HAMILTON, BERMUDA - July 1, 2015 Frontline 2012 Ltd. (NOTC: FRNT) ("Frontline
2012") and Frontline Ltd. (NYSE/OSE/LSE: FRO) ("Frontline") 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 2012 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 announcement is distributed by GlobeNewswire on behalf of
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originality of the information contained therein.
Source: Frontline 2012 Ltd. via GlobeNewswire
[HUG#1933718]
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