HAMILTON, Bermuda, Feb. 5, 2007 (PRIME NEWSWIRE) -- With reference to our press release dated February 1, 2007, Frontline Ltd. ("Frontline" or the "Company") is pleased to announce that Sea Production Ltd. ("Sea Production") has successfully completed a private placement and raised $180 million in equity. In line with original intention Frontline and Keppel have been allotted approximately 33% of the total shares in the private placement, divided with 28% to Frontline and 5% to Keppel Corp. The subscription was heavily oversubscribed. Due to the restriction of minimum allotment in private placements, a significant amount of subscribers were not allocated any shares. The equity offering was managed by Pareto Securities ASA, SEB Enskilda ASA and Glitnir Securities ASA.
Sea Production has agreed with Frontline to acquire its floating production activities including the FPSO "Front Puffin" currently under conversion at Keppel Shipyard in Singapore and its floating production management organization. Sea Production will also acquire the management company and the FPSO project portfolio. Totally Sea Production will pay $210 million gross for these assets, based on a delivered cost assumption of Front Puffin of $150 million.
Sea Production will also acquire two further Aframax vessels from Seatankers. The price for each vessel being $18 million. In addition, Sea Production has agreed to purchase the FPSO vessel "Crystal Ocean" for $90 from Seadrill Limited.
Sea Production's total investment for the four vessels and the floating production management organization will be $336 million. The company will be financed through a combination of the $180 million raised in equity, a $130 million bond facility and bank loan.
It is expected that the completion of the transaction and the participation in Sea Production will contribute materially positive to Frontline's earnings and liquidity short term, as well as strengthen the Company's balance sheet and dividend capacity in the long term.
Chief Executive Officer of Frontline Management AS, Mr. Bjoern Sjaastad says in a comment: We are very pleased with this transaction and the response Sea Production got in the market. The spin off of these assets from Frontline follows a strategy which Frontline has followed for a long time in order to optimize the value to its shareholders. Earlier Ship Finance International Limited, Golden Ocean Group Limited and Sealift Ltd. have been spun off in a successful way.
The spin off realizes part of the value and increases the focus of these companies going forward. Sea Production endeavors to become a leading FPSO contractor by utilizing its fleet of suitable vessels, through its existing experienced management organization and through partnerships with strategic subcontractors.
Sea Production will apply for listing at the OTC market in Norway, Oslo.
February 5, 2007 The Board of Directors Frontline Ltd. Hamilton, Bermuda