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

People & Company News

AEU Presents Safety Awards

The American Equity Underwriters, Inc. (AEU) presented its 2014 Safety Awards at the annual American Longshore Mutual Association, Ltd. (ALMA) Conference on July 19, 2015, in Key Biscayne, Fla.

Hapag-Lloyd Names Haeser Next CCO

Container shipping line Hapag-Lloyd AG’s supervisory board has appointed Thorsten Haeser as a new executive board member in charge of Hapag-Lloyd’s global sales

MARAD to Host Meeting on Proposed Delfin LNG License

MARAD Announces Public Scoping Meetings for Proposed Delfin Liquefied Natural Gas Deepwater Port Export Facility.   On July 29, the Maritime Administration

Fuels & Lubes

ClassNK Releases Guidelines for CNG Carriers

Classification society ClassNK has released its Guidelines for Compressed Natural Gas (CNG) Carriers.   Global economic and population growth is bringing about

Côte D’Ivoire Invests in O&G Safety Training

Thegrowth in oil and gas activity in Côte D’Ivoire has seen investment in standardized safety training in the region far outstrip that of other hydrocarbon-rich West African countries,

Diesel Spill in Houston Ship Channel

A small section of the Upper Houston Ship Channel was closed Tuesday morning after a report of 1,000 gallons of diesel entered Greens Bayou from a cement facility, the U.

News

AEU Presents Safety Awards

The American Equity Underwriters, Inc. (AEU) presented its 2014 Safety Awards at the annual American Longshore Mutual Association, Ltd. (ALMA) Conference on July 19, 2015, in Key Biscayne, Fla.

UK Navy Chooses Effer Crane Again

Cranes manufacturer Effer informs its marine crane has recently been installed aboard the U.K. Royal Navy’s patrol vessel HMS Mersey.   The new 5s 275M crane,

US Senate Energy Panel Votes to Lift Oil Export Ban

The U.S. Senate Energy Committee on Thursday passed a bill that would lift a decades-old ban on the export of crude oil.   The 22-member panel passed the bill

Vessels

UK Navy Chooses Effer Crane Again

Cranes manufacturer Effer informs its marine crane has recently been installed aboard the U.K. Royal Navy’s patrol vessel HMS Mersey.   The new 5s 275M crane,

RoRo Launched for Royal Bahamas Defense Force

A Damen RoRo 5612 was launched this month at Halong Shipyard in Vietnam, the shipbuilder announced. The RoRo is one of nine Damen vessels ordered by the Royal

Fire-stricken Icebreaker Overhauled

SENER concludes the Almirante Irizar icebreaker engineering works for re-outfit and overhaul   SENER reports it has completed the engineering works relating to

Insurance

AEU Presents Safety Awards

The American Equity Underwriters, Inc. (AEU) presented its 2014 Safety Awards at the annual American Longshore Mutual Association, Ltd. (ALMA) Conference on July 19, 2015, in Key Biscayne, Fla.

Mergers & Acquisitions

Diana to Acquire Two Post-Panamax Containerships

Diana Containerships Inc. announced that yesterday it signed, through two separate wholly-owned subsidiaries, two Memoranda of Agreement to purchase from an unaffiliated

Vale Sells Four 'ValeMax' Bulkers to China Merchants

Brazilian mining company Vale SA said on Thursday that it expects to receive $448 million from the sale of four dry-bulk iron ore ships to China's state-owned China

Scorpio Tankers to Acquire Product Tanker

Scorpio Tankers Inc. announced today that it has entered into an agreement to purchase an MR product tanker. The Company reached an agreement with an unrelated

 
 
Maritime Careers / Shipboard Positions Maritime Standards Offshore Oil Pipelines Port Authority Salvage Ship Electronics Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | 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: 0.2382 sec (4 req/sec)