Newbuilding program4 J1 U9 Y3 ?5 i7 M! [( _
Frontline's newbuilding program is developing according to schedule, however we expect that the eight Suezmaxes being built at Rongsheng ship yard might be somewhat delayed compared to original schedule. The first VLCC to be delivered from SWS, Hull no. 2396 tbn Front Kathrine, will be delivered in January 2009.! ]' L2 q) H3 _/ I& ~
The total contractual cost of Frontline's newbuilding program is $1,794 million. As of September 30, 2008, $393 million in installments have been paid on the newbuildings as compared to $333 million at the end of the second quarter. The remaining installments to be paid for the newbuildings amount to $1,401 million with expected payments of approximately $42 million, $386 million, $578 million, $342 million and $54 million in 2008, 2009, 2010, 2011 and 2012, respectively.6 k- V/ X9 `, W2 X$ q
The Company has established long term pre- and post delivery newbuilding financing in an amount of $420 million representing 80 percent of the contractual cost of four of the newbuildings beeing built at Rongsheng ship yard and two of the newbuildings being built at Shanghai Waigaoqiao Shipbuilding Company Ltd. (SWS) ship yard. In addition, the Company has established short term pre-delivery newbuilding financing in the amount of $129.6 million representing 80 percent of the contractual cost of the first installment for the six vessels being built at Jinhaiwan ship yard. This facility matures June 2009. As of September 30, 2008, $221 million has been drawn under these facilities and we expect to draw a further $51 million in 2008.6 _& e. \! v7 u1 v" U+ v; p1 z y
Based on committed financing and indications given in today's depressed credit market for possible obtainable financing of the remaining unfinanced vessels, together with fixed contract revenues above cash cost breakeven rates, the Company expects maximum $300 million in additional funds will be needed to complete a full financing of the Company's new building commitment. If credit market doesn't improve before 2012, this might have to be funded from the operational earnings from existing and new vessels. Such a solution might reduce the dividend capacity temporarily. The Board is confident that Frontline with its strong presence in the banking market and through possible refinancing of existing tonnage can improve this position further.; n. Q1 ^2 M" r
Corporate and Other Matters) @( X2 c$ s/ J0 Y1 |6 [
In July, 2008 Frontline received approximately $207 million after the completion of a private placement of three million new shares at a subscription price of NOK 357 per share.
+ Q+ z" n+ n u6 w, eIn September 2008, Frontline completed a syndicated loan facility for $180 million to part finance the acquisition of the five double hull Suezmaxes purchased from Top Ships Inc.
' L/ @8 d: Q7 H; cOn November 27, 2008, the Board declared a dividend of $0.50 per share. The record date for the dividend is December 9, 2008, ex dividend date is December 5, 2008 and the dividend will be paid on or about December 22, 2008. 77,858,502 ordinary shares were outstanding as of September 30, 2008, and the weighted average number of shares outstanding for the quarter was 77,858,502. |