custodian. These shares will be sold in the open market, during the first five (5) days following commencement of trading in the Oslo OTC Market. The average price per share (the “Cash Price”) determined as a result of the sales over those five (5) days will be used to calculate the amount of subsequent distributions to the Cash Recipients.
For its fiscal year ended December 31, 2007, ITC had net income (unaudited) of approximately $12 million, a book equity value (unaudited) of approximately $23 million, restricted cash (unaudited) of approximately $423 million, book value of vessels (unaudited) of approximately $377 million and total liabilities (unaudited) of approximately $785 million. 
The shares in ITC will be spun off to Frontline’s shareholders according to the following schedule.

In order for U.S. registered shareholders to receive cash or share settlement, the U.S. registered shareholder must own his or her shares on the Record Date; however, if the U.S. registered shareholder sells his or her shares after the Record Date and before the NYSE Ex Dividend Date, then the right to receive the cash or the share settlement will be passed on to the buyer. The cash or the share settlement is expected to be made in the end of March 2008.
ITC’s business is mainly concentrated around the ownership and operation of tankers on long term bareboat contracts to major oil companies, including certain cancellation options.  All vessels are financed through bonds and some of the vessels are also subject to financial lease arrangements.  ITC purchases all necessary management related services from Frontline. The Company intends to cause ITC to take steps to enhance shareholder value and liquidity by enabling ITC shares to trade on the Oslo OTC Market. Frontline will consider and may, but is under no obligation to, make further distributions of ITC shares. 
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 shipping market, 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 U.S. Securities and Exchange Commission.
The appendix is available in the enclosed file.
February 20, 2008
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
Questions should be directed to:
 Bjørn Sjaastad: Chief Executive Officer, Frontline Management AS
+47 23 11 40 00
Inger M. Klemp, Chief Financial Officer, Frontline Management AS
+47 23 11 40 00
Bengt Neteland, Vice President Finance, Frontline Management AS
+47 23 11 40 00