June 25, 2008
Frontline adds Suezmax capacity
Frontline Ltd. (NYSE:FRO) reports the acquisition of five double hull Suezmax tankers en bloc from Top Ships Inc. at a purchase price of $240 million. The vessels were built in the 1992--1996 period, and will be delivered between June 2008 to August 2008.
Frontline has also agreed to take five double hull Suezmax tankers on time charter from Eigir Shipping for the balance period of existing charters, all with delivery June/August 2008 and redelivery November 2009/April 2010. The vessels were built 1999 to 2006.
Frontline says the acquisitions and charterings-in will contribute to further consolidation in the suezmax market. Frontline is also once again the world's largest operator and owner of double hull Suezmax tonnage in addition to its position as the world's largest independent operator and owner of double hull VLCC tonnage. ket.
Chairman John Fredriksen says in a comment: "We have for several months looked for ways to increase Frontline's exposure to the strong tanker market. Suezmax rates and values have lagged the VLCC development during the last months, and provide thereby better value. The two deals will increase Frontline's exposure in the double hull Suezmax market from nine to 19 units, in addition to its eight Suezmax newbuildings to be delivered in 2009/2010. The deals should be seen as an opportunistic investment approach where the first fixtures in the current strong market will take down the financial risks, while upside for shareholders remains significant."