Frontline Ltd. (“Frontline” or the “Company”) has agreed with Ship Finance International Limited (“Ship Finance”) to terminate the long term charter party between the companies for the OBO carrier Front Breaker. Ship Finance has simultaneously sold the vessel. The termination of the charter is expected to take place in May 2011.
Frontline will make a compensation payment to Ship Finance of approximately $6.6 million for the early termination of the charter. Furthermore, the transaction will reduce the Company’s obligations under capital leases with approximately $10.2 million. The Company expects to record a loss of approximately $8 million in the second quarter 2011.
May 18, 2011
The Board of Directors
Questions should be directed to:
Jens Martin Jensen: Chief Executive Officer, Frontline Management AS
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 00
Cautionary Statement Regarding Forward Looking Statements
This press release may contain 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 presentation 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.