Ship Finance International Limited (the “Company”) today announces the sale of the three Suezmax tankers, Front Lillo, Front Emperor and Front Spirit, for a total consideration of USD 92.0 million. The vessels will be delivered to the buyers within the next two months. At the same time the time charter arrangements between Ship Finance and Frontline Ltd. (“Frontline”) will be cancelled.
Concurrently, Frontline will sell three similar vessels to Ship Finance for an aggregate price of USD 92.0 million. These vessels are the Suezmax tankers, Front Traveller, Front Transporter and Front Target. Frontline will charter back these vessels on similar terms to the contracts that are being cancelled on the three vessels being sold by Ship Finance.
Chairman and CEO of Ship Finance, Tor Olav Trøim says in a comment: “Ship Finance will be secured the same cash flow through the replacement of the vessels. We will benefit from the fact that we already have four sister ships of these Croatian built vessels in our fleet. The vessels have historically performed very well and are built based on a specification of minimal use of high tensile steel. The vessels are also particularly well designed to be used for conversion to offshore vessels in order to secure commercial life after they will have to stop trading as tankers.”
CFO of Frontline Tom Jebsen says in a comment: “Frontline bought the three vessels which are being sold to Ship Finance last year for USD 66 million. We have incurred significant expenditure on upgrading the vessels, but have also made substantial money on trading them.”
“The third party sale and subsequent cancellation of the charter of the three Spanish built Suezmaxes should be seen as a part of the Frontline Group’s strategy to renew its fleet over time through opportunistic trading in the S&P market.”
May 19, 2005