This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
NEW YORK (
TheStreet) -- Shares of
Frontline(FRO) roared Tuesday after the massive shipping company
announced a restructuring plan designed to shift much of its debt and unfilled new-vessel contracts to a new corporate entity.
Shares of the Bermuda-based company finished Tuesday's regular session up 66 cents, or 18.6%, at $4.20 with volume reaching 8.6 million, more than three times the issue's trailing three-month daily average of 2.7 million.
"With the restructured cash break even rates Frontline will be extremely well positioned to meet the challenges the current oversupply of tankers has created," CEO Jens Martin Jensen said in a statement.
Frontline said it plans to transfer $666 million in bank debt and $325.5 million in remaining to-be-built vessel contracts to the new company, which it referred to as Frontline 2012. Hemen Holding Ltd., a major Frontline shareholder, is providing certain guarantees in order to facilitate the restructuring.
The company said Frontline 2012 plans to raise $250 million in equity, and that it plans to subscribe to provide 10% of that amount.
"We feel that significant upside will be kept for Frontline's existing equity holders through the massive reduction in debt and newbuilding obligations that the proposed solution will bring," Jensen said.
-- Written by Joe Deaux in New York.
>Follow Joe Deaux on
Twitter. Subscribe on