Acquisition and Sale of VLCCs
Frontline plc ("Frontline") (NYSE: FRO - OSE: FRO) announces a strategic fleet
renewal initiative, involving both the acquisition of new vessels and the sale
of older vessels.
Sale of eight of its oldest 1(st) generation ECO VLCCs
The Company has entered into an agreement to sell eight of its oldest 1(st)
generation ECO Very Large Crude Carriers (VLCCs), built between 2015 and 2016.
These vessels are being sold for a total sales price of $831.5 million, with
delivery to the new owner scheduled during the first quarter of 2026. After
repayment of existing debt on the vessels, the transaction is expected to
generate net cash proceeds of approximately $486.0 million and the Company
expects to record a gain in the first quarter of 2026 in the range of
approximately $217.4 million to $226.7 million, depending on the delivery date
of each vessel. The sale remains subject to certain closing conditions, in line
with industry standards.
Acquisition of nine latest generation scrubber-fitted ECO VLCC newbuilding
contracts
In parallel, the Company has entered into an agreement to acquire nine latest
generation scrubber-fitted ECO VLCC newbuilding contracts from an affiliate of
Hemen Holding Limited, the Company's largest shareholder, for an aggregate
purchase price of $1,224.0 million. Of these nine vessels, six are currently
under construction at the Hengli shipyard and three at the Dalian shipyard in
China. The delivery schedule for the vessels is attractive, with seven vessels
due for contract delivery during 2026, commencing in the third quarter, one
vessel expected in the first quarter of 2027 and the final vessel anticipated in
the second quarter of 2027. The payment schedule for these acquisitions is
weighted towards delivery, with the largest portion of the instalments due upon
delivery of each vessel. The Company intends to finance this acquisition with
cash and long-term debt financing. The acquisition remains subject to certain
closing conditions, in line with industry standards.
Management Commentary
Lars H. Barstad, Chief Executive Officer of Frontline Management AS, commented
on these transactions:
"These two transactions enable Frontline to renew its fleet by replacing 10-
year-old first-generation ECO vessels with latest-generation, scrubber-fitted
ECO vessels at very firm pricing. This aligns with our strategy of operating one
of the most modern, cost- and fuel-efficient fleets in the market.
The acquisition also supports our objective of increasing exposure to the VLCC
segment without adding to overall vessel supply. The delivery schedule is
particularly attractive, falling within a period that is generally considered
closed to newbuild orders. Through this transaction, Frontline is making
tangible progress toward improved fuel efficiency and reduced carbon emissions."
Fleet Composition Post-Transaction
Upon completion of these transactions, Frontline's fleet will comprise of 81
vessels, including 42 VLCCs, 21 Suezmax tankers and 18 LR2/Aframax tankers.
January 8, 2026
The Board of Directors
Frontline plc
Limassol, Cyprus
DNB Carnegie, a part of DNB Bank ASA, is acting as financial advisor to
Frontline and has also rendered a fairness opinion in connection with the
transaction.
Contact Information
For further information, please contact:
Lars H. Barstad: Chief Executive Officer, Frontline Management AS
+47 23 11 40 00
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 00
Forward-Looking Statements
Matters discussed in this announcement may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides safe
harbor protections for forward-looking statements, which include statements
concerning plans, objectives, goals, strategies, future events or performance,
and underlying assumptions and other statements, which are other than statements
of historical facts.
Frontline and its subsidiaries, desire to take advantage of the safe harbour
provisions of the Private Securities Litigation Reform Act of 1995 and is
including this cautionary statement in connection with this safe harbour
legislation. This announcement and any other written or oral statements made by
Frontline or its behalf may include forward-looking statements, which reflect
its current views with respect to future events and financial performance and
are not intended to give any assurance as to future results. When used in this
document, the words "believe," "anticipate," "intend," "estimate," "forecast,"
"project," "plan," "potential," "will," "may," "should," "expect" and similar
expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this announcement are based upon various
assumptions, including without limitation, management's examination of
historical operating trends, data contained in our records and data available
from third parties. Although Frontline believes that these assumptions were
reasonable when made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or impossible to
predict and are beyond Frontline's control, it cannot assure you that Frontline
will achieve or accomplish these expectations, beliefs or projections. Frontline
undertakes no obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise. In addition to these
important factors and matters discussed elsewhere herein, important factors
that, in Frontline's view, could cause actual results to differ materially from
those discussed in the forward-looking statements include the parties' ability
to obtain the necessary regulatory approvals and to meet other closing
conditions to complete the transactions referenced herein, as well as important
factors described from time to time in the reports and other documents,
including filings with the U.S. Securities and Exchange Commission.
This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act.