Frontline signs agreement with Golden Ocean creditors.

Frontline has reached an agreement with creditors holding USD 101,075,000 of Golden Ocean’s 10% Senior Notes due 2001 (the “Golden Ocean Bonds”). The entire issue of Golden Ocean Bonds totalled USD 291 million; accordingly, with this agreement, Frontline has the support of more than USD $210 million of the Golden Ocean Bonds. Frontline estimates that this amount exceeds two-thirds of all outstanding unsecured claims against Golden Ocean. In addition, the Official Committee of Unsecured Creditors in the Golden Ocean bankruptcy case has also unanimously decided to support Frontline’s restructuring plan for the company.



Pursuant to the agreement described above, among other things, the holders of the Golden Ocean Bonds have committed to vote in favor of the Frontline plan of reorganization in the Golden Ocean bankruptcy case (the “Frontline Plan”). In return, Frontline agreed to pay Golden Ocean’s unsecured creditors, at their respective options, Frontline common shares with a value of up to 20% of each allowed claim or cash in the amount of 17% of each allowed claim. If creditors holding more than USD 97.5 million in claims elect to receive stock, the distribution of common shares may be reduced by Frontline on a pro rata basis; in the event of any shortfall in value (e.g., below 20% returns) as a result of the foregoing oversubscription, Frontline shall, at its option, make up such shortfall in cash or by increasing the amount of common shares to be distributed. Payment to creditors will occur on the Effective Date of the Frontline Plan, currently estimated to occur in late September 2000.



The issue price of Frontline common shares under the Frontline Plan is set to the average Frontline shareprice at Oslo Stock Exchange for the ten day trading period prior to Effective Date. The number of shares to be issued will thereby not be determined before the Effective Date.



These agreements follow the execution by Frontline of an agreement with Bentley Investments, S.A., whereby Bentley, among other things, (1) withdrew its competing plan of reorganization in the Golden Ocean bankruptcy case and (2) agreed to designate a Frontline representative to the Golden Ocean board of directors. Frontline expects that it, Golden Ocean and the Creditors’ Committee will work together in order to try reduce the costs of the Golden Ocean bankruptcy case and Golden Ocean’s general operations.



Frontline’s Chairman John Fredriksen says in a comment to the latest development:



”The lock up agreement, the support from the Creditor Committee, and the agreement with Bentley put Frontline in an excellent position to conclude the financial restructuring of Golden Ocean.



The demand and support for a Frontline paper alternative from the American bondholders are encouraging and strengthens Frontline’s presence and position in the US capital market.



A full take-over of Golden Ocean will increase Frontline’s controlled fleet to 29 VLCCs and 28 Suezmaxes. Total size of the fleet will be approximately 13 mill dwt, with an average age of 4 years. All the ships are built after 1990, and the overwhelming part of the fleet will be double hull tonnage. In addition to the tanker fleet comes 10 modern bulkcarriers.



With current spot rates, in excess of USD 50.000 for VLCCs, and USD 40.000 for Suezmaxes, we have already created a company that based on today’s charter fixtures generates more than USD 1.0 million in free cash every day. With the planned take over of Golden Ocean we should further improve the services to our clients as well as increase the earnings and value potential for our shareholders.



The Board remains optimistic about the Company’s ability to generate a superior return to its shareholders in the coming three to five year period.”



New York – 31/07/00