SFL - Sale of vessel and charter termination compensation from Frontline
Press release from Ship Finance International Limited, December 11, 2012
Ship Finance International Limited (NYSE:SFL) ("Ship Finance" or the "Company"), today announced that it has agreed with a subsidiary of Frontline Ltd. ("Frontline") to terminate the charter parties for the two remaining 21-year old combination carriers Front Viewer and Front Guider.
Frontline will make a net settlement payment to Ship Finance of approximately $23.5 million as compensation for the early termination of the charters and the estimated loss of future cash sweep relating to the two vessels. The two vessels were previously employed on profitable sub-charters which have now been terminated early by Frontline against a cash settlement.
The Company has agreed to sell Front Viewer to an unrelated third party with expected delivery to the new owner in late December 2012. Net proceeds from the sale is estimated to be approximately $9.1 million. The last combination carrier, Front Guider, is expected to be sold in the first quarter of 2013, and will remain on charter to Frontline until a sale is concluded.
The sale of older vessels and termination of charters to Frontline is a part of the Company's strategy to renew and diversify the fleet and the net cash proceeds after repayment of debt is expected to be reinvested in new assets. Following the sale of the two vessels, the number of vessels on charter to Frontline is reduced to 23 vessels, including 17 VLCCs and six Suezmax crude oil carriers.
The Board of Directors
Ship Finance International Limited
Investor and Analyst Contacts:
Harald Gurvin, Chief Financial Officer, Ship Finance Management AS
Magnus T. Valeberg, Senior Vice President, Ship Finance Management AS
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
About Ship Finance
Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including newbuildings, the Company has a fleet of 66 vessels, including 25 crude oil tankers (VLCC and Suezmax), two chemical tankers, 12 drybulk carriers including one newbuilding, 15 container vessels including four newbuildings, six offshore supply vessels, one jack-up drilling rig, one ultra-deepwater drillship, two ultra-deepwater semi-submersible drilling rigs and two car carriers. The fleet is one of the largest in the world and most of the vessels are employed on long-term charters.
More information can be found on the Company's website: www.shipfinance.org
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Ship Finance management's examination of historical operating trends. Although Ship Finance believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Ship Finance cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in this presentation include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in the Company's operating expenses including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission.