Press release from Ship Finance International Limited - 15.03.2007
Ship Finance International Limited (NYSE:SFL) ("Ship Finance" or the "Company"), today announced that it is has agreed to sell the single-hull VLCC Front Vanadis to a subsidiary of Taiwan Maritime Transportation Co., Ltd. ("TMT" or the "Buyer"), an unrelated third party. The sale will be in the form of a hire-purchase agreement, where the vessel will be chartered to the Buyer for a 3.5 years period, with a purchase obligation at the end of the charter.
There will a gross upfront payment of $12.5 million from TMT, and the gross bareboat charter rate will be $25,000 per day during the charter period. The purchase obligation at the end of the charter is $3 million. In addition, the Buyer will have quarterly purchase options during the charter, starting at $27.9 million, and reducing gradually over the term of the charter. Ship Finance has agreed to pay a compensation payment of approximately $13.2 million to Frontline Ltd. ("Frontline") for the termination of the current charter. Delivery to the Buyer is expected to take place in April or May 2007.
During the term of the new charter, Ship Finance will receive on average approximately $10,000 more per day compared to the base rate in the current charter agreement with Frontline, net of operating expenses.
Following this sale, and after the delivery of six other suezmax single-hull tankers previously announced sold, Ship Finance will only have 10 single hull vessels remaining in the fleet, of which three have double sides. This is significantly less than the 18 single hull vessels in the fleet only four months ago. Of the remaining crude oil tankers without double hull, Frontline has, as charterer, secured profitable sub-charters for seven of the vessels, and only the three vessels with double sides are currently traded in the spot market.
The reduction of the single hull tanker exposure is in line with the Company's strategy of focusing on modern assets in various shipping and offshore market segments. Including newbuildings and recently announced acquisitions and sales, the Company's fleet will consist of 56 vessels, essentially all on medium to long term charters.
March 15, 2007
The Board of Directors
Ship Finance International Limited
Lars Solbakken: Chief Executive Officer, Ship Finance Management AS
+47 2311 4006 / +47 9119 8844
Ole B. Hjertaker: Chief Financial Officer, Ship Finance Management AS