In line with the strategy decided by the Board, Frontline Ltd. is currently in the process of establishing a separate entity to develop the company's heavy lift activity. Such a company will include up to six single hull Suezmax vessels. Five of these vessels are on long term leases from Ship Finance International Limited, and a deal is subject to reaching a mutually acceptable solution with Ship Finance International Limited for a purchase of these vessels. One vessel is currently being converted to a
heavy lift vessel at Cosco shipyard in China and will be completed in April 2007. One further firm contract has been signed for a second vessel to be delivered in August 2007, and
optional conversion contracts are in place with the yard for up to four more vessels.
The new company which will be named Sealift Ltd., has recruited former Chief Executive Officer of Dockwise Transportation N.V. Bert Bekker to be the CEO of the Sealift management organization. Frontline is currently investigating the possibility to bring in outside investors in Sealift. It is the intention that Frontline will remain with minimum 33% of the equity. Frontline expects a final clarification around the
possible spin off of Sealift and the financial consequences of the transaction to be communicated to the market within this week.