Knightsbridge, Frontline to Form US Capesize Company

MarineLink.com
Thursday, April 24, 2014
Photo courtesy of Knightsbridge Tankers

Knightsbridge Tankers Limited and Frontline 2012 Ltd. have announced an agreement to combine Frontline 2012's remaining fleet of 25 fuel efficient vessels with Knightsbridge. The newbuildings have expected deliveries between September 2014 and September 2016, with five vessels delivering in 2014, 14 vessels in 2015 and six vessels in 2016. Knightsbridge recently acquired five Capesize newbuildings from Frontline 2012 and one vessel from Hemen Holding Ltd. The combination of Knightsbridge and Frontline 2012 Capesize fleet will create the leading US listed Capesize company with a unique fleet of 39 modern vessels.



Under the agreement in principle, the exchange ratio for the acquisition and share issuance will be based on NAV using March 31, 2014 broker values. The Knightsbridge/Frontline 2012 exchange ratio will be 44%/56%. Accordingly, Knightsbridge has agreed to issue 62 million shares to Frontline 2012. The closing will be executed in two stages, with 31 million shares expected to be issued around September 15, 2014 and 31 million shares around March 15, 2015. Following the issuance of the shares, Knightsbridge will have 111 million shares outstanding. Including the Knightsbridge shares already owned by Frontline 2012 and Hemen, Frontline 2012 will own 70%, other existing Knightsbridge shareholders 27% and Hemen 3% of Knightsbridge.
 


It is expected that Frontline 2012 will distribute its shares in Knightsbridge to its shareholders over time.
 


The transaction is subject to execution of definitive documentation, normal closing conditions and regulatory approvals. The transaction will also be subject to consent from Knightsbridge's shareholders to increase the Company's authorized share capital to enable and approve the issuance of the new shares to Frontline 2012.
 


The net remaining estimated Capex of the 25 Capesize newbuildings is $894 million. Assuming average debt of around $33 million per vessel the newbuilding program in Knightsbridge is expected to be fully financed. The Knightsbridge's Board of Directors will seek to optimize Knightsbridge's capital structure following the transaction to achieve cash breakeven rates below $15,000 per day.

 

The Knightsbridge Board of Directors will seek to grow the Company's dividend per share as the dry bulk market recovers and newbuildings commence operation.

 

Commenting on the transaction, Ola Lorentzon, Chief Executive Officer of Knightsbridge, stated: "The Frontline 2012 transaction will be a transformative step for the Company and will make us the leading US listed Capesize owner. With a fleet of 39 modern vessels, of which 34 are "Eco design" fuel efficient vessels, which could achieve higher time charter equivalent earnings than existing vessels in any market situation and a targeted breakeven rate below $15,000 per day, we are setting the groundwork to be in a unique position to benefit from an expected dry bulk market recovery. As the market recovers we expect this transaction to be highly accretive to our cash flow per share and give us the ability to pay high dividend to our shareholders."
 


The Chairman of Frontline 2012, John Fredriksen, said, "We are very pleased to be able to enter into this transaction with Knightsbridge for the remaining Capesize fleet of 25 newbuidings, which is in line with our strategic plan of creating pure plays in different shipping segments through consolidation, divestments and spin offs."

Maritime Reporter February 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

First Subsea Achieves API 17L1 Certification for Bend Stiffener Connectors

Connector technology developer First Subsea has received APL 17LI certification for its bend stiffener connectors from the American Petroleum Institute, the company announced today.

Gulf of Mexico Sees First LNG-powered OSV

A special Offshore Supply Vessel (OSV) has been delivered to Shell for its deepwater operations in the Gulf of Mexico.   The vessel, Harvey Energy, is chartered

Bestobell Bags Hat Trick Order in China

Bestobell Marine, part of the President Engineering Group, has received its third order in the past 12 months from Hudong Zhonghua shipyard in China. The deal

Fuels & Lubes

New Tool for Recovering Oil from Sunken Wrecks

A tool for removing oil trapped in submerged vessels has been developed in Norway by design specialists Miko Marine.   The launch of the Moskito aims to address

Gulf of Mexico Sees First LNG-powered OSV

A special Offshore Supply Vessel (OSV) has been delivered to Shell for its deepwater operations in the Gulf of Mexico.   The vessel, Harvey Energy, is chartered

EC Study on LNG as Shipping Fuel Reveals Industry Backing

As efforts to combat climate change increase worldwide, pollution stemming from maritime shipping presents a particular challenge.     The study on the perception

News

Two Mooring Tugs Delivered to NSW

Nakilat Damen Shipyards Qatar (NDSQ) has delivered two new Qatari-built mooring tugs to towage operator Nakilat SvitzerWijsmuller (NSW).   The delivery of the

Senate Committee Approves Vessel Discharge Reform Legislation

The effort to establish a uniform national framework for the regulation of vessel discharges took another step forward as the Senate Committee on Commerce, Science and Transportation approved S.

Vancouver Port Operations Resume Atfer Container Fire

Port Metro Vancouver said on Thursday that operations had resumed at most port facilities shut down by a shipping container fire the day before, but that its Centerm

Vessels

Two Mooring Tugs Delivered to NSW

Nakilat Damen Shipyards Qatar (NDSQ) has delivered two new Qatari-built mooring tugs to towage operator Nakilat SvitzerWijsmuller (NSW).   The delivery of the

Senate Committee Approves Vessel Discharge Reform Legislation

The effort to establish a uniform national framework for the regulation of vessel discharges took another step forward as the Senate Committee on Commerce, Science and Transportation approved S.

Food Handling Products Ordered for Ovation of the Seas

ALMACO informs it has been contracted to deliver food handling products for the Royal Caribbean International’s Ovation of the Seas, the third Quantum-class ship

Insurance

Rescue 21 Achieves 'SOLAS' Declaration from DHS

The U.S. Coast Guard is declaring 'Sea Area A1' service in certain areas off the coast of the United States based on the performance of the General Dynamics-built Rescue 21 system.

Mariners Transiting Delaware River Cautioned

The Captain of the Port (COTP) Delaware Bay is notifying mariners that Upper Delaware River lighted buoy 33 (LLNR 3875) and Upper Delaware River lighted buoy

Top Five Most Costly Insurance Claims

The TT Club has alerted the supply chain industry to a persistence of claims in a handful of loss types. The international transport, freight and logistics insurance

Mergers & Acquisitions

UK Will Force Fridman to sell N.Sea Assets

Britain is ready to force the sale of Russian oligarch Mikhail Fridman's recently acquired North Sea energy assets unless it receives unspecified assurances within the next week,

Kvichak, Vigor Announce Merger

Merger positions combined company to play a dominant role in recapitalization of North Pacific fishing fleet and emerging Arctic oil gas operations. Kvichak

Genting Acquires Crystal Cruises

Crystal Cruises has been sold for $550 million to the owner of Asia's largest cruise line and a major shareholder of Norwegian Cruise Line.    Crystal's parent company,

 
 
Maritime Contracts Maritime Security Naval Architecture Offshore Oil Pod Propulsion Port Authority Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.4674 sec (2 req/sec)