Ship Finance International Limited, today announced that it has agreed with a subsidiary of Frontline Ltd. 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.
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SFL, December 11, 2012