Frontline Confirms Metrostar Newbuilds Buy
John Fredriksen’s oil tanker giant Frontline Ltd. revealed today that it has acquired two VLCC newbuildings under construction at Hyundai Heavy Industries at a purchase price of USD 84 million each. The vessels are due for delivery in September and November 2016.
The company has also secured options for two additional sister vessels with delivery in January and March 2017 at a purchase price of USD 85 million each.
As World Maritime News reported last week, the 308,000 DWT four VLCC newbuilds were bought from Greek Metrostar Management Corporation.
The ships in question, said to be bought on June 2nd, are Crude Hope, Crude Horn, Crude Med and Crude Progress.
“We have been consistently looking for ways to increase Frontline’s exposure to the tanker market as current resale prices do not accurately reflect the earnings power of vessels on the water. This acquisition will be accretive in the near term given historically low pricing and the low cash breakeven rates on these vessels and across our fleet. It is also a reflection of our long term market outlook and our focus on generating significant cash flow to provide long term value to our shareholders,” Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS commented.
Metrostar ordered the ships in 2015, paying USD 95 million for each ship. Euronav was interested in purchasing the quartet, however the resale deal was never realized.