Frontline sells 3m shares in private placement

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John Fredriksen’s Frontline has succeeded in privately placing 3 m new shares at a subscription price of NOK357 per share. Gross proceeds from the equity issue amounted to NOK 1,071 million (equivalent to approx. USD 210 million).

The net proceeds from the private placement will be used to finance the acquisition of five double hull suezmax tankers and as settlement for the delivery of shares in Overseas Shipholding Group Inc. currently covered by forward contracts.

Hemen Holding Limited, a company indirectly controlled by Frontline’s chairman John Fredriksen, guaranteed the subscription of 2.3 million shares and was allocated a total of 225,000 shares. No compensation was received for the underwriting. Hemen Holding Limited will now control a total of 26,304,053 shares constituting 33.8% of the issued share capital in the company.

The share issue was lead managed by Carnegie ASA, with Fearnley Fonds ASA, DnB NOR Markets and Dahlman Rose & Co LLC as co-lead managers.

Frontline is buying five double-hull suezmax tankers from Evangelos Pistiolis’ Top Ships for $240m, and chartering-in five more from Eigir Shipping.

The two transactions will more than double Frontline’s existing fleet of double-hull suezmaxes to 19 vessels, promoting the company to a leading role in this segment.

Delivery of the Top Ships vessels, which were built between 1992-1996, will commence this month and be completed in August.