FRO - Termination Of Charter-in Contracts Of VLCCs

HAMILTON, Bermuda, Nov. 7, 2013 (GLOBE NEWSWIRE) --
Frontline  Ltd.  ("Frontline"  or  the  "Company")  has agreed with Ship FinanceInternational  Limited  ("Ship  Finance")  to  terminate  the  long term charterparties  for the 1998 and 1999 built VLCCs Front Champion and Golden Victory andShip Finance has simultaneously sold the vessels to unrelated third parties. Thecharter parties are expected to terminate in November 2013.The decision to terminate the long term charter parties was taken in view of therequired  investment to take the vessels  through the 15 year special survey andcurrent  market rates. While the VLCC spot  market has recently shown some signsof  recovery, there  is still  a fundamental  oversupply in  the market  and theretirement of older vessels should assist in balancing the market going forward.Frontline  has  agreed  an  aggregate  compensation  payment  to Ship Finance ofapproximately  $90 million for the early  termination of the charter parties, ofwhich  approximately $11 million  will be paid  upon termination and the balancewill  be recorded  as notes  payable, with  similar amortisation profiles to thecurrent  lease obligations,  with reduced  rates until  2015 and full rates from2016. Front Champion and Golden Victory have the highest charter rates among thevessels  Frontline  has  chartered  in  from  Ship  Finance  and  the  level  ofcompensation is a reflection of this.These transactions will reduce the Company's obligations under capital leases byapproximately  $105 million and  the remaining obligations  under capital leasesfollowing  these terminations will be approximately  $735 million related to 15VLCCs and five Suezmax tankers.November 7, 2013The Board of DirectorsFrontline Ltd.Hamilton, BermudaQuestions should be directed to:Jens Martin Jensen: Chief Executive Officer, Frontline Management AS+47 23 11 40 00Inger M. Klemp: Chief Financial Officer, Frontline Management AS+47 23 11 40 00Forward Looking StatementsThis press release contains forward looking statements. These statements arebased upon various assumptions, many of which are based, in turn, upon furtherassumptions, including Frontline management's examination of historicaloperating trends. Although Frontline believes that these assumptions werereasonable when made, because assumptions are inherently subject to significantuncertainties and contingencies which are difficult or impossible to predict andare beyond its control, Frontline cannot give assurance that it will achieve oraccomplish these expectations, beliefs or intentions.Important  factors that,  in the  Company's view,  could cause actual results todiffer  materially  from  those  discussed  in  this  press  release include thestrength  of world economies and currencies, general market conditions includingfluctuations  in charter hire rates and vessel  values, changes in demand in thetanker  market as a result of changes  in OPEC's petroleum production levels andworld  wide  oil  consumption  and  storage,  changes in the Company's operatingexpenses  including bunker prices,  dry-docking and insurance  costs, changes ingovernmental  rules and regulations or  actions taken by regulatory authorities,potential  liability  from  pending  or  future litigation, general domestic andinternational  political conditions, potential disruption of shipping routes dueto  accidents or  political events,  and other  important factors described fromtime  to  time  in  the  reports  filed  by  the  Company with the United StatesSecurities and Exchange Commission.This information is subject of the disclosure requirements pursuant to section5-12 of the Norwegian Securities Trading Act.[HUG#1741504]

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