Frontline files restructuring plan for Golden Ocean Ltd.

Frontline filed as of July 7 a financial restructuring plan for Golden Ocean Ltd, currently under Chapter XI administration. Two other competing plans where filed within the time limit defined by the Bankruptcy Court. A disclosure hearing in Court is scheduled for July 28. In this hearing the contents of the plans will be evaluated, and the approved plans will subsequently be distributed to the creditors for solicitation of votes.



Frontline’s proposal includes that all assets and senior loans will be absorbed by the reorganized Golden Ocean Group. Unsecured creditors will receive a cash dividend of up to 17 % of face amount. Total unsecured claims are in Frontline’s plan capped to maximum USD 305 million.



The fact that the Board of Golden Ocean decided to breach the term sheet, which was signed between Golden Ocean and Frontline, opened the possibility for Frontline’s Board to reevaluate the terms under which Frontline could be prepared to complete a financial restructuring of Golden Ocean. Frontline’s Board decided in this situation to increase the cash alternative offered to the unsecured creditors from 15 to 17 % of face value. At the same time the board decided to eliminate the Frontline share and warrant alternative, which was a part of the initial term sheet. This alternative had due to the strong development in Frontline’s share price substantially more value than the cash alternative. The need to change the terms was a reflection of Golden Ocean’s increased administration cost in the Chapter XI process, uncertainty created by Bentleys attempt to frustrate the process, as well as a function of Frontline’s increased financial strength.



After an initial review of the two alternative proposals Frontline’s Board is confident that Frontline’s plan offers the best value to Golden Ocean’s creditors.



Frontline and affiliated parties control as of July 7 32 % of Golden Ocean’s outstanding bond issue. The Board remains confident that Frontline as the largest unsecured creditor in Golden Ocean and as the industry leader will take a leading role in the restructuring of Golden Ocean.



Hamilton, Bermuda

July 7, 2000