Frontline Ltd. (the "Company" or "Frontline") (NYSE:FRO) today announced that it has entered into an agreement with STX Offshore & Shipbuilding Co., Ltd. ("STX") to terminate contracts for four VLCC newbuildings due for delivery in 2017. The contracted price of these vessels was $364.3 million, of which the company has made instalment payments of $45.5 million. Following the contract terminations, the Company has been released of any and all obligations relating to the contracts, and received all instalment payments made to STX, less a $0.5 million cancellation fee per vessel.
The Company believes the market will continue to present attractive opportunities, and we will assess on-the-water and resale assets, which are at historically low prices. Frontline's low cash breakeven levels, and access to attractively priced capital, gives the Company significant operating leverage and positions Frontline to take advantage of price dislocations in the market.
Following the terminations, Frontline's fleet consists of 73 vessels, including newbuildings, with an aggregate capacity of approximately 13.5 million dwt. The Company's fleet is comprised of 25 VLCCs, 22 Suezmax tankers, 22 LR2/aframax tankers and one MR. In addition, we have three MR tankers chartered in on short term contracts.
October 14th, 2016 The Board of Directors Frontline Ltd. Hamilton, Bermuda
Robert Hvide Macleod: Chief Executive Officer, Frontline Management AS +47 23 11 40 84
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.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.