Press release from Ship Finance International Limited - 18.01.2007
Ship Finance International Limited (NYSE:SFL) ("Ship Finance" or the "Company"), today announced that it is has agreed to sell five vessels to Frontline Ltd ("Frontline" or the "Buyer") in connection with Frontline's proposed spin-off of Sealift Ltd., a dedicated heavy-lift company.
The vessels are the single hull suezmax tankers Front Comor, Front Granite, Front Target and Front Traveller, in addition to Front Sunda, which is currently under conversion to a heavy-lift vessel. Delivery to the Buyer is expected to take place during the first quarter of 2007.
The gross sales price for the five vessels is $183.7 million, and Ship Finance will receive a net amount of approximately $121 million after compensation of approximately $62 million to Frontline for the termination of the charters. There are currently $14.2 million in aggregate loans outstanding against the five vessels, and the net cash effect to Ship Finance is estimated to be approximately $107 million.
Following these sales, Ship Finance will only have 11 single hull vessels remaining in the fleet, including three vessels with double sides. This is significantly less than the 18 single hull vessels we owned only three months ago. Of the remaining crude oil tankers without double hull, Frontline has, as charterer, secured profitable sub-charters for seven of the vessels, and only four of the vessels are traded in the spot market.
The reduction of the single hull tanker exposure is in line with the Company's strategy of focusing on modern assets in various shipping and offshore market segments. The cash proceeds from the sales is intended to be re-invested as equity contribution in new projects, and the management of Ship Finance estimates that the combination of sales proceeds, expected profit share from Frontline for the year 2006, undrawn amounts under our credit lines and available cash on our balance sheet may facilitate additional investments in excess of $1 billion.
Including newbuildings and recently announced acquisitions and sales, the Company's fleet will consist of 55 vessels, essentially all on medium to long term charters.
January 18, 2007
The Board of Directors
Ship Finance International Limited
Lars Solbakken: Chief Executive Officer, Ship Finance Management AS
+47 2311 4006
Ole B. Hjertaker: Chief Financial Officer, Ship Finance Management AS