Frontline Ld Fro - Frontline Ltd. And Frontline 2012 Ltd. Agree To Merge
July 02 2015 - 1:31AM
UK Regulatory
TIDMFRO
HAMILTON, BERMUDA - July 1, 2015 - Frontline Ltd. (NYSE/OSE/LSE: FRO)
("Frontline") and Frontline 2012 Ltd. (NOTC: FRNT) ("Frontline 2012")
have today entered into an agreement and plan of merger (the "Merger
Agreement"), pursuant to which the two companies have agreed to enter
into a merger transaction, with Frontline as the surviving legal entity
("the "Surviving Company") and Frontline 2012 as a wholly-owned
subsidiary. Subsequent to the merger, this subsidiary is expected to
merge into the Surviving Company (together, the "Combined Company")
which will retain the Frontline Ltd. name.
Commenting on the transaction, Chairman of Frontline Ltd. and Frontline
2012 Ltd., John Fredriksen stated: "By merging Frontline and Frontline
2012 we will regain Frontline's position as a leading tanker Company.
The Combined Company will have a large fleet and a strong balance sheet
which puts us in a position to gain further market share through
acquisitions and consolidation opportunities. With the current strong
tanker market and attractive cash break even rates, we believe the
Combined Company will generate significant free cash. The intention is
to pay out excess cash as dividends at the Board's discretion. I am very
pleased with this merger and I am determined to develop and grow the
Company further."
After the merger is completed the Combined Company expects to become one
of the world's leading tanker companies with a total fleet of
approximately 90 vessels, consisting of approximately 25 VLCCs, 17
Suezmax tankers, 16 MR product tankers and 10 LR2 Aframax tankers. This
includes approximately 20 vessels on time charter in or under commercial
management. The Combined Company will also have a newbuilding program of
approximately 22 vessels, which are scheduled to be delivered in the
period 2015 - 2017.
Shareholders in Frontline 2012 as of the time the merger is completed
will receive shares in Frontline as merger consideration. Pursuant to
the Merger Agreement, one share in Frontline 2012 will give the holder
the right to receive 2.55 shares in Frontline. The exchange ratio is
based on June 30, 2015 NAV broker estimates for Frontline and Frontline
2012. Frontline is expected to issue a total of approximately 584
million shares to shareholders in Frontline 2012 following cancellation
of treasury shares held by Frontline 2012 and Frontline 2012 shares held
by Frontline (subject to rounding for fractional shares).
Frontline's ordinary shares are currently listed for trading on the New
York Stock Exchange, the Oslo Stock Exchange and the London Stock
Exchange and Frontline 2012's ordinary shares are currently registered
on the Norwegian over-the-counter list (the "NOTC"). In accordance with
the Merger Agreement, the Combined Company will continue Frontlines
current three listings.
Completion of the merger is subject to the execution of certain
definitive documents, customary closing conditions and regulatory
approvals. The merger is also subject to approval by the shareholders of
Frontline and Frontline 2012 in special general meetings expected to be
held in the fourth quarter of 2015 and the merger is expected to close
as soon as possible thereafter.
In connection with the special general meetings, Hemen Holding Limited
("Hemen"), a company indirectly controlled by trusts established by John
Fredriksen for the benefit of his immediate family, and holding
approximately 13% of the ordinary shares in Frontline and approximately
59% of the ordinary shares in Frontline 2012, and Ship Finance
International Limited ("Ship Finance"), holding approximately 28% of the
ordinary shares in Frontline, have entered into voting agreements to
vote all of their respective shares in favor of the merger. Approval of
the merger requires that a minimum of 75% of the voting Frontline 2012
shareholders and 50% of the voting Frontline shareholders vote in favor
of the merger.
Following completion of the merger, Frontline will (subject to rounding
for any fractional shares) have approximately 782 million shares
outstanding and it is expected that Frontline's current two largest
shareholders, Hemen and Ship Finance, will own approximately 52% and 7%,
respectively, of the shares and votes in the Combined Company.
Important Information For Investors And Shareholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval. In connection with the proposed transaction between
Frontline and Frontline 2012, Frontline will file relevant materials
with the Securities and Exchange Commission (the "SEC"), including a
registration statement of Frontline on Form F-4 that will include a
joint proxy statement of Frontline 2012 and Frontline that also
constitutes a prospectus of Frontline, and the joint proxy
statement/prospectus will be mailed to shareholders of Frontline 2012
and Frontline. INVESTORS AND SECURITY HOLDERS OF FRONTLINE 2012 AND
FRONTLINE ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND
OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to obtain free
copies of the registration statement and the joint proxy
statement/prospectus (when available) and other documents filed with or
furnished to the SEC by Frontline through the website maintained by the
SEC at http://www.sec.gov. Copies of the documents filed with or
furnished to the SEC by Frontline will be available free of charge on
Frontline's website at http://www.Frontlineshipping.com. Additional
information regarding the participants in the proxy solicitations and a
description of their direct and indirect interests, by security holdings
or otherwise, will be contained in the joint proxy statement/prospectus
and other relevant materials to be filed with or furnished to the SEC
when they become available.
Forward -Looking Statements
Matters discussed in this press release may constitute forward-looking
statements. Forward-looking statements 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. Words, such as, but not limited to
"believe," "anticipate," "intends," "estimate," "forecast," "project,"
"plan," "potential," "may," "should," "expect," "pending" and similar
expressions identify forward-looking statements.
Forward-looking statements include, without limitation, statements
regarding:
-- The effectuation of the transaction between Frontline and Frontline
2012 described above;
-- The delivery to and operation of assets by Frontline;
-- Frontline's and Frontline 2012's future operating or financial
results;
-- Future, pending or recent acquisitions, business strategy, areas of
possible expansion, and expected capital spending or operating expenses;
and
-- Tanker market trends, including charter rates and factors affecting
vessel supply and demand.
The forward-looking statements in this press release are based upon
various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, examination of historical
operating trends, data contained in records and other 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 the control of
Frontline, Frontline cannot assure you that they, or the Combined
Company, will achieve or accomplish these expectations, beliefs or
projections. In addition to these important factors, other important
factors that could cause actual results to differ materially from those
discussed in the forward-looking statements, including the strength of
world economies and currencies, general market conditions, including
fluctuations in charter rates and vessel values, changes in demand for
tanker shipping capacity, changes in the Combined Company's operating
expenses, including bunker prices, drydocking and insurance costs, the
market for the Combined Company's vessels, availability of financing and
refinancing, changes in governmental rules and regulations or actions
taken by regulatory authorities, potential liability from pending or
future litigation, general domestic and international political
conditions, potential disruption of shipping routes due to accidents or
political events, vessels breakdowns and instances of off-hires and
other factors. Please see Frontline's filings with the SEC for a more
complete discussion of these and other risks and uncertainties. The
information set forth herein speaks only as of the date hereof, and
Frontline disclaims any intention or obligation to update any
forward-looking statements as a result of developments occurring after
the date of this communication.
July 1, 2015
The Boards of Directors
Frontline Ltd.
Hamilton, Bermuda
Contact Persons:
Robert Hvide Macleod: CEO, Frontline Management AS
+47 23 11 40 84
Inger M. Klemp: CFO, Frontline Management AS
+47 23 11 40 76
This information is subject to the disclosure requirements pursuant to
section 5-12 of the Norwegian Securities Trading Act.
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Frontline Ltd. via Globenewswire
HUG#1933698
http://www.frontline.bm/
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