Press release from Ship Finance International Limited, February 7, 2013.
Ship Finance International Limited (NYSE:SFL) (“Ship Finance” or the “Company”), 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.
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
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 65 vessels, including 24 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.