Frontline Ltd. has agreed with Ship Finance International Limited to terminate the long term charter parties for the 1999 built VLCCs Front Opalia, Front Comanche and Front Commerce. Ship Finance has simultaneously sold the vessels to unrelated third parties.
The charter parties are expected to terminate in the fourth quarter of 2014.
The decision to terminate the long term charter parties was taken in view of the required investment to take the vessels through the 15 year special survey.
Frontline has agreed an aggregate compensation payment to Ship Finance of approximately USD 58.8 million for the early termination of the charter parties, of which approximately USD 10.5 million will be paid upon termination and the balance will be recorded as notes payable.
As of June 30, 2014, the company has capital lease obligations to Ship Finance of USD 101.5 million and USD 608.3 million for these three vessels and the remaining 12 VLCCs and five Suezmax tankers, respectively.
Press Release; July 24, 2014