Frontline sells non-eco ships to have entire fleet fuel-efficient

Norwegian tanker major Frontline has agreed to sell its five oldest very large crude carriers (VLCCs), aligning with the company’s strategy of having only eco-friendly vessels in its fleet.

Built in 2009 and 2010, the ships will be sold for an aggregate net sale price of $290 million, the company said.

Frontline did not disclose to whom the ship quintet was sold. However, data provided by VesselsValue shows that South Korean shipping company Sinokor Merchant Marine is behind this deal.

The ships in question are the 297,000 dwt Front Cecilie, Front Signe, Front Queen, Front Kathrine and the 321,300 dwt Front Endurance, according to VesselsValue.

The tankers are expected to be delivered the new owner owner during the first quarter of 2024. After repayment of existing debt on the vessels, the transaction is expected to generate net cash proceeds of approximately $207 million, and the company expects to record a gain in the first quarter of 2024 in the range of approximately $68 million to $76 million, depending on the date of delivery of each vessel to the new owner.

The sale is subject to certain closing conditions, in line with industry standards.

“We are very pleased with this transaction, capturing firm pricing for 14-15 year old vessels. Frontline has increased its position significantly in the VLCC segment during 2023 and this divestment of our remaining non-eco VLCCs is in line with our strategy of running the most modern, fuel-efficient fleet in the market,” Lars H. Barstad, Chief Executive Officer of Frontline Management AS, commented.

Two months ago, Frontline completed the sale of its stake in Belgian tanker shipping company Euronav, acquiring a fleet of 24 ECO VLCCs from the company and becoming the largest pure-play tanker owner in the public domain measured by dwt.

Following this transaction and the completion of the delivery of all 24 VLCCs acquired from Euronav NV, Frontline’s fleet will consist of 84 vessels comprised of 41 VLCCs, 25 Suezmax tankers and 18 LR2/Aframax tankers with an aggregate capacity of approximately 18.2 million dwt and average age of only 5.9 years.