SFL Provides Fleet Renewal Update
Ship Finance International Limited, today announced that it has agreed to sell the 1993-built Suezmax Front Pride and the 1991-built OBO Front Guider to unrelated third parties. The Company has simultaneously agreed to terminate the corresponding charter parties with a subsidiary of Frontline Ltd. (Frontline).
Front Pride is expected to be delivered to the new owner in February 2013 and Ship Finance expects to receive net proceeds of approximately $12.1 million including a $2.1 million charter termination compensation payment from Frontline.
Front Guider is expected to be delivered to the new owner in March 2013 and Ship Finance expects to receive net proceeds of approximately $9.1 million. This is the last of the older OBOs in the fleet, and the Company received charter termination compensation for this vessel already in December 2012, as part of the $23.5 million settlement for the remaining OBOs.
The Company expects to record book gains of approximately $13.3 million in the first quarter of 2013 in connection with the sale of the two vessels.
Divesting of older vessels 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 22 vessels, including 17 VLCCs and five Suezmax crude oil carriers.
The newbuilding program continues according to plan with five vessels remaining. One 32,000 dwt Handysize bulk carrier is scheduled to be delivered in the first quarter of 2013, three 4,800 teu eco-design container vessels are scheduled for the second half of 2013, and a 4,800 teu eco-design container vessel is scheduled to be delivered in the first quarter of 2014. All newbuildings have been chartered out on medium to long-term time charters.
SFL, February 7, 2013