Frontline Ltd. (“Frontline “) has agreed to an early termination of the time charter out contracts on the two OBO carriers, Front Viewer and Front Guider, and will receive a compensation payment in December 2012 from the charterers for loss of hire due to the early termination of approximately 34.5 million net.
Frontline has also agreed with Ship Finance International Limited (“Ship Finance”) to terminate the long term charter parties for these two OBO carriers. The charter parties for Front Viewer and Front Guider are expected to terminate in late December 2012 and the first quarter of 2013, respectively. Ship Finance has sold the Front Viewer and expects to sell the Front Guider at the time the charter party terminates.
Frontline will pay Ship Finance approximately $23.5 million as compensation for the early termination of the charters and the estimated loss of future cash sweep relating to the two vessels.
December 11, 2012
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 00
FORWARD LOOKING STATEMENTS
Matters discussed in this document may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
Frontline desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in Frontline’s records and other data available from third parties. Although Frontline believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond Frontline’s control, you cannot be assured that Frontline will achieve or accomplish these expectations, beliefs or projections. Frontline undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in expectations.
Important factors that, in Frontline’s view, could cause actual results to differ materially from those discussed in the forward-looking statements include, without limitation: the strength of world economies and currencies, general market conditions, including fluctuations in charterhire rates and vessel values, changes in demand in the tanker market, including but not limited to changes in OPEC’s petroleum production levels and world wide oil consumption and storage, changes in Frontline’s operating expenses, including bunker prices, drydocking and insurance costs, the market for Frontline’s vessels, availability of financing and refinancing, ability to comply with covenants in such financing arrangements, failure of counterparties to fully perform their contracts with us, 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, vessel breakdowns, instances of off-hire and other important factors. For a more complete discussion of these and other risks and uncertainties associated with Frontline’s business, please refer to Frontline’s filings with the Securities and Exchange Commission, including, but not limited to, its annual report on Form 20-F.