Capital adjustments

Frontline Ltd. has today entered into an agreement with Wilh. Wilhelmsen ASA to buy the two 1993-built tankers, M/T TARTAR (307,000 dwt) and M/T TARIM (300,000 dwt). The agreed purchase price of USD 45 million per ship will be paid by USD 62 million in cash and through the issuance of 2,957,500 Frontline shares. The shares will be issued at NOK 80.00 per share. M/T Tartar and M/T Tarim will be taken over by Frontline in May and June, respectively and will subsequently be entered into the Tankers International Pool. Frontline Ltd.’s subsidiary ICB Shipping AB, has also today completed the sale of their 50 percent share of the FSO OHKA to the joint venture partner SBM Productions. The sale of the shares gives approximately USD 2 million in book profit and will generate around USD 15 million in liquidity.



Frontline Acquires Two VLCCs



Frontline Ltd. has today entered into an agreement with Wilh. Wilhelmsen ASA to buy the two 1993-built tankers, M/T TARTAR (307,000 dwt) and M/T TARIM (300,000 dwt).



The agreed purchase price of USD 45 million per ship will be paid by USD 62 million in cash and through the issuance of 2,957,500 Frontline shares. The shares will be issued at NOK 80.00 per share.



Under the agreement, Frontline has given a price guarantee for the shares issued. This guarantee becomes effective if Frontline’s share price six months after the date of issuance of the shares to Wilhelmsen is under NOK 80.00. Frontline has, in such an event, agreed to compensate Wilhelmsen for the difference between NOK 80.00 and the market price at that time. This guarantee is released if Frontline’s share price in the period before this date has been over NOK 90.00 for more than 20 trading days.



M/T Tartar and M/T Tarim will be taken over by Frontline in May and June, respectively and will subsequently be entered into the Tankers International Pool.



President and CEO of Wilh. Wilhelmsen ASA, Wilhelm Wilhelmsen says in a comment: “The decision to sell M/T Tartar and M/T Tarim is consistent with our strategy to focus our business on our three core activities: Liners, car carriers and shipping services. Through the deal with Frontline we will keep an upside in the tanker market, a market which looks set for a positive development during the next years. Frontline is, in our opinion, one of the leading and most interesting companies in this market.”



Chairman of Frontline Ltd. John Fredriksen says: “The two ships fit well into our fleet which now totals 15 VLCCs all built after 1990, and adds another two units to the Tankers International Pool. As in the Mosvold Suezmax transaction, we are pleased to see a major shipping company like Wilh. Wilhelmsen ASA become a large shareholder in Frontline through a sale of assets for part payment in Frontline equity. Such a development spurs the much needed consolidation in the tanker market. With the strong positive development we currently see in the tanker market, we are of the opinion that the deal will increase earnings and value creation per share. The structure of the transaction including the price guarantee mechanism has aimed to minimise dilution for our existing shareholders.”



Frontline Ltd.’s subsidiary ICB Shipping AB, has also today completed the sale of their 50 percent share of the FSO OHKA to the joint venture partner SBM Productions. The sale of the shares gives approximately USD 2 million in book profit and will generate around USD 15 million in liquidity.



The decision to sell the ownership in OHKA was taken as a part of Frontline’s commitment to focus the Company’s activities on modern VLCC and Suezmax crude oil transportation.