Frontline Ltd. (the “Company” or “Frontline”) is pleased to announce the successful delivery of the fourth and final heavy lift vessel, Front Traveller renamed m/v Treasure, to Dockwise Ltd. (“Dockwise”). In May 2008, Frontline announced the successful delivery of the third heavy lift vessel, Front Comor renamed m/v Talisman.
In January 2007, Frontline spun off a separate entity to develop the Company’s heavy lift activity named Sealift Ltd. (“Sealift”). Sealift acquired six single hull Suezmax vessels from Frontline and Frontline assumed full responsibility for the conversion of four of these into heavy lift vessels. In May 2007, Sealift completed the combination of its businesses with Dockwise and in October 2007 Frontline sold its remaining shares in Dockwise. Following the delivery of the final heavy lift vessel, Frontline has successfully concluded the project of converting the four Suezmax vessels into heavy lift vessels and fulfilled its commitment to Dockwise.
As a result of the delivery of the third and the fourth heavy lift vessels to Dockwise, Frontline expects a net cash generation of approximately $28 million in the second and third quarter of 2008, which will enhance the dividend capacity, and expects to record a gain of approximately $105 million, including deferred gain related to the transaction, in the second quarter of 2008.
The total overall gain on the transaction, including gain on issuance and sale of shares and delivery of the four vessels to Dockwise, is expected to be approximately $255 million.
Chairman John Fredriksen says in a comment:
“The transaction confirms Frontline’s unique ability and determination to create shareholder value and the Board is very satisfied with the technical team for their efforts to conclude the conversion of the vessels close to budget and delivery schedule”.
July 1, 2008
The Board of Directors
Questions should be directed to:
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 00
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, drydocking 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.