Frontline acquires vessels, time charter contracts

Frontline Ltd. said today it has acquired five double-hull Suezmax tankers from Top Ships at a purchase price of $240 million and an agreement to take five similar vessels on time charter from Eigir Shipping.

The vessels coming from Top Ships were built between 1992 to 1996 and will be delivered to Frontline by the end of August. The company is also taking over the existing charters of the Eigir Shipping tankers -- built between 1999 to 2006 -- with delivery in June and August and redelivery in November 2009 through April 2010.

We have for several months looked for ways to increase Frontline's exposure to the strong tanker market, said Frontline Chairman John Fredriksen. Suezmax rates and values have lagged the VLCC (Very Large Crude Carrier) 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.

Source: American Shipper