Geneva, 23 August 2019 - Trafigura Marine Logistics (“TML”), a wholly-owned subsidiary of Trafigura Pte Ltd (“Trafigura”), today announced that it has entered into an agreement to sell ten Suezmax tankers built in 2019 to Frontline Ltd. ("Frontline") (NYSE and OSE:FRO), through the sale of a TML special purpose vehicle which holds the vessels (the “Transaction”). As part of the transaction, options have also been agreed for Frontline to acquire a further four Suezmax tankers built in 2019 through the sale of a second TML special purpose vehicle.
Rasmus Bach Nielsen, Global Head of Wet Freight at Trafigura, commented:
“This marks a continuation of an approach that has long been integral to Trafigura’s strategy, namely investing in infrastructure assets in support of commodity flows and then collaborating with a market leader like Frontline to maintain sufficient access to those assets for our trading business. Trafigura trades around 5.5 million barrels per day of oil and petroleum products around the world and has a market-leading position in strategic commodity flows, notably as a leading exporter of crude oil from the U.S. The significant increase in U.S. export volumes, an aging global fleet particularly of crude vessels and a historically low order book all support our constructive outlook for the sector. We therefore see significant upside potential in our equity in Frontline, a company with vast commercial scale and capabilities with whom we already enjoy a close working relationship.”
Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS commented:
“This transaction is backed by our strong belief in tanker market fundamentals and reflects our ability to act swiftly and decisively with the support of our largest shareholder. We welcome Trafigura as a strategic shareholder and believe the transaction reflects the value they ascribe to our equity. In addition to Trafigura being a longstanding customer of Frontline, we now have a unique partnership with Trafigura that we believe will lead to further synergies going forward. The structure of the transaction creates an immediate impact to our earnings at a time when we expect freight rates to increase significantly. Moreover, we expect the transaction to boost our dividend capacity going forward.”
DNB Markets has acted as mandated advisor between the parties in the transaction.
Frontline Management AS
Robert Hvide Macleod: Chief Executive Officer - +47 23 11 40 84
Inger M. Klemp: Chief Financial Officer - +47 23 11 40 76
Press Office: +41 22 592 45 28 or firstname.lastname@example.org
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Notes to Editors
About Frontline Ltd.
Frontline Ltd. is a world leader in the seaborne transportation of crude oil and refined products. The Company owns and operates a large, modern fleet of 63 vessels with an aggregate carrying capacity of approximately 12.2 million deadweight tons and an average age of 4.3 years. Due to Frontline’s brand, financial flexibility, and significant scale, it holds a unique position among its peers. Frontline is listed on both the New York and Oslo Stock Exchanges under the symbol “FRO.” Visit: https://www.frontline.bm
Founded in 1993, Trafigura is one of the largest physical commodities trading groups in the world. Trafigura sources, stores, transports and delivers a range of raw materials (including oil and refined products and metals and minerals) to clients around the world. The trading business is supported by industrial and financial assets, including 49.3 percent owned global oil products storage and distribution company Puma Energy; global terminals, warehousing and logistics operator Impala Terminals; Trafigura's Mining Group; and Galena Asset Management. The Company is owned by around 700 of its 4,300 employees who work in 66 offices in 38 countries around the world. Trafigura has achieved substantial growth over recent years, growing revenue from USD12 billion in 2003 to USD180.7 billion in 2018. The Group has been connecting its customers to the global economy for more than two decades, growing prosperity by advancing trade. Visit: https://www.trafigura.com