January 15, 2007
Frontline to spin off new heavy lift activities
John Fredriksen-controlled Frontline Ltd. says it is establishing a separate entity to develop its heavy lift activity.
Frontline sees conversion to heavy lift ships as one way of recycling single hull tankers phased out from oil carrying by MARPOL deadlines.
The new company will be named Sealift Ltd. and has already recruited Bert Bekker, former CEO of Dockwise Transportation N.V. to be the CEO of the Sealift management organization. Bekker retired from Dockwise in June 2003.
Sealift will include up to six single hull Suezmax vessels.
Five of these vessels are on long term leases from Fredriksen-connected Ship Finance International Limited, and Frontline says a deal is subject to reaching a mutually acceptable solution with Ship Finance International Limited for a purchase of these vessels.
One vessel is currently being converted to a heavy lift vessel at Cosco shipyard in China and will be completed in April 2007. Another further firm contract has been signed for a second vessel to be delivered in August 2007, and optional conversion contracts are in place with the yard for up to four more vessels.
Frontline is currently investigating the possibility of bringing outside investors into Sealift. It is the intention that Frontline will retain a minimum 33% of the equity.
Frontline says it expects a final clarification on the possible spin off of Sealift and the financial consequences of the transaction to be communicated to the market within this week.