Frontline sells eight older VLCCs and buys nine newbuilds
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Tanker giant Frontline plc [NYSE: FRO] has taken a strategic fleet renewal initiative that involves the acquisition of new vessels and the sale of older vessels. The vessels being disposed of are eight of the company\u2019s oldest first-generation ECO very large crude carriers (VLCCs), built between 2015 and 2016. They are being sold for a total sales price of $831.5 million, with delivery to the new owner scheduled during the first quarter of 2026. After repayment of existing debt on the vessels, the transaction is expected to generate net cash proceeds of approximately $486.0 million and the Frontline expects to record a gain in the first quarter of 2026 in the range of approximately $217.4 million to $226.7 million, depending on the delivery date of each vessel. The sale remains subject to certain closing conditions, in line with industry standards.<\/p>\n
In parallel, the company has entered into an agreement to acquire nine latest generation scrubber-fitted ECO VLCC newbuilding contracts from an affiliate of Hemen Holding Limited, the John Fredriksen related holding company that is Frontline\u2019s largest shareholder<\/a>. The aggregate purchase price of the nine vessels is $1,224.0 million. Six of the vessels are currently under construction at the Hengli shipyard and three at the Dalian shipyard in China. Frontline calls the delivery schedule for the vessels \u201cattractive,\u201d with seven vessels due for contract delivery during 2026, commencing in the third quarter, one vessel expected in the first quarter of 2027 and the final vessel anticipated in the second quarter of 2027.<\/p>\n The payment schedule for these acquisitions is weighted towards delivery, with the largest portion of the instalments due upon delivery of each vessel. The ompany intends to finance this acquisition with cash and long-term debt financing. The acquisition remains subject to certain closing conditions, in line with industry standards.<\/p>\n \u201cThese two transactions enable Frontline to renew its fleet by replacing 10-year-old first-generation ECO vessels with latest-generation, scrubber-fitted ECO vessels at very firm pricing,\u201d said Lars H. Barstad, <\/a>CEO of Frontline Management AS. \u201cThis aligns with our strategy of operating one of the most modern, cost- and fuel-efficient fleets in the market.\u201d<\/p>\n \u201cThe acquisition also supports our objective of increasing exposure to the VLCC segment without adding to overall vessel supply,\u201d added Barstad. \u201cThe delivery schedule is particularly attractive, falling within a period that is generally considered closed to newbuild orders. Through this transaction, Frontline is making tangible progress toward improved fuel efficiency and reduced carbon emissions.\u201d<\/p>\n On completion of these transactions, Frontline\u2019s fleet will total 81 vessels, including 42 VLCCs, 21 Suezmax tankers and 18 LR2\/Aframax tankers.<\/p>\n The post Frontline sells eight older VLCCs and buys nine newbuilds<\/a> appeared first on Marine Log<\/a>.<\/p>\n<\/div>\n