As previously reported in June 2006, Frontline Ltd. (“Frontline” or the “Company”) has been granted an option for further two VLCC newbuilding contracts at Jiangnan Shipyard in China for delivery 2010/2011. The Company has now exercised these options and simultaneously sold the newbuilding contracts to a third party including an element of profit.
In addition, Frontline has through its affiliated company Ship Finance International Limited, sold its VLCC Front Tobago for gross sale proceeds of $45 million. Delivery to buyers will take place in January 2007. Upon delivery of the vessel to the buyers, the long term charter party between Frontline and Ship Finance International Limited will be terminated, and the latter will make a compensation payment for the early termination of the charter party.