Knightsbridge Tankers Limited
has agreed to purchase two newbuilding contracts, each for a Capesize bulk carrier
of approximately 170,000 deadweight tons (dwt). The ships will be built at Daehan Shipbuilding Co. Ltd in the Republic of Korea with delivery scheduled for September and December 2009 respectively. The newbuilding contracts have been acquired from Golden Ocean Group Limited ("GOGL") which company has ordered a series of sister ships at the same yard. The contract price for the two vessels is $ 81m per vessel. In addition Knightsbridge will pay a 1% commission to GOGL for arranging the deal. GOGL is listed on the Oslo Stock Exchange and is a related party of Frontline Ltd, the parent company of the Company's manager.
With this transaction, the Board is aiming to expand the Company and to renew its fleet through the acquisition of new tonnage. The Company will consider different employment options for the two ships including possibilities for fixing long term time charters. The Board intends to pre-delivery finance the two newbuildings through leverage against existing assets and contract back log. Such a financing will not materially affect the company's dividend capacity during the ships' construction period. For long term financing of the assets normal mortgage financing as well as lease financing will be considered. It is not intended that the purchase of the two newbuildings will require any new equity.
The supervision of the ships' construction will be carried out by Frontline Management (Bermuda) Ltd. which is already doing the supervision for the sister vessels, and the commercial operation will be contracted to Golden Ocean Management AS, a subsidiary of GOGL that operates the GOGL fleet.