Knightsbridge Tankers Limited entered into a new time charter agreement for the VLCC MT Mayfair. The ship is currently trading in the spot market, and will commence the new time charter employment directly after the current voyage in end of March 2007. The Mayfair has been chartered to a Far East based operator for a period of three years at a rate of $45,000 per day.
The Board of Knightsbridge Tankers believes that the new charter will
serve the Company well as it continues to secure income into the next decade at levels considerably in excess of the companies required return of capital.
In addition to this VLCC, Knightsbridge Tankers owns one VLCC which is time chartered out at a fixed rate of $30,000 until 2009. Two further VLCCs are fixed on 4 and 5 years period charters at $37,750 plus 50% trading profit above that level. The fifth vessel is trading in the spot market.
The aggregate value of the fixed charters in our fleet is now around $200 million. While four out of our five vessels now have fixed income in the coming years, protecting downside risk, three of the five units continue to have the ability to take advantage of market upside. The cash break even cost for the vessels including loan interest and instalments were by end of last quarter $18,000 per day. This arrangement thereby secures a continued high dividend payment to shareholders with potential for further upside in a positive market scenario.