Tankrederiet Frontline has entered into an agreement with STX Offshore & Shipbuilding to terminate the contracts for the four VLCC-newbuildings (new very large tankers) which should be delivered in 2017.
the contract price for the new tankers was 364,3 million dollars, of which Frontline has paid into 45,5 million dollars.
364,3 million dollars equates to around 2.978 million Norwegian kroner.
- VLCC is the abbreviation for Very Large Crude Carrier, and denotes a skipsklasse with a typical length of up to 330 metres and the displacement of between 200.000 and 320.000 tonnes.
Frontline states that after the termination is free from all the obligations related to the contracts, against a kanselleringsavgift of 0.5 million dollars per ship.
– the Company believes that the market will continue to provide attractive opportunities, and we will consider the already launched and the re-sold assets, which are historically low-priced, writes the company in an announcement.
It appears that the Frontline need low price to achieve profitability and have access to capital on attractive terms, which means that you can take advantage of the “feilprising” in skipsmarkedet.
Shares rise
After termineringene constitute the front line fleet of 73 vessels, including newbuildings, with a total capacity of around 13.5 million dwt. 25 of the ships are VLCC’s, 22 suezmax tankers and the rest are smaller.
Frontlines share seems to react slightly positively to today’s news. It is up to 2,13 per cent to 62.4 million per share, while the main index on the Oslo stock Exchange is rising 0,91 percent.
Frontline-the stock is, however, down over 50 percent so far this year.
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