Frontline Ltd. (NYSE and OSE: FRO) ("Frontline" or the "Company") today announces that it has entered into an agreement for the acquisition through resale of six latest generation ECO-type VLCC newbuilding contracts.
The six VLCCs are currently under construction at the Hyundai Heavy Industries ("HHI") shipyard in South Korea and are being acquired for an aggregate purchase price of $565.8 million, including an estimated $25.7 million in additions and upgrades to the standard specifications. The vessels are designed to operate on different fuels, including Biofuel, have the potential to be converted or retrofitted to consume fuel like LNG or Ammonia and consequently there is an ability to cut CO2 emissions to zero when technology, logistics and the regulatory framework allows for it. The newbuildings will also be fitted with Exhaust Gas Scrubber technology, high-end Anti Fouling systems, equipped with Digital Energy Performance solutions as well as compliant with specific Exxon Mobile lightering requirements to allow for maximum trading flexibility.
The delivery schedule is very attractive with five vessels delivering during 2022 starting in Q1 and the last vessel in Q1 2023.
The payment profile for this transaction means that the largest portion of the instalments on each vessel will be made on delivery of each vessel. Frontline will meet the financing of this acquisition with existing borrowing facilities and will establish long term financing closer to delivery of the vessels.
Lars H. Barstad, Interim CEO of Frontline Management AS said:
"This transaction is consistent with our core company goals to increase exposure to the VLCC market without adding to existing vessel supply. It further cements Frontline's position in respect of owning a modern, high quality, fuel efficient fleet. The delivery schedule for these vessels is particularly attractive, in a timing window regarded closed for new orders. With this acquisition Frontline is tangibly moving on our journey towards lower carbon emissions."
May 18, 2021
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
Questions should be directed to:
Lars H. Barstad: Interim Chief Executive Officer, Frontline Management AS
+47 23 11 40 37
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 76
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. Words, such as, but not limited to "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Frontline believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the control of Frontline, Frontline cannot assure you that they will achieve or accomplish these expectations, beliefs or projections. The information set forth herein speaks only as of the date hereof, and Frontline disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.
The information included in this announcement is defined as inside information pursuant to article 7 of the Market Abuse Regulation and is publicly disclosed in accordance with article 17 of the Market Abuse Regulation and section 5-12 of the Norwegian Securities Trading Act. The announcement is made by the contact person.
